Parker v. Clarkson , 4 W. Va. 407 ( 1870 )

Berkshire, J.

In disposing of the questions arising in this case, I propose to consider them in the order in which they were made and argued by the counsel for the appellees. The first question discussed by them was the power and authority of the trustee and cestui qui trust, under the deed of marriage settlement, to make the sale to Clarkson. This objection was made here for the first time, and it was earnestly insisted that by the terms of this instrument, a sale is prohibited, unless for special purposes of reinvestment in the mode therein specified; that as it appeared that the rents and profits of the estate conveyed in the deed of settlement, were sufficient in five years to discharge the decree of Meem v. Cabell and others, it was not competent for the court in that case to have decreed a sale of the land so conveyed, or any part thereof, and consequently the sale to Clarkson was in direct violation of the deed of settlement under which the grantors held; that Clarkson was bound to take notice of it at bis peril; and that it was the duty of this court, in the application of the purchase money, to. protect the interest of the cestui qui trust without regard to the interests of Clarkson or his creditors.

In considering this question it is necessary to advert to. the conditions of the estate conveyed, and the rights and power of the grantor in the deed of settlement at the time it was executed. It appears that this estate descended to-the grantor and cestui que trust, Henri Ann Early, from her father, Dr. John J. Cabell, who, it appears, was largely indebted at the time of his death, (the debts, including interest, amounting to upwards of forty thousand dollars, after exhausting the personalty,) and that a suit by the creditors was pending in the circuit court of Lynchburg to subject the said estate to the payment of said debts at the time of the execution of the deed of settlement; and that subsequently a decree was rendered separately against the four sets of heirs of the said Cabell for their respective portions of the debts amounting to the sum of 8,237 dollars and 52 cents each, to be paid in three several installments, due respectively on the first of January, 1856,1857, and 1858, and the lien previously existing on the real estate of said Cabell for said debts was expressly reserved in said decree.

After the rendition of this decree, the deed from Jubal A. Early, the trustee, Ilenri Ann Early, the cestui que trust and her husband Samuel H. Early, was made to Clark-son for the land in controvei’sy. This deed recites the fact of the deed of marriage settlement under which the grantors claimed, and after referring to the decree of the circuit, court of Lynchburg which constituted a lien on the whole estate conveyed in the deed of settlement, it is further recited-'.that, “ In the opinion of the trustee and cestui que trust, it is advisable to sell a portion of said real estate in order to remove the lien aforesaid; the said Jubal A. Early and the said Henri Ann Early, with the approbation -and consent of the said Samuel II. Early have sold,” &c.

It is clear, therefore, that, as the lien, resting on the estate conveyed in the deed of settlement, was paramount to tbe rights and title of the grantors and cestui que trust therein, its provisions could not be carried into effect as to any part of the property so long as the lien remained unsatisfied, as they could neither sell it, or any part of it for the purposes of reinvestment, nor could the cestui que trust enjoy .the rents and profits, or any part thereof, for at least five years. Under these circumstances, it seems to me it was clearly competent to sell a part of the estate and discharge the lien, in order that the residue might be enjoyed by the cestui que trust, and in doing so there was no violation of the spirit of the heed of settlement — at least none that the cestui que trust could be heard to complain of, as non constat her interest was thereby in fact (as she believed it would be) promoted rather than injured; and I am aware of no principle of equity that would tolerate so gross a fraud as would be practiced on Clarkson and his creditors, if his vendors were allowed, under the circumstances, to avoid the sale or require him to pay the purchase money over again. It was suggested that the children of the cestui que trust have an interest in this question and ought to have been made parties to this proceeding. But it is not perceived wherein they are injured or interested in this controversy. The mere possible interest which they might ultimately have in the property is clearly too uncertain and remote to make them necessary parties, or to enable them to defeat the provisions of the deed of settlement, in reference to the sale of the estate.

The next question in the order is the payment made by Clarkson on the purchase of the land in controversy. In considering this question, it is proper, in the first place, to dispose ©f the exceptions taken to the depositions of I). J. ~W. Clarkson, and James M. Laidly. These depositions were regularly taken and filed in the cause before the passage of the act of February 7th, 1868. The only objection taken to them was the incompetency of the witnesses on account of their interest in the result of the suit, at the time the depositions were taken; but as that objection has since been removed by the act aforesaid, and as the depositions, when read on the hearing, could have no more weight than if taken since the passage of the act making the witnesses competent, no good reason is perceived why they should have been excluded and the parties required to go through the formality of retaking them.

I am of opinion, therefore, that depositions regularly taken and filed in a suit before the passage of the act before cited, if there be no other objection than the interest of the witnesses in the subject matter of the suit, fall directly within the spirit and policy of the act, and may be read on the hearing of a cause after its passage.

From the evidence in the record it clearly appears that Clarkson, at sundry times, made payments by deposit in the Citizens’ Savings Bank at Lynchburg, to the credit of the decree of Meem v. Cabell and others, to the amount of 11,847 dollars and 16 cents. The three last payments of 2,500 dollars, 1,500 dollars, and 300 dollars, it appears were made to Charles K. Slaughter, who, it is stated in the answer of Jubal A. Early, was the receiver in the case of Meem v. Cabell and other's, and by whom it seems the money was deposited'in said bank. These payments, it also appears, were made to said Slaughter with the knowledge and consent of the trustee Jubal A. Early. The remaining question is the proper application of the money so paid by Clarkson into the bank at Lynchburg. It was earnestly and ably insisted here that these payments, if allowed at all, should be applied, first, to the payment of the debt of 4,600 dollars due from Clarkson to Samuel IT. Early for the personal property purchased of him by Clarkson, mentioned in the contract between him and Samuel IT. Early for the sale of said real estate and personal property of the 9th of April, 1855. Second, to the payment of the 1,400 dollars, being the first installment of the purchase money for the land in controversy, which was not included in the deed of trust on said land executed by Clarkson to secure the residue of said purchase money. And it was also maintained that the excess of the money so paid to the credit of the Meem decree over and above the amount of the same, was an improper payment and misapplication; and that Clarkson should be charged with the same.

First, as to the debt of 4,600 dollars: There is no evidence in the record showing or tending to show that Clark-son had any authority to pay it, by depositing it in the bank to the credit of the Meem decree; and it would be, I think, a violent presumption to assume, in the absence of all evidence of authority, that he did do so. But on the other hand, the deed under which Clarkson claimed distinctly admonished him of the existence of the lien on the land conveyed to him and for the extinguishment of which it is therein expressly recited the sale and conveyance were made; and it was therefore his plain duty to apply the purchase money to the discharge of the said decree with or without the consent of his vendors; and the reasonable presumption is that he did apply it accordingly.

Second, as to the 1,400 dollars: In the contract between Samuel H. Early and Clarkson, and in the deed to the latter for the land in controversy, the consideration is stated to be 11,000 dollars, and a lien is expressly reserved in the deed for the whole amount of purchase money. ' This deed bears date on the 10th of April, 1855, and on the same day a deed of trust was executed by Clarkson on the lands so conveyed to him, to secure 9,600 dollars of the purchase money (being the residue after deducting the 1,400 dollars) due in three equal installments, payable as before stated, on the 1st day of January, 1856, 1st day of January, 1857, and first day of January, 1858, with interest from date, thus corresponding with the installments of the Meem decree. But no reference is made in the trust to the 1,400 dollars which, by the contract, was to be paid in thirty days. The trust deed, however, bearing the same date of the deed to Clarkson, it appears, was not admitted to record until the 3d of July following.

The answer of Jubal A. Early expressly denies the payment of the 1,400 dollars, as well as the authority of Samuel II. Early to receive it, while the answer of Samuel H. Early as expressly admits the payment of the same. The fact that the deed of trust was not admitted to record until some three months after its date and the date of the deed to Clarkson, and nearly two months after the 1,400 dollars were due, and does not secure the same, coupled with the admissions of Samuel Ii. Early, and other circumstances disclosed in the record, are certainly sufficient to create a strong presumption of the payment of the 1,400 dollars to Samuel H. Early. But, in my judgment, they are not suf-fficient to overcome the effect of the deed for the land, and the answer of Jubal A. Early, nor is any authority shown in Samuel H. Early to receive it., It was suggested that the letter of Clarkson to S. A. Miller, dated the 16th of November, 1867, which is found in the record, ought to have a eontroling influence on the question of the application of the payments made by Clarkson as aforesaid. If it were competent evidence, it seems to me, no such importance could properly be attached to it. There seems to be a studied indefiniteness in his statements, which would greatly impair, if it did not wholly divest them of any weight. He states in general terms that it was his ¡purpose and intention that all the payments made by him on the purchase of the said real estate and personal property, should be applied first to a debt due Samuel II. Early personally and individually, and the residue of the payments to the discharge of the purchase money for the real estate. But he fails to state the amount paid, and when, where, and to whom it was paid.

' But, it is not perceived upon what principle of law the 'unsworn written communication of a defendant who had failed to answer, to a third party, after the" institution of the suit, could be received as evidence against any party to the suit, and in my judgment this letter is clearly iuadmissable as evidence in this case.

Third, as to the excess paid beyond the Meem decree: The deed of settlement provides that whenever it is deemed expedient for the purpose of reinvestment, a sale of the real estate, or any part of it, may be made, and bank stocks or bonds of any of the States or the United States, are to be purchased with the proceeds of such sale. From this, I think it is clearly implied that the purchase money, in the event of a sale, would have to be paid to the party entitled to purchase the stocks or bonds, and to make such investments, and to do which, it is evident, would require both time and discretion; and in such cases I think the authorities are clear that the receipt of the money by the trustee is good, and will exonerate the purchaser. Drewet et ux. v. Willshire, 3 Swanton Chy. Reps., 698; Balfour v. Welland, 16 Ves.; 3 Sug. on Vendors, 100 ; 2 Tucker 451-2; 2 Story, § 1134.

The result of the foregoing views is that, in my judgment, Clarkson should be charged with the whole amount of the purchase money for the real estate (11,000 dollars,) and have a credit for the 11,847 dollars and 16 cents, the amount paid at sundry times into the bank at Lynchburg to the credit of the decree of Meem v. Cabell and others, and that-the residue of the purchase money for the real estate should be paid to Samuel H. Early, as trustee for said Henri Ann Early, to be held for her sole and separate use according to the provisions of the deed of marriage settlement. I am of opinion to reverse the decree and remand the cause to the circuit court for further proceedings to be had therein in accordance with the principles above indicated.

The other Judges concurred.

Decree reversed.