Alexander v. Alderson

• Decision Date: 30 April 1874
• Citation: Alexander v. Alderson, 66 Tenn. 403 (Tenn. 1874)
• Court: Tennessee Supreme Court
• Parties: W. D. ALEXANDER v. ALDERSON & WATSON.

66 Tenn. 403

W. D. ALEXANDER

v.ALDERSON & WATSON.

Supreme Court of Tennessee.

April Term, 1874.

FROM LAUDERDALE.

Appeal from the Chancery Court. JOHN W. HARRIS, Chancellor.

LYNN & OLDHAM for complainants.

MARLEY & STEELE for defendants.

FREEMAN, J., delivered the opinion of the court.

The only question presented for our descision in this case is, whether Anderson & Watson are entitled to the proceeds of a note of $800 given by A. & J. L. Lea to J. M. Alexander, April 25, 1868.

The facts on this question are, that certain lands had been conveyed to said Alexander in trust for his children, the complainants, with power as trustee to have the entire control and management of said property, rents, profits, etc., for the purposes of the trust, with authority “to sell and dispose of the same whenever he thinks the interest of the parties for whose benefit this conveyance is made requires it, and so invest the proceeds in whatever other business he may think best.” The trustee, under this power, sold the land to A. & J. L. Lea for $2,000, of which $1,200 was paid, and the note in dispute given for balance. The note, on its face, shows it was payable to said Alexander as “trustee.” It was endorsed to Anderson & Watson in payment for some furniture, Alexander being engaged in the furniture business in Memphis at the time. It was evidently transferred in purchase of this property for his own business, and not for the benefit of his beneficiaries.

The question is, were Anderson & Watson bona fide holders of the note, so as to be able to resist the claim of the beneficiaries? We hold it clear that they were not. The case of Duncan v. Jandon, 15 Wall., 175, is conclusive of this question. In that case, Jandon held certificates of stock as trustee for Mrs. Jandon, so expressed on their face. He obtained a loan from Duncan, Sherman & Co. by...