Alexander v. Alderson
| Decision Date | 30 April 1874 |
| Citation | 66 Tenn. 403 |
| Court | Tennessee Supreme Court |
| Parties | W. D. ALEXANDER v. ALDERSON & WATSON. |
OPINION TEXT STARTS HERE
FROM LAUDERDALE.
Appeal from the Chancery Court. JOHN W. HARRIS, Chancellor.
LYNN & OLDHAM for complainants.
MARLEY & STEELE for defendants.
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 pledging these certificates as collaterals. Failing to pay the loan, the certificates were sold. The court held that the sale or disposition of the certificates of stock for individual purposes by Jandon was a breach of trust, and that the fact appearing on the face of the certificates, Duncan, Sherman & Co. were chargeable with notice of the trust, and inquiry would have informed them of the improper use of it, and that the parties taking the stock and selling it were liable for it to the beneficiary.
The case of Shaw v. Spencer, 100 Mass. R., 389, cited in the above case, was a similar case, where the name of...
To continue reading
Request your trial
-
Fidelity & Deposit Co. of Maryland v. Hamilton Nat. Bank
... ... its fiduciary character is bound to inquire of the transferor ... the right to dispose of it. Alexander v. Alderson et ... al., 66 Tenn. 403, 7 Baxt. 403; Covington v ... Anderson, 84 Tenn. 310, 16 Lea 310; Caulkins v ... Gas-Light Co., 85 Tenn ... ...
-
Fidelity & Deposit Co. v. Hamilton Nat. Bank, 3.
...trustee importing upon its face its fiduciary character is bound to inquire of the transferor the right to dispose of it. Alexander v. Alderson et al., 66 Tenn. 403, 7 Baxt. 403; Covington v. Anderson, 84 Tenn. 310, 16 Lea 310; Caulkins v. Gas-Light Co., 85 Tenn. 683, 684, 4 S.W. 287, 4 Am.......
- Barton v. Cannon