Jones v. Dougherty

• Decision Date: 31 July 1851
• Docket Number: No. 39.,39.
• Citation: 10 Ga. 273
• Parties: Seaborn Jones, plaintiff in error. vs. Wm. Dougherty, defendant in error.
• Court: Georgia Supreme Court

10 Ga. 273

Seaborn Jones, plaintiff in error. vs. Wm. Dougherty, defendant in error.

No. 39.

Supreme Court of the State of Georgia

JULY TERM, 1851.

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In Equity, in Muscogee Superior Court. Decision by Judge Iverson, at Chambers, April 9, 1851.

On the 3rd day of March, in the year 1851, Wm. Dougherty, in behalf of himself and other creditors of Daniel McDougald, deceased, filed a bill returnable to Muscogee Superior Court, against Seaborn Jones, charging, that on the 25th day of August, 1846, Daniel McDougald made an assignment of a very large amount of property, consisting of lands, negroes, debts and obligations, and other valuable interests, to Seaborn Jones and Robert B. Alexander, (since deceased,) to hold as trustees for the benefit of all his creditors, giving preference to such as within six months thereafter should file with said trustees a release in full of said McDougald; that on the same day said trustees accepted the trust in writing; that in September, 1849, McDougald died largely indebted; that said Jones and Alexander, regardless of their duties and obligations as trustees, had wholly failed to execute the trust, but on the contrary permitted said McDougald from the time of the execution of the said deed to time of his death, to control, use and enjoy the property assigned; to sell the same at pleasure, and receive and apply to his own use the rents, issues and profits; keeping also the title deeds to the same—the said trustees never having demanded either the property or the title papers; that since the death of McDougald the trustees have been equally as negligent—permitting the property to go into the possession of the widow of the said McDougald, Duncan McDougald and Alex. McDougald, (who had knowledge of the trust,) and who have received the rents, issues and profits of the said property, amounting to the sum of $8,000 per annum; that said Jones was much involved in his own private matters at the time of the execution of the assignment, and that many judgments and a large mortgage are still unsatisfied upon the records of said County; that said Jones claims title to a portion of the property assigned, adverse to the interest of the creditors, and claims himself to be a creditor to alarge amount, and that said Alexander is now dead. The bill farther charged that the administrator of McDougald, in the State of Alabama, was about to sell some of the lands assigned, lying in that State; thereby creating an adverse title, and embarrassing the execution of the trust; that the trust property was becoming much exposed, unprotected, wasted and scattered, and required the immediate inteference of the Court.

The prayer was for an account—the removal of said Jones as trustee, and the immediate appointment of a receiver to take charge of the property and execute the trust.

The bill was verified by the usual affidavit of the complainant.

The presiding Judge granted an order requiring the defendant, Jones, to appear on the 15th March, 1851, and show cause why the prayer for a receiver should not be granted—a copy of the bill being served on him in the meantime. The hearing was postponed until the 3d day of April, at which time Jones appeared by his counsel, and showed for cause—

1st. That the Judge had no power to make such appointment in vacation.

2d. That if the Judge had such power, he could not exercise it at that early stage of the case, nor before the answer of the said Jones had been filed.

3d. That if he could exercise it at that stage of the cause, still he could not exercise it in the particular case made by the bill, for the reasons, 1st, that the facts set forth in the bill were not sufficiently verified or proved—more being required for that purpose than the bare oath of the said Dougherty appended to said bill; and 2d, that if sufficiently verified, the facts did not, in themselves, constitute such a case as would justify the said Judge in appointing said receiver as prayed for, in said bill.

On the 9th April, 1851, the Judge below overruled the showing, and granted an order appointing Adolphus S. Rutherford as receiver.

This order is assigned as error.

H. L. Benning, for plaintiff in error.

I. 1. A receiver will not be appointed before answer. 3 Dan. Ch. Pr. 427, \'9. 2 Story\'s Eq. §§835, \'6. 4 Ga. R. 423, \'4, \'5.

2. The Court appoints with great reluctance. 16 Ves. 70. 3 Dan. 406, 7.

3. The bill does not allege any fear, on the part of the plaintiff, of loss to himself. 2 Story's Eq. 826. He could not fear for others, and yet he would bind them. 1 Story's Eq. 549. Sto. Eq. Pl. §99.

4. A creditor's bill does not lie in Georgia. See brief in Gilbert vs. Thomas and others, at this Court.

5. There is no allegation of numerousness. Sto. Eq. P. §95.

6. The remedy is adequate at Law. Pr. Dig. 447. 7 Ga. Rep. 209: 2 Ib. 154. 9 Ib. 3. Though it is alleged that the estate is insolvent, all debts being taken into the account, it is not alleged that it is not able to pay this judgment, obtained before deed of trust.

7. Equity will not aid a judgment creditor till he has exhausted his remedies at Law. 2 Kelly, 452. 4 Ib. 322, '23.

8. It never aids one by appointing a receiver, when he has a right which he can assert at law. 3 Dan'l. 416, 401, '2, '4, '6, '7, 22. 1 Jac. & Wal. 657, 16, Ves. 70. 2 Sto. Eq. §836.

II. No right has vested in defendant in error, under the deed of trust.

1. There is no express assent of the creditors, or any creditor to the deed, and one will not be implied, unless such assent should appear to be to their interest. 2 Sto. Eq. Sec. 1086, a 2 Mylne & Keen, 492. Lewin on Trusts, 107, 108 marg.

2. The complainant D. has not waived or relinquished his judgment lien. Cook on Trust, 396 marg. 1 Phil. 694. 2 Beav. 385.

3. The deed of trust is void, by the Act of 1818, against preferring creditors. 3 Kelly, 151. (Quoting whole Act of 1818) 158.

4. The deed not having been assented to by any creditor, amounted to no more than a power for the benefit of the maker, McDougald deceased, and was revocable by him in his lifetime.

2 Sto. Eq. §1036 b. 1045, 46. 1196, 982, and note 3. 2 Mylne & Keen.

5. The relention by McDougald, of the whole property and title papers, &c. in his own hands, and the sale of some of it was in fact an implied revocation. Sto. Agency, §474, '5. The bill alleges that McDougald kept possession of the property and title papers. Deed was made in 1846. McDougald died in September 1849. Alexander died before this bill was brought.

6. At all events the power was revoked by his dying before the assent of any creditor. Story's Agency, §488. As it was not a power coupled with any interest in the agents, Jones and Alexander. Ib §489. Hunt vs. Rousmanier's administrators, 8 Wh, 174—quoted fully in Story's Agency, pages 622, '3, '4.

7. Moreover, if not revoked before it was revoked by the death of Alexander, one of the joint agents. Story's Agency, §42, 9 Ga. R. 369. Sug. on Powers, 143-4, marg.

8. Or his executors, &c., are necessary parties to the bill. (See deed of trust.)

9. At least Jones could do nothing of himself without their co-operation. It was after A.'s death before Dougherty applied to Jones, &c.

10. The original plaintiff in fi fa. acquiesced in the acts complained of, relying for many years upon the large levy, and these years covering the time in which the acts were committed. Walker vs. Symonds, 3 Swans, 64.

11. But if that plaintiff did not, still the transfer carried with it to the transferree no right to complain of torts, &c. 4 Ga, R. 484, '5, '6.

III. The bill is to collect a debt against the estate, and the administrator, Mrs. McDougald, as administratrix, is not a party.

2. If a party, she is sued too soon, before her 12 months exemption are out. Pr. Pig. 229.

3. No misconduct on her part is alleged as a ground for dispensing with the Statute.

4. It appears from the inventory that she has ample assets to pay this judgment.

W. Dougherty, for defendant in error.

The defendant in error insists that trusts of this character, to wit: for the benefit of creditors, are, in a peculiar sense, the objects of Equity jurisdiction. 2 Story's Eq. Jur. §1073.

The general rule is, that when application is made for the removal of a trustee, and the appointment of a new one, in a proper case made, to wit: that the property has been misapplied, or is in danger in the hands of the existing trustee, or when he has been guilty of laches or other misconduct in administering the trust, a Court of Equity will appoint a receiver. Hill on Trustees, 191, 212, 525. 2 Story's Eq. Ju. §§835, 836. Middleton vs. Dodwell, 13 Ves. 266. Scott vs. Beecher and Wife, 4 Price, 137. Hart vs. Crane, 7 Paige, 37. Calhoun vs. King, 5 Ala. 523. Conah vs. Sedgwick; 1 Harbour's Pep. 210. Harrisson vs. Mock, 10 Ala. 185. Lewin on Trusts, 597. At page 303 8 vol. Law Library. Jenkins vs. Jenkins, 1 Paige, 243. Bloodgood vs. Clark, 5 Paige, 577.

That the application to the Court of Equity must be by bill, filed by some of the creditors in behalf of themselves and the other creditors. Story's Eq. Pl. §§102, 216.

It is not necessary, in order to entitle the creditors to take under the assignment in this case, that they should be technical parties thereto, or formally accept the deed; the acceptance of the trustees is sufficient, and the acceptance of the creditors will be presumed until the contrary appears, if there be no stipulation for a release, or other condition in the deed which may not be for their benefit. 2 Story's Eq. Ju. §§972, 1036 a., 1045. New England Bank vs. Lewis, 8 Pick. 113. Halsey vs. Whiting, 4 Monr. Bep. 206. Egbert vs. Wood, 3 Paige, 517. Nichol vs. Munford, 4 Ch. R. 522. Small vs. Morewood 9 Barn. & Cress. 300. Marbury vs. Brooks, 11 Wheat. 78. Cunningham vs. Freeborn, 11 Wend. 241. Kent's Com. vol. 2, 533, and notes. Lewin on Trusts, 110, at page 56, of vol. 8, Law Library.

By the Court.—Lumpkin J. delivering the opinion.

The error assigned in ...