Williams v. McCarty
| Decision Date | 26 March 1918 |
| Docket Number | 3282. |
| Citation | 95 S.E. 638,82 W.Va. 158 |
| Parties | WILLIAMS v. MCCARTY ET AL. |
| Court | West Virginia Supreme Court |
Syllabus by the Court.
A party whose property has been appropriated by another may in equity follow and secure such property, either in its original or in any changed or different form, and this right to so follow and secure it extends to the property either in its original or any altered form in the hands of a third party, where it appears that such third party took it with notice of the fact that it had been improperly appropriated.
The jurisdiction of equity to follow property, or the proceeds thereof, when the same has been converted into some other form, at the suit of the owner thereof, will not be denied because the title of the plaintiff in such suit is contested by another, when the determination of the rights of the parties to the property simply depends upon the construction of their title papers, and not upon the determination of any question of fact.
Where the owner of land conveys the timber thereon to a trustee to secure a debt which he owes to another, and there is no limit as to the time within which such timber shall be removed, it is competent for the owner of such land and the party secured by such deed of trust to fix such time by subsequent agreement, and when they have by such subsequent agreement fixed the time within which such timber is to be removed, and a sale is made under such deed of trust with reference to the time agreed upon by the parties for the removal of said timber, and the deed to the purchaser under such deed of trust provides for the removal of said timber within such time, such provision is valid and binding, and the purchaser's right to remove said timber will cease and determine at the expiration of such time.
Appeal from Circuit Court, Pocahontas County.
Suit by E. H. Williams, Trustee, against J. H. McCarty and others. Decree for defendants on sustaining demurrer to bill, and plaintiff appeals. Affirmed.
For concurring opinion, see 100 S.E. 565.
Price & McNeel, of Marlinton, for appellant.
L. M McClintic, of Marlinton, for appellees.
S. E McCarty, being the owner of a tract of land in Pocahontas county, on the 31st day of October, 1906, conveyed the timber upon the same to T. A. Bruffey, trustee, to secure to J. E Peck & Co. the payment of certain debts mentioned in said deed of trust. Subsequently, on the 27th day of May, 1907, said McCarty conveyed the land, except the timber thereon, to the defendant J. H. McCarty. The deed of trust conveying the timber contained no limitations as to the time in which said timber should be removed from the land. The debt secured by said deed of trust remaining unpaid, J. E. Peck, the cestui que trust therein, the trustee, and J. H. McCarty, the owner of the land, on the 24th day of April, 1909, entered into an agreement by which it was provided, among other things, that in case of a sale under said deed of trust the purchaser at such sale should have three years from the date thereof within which to remove the timber. On the 1st day of June, 1909, the trustee made sale of the timber under said deed of trust, and on that day conveyed the same to the purchaser, the predecessor in title of the plaintiff, reciting in said deed the agreement made between McCarty, Peck, and the trustee, to the effect that the purchaser should be allowed three years within which to remove said timber. The timber was not removed within three years from the date of said purchase, and in the year 1916 the defendant J. H. McCarty sold the said timber to the defendant Spice Run Lumber Company for the sum of $1,000. The defendant lumber company, however, ascertaining that the plaintiff was making a claim to said timber, did not pay the purchase money to McCarty, but deposited the same in the First National Bank of Marlinton, to be retained by that bank until it was determined who was entitled thereto. Plaintiff thereupon brought this suit for the purpose of recovering the purchase price of the timber on deposit in the bank.
The jurisdiction of a court of equity to entertain the bill is challenged. The bill is filed upon the theory that the plaintiff, as successor to the purchaser at the sale made by the trustee, was the owner of the timber; that this fact appears from a proper construction of the title papers filed with the bill; that the defendant McCarty, when he sold this timber to the defendant Spice Run Lumber Company, was a trespasser and wrongdoer; and that the plaintiff may waive his right to sue for damages for the trespass, and follow the proceeds derived from the sale of the timber, so long as the same can be identified, and so long as the rights of no innocent third party intervene. If the property involved in this case was the property of the plaintiff, then his equitable right to follow the proceeds of a sale of it by a wrongdoer, so long as he can identify such proceeds, can hardly be questioned. In equity such proceeds belong to the owner of the property, and they will be impressed with a trust in his favor so long as the same can be traced and definitely identified. 39 Cyc. 25. The fact that the plaintiff may have relief at law by a suit against McCarty, or against the Spice Run Lumber Company for damages, does not deny him the right to go into equity to secure the proceeds arising from a sale of his property. In this connection Mr. Justice Story in his work on Equity Jurisprudence, at section 1256, says:
The theory upon which the courts proceed is that a party dealing with the property of another will, in a court of equity, be treated as the agent of the real owner of the property, should the real owner desire to avow his acts; that while there may have been no relation of trust or of privity between them, if the real owner of the property desires to affirm a contract made by another for the sale or disposal of his property, he may do so in a court of equity, and such court will treat the wrongdoer as an agent ex maleficio. Story's Equity Jurisprudence, § 1255; Pomeroy's Equity Jurisprudence, § 1053. Cases are numerous in which this has been done, and it will suffice to cite but a few representative ones. In the case of National Mahaiwe Bank v. Barry, 125 Mass. 20, the bank filed a bill to impress a trust in its favor in certain property which had been acquired with its money. One of its employés had embezzled a large sum of money, part of which had been intrusted to another, and had been invested in real estate in the name of such other. The Supreme Judicial Court of Massachusetts held, in accordance with well-established authority, that while the bank could sue the embezzling officer for the money, or could maintain a suit against the party to whom the money was turned over with knowledge that it was embezzled, and recover a judgment against either or both of those parties, it was not bound to do so. When it found property which had been purchased with its funds, it had the right in a court of equity to impress that property with a trust in its favor, and to compel the relinquishment to the defendant of the specific property. So in the case of Humphreys v. Butler, 51 Ark. 351, 11 S.W. 479, it was held that where a party wrongfully collected money due another, and with that money purchased property, the true owner of the fund thus collected could in equity impress the property purchased with a trust in his favor, and it mattered not that he might, in an action at law, recover the fund. The holding is that the fund was always his, and that in equity the party who used it for the purchase of something else would be held to be acting as the agent of the real owner; and, while the title to the property thus acquired was in the name of the wrongdoer, in equity it belonged to the actual owner of the fund which purchased it, and the wrongdoer would be compelled to surrender the title. In Newton v. Porter, 69 N.Y. 133, 25 Am.Rep. 152, it was held that where one stole negotiable securities and exchanged them for other securities, a court of equity would hold that the other securities belonged to the owner of the stolen property. A court of law would not so treat them, but in equity the owner of the property may elect to treat the wrongdoer as his agent, and compel the surrender of the property thus acquired. See, also, Robison v. Pierce, 118 Ala. 273, 24 So. 984, 45 L.R.A. 66, 72 Am.St.Rep. 160. Many authorities are cited in the opinions in the above cases which clearly establish the jurisdiction of courts of equity in cases like this. As was said by Lord Ellenborough in Taylor v. Plumer, 3 M. & Sel. 362, in speaking of the right of the owner of property to follow the proceeds thereof in equity:
"It make no difference, in reason or law, into what other form different from the original the change may have been made, whether it be into that of promissory notes for the security of money produced on the sale of the goods of the principal, as in Scott v. Surman (Willes, 400), or into other merchandise, as in Whitecomb v. Jacob (Salk. 160), for the product or substitute for...
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