Yandell v. Wilson
| Decision Date | 26 September 1938 |
| Docket Number | 33235 |
| Citation | 182 Miss. 867,183 So. 382 |
| Court | Mississippi Supreme Court |
| Parties | YANDELL ct al. v. WILSON et al |
Suggestion Of Error Overruled November 7, 1938.
(En Banc.)
1 TRUSTS.
The delivery of notes to bank by bank president to be held in trust for president's daughter and her children, followed by a remittance of interest each year by the president as the interest was paid by the makers, constituted a completed "gift," notwithstanding that the bank was allegedly not authorized under its charter to act as a trustee, since president became trustee by assuming to act with acquiescence of the beneficiaries.
2 TRUSTS.
Equity will not permit a trust to fall for want of a trustee qualified to act.
3 TRUSTS.
The beneficiaries of a trust created by delivery of notes to bank to be held in trust for the beneficiaries were entitled to select or cause to be selected a trustee legally qualified to administer the trust, after lack of bank's capacity under its charter to act as such became apparent.
4 TRUSTS.
The donor may deliver possession of personal property to a trustee to hold as a gift for the donee, but if the donor expressly says, or does acts amounting to the same thing, he constitutes himself a trustee to hold the property for the donees.
5. TRUSTS.
Where deed of trust securing original notes and new notes when recast remained in the name of donor-trustee by whom the original notes had been given in trust to donor's daughter and her children, the lien thereof passed as an incident to the gift of the notes to the donees.
6. TRUSTS.
A donor-trustee who waived the priority of the lien of a deed of trust securing notes which donor held in trust for benefit of his daughter and her children, by assuming control of the notes and executing waivers, constituted himself a trustee de son tort of the security and became liable to the beneficiaries as owners of the equitable and beneficial interest of the lien, and became liable to account to them as trustee for the value of the notes after value thereof was destroyed by the donor's unauthorized act.
7. LIMITATION OF ACTIONS.
Where donor-trustee waived the priority of the lien of a deed of trust given in his favor and recorded in his name as security for notes which donor held in trust for the benefit of his daughter and her children, and value of the notes was destroyed by donor's unauthorized act, a suit against executor of the donor's estate, commenced within 10 years after donor had waived priority of the lien, was not barred by limitations, since donor's action created a trust in regard to the notes and their security not cognizable by the courts of common law, to the enforcement of which the 10-year statute of limitation was applicable (Code 1930, section 2316).
HON. R. E. JACKSON, Chancellor.
APPEAL from the chancery court of Leflore county HON. R. E. JACKSON, Chancellor.
Action by Nellie Wilson Yandell and another against G. A. Wilson, Jr., and others, executors of the estate of George A. Wilson, to recover the amount of certain notes. Judgment for defendants, and plaintiffs appeal. Reversed and judgment entered for plaintiffs.
Reversed and judgment here for appellants.
Ceylon B. Frazer, of Memphis, Tenn., and H. Talbot Odom, of Greenwood, for appellants.
Gifts inter vivos of unindorsed negotiable notes of a third person may be made by a simple delivery of the notes, the equitable interest therein vesting in the donee by the delivery and acceptance. However, in such case an actual delivery of the instrument in the lifetime of the donor is essential to perfect the gift, although delivery to a third person as trustee or agent of the donee is as effectual to make the gift valid as delivery to the donee personally.
Pace v. Pace, 107 Miss. 292, 65 So. 273; 28 C. J., page 659, sec. 61, page 642, sec. 34.
In the instant case there can be no question but that the trust is express and that the language creating the same is clear, unequivocal and irrevocable.
Delivery of the gift, regardless of the manner in which the same may be consummated is effected by the donor's surrender of all dominion over the gift.
It is recognized in the State of Mississippi that a gift may be consummated by actual, constructive or symbolical delivery of the property to the donee.
Harmon v. McFarlane, 99 So. 566; McLellan v. McCauley, 130 So. 145; Wheatley v. Abbott, 32 Miss. 343.
It is well settled that a donor may retain possession of the subject of the gift, and if he constitutes himself a trustee or holds for another as trustee to whom he is responsible, manual delivery of the gift being impossible, it is not essential to the consummation of the same. It is, of course, fundamental that the Wilson Banking Company, a corporation, could act only through its officers and agents.
Pohl v. Fulton, 119 P. 716, 1913B, Ann. Cas. 1014; Williamson v. Yager, 91 Ky. 282, 34 Am. St. Rep. 184.
In like manner as a donor may constitute himself a trustee and perfect a gift, likewise it necessarily follows that a donor with power to bind and hold for a corporation may bind the corporation.
Love v. Francis, 29 N.W. 843; Yokem v. Hicks, 93 Ill.App. 667; McMahon v. Lawler, 77 N.E. 489; In re Brady's Estate, 239 N.Y.S. 6, 173 N.E. 879; In re Valentine's Estate, 204 N.Y.S. 285; Tucker v. Tucker, 116 N.W. 119.
If it be sound law as expressed by the Circuit Court of Appeals, Third Circuit, in the case of Miller, Alien Property Custodian, et al. v. Herzfeld, 4 F.2d 355, that doubt as to whether a gift was perfected may be determined by subsequent declarations of the donor showing the nature of the transaction, there can be no question of the gift in this cause.
The complainants consistently and until the death of Mr. Wilson were paid the income from the notes involved herein.
The transfer of notes secured by mortgage carries pro tanto the underlying security. 41 C. J. 675, sec. 688; Henderson v. Herrod, 18 Miss. 631. The trust was established. To create a trust or to appoint a trustee a written instrument is not necessary.
65 C. J. 573, 574, 576; Commissioner of Sinking Fund v. Walker, 7 Miss. 143. The liability of G. A. Wilson to complainants was as trustee to cestui que trustent.
26 g. C. L. 1251, sec. 97; Cummings v. Oglesby, 50 Miss. 153; Jones v. McDougal, 32 Miss. 179; Buie v. Pollack, 55 Miss. 309; Calhoun v. Burnett, 40 Miss. 601; Smith v. Jeffreys, 16 So. 377.
What Mr. Wilson actually did was to dispose of the complainants' property, without their consent and to their prejudice, creating as between parties a status of trustee and cestuis que trustent on which the suit herein is based.
Cumings v. Oglesby, 50 Miss. 157; Patton v. Pinkston, 86 Miss. 651, 38 So. 500; Smith v. Jeffreys, 16 So. 377.
We readily concede that if the complainants' demand were based on a simple implied contract, section 2299 is applicable. However, such is not so, for as heretofore stated the purpose of this proceeding is to enforce liability against a trustee for moneys had and received. It is true that a trust arises from and is a contract, express or implied, but is a different type of contract, having applicable to it a different period of limitation than the simple contract contemplated in Section 2299. The case at bar is controlled by Section 2316 of the Code.
The executors also pleaded the six-year statute of limitations, being Section 2292 of the Code of 1930, but we respectfully submit that this statute does not apply.
Hook v. Bank of Leland, 134 Miss. 185, 98 So. 594; Sec. 3125, Code of 1906; Robinson v. Strauther, 106 Miss. 754, 64 So. 724; Patton v. Pinkston, 86 Miss. 651, 38 So. 500.
G. A. Wilson did assume the obligation of the bank to safely keep the notes and deliver them to the appellants on demand. Mr. Wilson was necessarily fully aware of appellants' ownership of the notes, the existence of the trust and the obligation he himself had imposed on the Wilson Banking Company.
Conner v. Hull, 36 Miss. 424; Restatement of the Law of Restitution, sec. 202; Jackson v. Jefferson, 171 Miss. 774, 158 So. 468; Bank v. McPherson, 102 Miss. 852, 59 So. 934; Wood v. Stafford, 50 Miss. 370; Coffin v. Bramlitt, 42 Miss. 194; Pennington v. Seal, 49 Miss. 518.
The ownership of the underlying security is incidental to the ownership by the appellants of the notes. It is well settled in this state and elsewhere that where part of a series of notes secured by mortgage or deed of trust are transferred, such transfer carries with it a proportionate part of the entire underlying security.
41 C. J., page 674, sec. 687, page 675, sec. 688; Henderson v. Herrod, 18 Miss. 631; McLeod v. First National Bank, 42 Miss. 99.
Appellants take the position that their cause of action accrued neither when Mr. Wilson subordinated the lien securing their notes to the liens of the Federal Land Bank and the Mississippi Joint Stock Land Bank nor at such time as he might have been called upon to deliver the notes to the appellants. The subordination agreements were duly recorded. It is in fact shown in the record that he was never called upon to deliver the notes to the appellants, but on the contrary, the same were delivered to the appellants after his death by his executors. It is submitted that appellants' cause of action accrued when the statute of limitations began to run against them.
Cooper v. Cooper, 61 Miss. 676.
It is submitted that under the laws of the State of Mississippi, the appellants' cause of action accrued when they acquired actual knowledge of the subordination of the security underlying their notes.
Cooper v. Cooper, 61 Miss. 676; Fleming v. Grafton, 54 Miss. 79; Peeples v. Boykin, 132 Miss. 359; 37 C. J 943-945, sec. 310; 17 R. C. L. 861, sec....
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