Crutchfield v. Haynes

DARGr AN, J. A trustee cannot, by buying the trust estate, under a prior mortgage, lien, or incumbrance, acquire a title'adverse to his cestui que trust. 5 John. Ch. Rep. 409; 4 Paige’s Rep. 578; 6 Dana, 176; 10 Ala. Rep. 185. But it is equally true, that a trustee is clothed with all power necessary to protect the trust estate, and may discharge a prior incumbrance for the benefit of the estate; and will be entitled to be re-imbursed out of the proceeds of the trust property. See 10 Ala. Rep. 185. If this were not the law, a trustee could not protect the trust property for the benefit of the cestui qiie trust. From these rules it follows, that the purchase of Houston, who was the trustee, inured to the benefit of the' cestui que trust under the deed, and the slaves purchased by him were still trust property, but liable to refund to him the amount he advanced at the sheriff’s sale, if the execution, at the time of the sale, was a subsisting lien on the slaves, • which was older than the deed of trust. The legal title, however, under [53] any circumstances, was vested in Houston, and his purchasers of the two slaves, Sophia and her child Charles, by their purchase, acquired the legal title — they paid a fair price — - Houston, the trustee, has received the money, and it is neither alledged, nor shown, in any way that he is unable to account for the money he received on the sale of the two slaves. The equity of the purchasers therefore, as against Houston, is equal to the equity of the cestuis que trust, and they having the legal title by a fair sale, from the trustee, and he able to respond either to the cestuis que trust, or to the purchasers, the title of the purchasers should not be disturbed. But the question is, shall Houston, the trustee, be permitted to retain the money he received from the purchasers for Sophia and her child, to indemnify him for the money he paid the sheriff, Price, at the sale of the slaves by him, under the execution in favor of Choice, Harben, & Co., against Haynes, the grantor in the deed of trust. The execution was older than the deed, and was a valid lien on the slaves, at the time the deed was executed. But it is admitted by the answers of Haynes, Houston and Price, that after the deed was executed, Price, the sheriff, advanced the money to the plaintiff in the execution, to avoid the consequences of his neglect to make the money. This advance by him was a satisfaction of the judgment in law, to the extent of the money advanced, and no execution could rightfully issue to indemnify Price, the sheriff. See 8 Ala. Rep. 314; 6 Port. 445; 4 Ala. 323; 1 Ala. 227. It is true, that as no satisfaction appeared of record, if a sale had been made to a stranger, who had no notice of the satisfaction of the judgment, his title would have been good. See Boren v. McGehee, 6 Porter, 445, and 4 Ala. 223. But we have seen that Houston, being a trustee of the slaves, the question of title between him and his cestuis que trust cannot arise; for all his acts must be treated as enuring to the benefit of the beneficiaries under the deed ; and he cannot buy up a title adverse to his cestui que trust. The only question that can arise is, was the execution a valid lien on the slaves, at the time they were <s,old by the sheriff under it ? [54] Beyond doubt it was not. The payment of • the money by Price, from whatever motive it was done, operated as a satisfaction of the judgment, to the extent of the payment; and the execution, so far as it was paid, could no longer operate as a lien on the slaves. Houston, the trustee, in bidding for the slaves, and paying the amount bid to the sheriff, discharged no lien except the amount of the cost of the execution, which was not paid by Price, and therefore he cannot retain against the cestui que trust the amount thus paid by him. It is not even alledged in the answer of Houston, that he did not know at the time the slaves were sold by the sheriff, that Price had advanced the amount due the plaintiffs in the execution; but on the contrary it is admitted that he had been informed that Price had advanced to Choice, Harben & Co. the amount due them on the execution. It was then the duty of Houston, as trustee, to have resisted the sale of the slaves under the execution, and not to have become the purchaser under it; for he knew of the payment made by Price, and the execution could no longer retain the lien on the slaves as against him, or the cestui que trust under the deed, and he cannot be protected by law, further than the execution was a lien on the slaves, and which extended to the cost only. It is true, that if Crutchfield knew that Price had advanced the money to Choice, Harben & Co., and also the sale by the sheriff, and assented to it, then his interest in the trust fund would be subjected to indemnify the trustee, Houston ; for the rule is, that if a cestui que trust assents to the violation of the duties of the trustee, his interest in the trust estate must be subjected to the protection of the trustee. I Beavan’s Hep. 129. But there is no proof, independent of the answer, that Crutchfield knew of the payment of the money by Price, the sheriff, to Choice, Harben & Co., or that he knew of, or assented to the sale of the slaves by the sheriff, and as the answers are not responsive to the bill, set [55] ting forth these facts, the bill requires they should be proved, independent of the answer. From this view it results, that the decree must be reversed, and the cause remanded for further proceedings. Chilton, J., not sitting.