Henderson v. Segars

CHILTON, C. J. There can be no doubt of the fact, so clearly shown by the proof, that the arrangement by which the slaves mentioned in the bill were conveyed in trust to Jeremiah Darby, for the support and maintenance of Mrs.' Segars and her children, was intended to defraud the credi [358] tors of Wiley White. It seems to have been a sort of family arrangement to screen the property from, liability to White’s debts, and with which the parties concerned were well enough satisfied until these debts were pressed as against them, when the idea of an honest application of the proceeds of the slaves occurs for the first time. The law wisely ordains that a man shall not take advantage of his own wrong, and, as a check upon frauds of this kind, it allows the defrauded creditors to pursue the property in the hands of the fraudulent vendee, and as to them regards the fraudulent transfer or arrangement, by which it is attempted to divest the title of the debtor, as though it had never been made; but as to the parties to the fraud, .they are bound by it. In the case before us, the appellant voluntarily made himself a party to this deed, by accepting the title as trustee, and entering into bond and security for the faithful execution thereof. He was apprised of the condition of the property,— knew that it was in Arkansas, whither it had been ruii in furtherance of the fraudulent scheme; and having thus made himself a party, and pending the obligation which he had assumed as the executive agent of the court of chancery to carry out the trust, it was hot competent for him to set up the claims of creditors, or any claim of his own as á creditor or surety for White, as antagonistic to the trust. He was effectually estopped by reason of the relation he voluntarily assumed. The deed being valid as to him, all the duties, liabilities, and disabilities which attach to ordinary trustees, at once were devolved on him. But it seems, liabilities as surety upon White’s bond as sheriff were fixed by judgments upon him, and he becomes interested in making this property available in their payment. To this end, he obtained a power of attorney from complainant to sell the slaves, — sold them, four in number, for seven hundred dollars, and applied the proceeds towards the payment of the debts for which he was bound, and obtained from the complainant a receipt, showing that the proceeds had all been applied to her support. This receipt he filed as a voucher in the chancery court, which appointed him [359] trustee. A settlement was thereupon predicated, and he resigned his trust. We cannot, for a moment, recognize such an execution of a trust. The trustee merely uses it as a guise to serve Ms own selfish purpose. So far from executing the trust, as his vouchers assert,, his sole effort has been effectually to defeat it. The position, that the proceeds have gone where a court of chancery would have placed them, is fully met by the fact, that the appellant is estopped from saying this; for he cannot set up a claim in opposition to the trust. He has said, that the trust was bona fide and honest, by accepting it, and he shall not now avail himself of the relation of trustee, and the influence and opportunities it affords, to defeat the trust upon the ground that it was dishonest and fraudulent. — Godwin v. McGehee, 22 Ala. Rep. 553. But, it is said, the complainant not only consented to the sale, but, with a full knowledge of all the facts,.authorized the proceeds to be thus appropriated. To this we say, the deed requires the corpus to be retained by the trustee for the support and maintenance of Mrs. Segars and her children, and for this purpose <only. She then had a child born, who was one of the beneficiaries under the deed, as the trust opens and lets in the after-born children of Mrs. S. The profits of the entire corpus may be needed for the support of the children, even if none of it was required by their mother for her support. The sale was therefore a conversion; and since, under the circumstances, the purchaser acquired a good title, as against these parties, if he purchased bona fide, the proceeds must stand as the corpus, and be held in trust for the purposes expressed in the deed. Aside, however, from this consideration, we should not hesitate to hold, that the transaction between the trustee and the beneficiary, the effect of which is a gift of the entire subject-matter of the trust to the trustee, in the procurement of false vouchers, evincing a strict conformity to the requirements of the trust, but, in truth, designed to defeat it, could not be supported against the objection of the cestui que trust. The condition of the parties, the relation of trustee- and cestui que trust, and the profit to the trustee without any corresponding benefit to the beneficiary, all forbid that we should sustain the transaction, [360] Aside from positive fraud, public policy forbids such dealing. 1 Story’s Eq. Jurisp. § 321, and notes. As to the position, that this property- vested in Hanchey, the first husband of Mrs. Segars, it is enough to say, that the record no where shows that he ever held it as such. The most he could have claimed was the share of the profits to which his wife was entitled; and without now deciding that he acquired an interest even to that extent, it is enough that no question as to such profits is raised by the record. What we said in Hill and Wife v. McRae, at the last term, 27'Ala. 175, is sufficient to indicate our views with respect to the nature of Mrs. Segars’ interest. The decree of the chancellor conforms to our view of- the law. Let it be affirmed, with costs.