Martin v. Branch Bank at Decatur

BICE, C. J. — By the decree of the chancellor, the complainant was held entitled to recover from the respondent the several sums which he had collected upon the note executed by A. C. Austin to William Martin, and transferred by said William to the respondent. We shall confine ourselves to an examination of the correctness of that decree. Looking only to those allegations of the bill which are either proved or virtually admitted, the right of the complainant rests upon the following facts: In 1837, Henry T. Davis & Co., as principals, and William Martin and certain other persons, not parties to this suit, [121] as sureties, became indebted to complainant, in the sum of $7,112 38. Davis & Co. sold to A. C. Austin the remnant of their stock of goods, for the sum of $1100, on time; and, at their request, he executed Ms note for said sum of $1100 to the said 'William Martin, as an indemnity, or security, in part, against said debt of $7,112 38. Said 'William Martin received said note on Austin as such indemnity or security, and afterwards, in March, 1839, transferred said note to his brother, the respondent, who was well acquainted with the circumstances by which said note came to the possession of the saidWilliam Martin, and who, with knowledge that said note was a trust claim in the hands of said William as aforesaid, collected the whole of it from Austin, and applied the money to his own use, — part of it having been collected by respondent more than six years before the bill was filed, and part collected within six years before the bill was filed. In 1840 the complainant obtained judgment, in the circuit court of Morgan county, on the indebtedness of $7,112 38, against the principals and sureties, and duly sued out a fieri facias, which was returned by the proper officer “no property found.” Upon the foregoing facts, a right accrued to the complainant, to recover from the respondent the several sums collected by him on the Austin note. That right accrued, as to each sum so collected by him, as soon as he collected it. As to those sums, he was the trustee of the complainant ; but he acquired his character of trustee only by implication. No express or direct trust as to him is shown. The right of the complainant, as against him, is founded entirely upon an implied trust. And beyond all doubt, the statute of limitations of six years is, in a court of equity, applicable to this case, and to all other cases of implied tmst in relation to personal property ; and the right of action, in equity, will be considered as barred in six years, in analogy to the limitation at law, unless the bar, when set up as a defense, is avoided by matter alleged in the bill and duly established. — Maury v. Mason, 8 Porter’s Rep. 211; Tarleton v. Goldthwaite, 23 Ala. 346 ; Lewin [122] on Trusts, 611; 2 Story Eq. Jnr. §§ 1520, 1520 a; Story’s Eq. Pl. § 157; Bond v. Hopkins, 1 Sch. & Lefr. 429; Hovenden v. Lord Annesley, 2 ib. 607; Smith v. Clay, Ambler’s Rep. 645 ; Beckford v. Wade, 17 Vesey, 96; Farnam v. Brooks, 9 Pick. Rep. 212. The respondent pleads and relies on the bar; and it remains for us to determine whether it is avoided, as to the sums collected more than six years before the commencement of the suit, by any matter alleged in the bill. The only allegation of the bill, which has any material bearing upon that question, is in the following words: “Complainant avers, that the foregoing facts, relating to said note of A. C. Austin to said William Gr. Martin, and the transfer thereof to the said Daniel M. Martin, have only come to complainant’s knowledge within two years before the filing of the bill.” The bill does not state a case of secret fraud, nor contain any averment that the transfer of the note to the respendent was made with intent to defraud, or that the cause of action was fraudulently concealed. Its averments do not amount to a denial of constructive notice of each cause .of action at the time it accrued. It simply avers a want of uhiowledge" of the •particular facts specially stated in the bill, without asserting want of notice, or ignorance of other facts, notice or knowledge of which might be good constructive notice of each cause of action at the time it accrued. — Hill on Trustees, 510, 512. We feel constrained to hold, that the allegation of a want of “knowledge” of the particular facts stated in the bill, is not equivalent to an allegation of want of notice of the cause of action ; that the complainant’s more, ignorance of those particular facts will not avoid the bar of six years, as to the sums collected by respondent more than six years before the bill was filed; and that, as the bill does not allege any matter which is sufficient- to avoid the bar as to those sums, the complainant’s remedy as to them is lost. — Maury v. Mason, 8 Porter’s Rep. 227; Johnson v. Johnson, 5 Ala. 90; Carr v. Hilton, 1 Curtis’ Rep. 390; Fisher v. Boody, ib. 218 ; Steairns v. Page, 7 How. H. S. Rep. 829; Wagner v. Beard, ib. 241; Farnam v. Brooks, supra. [123] The decree of the chancellor is erroneous, and must be reversed; and a decree must be here rendered, in favor of the complainant, for such sum or sums only as may have been collected by the respondent, on the said note executed by A. C. Austin to William Gr. Martin, in the pleadings mentioned, within six years next before the filing of the bill, and interest on such sum or sums from the time of the collection ; and referring it to the registrar of the chancery court of Jackson county, to ascertain and report to the next term of said chancery court such sum or sums, and the time when collected, and the interest accrued thereon from the time of collection to the time of making his report. Upon the confirmation of the report, execution must issue for the amount reported in favor of complainant, against the respondent. The respondent must pay the costs of the court below; and each party must pay one half of the costs of the appeal to this court.