Pickens v. Dwight

The opinion of the Court was delivered by Moses, C. J. The bill seeks to set up the bond and mortgage against the obligor and mortgagee, Isaac M. Dwight, and failing in that, then to make Mr. Tupper, the late Master, liable therefor. So far as the pleadings have been brought to our notice, no liabilty is charged against him for the conversion of the Confederate Treasury notes received by him into Confederate bonds, nor do the grounds of appeal allege error in the Circuit decree for not holding him responsible for such change. Although one of the objects of the bill was to have the original securities setup against the obligor and mortgagee, the refusal to do so by the Court below is not charged as error asked to be corrected by this Court. In fact, the first ground on which the reversal is claimed assumes that the cancellation of the bond was a breach of trust, for which he is responsible. Our judgment will be restricted to the points made in the notice of appeal. Whatever doubts may have been entertained in regard to the case of McPherson vs. Lynah and Gray, 14 Rich. Eq., 121, as a binding authority, it has now been directly impugned, according to-the mode permitted by our practice, and it is, therefore, our necessary duty to enquire whether it is to be considered a decision which we are bound to follow. While we cannot adopt the argument on which the Court founded its judgment, our examination leads us to the same result. If we regarded Mr. Tupper, the Master, a trustee, as the Court there did Mr. Gray, who occupied a like position, we do not see how a different rule could be applied to him than to any other trustee, charged with a breach of duty, by converting, without any adequate and sufficient reason, a security, admitted to be good and valuable, into one which, in open market, and with the most careful endeavor, could not be made productive of a value in any way approximating that for which it had been substituted. More especially would the breach be without excuse, if the new security was of the class least favored by the Courts for investments, and it would be without the shadow of extenuation, if the change was made for Confederate notes, which, when compared with gold and silver coin or national bank issues, had not only a depreciated value, but one daily fluctuating with the probable success or failure of the government which had issued them, and, to any ordinary understanding, ultimately entirely worthless, unless [367] the civil war which it was waging could resist the arms and powers of the United States, which were brought into requisition for its suppression. ■ Trusts are various. A debtor may be said to be a trustee for his creditor ; a bailee is certainly one for his bailor, and an agent for his principal. Breaches of obligation in these relations may be relieved in the Courts of law. The rules which equity prescribes for the administration of a technical trust cannot, to their full extent, apply to them. A Master in Equity, in regard to the bonds committed to his charge, is the ministerial officer of the Court — the custodian of the treasury, holding it under its supervision, and disposing of the securities confided to him, under its direction, and in conformity with its course of proceeding; not only subject to its punishment for any wrong appropriation, or improper dealing, but responsible also to the party to whom loss may therefrom ensue. He does not hold the money in his hands as a trust, in the technical sense of the word, but as the financial agent of the Court, and where he has received it on a sale under proper authority, he stands in no different relation to it than a Sheriff or a Referee who has made it under proceedings in a Court of law. Money there paid goes into the care of the Court, and is held subject to its order; and yet he cannot be considered a trustee in the meaning in which the term is sought to be applied to the Master in the argument here. There may be cases in which the terms of the order might constitute him a trustee, and require of him all the duties, and impose on him all the obligations, which, in equity, attach to the position, as in Houseal vs. Gibbes & Patterson, Bail. Eq., 485, where he was directed “ to apply the interest of the proceeds, and as much of the principal as might be necessary for the maintenance and education” of the person named, “ and to improve the surplus at interest, or invest in public securities.” The Master (Mr. Tupper) was the officer of a Court, in a State which satisfied all its obligations and engagements with Confederate currency, and accepted it in payment of debts due to it, without question as to the time when they were contracted. He was required to deposit all money received by him in his official character in the Bank of the State, (7 Stat., 223 ; 11 Stat., 113,) and that institution dealt exclusively in the prevailing currency, so far as its payment of deposits was concerned. It has been shewn in the argument that the Court recognized the currency, by ordering sales [368] for cash where no other medium existed, and directing stocks of a bank in Charleston of good repute, and State and city bonds, to be sold by the Master, and the proceeds invested in bonds or stocks of the Confederate States. At least one instance is known to a member of the Court, long a practitioner in the State, where the Court of Equity instructed the Commissioner to invest money received on a bond in which minors were interested, and which was secured by a mortgage of real estate, in the bonds of the Confederate Government. The notes accepted by Mr. Tupper “ were used as money in nearly all the business transactions of many millions of people. They must be regarded, therefore, as a currency imposed on the community by irresistible force by a government, obedience to whose authority in civil and local matters was not only a necessity but a duty. They were the only measure of value which the people had, and their use was a matter of almost absolute necessity.” —Thorington vs. Smith, 8 Wallace, 11, 12, 13. See, also, opinion of Mr. Justice Willard, in Neely vs. McFadden, 2 S. C., 173-4. Should the Master, the mere officer of the Court, be held liable for doing that which had the implied sanction of the Court in its own mode of dealing with such notes? Was not the recognition of the currency, by receiving it at par value, on the sale of even the estates of minors, a sanction for the act of the Master in the case before us? Was it, in the line of his duty, a prudent one, consistent with an honest and faithful discharge of it? The Court of which he was the officer had prescribed the course which, under the like circumstances, he should adopt, by commending it through its own example. And yet it is sought, through the equitable jurisdiction of the Court, to hold him responsible for an act which the tribunal of which he was the officer could not have considered a breach of duty; for it was in perfect consistency with its own order of proceeding. The motion is dismissed. Wright, A. J., and Willard, A. J., concurred.