Kent v. Waters

Le Grand, C. J., delivered the opinion of this court. It is the opinion of a majority of the judges who heard this appeal, that by the trusts declared in the deed from John W. Waters to J. J. Speed, the grantor, in effect, reserved the right to use the whole trust funds, by requiring advances or payments to be made on his account, and that this power of appropriation might be exercised by his selling the land and receiving the purchase money, or directing its application for his own use. The effect of this construction of the deed is, that as to so much of the purchase money as John W. Waters received, or had the benefit of, Speed was not liable as trustee. The decree of the court below must therefore be reversed. The appellants were not concluded by the order of February 25th, 1857, as supposed by the appellee’s counsel. On this point we agree with the Circuit judge, who has stated the practice in chancery in such proceedings. The claim was not disposed of by the special judge, and the Circuit judge states that it was heard on its merits, for the first time, when his opinion was filed. The paper filed on the 27th of October 1858, copied from Speed’s books, was admissible, under the agreement, to that effect. The judge had expressly allowed further proof to be taken by agreement, or in the usual mode, and the parties did agree to admit this paper, subject to exceptions. The first objection we have noticed—the heirs were not precluded from taking proof by any previous order or proceeding. The second objection is answered by the remark, that the case had not been finally disposed of, and the permission to take proof rantl been expressly given with a view to the final action of the ■JQitrU the third:—If, as this court has decided, the grantor ha want to control the proceeds of sales, at any time before investíti.mi.s were made, it is clear that his acts may be proved to Jtow that the trustee htH disposed of the funds according to the trust, or that ihe gieit.tn had done so himseif, by the exercise of the power of sale and appropriation. The books certainly ought to be evidence, vouched as [72] they are by the signature of the grantor, to show what money had been received by the trustee, and how applied, as far as John W. Waters had connection with the application. His orders on Speed would be evidence, and surely an account of the trust, verified by him, would bind all persons claiming against the trustee and his surety. Of course, if John W. Waters had no right to sell the land and control the proceeds of sale, the argument of the appellee’s counsel against the introduction of this paper to bind Mrs. Waters by the acts of her son, would be unanswerable; but, as we have said,- this is not the true construction of the deed of Waters to Speed. These observations dispose of this appeal. But we deem it proper to advert to some matters of practice discussed at the bar. As to the proof of Mr. Speed’s insolvency;—The evidence on this question was taken by other persons than the present claimant, before she became a party to the proceedings, and, we think, the heirs are not more bound by it, than she would have been by proof against her interests. It is not like a final decree for a sale, which establishes the complainant’s claim as against all persons. Here the question of Speed’s solvency is raised merely for the purpose of letting in claims against the estate of a surety, and although under a general order to take proof, all creditors as well as the heirs, might- be bound by the evidence so taken, it does not follow that creditors coming in afterwards would be concluded, nor ought the heirs at law to be, in reference to such subsequent claims. The circuit judge was of this opinion, but he felt himself constrained to follow the order of the special judge, who had decided that the insolvency was proved. It was not necessary to accompany the claim by the oath Mrs. Waters. “The appellants, by their.aoswer, called upon the appellee for full proof of her claim; and this requisition,per se, would have dispensed with the ordinary precautionary proof of their, claim prescribed by our testamentary system, had it ^e'en made against the estate of a deceased person. * # * Pri [73] mary proof stand in the place of full proof, until full proof is dciaaiwied. From that moment they ceased to be any evidence in the case, and there no longer exists any necessity for thoi' production.” Allender vs. Trinity Church, 3 Gill, 166. (Decided November 4th, 1861.) With these views we reverse the decree of the Circuit court, and dismiss the petition of the appellee. Decree reversed and petition of appellee dismissed, each party to pay their own costs.