Brady v. Dilley

Bartol, J., delivered the opinion of this Court. These appeals bring before us for review, several exceptions taken by the parties respectively, to the report and account of the auditor, made on the 13th of July, 1865, in the matter of the deed of trust from John T. Greenwade to Samuel Brady, and ratified by the Circuit Court for Allegany County on the 3d day of August, 1865. The exceptions of Dilley will be first considered. 1st. The allowance to Brady of $20, and $150 attorney’s fees paid G. A. Pearre, Esq. The testimony of Mr. Pearre proves that these fees were fair and reasonable, and that the services were indispensable to the trustee, in the proper discharge of his trust. By the terms of the deed creating the trust, Brady was entitled to be allowed for “all just and reasonable expenses, costs, charges and commissions,” attending the due execution of the trust, “ together with a reasonable and lawful compensation or commission, not exceeding ten per cent., for his own services.” “Such allowances,” as was said by Chancellor Johnson in Green vs. Putney, “ should the nature of the trust and the circumstances of the case require it, will embrace, even without an express provision, the expense of employing an attorney.” 1 Md. Ch. Dec., 267, and cases there cited ; 4 Md. Ch. Dec., 347, Laroque vs. Candole. In our opinion the attorney’s fees in this case were properly allowed. 2d. The allowance for auditor’s fees charged for taking testimony to prove Brady’s claim to “ Walnut Island.” This claim was unsuccessfully asserted, and the objection is that these costs ought to be paid by Brady. In examining the fees charged by the auditor for the various audits made by him in the progress of the cause, we find it impossible to discover the amount covered by this exception ; it is nowhere stated as a separate item ; and, judging from the aggregate amounts of fees charged by the auditor, this particular part of the cost must he very — 583 — inconsiderable. In our opinion, however, the dispute in regard to the Island was made by Brady honestly and in good faith, and although he failed in establishing his claim, the costs thereby incurred were within the discretion of the Circuit Court to award for him or against him, and that Court having allowed them to Brady, with the other auditor’s fees, we think there is no good reason for reversing its decision in this respect. 3. The only remaining exception taken by Dilley to the audit, is to the allowance of eight per cent, commissions to the trustee. Under the decisions in Wilson vs. Wilson, 3 G. & J., 20, and Gwynn vs. Dorsey, 4 G. & J., 453, we think this allowance was a matter resting in the discretion of the Circuit Court, and not a subject for appeal. But if it were open for examination here, it would be presumed, in the absence of proof to the contrary, that the Court below decided correctly. We may add further, that by the terms of the deed the commissions are limited to ten per cent. The Circuit Court did not allow the maximum rate fixed by the deed, and considering the nature of the trustee’s duties, and the manner in which he appears to have performed them, we have discovered no reasons disclosed by the record to show that the allowance of eight per cent, was unreasonable. We now proceed to the examination of Brady’s exceptions. The 1st, 2d, 3d and 4th exceptions are to the charges of interest on the notes taken by him. to secure the deferred payments. He is charged with principal and interest to the time of the audit, although the notes had not then matured, by which means it is objected he loses the interest on the amounts of interest so charged. But that mode of calculation was assented to by him. In the instructions given by his solicitor to the auditor, the latter is directed “ to charge interest up to the date of the audit, and state that the trustee is willing to treat the same as — 584 — cash as of the date of the audit.” The point presented by the second exception is somewhat different; there the objection is that hé is charged interest on the first credit instalment of the third sale to the date of the audit, 12th July, 1865, whereas it matured on the 17th October, 1864, about nine months before. But this is sanctioned by the consent and,agreement of Brady, as evidenced by the in- ■ structions given to the auditor above cited. Besides, it does not appear that the instalment was actually received by him at maturity, and if it remained unpaid he wo'uld be entitled to collect the interest thereon to the time of its payment, and would be held to account for such interest. In respect to these items of interest charged to the trustee in the auditor’s account, there is evidence that the mode of calculation adopted by the auditor was consented to by Brady in order to facilitate a settlement, and his exceptions thereto were properly overruled. The 5th and 6th exceptions will be considered hereafter. The 7th exception, which refers to Brady’s claim to the Island mentioned in the proceedings, has been properly abandoned by his counsel in this Court, and is not supported by the evidence in the. cause. The 8th exception is based upon a claim for interest on moneys which the trustee is alleged to have paid and advanced from time to time in excess of his actual receipts, and is stated by his counsel in his brief to be at least $94.69. But it has not been shown in what manner this sum is ascertained. Looking at the mode in which the interest has been estimated by the auditor, we think the trustee has no just ground of exception to the account in that respect. The 9th and 10th exceptions taken to the allowances to Dilley on his judgment claims, have not been insisted on in the argument. The main question in the case arises upon the 5th and 6th exceptions. These refer to the two items of $1467.50 and .$1644, with which the trustee is charged, as the proceeds with interest thereon of the, sales of two negroes “ Jim and Bill.” The ground — 585 — of this exception is, that these sums are “ not chargeable to Brady under the deed of trust, he having purchased and paid for the negroes long prior to its execution.” The question whether Brady is properly chargeable in this account with the negroes or their value, seems to us to turn necessarily upon the true construction of the deed of trust. Unless this property passed to the trustee under that deed, and was received and accepted by him as part of the trust estate, he would not be chargeable with it, in the account of this trust. It appears that on the 17th day of June, 1856, John J. Greenwade executed a mortgage conveying to Charles Ridgely, Moses T. Greenwade, George C. Perry and Samuel Brady, several tracts and parcels of land particularly therein described, for the purpose of indemnifying and saving harmless from loss the mortgagees who, according to the recitals in the mortgage, were bound as his sureties in large penal bonds conditioned for the faithful performance by him of trusts reposed in him as trustee and committee of Charity Greenwade, a lunatic, and as guardian of Virginia Greenwade and Mary Margaret Greenwade, infants. The mortgage, after a full and particular description of the lands intended to bo conveyed, contains this clause, “ And as a further security to the said parties of the second part, and in consideration of the premises, the said John T. Greenwade doth hereby bargain and sell to the said parties of the second part the following property or personal estate, to wit: his negro slave ‘Jim,’ aged about 17 years, and his negro slave ‘Bill,’ about 13 years of age.” On the 15th day of Sejotember, 1857, John T. Groenwade sold to Samuel 11. Brady negro “Jim,” for one thousand dollars, and on the 2d day of May, 1859, negro “ Bill,” for twelve hundred dollars. These sales are evidenced by two receipts of the respective dates above mentioned, signed by John T. Greenwade, acknowledging the receipt of the purchase money and warranting the title. It is admitted that — 586 — Brady received the possession of the negro boys at the respective dates of the receipts.” On the 17th day of January, 1860, John T. Greenwade executed the deed of trust conveying to Samuel D. Brady in trust for the purposes therein named, “ All and singular the lands, tenements and hereditaments, real estate and chattels real of the party of the first part, and also all the personal property, chattels and effects belonging to the said party of the first part, — a particular description of which will be found in a mortgage executed by the said John T. Greenwade,” (then follows a particular reference to the mortgage of the 17th of June, 1856, “ and also all and singular the debts, sums of money, balances of accounts, promissory notes, bills of exchange, bonds, judgments and other securities, claims and demands now belonging, due or payable, or to become due or payable to the said party of the first part.” Did the negroes “ Jim ” and “ Bill ” pass to Brady, the trustee under this deed, as part of the trust property ? At the time it was executed John T. Greenwade had no right or title in them, having long before sold them for a valuable consideration to Brady, and delivered to him the possession. There is no evidence in the record to impeach the bona fides of that sale. How then can the deed of trust be construed as operating to convey them? It could convey, and professed to convey only “ the personal property, chattels and effects belonging to Greenwade;” these negroes^ did not belong to him. If the sales of the negroes in September, 1857, and May, 1859, had been made to a third person, it could hardly be successfully contended that the trustee would have a right to claim them under the deed of trust subsequently executed. How then can the acceptance of the deed of trust by Brady operate to divest him of his title acquired under his previous purchase? unless upon some principle of estoppel, we are to say that he toot the negroes under the deed of trust, and is thereby estopped from setting up a title in himself. — 587 — But this would he contrary to the manifest intention of the parties and the admitted facts of the case. He held the negroes as a bona fide purchaser for value, before the deed of trust was executed ; did not take them under the deed or accept or hold them as trustee. The whole argument of Dilley’s counsel upon the construction of the deed rests upon the Avords referring to the mortgage for the description of the property conveyed, without adverting to the fact that to apply those Avords to the personal property Avould limit the operation of the deed, so far as personal chattels are concerned, to a conveyance of the negroes alone, for no other personal property is named in the mortgage except the negroes ; Avhereas the intention of the instrument, as expressed on its face, was to convey all the grantor’s personal property of every kind. According to our construction of the deed, the negroes did not pass under it to Brady as part of the trust property, GreenAvade having before sold and delivered them to Brady. It is contended, lioAvever, that under all the facts and circumstances of this case, Dilley, as a creditor of GreenAvade, is entitled to claim that the negroes shall he accounted for under the trust, and applied towards the payment of the debts secured by the deed. If they had come into his possession under the deed of trust, it is of course very clear that he would he hound, as trustee, to account for them ; hut it is not easy to see upon what equitable principles Dilley can claim that he is hound to account, as trustee, for property Avhich he did not take under the deed of trust, hut held as a bona fide purchaser before the deed Avas executed-. This claim is supposed to rest upon an equitable right of Dilley to have a marshalling of all the assets of Greenwade, including the negroes. It seems to us that the rules by Avhich Courts of Equity are governed in alloAving the marshalling of assets among creditors, are inapplicable to the present — 588 — case. Dilley was a mere general creditor of G-reenwade, having no lien on the negroes at the time they were sold to Brady, he is therefore not in a position to question Brady’s title under his purchase. He comes in under the deed of trust, claims under the deed, and can claim as against Brady, the trustee, only in respect to the trust fund conveyed by the deed. It is a mistake to suppose that after his purchase of the equity of redemption, Brady held the property as mortgagee or for his co-mortgagees ; he held it subject to the rights of his co-mortgagees under the mortgage ; but they are not here asserting those rights ; so far as appears from the record, they acquiesced in the sale of the negroes to Brady, and have come in under the deed, elected to take according to its provisions, and rely for their security on the trust fund thereby created. There is no principle of equity upon which Dilley can question 'their rights under the deed, or require either that the negroes be applied to the payment of their claims, or be brought into the trust. He had no lien upon them at the time they were sold to Brady. The principle of marshalling assets does not apply; to enforce it here would be to work injustice by taking the property of a bona fide purchaser, to pay a debt for which neither he nor the property was liable. We have examined the authorities cited, and have found no case that supports the proposition here contended for on behalf of Dilley. Considering the question with regard to the marshalling of assets a plain one as presented in this case, we have not thought it necessary to cite the authorities at length. The cases of Cheesbrough vs. Millard, 1 Johns. Ch. Rep., 409, and Gill vs. Lyon, ib. 447, support the views we have expressed, and we refer to Chancellor Kent’s opinions in those cases as illustrating the principles governing the subject of marshalling assets by Courts of Equity ; and also to 2 Leading Cases in Equity, 216, 217, 238. Being of — 589 — opinion that the exceptions of Joseph Dilley were properly overruled, we affirm on the appeal of Dilley and Grreemvade. On the appeal of Brady we affirm the ruling of the Circuit Court on all the exceptions except the fifth and sixth, and reverse upon them. A decree will be signed reversing the order of the Circuit Court, so far as the fifth and sixth exceptions of Brady are concerned, and remanding the cause, that an account may be stated and further proceedings had in conformity with the opinion of this Court. The costs of these appeals to be paid out of the trust fund. (Decided 19th July, 1867.) Reversed and remanded.