Gott v. State ex rel. Barnard

Stewart, J., delivered the opinion of the Court. The substantial questions involved in this case are, whether there was any breach of duty, on the part of the trustee, to the damage of the equitable plaintiff, which entitles him to a recovery against his surety, Gott, one of the defendants, and if so, whether under the pleadings and proofs in the cause, he can recover the same. Sundry points as to the pleadings, admissibility of evidence, instructions of the Court, and regularity of the judgment rendered on the verdict, are presented for review, and will be disposed of in their order. The plaintiff declared on the bond of Adkisson, as trustee, with the defendant, Gott, as his surety, under — 336 — decree in equity, averred the receipt of a large sum of money by the trustee, on account of the trust; its misapplication by the trustee, the audit of the fund, making distribution amongst the parties entitled, one of whom was the equitable plaintiff, the order of the Court thereupon, directing the trustee to pay accordingly — notice thereof to the trustee, and formal demand upon him for the payment, and his refusal to pay the same. * To this, by his first plea, the defendant pleaded general performance, and the plaintiff demurred. Defendant’s plea was no sufficient specific answer.to the allegations of the plaintiff’s declaration, and there was no error in sustaining the demurrer thereto. The defendant’s demurrer to the plaintiff’s replication to the second, ninth and eleventh pleas, was properly overruled. The second, pleaded general performance by the trustee, and further, that no other trust was reposed in him, by any subsequent or other decree. General performance was insufficient as has been stated, as to his first plea. The plaintiff replied to the second plea in brief: “Join issue on second plea,” which imported, as we understand it, a denial of the averments of the plea, especially the latter part of it, but the plaintiff seemed to have considered the plea more in the nature of a traverse of the declaration. This short way of pleading might have been the subject of special demurrer, under the technical rule of pleading, but special demurrers are not now to be tolerated in civil cases. 6th sec. of Art. 75 of the Code. The 2nd, 3rd and 22nd sections of same Act, especially, make a plain statement of the facts, on the one side or the other, as the case may be, throughout the entire series of pleading, sufficient. Substance is to be considered the purpose of pleading — whilst the forms prescribed by the Code, or any other of like character, to suit the facts of the case, may be used ; the Courts must have regard to the substance of — 337 — the pleading — facts only are to be stated, not arguments, inferences, or matter of law or evidence, or of which the Court will take notice, ex officio. The replication could b,e ■treated as a denial of any substantial allegation of the plea. The defendant’s ninth plea is no answer to the specific allegations of the declaration ; what it asserts May be all true, that the trustee discharged his duty, in making sale of the property, but it does not answer the averment of the declaration, as to the non-payment of the money under the order of the Court. It is immaterial, and can only be treated, to take the most favorable view for the defendant, as an indirect denial of the allegations of the declaration. The replication to the defendant’s eleventh plea, is a denial of the facts averred in the plea, and afforded no ground of demurrer. The 49th Art. and secs. 14 and 18, of Ar^. 29, of the Code, recognize the right to recover judgment against one of several obligors in a bond, and under the system of pleading now authorized, alter the issues were made up and'tried before the jury, it was too late to undertake to arrest the judgment upon the verdict found against the defendant. It was then the duty of the Court, under the 14th sec. of Art. 29, of the Code, to pronounce the judgment upon the verdict. There was no matter of substance in the objection and the defendant could not be injured thereby. The proper form of entering the judgment, would have been for the penalty of the bond, to be released on the payment of the sum found due by the jury, etc. State, use of Maulsby vs. Tabler, 41 Md., 236. But the informality does not vitiate the judgment as entered. There was no error in the admission of the proposed testimony in the first exception. Defendant’s witness, Adkisson, had stated that he asked one of the Barnards to take certain promissory notes of — 338 — his, to his brothers and sisters, for the payment of their respective shares, intending the parties should take them for the balance due, and discharge him from the amount he owed as trustee, and that he gave him blank receipts to be executed by them. The plaintiff’s counsel produced one of the unsigned receipts, and proposed to offer the same in evidence, which was objected to by defendant’s counsel, but the same was admitted by the Court, upon the ground as stated in the exception, that the witness had testified that the receipt was part of the transaction, in which the promissory note already in evidence was offered.- There is no rule of evidence to justify the exclusion of the blank receipt, and as it constituted a part of the transaction connected with the offer of the notes, and might be explanatory of the same, it was properly admitted. The second exception was taken to the granting of the plaintiff's and rejection of the defendant’s prayers. The special objection to the first prayer of plaintiff is untenable. The prayer does not assume as a fact, that .the money was received by the trustee at any particular time, and it was immaterial when he received it. The declaration had averred more than was necessary to be alleged or proven to entitle the plaintiff to a recovery, but that did not vitiate it. If it had simply alleged the execution and approval of the bond given by the parties for the faithful discharge of the duty of the trustee, and the order of the Court directing the payment to the equitable plaintiff of his distributive portion, and its demand, and non-payment, that would have been enough ; we do not mean to say, that it would have been insufficient without this last averment, where notice of the order, demand and refusal to pay were proved. In the absence of any statement to the contrary, it would have been presumed the trustee had received the money, and had failed in the discharge of his duty, if he had not. — 339 — The first prayer makes the finding of the jury co-extensive with all the averments of the declaration, which certainly could not operate to the prejudice of the defendant. If the jury so found the facts, there was a sufficiency to enable the plaintiff to recover the amount distributed to him. See State, use of Oyster vs. Annan, 1 G. & J., 462; Comegys vs. State, use of Dyckes, 10 G. & J., 186; Brooks vs. Brooke, et al., 12 G. & J., 319. The equitable plaintiff could also recover his due proportion of the interest received by the trustee, from the purchasers of the property. Newson’s Adm’r vs. Douglass, 7 H. & J., 417 ; Fridge vs. State, use of Kirk, 3 G. & J., 117 ; Richardson vs. State, use of Rawlings, 2 Gill, 439. Although the question of interest is ordinarily left to the jury, especially in cases of tort, yet where moneys have been received by a trustee under such circumstances, as occurred in this case, it is clearly his duty to pay the same, and the Court committed no error in so instructing the jury and in the further instruction that the trustee was bound to pay interest upon the moneys received by him, and applied to his own use. The question of the liability of the trustee for interest, depends upon the nature of each case, and it is difficult to prescribe a fixed rule, to require its payment by the trustee ; but wherever he is bound in good conscience to pay interest, his surety must be held responsible also. His liability is commensurate with the obligation of the trustee for whose conduct in the management of the trust money he is responsible. State, use of Duvall vs. Snowden, 7 G. & J., 439; Garey vs. Hignutt, 32 Md., 559; Freaner vs. Yingling, 37 Md., 491. The plaintiff’s second, third and fourth prayers were properly granted. There was no error in the refusal of the defendant’s first prayer. — 340 — The testimony is too indefinite and vague, as to auy agreement on the part of the plaintiff, either before or after the proceeding for the sale of the property, to give to the trustee additional time for the payment of the money, and certainly entirely insufficient to estop the plaintiff from recovery from the surety. No other than parol evidence was offered. It is a mooted question whether a mere verbal agreement to give an extension of time to the principal obligor, can under any circumstances, operate to discharge the surety ; but, however this may be, it is a clear proposition that any agreement to that effect, must be upon sufficient consideration, and must amount to an estoppel upon the party claiming to hold the surety bound. Oberndorf vs. Union Bank of Balt., 31 Md., 126 ; Hayes vs. Wells & Babbitt, 34 Md., 512. The defendant’s second prayer was properly refused. Under the decree, the property was authorized to be sold for all or one-fourth cash — the balance on a credit at the option of the purchaser. The trustee reported that he had sold the property in accordance with the terms of the decree. The proposition of the prayer, that if the trustee received the purchase money before it was due, without the knowledge and consent of his surety, such receipt of the money operates to discharge the surety, is without any shadow of foundation, and manifestly unjust. From the character of the decree, allowing a sale for cash or on a credit, the purchaser may anticipate the payments with the consent of the trustee, and if the trustee recéived the money, and made no report thereof to the Court for its order thereon, but applied the same to his own use, without the consent of the surety, that would not discharge him from responsibility. If the trustee was not ready to pay it over, wdren ordered to do so by the Court, upon the demand of the plaintiff, — 341 — his surety, as well as himself, were bound for the breach of duty. (Decided 8th March, 1876.) There was no error in the refusal of defendant’s third prayer. The decree does not prescribe that interest shall he paid upon any deferred instalments of the purchase money, but it may he fairly inferred, in the absence of any proof to the contrary, that the sale was so made in fact by the trustee. However that might have been, there can be no doubt, that if the trustee did, in fact, receive interest on the credit payments, his surety was answerable for the same, as much so as to any principal received by him. The defendant’s fourth prayer was properly refused. The question of interest has been disposed of by the review of plaintiff’s first prayer, and was not to he left to the discretion of the jury in a case of this nature. There was no error in the additional instruction of the Court, for the reasons already stated. Judgment affirmed.