Bank of Kentucky v. Poyntz

Napton, Judge, delivered the opinion of the court. The only question in this case is'as to the propriety of the dual decree of the Circuit Court. There is no controversy about the facts and the evidence at the hearing is not therefore preserved in the record. All the parties, plaintiffs and defendants, are non-residents. Abont the year 1855, a mercantile house in Kentucky failed in business, and were debtors in a large sum to the plaintiffs and other creditors, and made a deed 'of trust of all their property, consisting of lands in Missouri, Alabama, Mississippi and other States to two of the defendants named Poyntz, [533] for the benefit of their creditors, giving said trustees power to sell said lands and apply the proceeds in a mode directed by the deed. About three thousand acres of this land were in Carroll County, Missouri, and the trustees sold and conveyed to Dawson, one of the defendants, about, two thousand acres of this land in Carroll Oonutv for $10,000, one-lialf of the purchase money being paid at the date of the sale, and Dawson’s notes, payable in one and two years, taken for the remainder. The object of this petition in the Circuit Court of Carroll County was, to secure these lands in Carroll County that were unsold, to the creditors, and to set aside the sale and deed to Dawson, upon allegations of the general unfitness and unfaithfulness of the trustees. The 'trustees were made parties defendant, and served by publication, and an interlocutory adecree was made against them, which, however, they subsequently moved to set aside. And this interlocutory decree was set aside, and they were-allowed to answer at a time fixed by the court; but there was no answer on their part and the decree was ultimately made-, finiil as to them. Dawson, who had purchased a portion of these, lands, filed, his answer, denying all the allegations of the bill, so far as they affected his purchase, and the court found in his favor, on the testimony (not reported.) and confirmed his title ; but the court in its final decree, displaced the trustees, as had already been done in the interlocutory decree, and ordered Dawson to pay over to the sheriff the balance of the purchase money, and, if he failed to do so at a day specified in the decree, directed the sheriff to sell Dawson’s lands and retain the purchase money, subject to the further orders of the court. It appears from the pleadings — which is all that is before this court; — that a proceeding was pending in Kentucky to remove these trustees, and it was averred in the answer of Dawson that his notes had been garnished in this proceeding. This allegation of garnishment was denied in the replication, but there is no finding of the court on this issue. It is not material, [534] however, in the view we take of the case, whether such garnishment was made by the plaintiffs in the suit in Kentucky pr not. The court proceeded, in its decree, to enforce a vendor’s-lien for unpaid purchase money not ascertained by any judgment. The petition asserted that the sale was fraudulent and void, and asked that it be set aside; and the issue on this point was found for defendant Dawson, the purchaser. It was determined that the sale to Dawson was a valid one. There was nothing in the pleadings to require an investigation into the amount of money due by Dawson at the date of the decree. The notes given were conceded to be in Kentucky, where all the parties lived, and no proceeding on them had ever been instituted in this State. The courts of this State were open to the holders of the notes, and the notes'were a lien on the land bought by the maker of them. But the allegations in the petition and the denials in the answer made no issue in regard to these notes. No judgment on them was asked, for the petition alleges them to be fraudulent. Whether they had been garnished in the Kentucky suit, or in whose hands the notes were, does not appear; nor whether any portion of them had .been paid. We are unable to perceive any ground for that portion of the decree which orders Dawson to pay over the money called for by the potes he gave to the trustees, and, on his failnre to 'do so, directing the sheriff to sell Dawson’s lands. The'notes were given to the trustees who reside in Kentucky, and who have not been removed from their trust by the court in Kentucky, so far as it appears, and who are subject to the final orders of that court. The court here sanctions the sale made to Dawson, and pronounces it to have been in good faith and valid. That being the case, the creditors who also live in Kentucky and who had, previously to the proceeding here, instituted proceedings there to save themselves, so far as the court of that State could do so, have not asked for any such decree here, nor made any allegation in their petition upon which such a decree could be based. On [535] the contrary, their petition contains charges totally inconsistent with sncli an application for such relief; and in truth there was no need of applying here for such relief, as the jurisdiction of the court in Kentucky was ample over the persons and property referred to, to-wit, over Dawson and the notes in the hands of the trustees. True, if an enforcement of the vendor’s lien was needed, in consequence of the inability of Dawson or his securities on the notes to pay the amount due, the court in this State must he resorted to. The suit must then be on the notes and payments, and other defences might he made, to which the present proceeding is totally foreign. The removal of the trustees here, by reason of their default, of course only affects their position as it regards the lands here. They might be allowed to retain their trusteeship by the court in Kentucky, or others in that State may replace them to whom the notes in question will be handed over. As the Kentucky trustees were removed, so far as the lands here are concerned, and the sheriff' substituted in their stead, that part of the decree which directed the sheriff to dispose of the unsold lands and retain the proceeds, subject to the order of the court, was unobjectionable. The ease will be remanded for the Circuit Court to modify the decree in conformity to this opinion. Judgment reversed and case remanded. The other judges concur, except Judge Sherwood, who is absent.