Calhoun v. Burnett

Ellett, J., delivered the opinion of the court. Calhoun filed his bill in the Chancery Court of Leake county, against Francis Burnett, Jordan E. Allen, and others, in which he alleged that R. J. Morgan and W. Morgan, in 1858, executed a deed of trust in the State of Texas, where all the parties resided, and where the property was situated, whereby they conveyed certain land and slaves to ~W. Alexander, as trustee, to secure certain debts due to the complainant; that in February, 1859, R. J. Morgan ran off the slaves from Texas to Leake county, Mississippi, and there sold four of them to defendants Francis Burnett and Allen, for an inadequate price; that.Morgan was assisted by one Bartlett, and that Burnett and Allen, at and before their purcháse, had notice of the deed of trust, and that the slaves had been run off in fraud; that said Burnett and Allen removed the slaves in the night, and secreted them; and that James Burnett, John Burnett, and Pinckney Bowie, confederated with and aided them to conceal said slaves, and remove them from place to place, so as to prevent complainant from finding them; that Alexander, the trustee, is a citizen of Texas, and can give no attention to the trust, and will not attend to it in this State; and prays that the defendants be declared trustees, and be decreed to deliver up the slaves to bfe sold under the deed of trust for the payment of complainant’s debt, and that if the defendants have sold the slaves, that they may be required to pay the value, etc. The notes and deed of trust are made exhibits to the bill. — 602 — The answers of Francis Burnett and Jordan E. Allen admit that they bought four of the slaves from Morgan on the 12th of February, 1859, at the house of Doles, near Carthage, in Leake county, for about $1,200 ; but they deny any notice or knowledge of complainant’s claim, and insist that théy are Iona fide purchasers for value, without notice. They admit that the purchase was made in the night, and that the slaves were immediately carried to Carthage; and that, on the next morn ing, Allen received a letter from a friend in Canton, giving him information of the facts, whereupon they at once ran the slaves off to Neshoba, and thence to "Winston county, and kept them concealed until they sold them to Bies, on the 26th or 27th of February, for $1,600. They further admit, that of the original purchase-money, only the sum of $300 was paid in cash, and $250 in horses, and that the residue of $700 was assumed by them to Bartlett, by request of Morgan, to be paid when they could raise the money by sale of the negroes, or otherwise; and that this part of the purchase-money was not paid until after the sale to Bies, by whom it was assumed to Bartlett, afterwards paid. The answers of John and James Burnett, and of Bowie, admit their participation in carrying away .the negroes, at the request of Allen and Francis Burnett, but deny any notice of the claim of complainant, and only state in substance that they were informed by Allen and his copartner that there was a doubt about the title, and that they wished to keep the negroes out of the way. Doles, a witness for complainant, testified that actual notice was given by Morgan and Bartlett, to Allen and Burnett, of the existence of complainant’s deed of trust, and that the negroes had been run from Texas to avoid it, and that they were advised to get the negroes out of the way as soon as possible. And in answer to this proof, it is shown that Doles was drunk on the day of the sale, and was in habits of intoxication at that time. The witness that proves this, made a purchase of property from Doles on the same day of the sale of the negroes. On the 25th of February, 1861, an order of reference was made to a commissioner, to report the amount due to complain — 603 — ant on the debt secured by the deed of trust, and the commissioner on the same day reported the amount then due to be $7,632.20, which report was confirmed on the 27th of the same month, and the cause was then submitted on final hearing. On the next day the Judge filed a written opinion, which is set out in the record, and which concludes by declaring that the complainant is entitled to a decree for the return of the negroes, or for their actual value, to be ascertained by a commissioner to be appointed for that purpose, and a decree was ordered accordingly. Nothing further was done until February, 1866, when an order was made appointing a commissioner to report the amount due from respondents to complainant, and also the value of the slaves. This commissioner reported the value of the slaves, and the amount due the complainant from Allen and Burnett, to be, on the 23d February, 1866, the sum of $3,990. To this report the following exceptions were filed, to wit: 1. That the value of the negroes is not properly involved in this controversy. 2. The court cannot make a decree in favor of said complainant against said defendants, for the value of the negroes as damages in this cause. 3. The said negroes, since the making of the said decree of reference, have ceased to be property,- and cannot be delivered by defendants. These exceptions were sustained by the court, and the bill dismissed, and the complainant appeals. The action of the court in sustaining the exceptions, and dismissing the bill, is assigned for error. On this case, thus briefly stated, we may remark that purchases, made with ucftice of the legal or equitable title of other persons to the same property, are classed in equity under the head of constructive frauds, and that in all such cases of purchases with notice, courts of equity will hold the purchaser a trustee for the benefit of the persons whose rights he has thus sought to defraud or defeat. 1 Story’s Eq., section 395. Doles testifies clearly, that Allen and Francis Burnett had — 604 — full notice of tbe complainant’s claim upon tbe property while tbe negotiations was going on, and before tbe bill of sale was executed, or any part of tbe purchase-money paid, and we see no reason to doubt tbe truth of bis statements. If be was intoxicated on that day, he was at least deemed competent to make contracts on bis own behalf, and there is nothing shown to disprove bis capacity to understand and recollect what was passing around him. Tbe bill being sworn to, tbe necessity for more than one witness to overcome the answer is removed; but we think tbe testimony of this witness sufficiently corroborated by tbe circumstances otherwise established to entitle it to preponderance over tbe answers, if the bill were not sworn to. Tbe facts that tbe negroes were brought all tbe way from Texas to Leake county in this State, to be sold; that it was agreed before starting between Morgan and Bartlett, that they should be sold at that point, passing by tbe markets of New Orleans and Yicksburg; that they were not offered in Oarthage, but carried to tbe house of Doles, two and a half miles distant; the anxiety to sell, and to sell “ low for cashtbe late hour of tbe night when the sale was made ; the actual sale for not one-half the value, of which only $300 was paid in cash — were all calculated to excite suspicion, and put the purchasers on inquiry, and go far to persuade an indifferent mind, that what Doles states is the truth of the case. And this conclusion is strengthened by the fact, that although Bartlett, Morgan, Allen, and Burnett were all competent witnesses, none of them was introduced to contradict him. Allen and Francis Burnett, having then purchased the property with notice of the trust, are chargeable as trustees, and were bound to hold it in good faith for the purposes of the trust. If it remained in their hands they would be compelled to surrender it. But having sold and disposed of it, so that it can no longer be followed, and having converted the proceeds of the sale to their own use, they are clearly liable to compensate the cesinds que frust, by payment of a sum equal to the actual value of the trust property so appropriated. Ilill on Trustees, 522. The proper remedy to enforce this liability is — 605 — by bill in equity. Hill on Trustees, 518; It is a case of constructive fraud and of implied trust, botb appropriate beads of equity jurisdiction. Besides, tbe complainant only bad an equitable interest in tbe property, and could not bave maintained an action at law. Tbis is a very different case from tbat of Brown v. Gooldsby, relied on by tbe appellee. Tbat was a bill in equity by tbe owner of tbe legal title, to recover a slave; sucb a remedy having been allowed in tbis state on account of tbe peculiar nature of tbat species of property. It turned out tbat tbe defendant was not in possession of tbe property wben tbe suit was brought, and tbe bill was therefore dismissed, because there could be no decree for tbe recovery of tbe property, and because tbe rule bad never been extended so far as to allow a bill in equity to recover damages for tbe conversion of a slave, where there was no other ground of jurisdiction. But the jurisdiction in tbe present case does not depend at all upon tbe character of tbe property, but rests entirely upon other and well-established principles of equity jurisprudence. Nor can tbe fact tbat slavery has been abolished bave any effect upon tbe rights of tbe parties. There is indeed no proof tbat any of these negroes were alive wben tbe emancipation took place, or tbat they were not voluntarily set free by tbe person to whom tbe defendants sold them. Tbat sale toot place while tbe negroes were slaves. Tbe purchaser acquired tbe property in them, and if they bave since been embraced by tbe general act of emancipation, tbe loss has been bis, not tbat of tbe defendants. They received tbe price, and bave enjoyed it; and their liability to pay tbe actual value of tbe slaves to tbe complainant accrued at tbe time of tbe sale to Ries, and has not been affected or altered by any subsequent events. ' Tbe decree dismissing tbe bill will be reversed, and, as tbe whole case was on final bearing in tbe court below, tbis court will pi’oceed to render sucb decree as that court ought to bave rendered. Tbe exceptions to tbe report of tbe commissioner will be overruled, and the report confirmed, and a decree entered for tbe complainant against tbe defendants, Jordan E. Allen and Erancis Burnett, for tbe amount stated in tbe said — 606 — report, witb interest from its date, and costs, and the bill will be dismissed as to the defendants James Burnett, John Burnett, and Pinckney Bowie, as to whom no sufficient ground has been shown for relief.