Lyford v. Holway

The opinion of the Court was by

Tenney J.

From the disclosures of the defendant, which are the only evidence in the case, it appears, that Xenophon Holway, the principal debtor in the original process, purchased of Ashur Hinds, a tract of land; paid at the time $ 100, and gave notes for $400, on interest, and a mortgage of the same land for their security. He conveyed to the defendant by deed with covenants of warranty one undivided half of this land, for the consideration of two hundred and fifty dollars, which *299when paid was to be applied to the note and mortgage; the whole of the consideration was paid and some excess by the defendant to Xenophon, but only one hundred dollars went in payment of the notes to Hinds. Two or three years after the purchase by the defendant, nothing more having been received by Hinds, a settlement took place between the principal debtor and the supposed trustee, and the former gave to the latter a note for $427, being the amount then due to Hinds and a balance of accounts in favor of the defendant. At the same time Xenophon conveyed his interest in the remaining part of the land to the defendant, and took a bond for the recon-veyance of the same, if the amount of the note of $427, should be paid within six years; and the defendant agreed by parol to pay to Hinds, the sum due to him. At the time of the service of the plaintiff’s original writ nothing had been received by Hinds upon his notes, excepting the one hundred dollars, and no payment had been made on the note to the defendant; it had been agreed between Xenophon and the defendant, that the latter should allow the sum of $25 on his note, and in consideration thereof, the bond should be surrendered to him. This agreement was carried into effect after the service of the original writ; a settlement was made, and Xenophon gave a new note for the balance owed by him, after deducting the amount due to Hinds. Nothing has been paid by the defendant since he was served with the trustee process, and the land is of less value, than the amount due upon the notes and mortgage to Hinds.

Was the defendant properly charged as the trustee of the principal debtor ? The last conveyance made to the defendant was in consideration of his agreement to pay to Hinds the balance due of the original purchase money. He contracted to pay this sum in discharge of the mortgage, and in no other manner; the principal debtor had no claim upon him for this sum, without first paying his own notes given for the land. By the disclosures, the defendant took the last deed, not for the purpose of obtaining directly thereby, any interest of value, for the sum due on the mortgage was greater than the worth *300of the land; but as indemnity, if he should be compelled to pay the sum due to Hinds, in order to get a title to the ¡land first purchased, for which he had made full payment to his grantor. If the sum, which he last agreed with Xenophon to pay to Hinds, should be diverted from that object, to benefit the creditors of Xenophon, he would still be obliged to pay a like sum, to discharge the mortgage,-before the interest which he first purchased would be available. A failure to discharge the balance due to Hinds, would result in the forfeiture of his entire title.

It does not sufficiently appear from the disclosures, that the principal debtor and the defendant were guilty of a fraud, as is contended in behalf of the plaintiff, so that the defendant is liable as trustee. Exceptions sustained. Trustee discharged, and his costs allowed.