delivered the opinion of the Court:
The errors assigned will be considered under the points and in the order discussed in the argument of plaintiff in error.
In the written agreement of Rankin and Holmes it is recited that the property has been conveyed to Rankin upon these trusts, namely: “The property is to be subdivided and sold, or otherwise disposed of by Rankin, in such manner and quantities, on such terms, and at such times and prices, as he shall think best, and the funds and proceeds arising from such disposition and sale of the said property shall be applied to the following purposes, to-wit: First, to the extinguishment and satisfaction of the existing incumbrances on said property, whether by way of mortgage or otherwise, amounting to some $16,000 at the date of these presents; secondly, to the payment of $30,000, on account of the running account current, to said Rankin from said Holmes; thirdly, to the payment and liquidation of a claim of the estate of Albert W. Senter against the said Holmes, provided said claim shall not exceed the sum of $10,000; and fourthly, the net balance of said proceeds, if any there be, after discharging the above incumbrances and debts, and paying the costs, interest, and expenses of executing this trust, shall be divided equally between the said Rankin and the said Holmes. ” The circuit court, in the interlocutory decree, found and decreed that the respective claims of Barcroft & Co. and the executors of John Swan wick were embraced in and composed the said sum of $16,000 declared in this agreement to be a first lien on the lands. Plaintiff in error contends that the evidence does not sustain this finding, and this is the first point made in his argument as a ground of reversal.
It may be conceded, as contended by counsel, that there is rio evidence showing that these claims were such that they could be enforced by virtue of a vendor’s lien, or that they were in judgment, or secured by mortgage on the land,—in short, that they were not, in fact, existing incumbrances on the land; still, there is no other indebtedness shown that could 'possibly have been intended, and no other incumbrances on the lands. No other creditors are claiming this $16,000 prior lien, and, from the terms of the agreement, the second and third preferences are only to be satisfied in the order stated. Neither of them can, upon any reasonable construction, be advanced and substituted for the first preference. But the evidence is full and complete that Holmes and Rankin intended the claims of Barcroft & Go. and John Swanwick to be paid under this first clause. The claim of the former was then $12,000, and that of the latter $4000, making the total $16,000. In the most favorable view that can be taken for Bankin, the parties were simply mistaken in assuming that these claims were existing incumbrances on the lands; but in the absence of intervening rights of third parties this mistake was of no consequence. A court of equity would have rectified it on bill filed for that purpose by Barcroft & Co. and the executors of Swanwick. What a court of equity would compel them to do, they could, of course, do of their own volition. If there had been no attempt before to declare a trust, Bankin might have declared it by letter, or by any other instrument in writing, declaring that he had held the lands in trust. (Perry on Trusts, 1st ed. 83.) And the right to thus declare a trust in the first instance, necessarily implies the right to make certain and specific a trust theretofore attempted to be declared. (Fast et al. v. McPherson, 90 Ill. 497.) Bankin went into bankruptcy in 1873, and in the schedules and exhibits filed by him on that occasion he clearly and emphatically declared and swore that he held these lands in trust, first, for the payment of the claims of Barcroft & Co. and John Swanwick, under the agreement between him and Holmes, and afterwards as further provided by that agreement. And in letters to Barcroft & Co., of a prior date, he also distinctly and fully acknowledged the trust.
The next ground of reversal urged is, that the administrator or executor of Albert W. Senter was not made a party. This objection was urged for the first time in the Appellate Court. The unknown heirs at law of Albert W. Senter were made parties by publication, and to the sufficiency of .the notice to them no objection is pointed out by counsel or perceived by the court. We may therefore assume that the heirs-. at-law of Senter are properly before the court.
The preference in the third clause of the agreement between Holmes and Bankin is of a claim of the estate of Albert W. Senter. Plainly, this assumes that Senter is dead, but does not attempt to declare whether the estate has been settled, or .whether Senter died testate or intestate. The word “estate,” as used, means simply that this claim is one to be collected and added to the mass of his estate,—or, in other words, that it constitutes part of his estate. The period of more than seven years having intervened between the execution of the instrument and the filing of the bill, we must presume the •estate had been settled, and that this part of it had vested in the heirs-at-law, nothing appearing to the contrary. In «equity the title is treated as being where, in good conscience, it ought to be, and we think to have made the present objection available, plaintiff in error should have urged it in the circuit court, and there affirmatively shown that the estate of Senter had not been settled. We are of opinion, under the circumstances, that the only interest to be protected under this third clause was that of the heirs-at-law of Senter, and that plaintiff in error will be amply protected by the decree in making payment to them.
The next objection taken to the decree is, that Bankin is not allowed sums paid by him before the filing of the bill to Barcroft & Co. and the executors of Swanwick, amounting to some §9830.70. If he were decreed to again pay this ■amount, the position would be tenable; but he is not. The •decree only directs a payment of the balance found due on those claims. By the first clause of the agreement between Holmes and Bankin, we have seen Bankin accepted the trust •of paying the claim of Barcroft & Co., then amounting to $12,000, and that of John Swanwick, then amounting to §4000! By his previous acceptances of the time drafts, Ban-kin became legally liable to pay these sums, and his acceptance of the trust made them payable before anything else, «out of the proceeds of the sales of the lands. When, therefore, he had paid $9830.70 of the amount, he only owed that much less, and he was only obliged to sell less, by that amount, of the lands conveyed to him in trust. But as to the residue of the indebtedness the trust still existed. The doctrine of subrogation could have no application, for his position is pre-. cisely that of a mortgagor paying part of his debt secured by the mortgage. It would be both unjust and absurd that by making a partial payment he could be preferred, as to the balance of the claim, over the mortgagee.
When Rankin went into bankruptcy, the debts due him, if any, on account of this trust, and his property rights in these lands, went to his assignee. His duties as trustee were unaffected by the proceeding. If any claims in favor of Rankin vested in his assignee upon his becoming bankrupt, which were prior liens upon these lands, which we very much doubt, it is quite obvious it still remained the duty of Rankin, as trustee, to pay off and remove them, and for doing that he would be entitled to precisely what he paid out. If he had a prior lien which passed to the assignee, he thereafter occupied towards it the relation of a stranger. It then stood as a debt to anyone else. No principle is better settled than that a court of equity will not permit a trustee to speculate in the subject of his trust. If he buy in outstanding claims, his purchase is treated as a payment only, and he is allowed. just what he paid out. (Perry on Trusts, 1st ed. sec. 428.) But this is in conformity with the ruling below. We are satisfied that if there be any error in the accounting, it is in favor of Rankin, and not to his prejudice. It is, to our minds, very questionable whether he should, as against the defendants in error, have been allowed any compensation for his services.
Objection is urged that the interlocutory decree was not. submitted to counsel for plaintiff in error, and that it was prepared in vacation. The interlocutory decree, we have before seen, was authorized by the-evidence. It was in conformity with the minutes of the judge, and has since been approved and adopted by the final decree. Under these circumstances, it was not indispensable that it should have been submitted to opposite counsel for their approval, if, in any event, that would have been necessary.
The objection that no time was allowed to amend the cross-bill, is destitute of merit.
The demurrer to the cross-bill was properly sustained. No ease was stated showing any ground of affirmative relief on behalf of the plaintiff in error. It does not appear that leave to amend the cross-bill was asked, or that any amendment could have been made thereto, consistent with the facts as proved on the hearing, which w/mld have removed'the objection to it.
The errors assigned raise other points, but inasmuch as nothing is said in argument in their support, we are authorized to assume that they are abandoned.
We have gone through the entire record with much care, and we feel thoroughly satisfied that there is no reason for reversing the decree of the circuit court. It favors the plaintiff in error at least so far as he has a right to claim that it should. It does him no substantial injustice.
The judgment of the Appellate Court is therefore affirmed.
Judgment affirmed.