Caswell County NcArchives Court.....Brown, V. Graves 1826
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Deb Haines http://www.genrecords.net/emailregistry/vols/00003.html#0000719 February 8, 2009, 8:28 pm

Source: Nc Court Reports Vol 11, 1826
Written: 1826

June Term 1826

BROWN v. GRAVES. 

From Caswell.

A. made a deed of trust to satisfy several creditors; after this, part of the 
property is levied on and sold under execution: The sale passes nothing. A. 
had not such an interest as could he levied on under our act of 1812, 
subjecting equitable interests to execution.

This was an action of trover to recover the value of two oxen. The writ issued 
October 28, 1823, and the following appeared to be the case:

The plaintiff claimed title to the property under a deed of trust executed by 
Zacharias Groom to William Russell, for the use of Philip Pierce (who was 
Groom's security), dated 22d of November, 1821, and by the trustee, he proved 
on the trial, that on the 11th of February, 1822, a sale was made under the 
trust deed, at the house of (343) Groom; that the land mentioned in the deed 
sold for $280, the mare for $32, the oxen (now in controversy) for $32. These 
articles, except the mare, were purchased by the plaintiff, who retained the 
purchase money in his hands; the mare was purchased by some other person, and 
the money arising therefrom was paid over to the plaintiff. There was also a 
quantity of tobacco mentioned in the deed of trust: this had been carried off 
by Groom and sold, except some trash tobacco, which was bought by the trustee 
for $2. At the time of sale, the plaintiff and Pierce forbid Swift & Martin 
(to whom the debts mentioned in the deed of trust was due, and for which debts 
Pierce was Groom's security) to bid for any of the property, unless they paid 
the money down for the bid, and stated that if they bid the amount bid, should 
not be paid by their entering it as a credit on the sums respectively due to 
them from Groom.

It also appeared, that before this sale, defendant had informed the trustee, 
that he had purchased these oxen at a public sale made by virtue of an 
execution which he had against Groom; that at the sale defendant claimed them, 
and requested the trustee to sell the other property mentioned in the deed 
first; that he mentioned it to the plaintiff and Pierce, who insisted on his 
first selling the personal property, and he did so.

Groom swore that he and Pierce agreed to sell the property before the debts to 
Swift & Martin became due; that he owed the plaintiff by bond about $109; that 
he did not know what had become of the money plaintiff received from the 
trustee, for which the property was sold, nor had he ever agreed that 
plaintiff should apply it in satisfaction of his debt of $109; that the steers 
remained in his possession two or three days after the sale, plaintiff on the 
day of sale telling him to keep them until he, plaintiff, called for them, and 
that they were taken away by defendant. He further proved, that he remained in 
possession of the land, from the day of sale up to the time of trial, and it 
did not appear that he was to pay any rent for the (344) place. It further 
appeared, that the oxen were in Groom's possession up to the 11th of February, 
1822.

Swift proved "that the plaintiff had a bond on him, and after the sale, on the 
same day, he and the plaintiff agreed, that the claim he had against Groom and 
Pierce should be credited on his bond to plaintiff; and they were afterwards 
so settled. He also stated, that he had never called on Groom or Pierce for 
the money due him before the 11th of February, 1822.

It also appeared that Martin never made application to have his debt paid 
before or at the time of sale.

The defendant insisted that plaintiff could not recover, because,

1. The sale was fraudulent, it having been made to hinder the collection of 
Groom's debts, upon which judgments and executions had been obtained.

2. That the trustee by the terms of the deed, had no authority to sell before 
the debts became due.

3. That defendant's purchase under execution, on the 29th of December, 1821, 
before the sale by the trustee, gave him the title.

4. That if defendant had not the legal title it was in the trustee, and 
therefore plaintiff could not recover.

Defendant then offered evidence of his having regularly purchased at execution 
sale on the 29th of December, 1821, under an execution dated 18th of December, 
1821, issuing on a judgment obtained December 15, 1821.

To the charge of the Court on the question of fraud, no exoeption was taken. 
His Honor Judge Norwood further charged, that although Pierce could not direct 
the sale of the property before he was called on for the money, yet that Groom 
might direct it before the money became due on the judgments mentioned in the 
deed, notwithstanding that at the time there might be other judgment creditors 
who had executions; and that if he directed the trustee in this case to sell 
on the 11th of February, 1821, it would be valid.

And further, that the sale under execution of (345) Dec. 29, 1821, having been 
made before the debts mentioned in the deed of trust had been satisfied, was 
unauthorized by law, and passed no title to the purchaser; that if the debts 
mentioned in the deed had been satisfied by a sale of part of the property, 
the remainder of the property would then be subject to execution; but not 
otherwise.

Verdict for plaintiff, new trial refused, judgment and appeal.

Badger, for appellant. 

Hogg, contra.

Henderson, Judge.—This transaction, upon its face, bears evident marKs of a 
fraudulent contrivance between Graves, Russell & Groom, to give to Brown a 
fraudulent preference in the payment of the debt which Graves owed to him, or 
to cause Graves's property to vest in him in fraud of creditors. If the object 
had been to give Brown a preference, and that object had been fairly, and with 
good faith effected, the law would not have annulled it. The fraudulent design 
is evidenced throughout the whole transaction; the expediting the sale at the 
instance of Graves, and more especially by prohibiting the cestui que trust 
under the deed, by virtue of which the sale was made, from bidding at the 
sale; they could not have oeen objected to as not being good bidders, for the 
money was coming to them: The only object which can properly be assigned, was 
to prevent competition, and thereby enable Brown to purchase the property at a 
reduced price; and if such was the object, of which a jury were the proper 
judges, the law pronounces the sale to be fraudulent; yet as the sale was made 
by the trustee, who had the legal title, and at the instance of Brown, the 
property passed as to all but those whose rights or interests were affected by 
the sale. The defendant does not claim under the trust deed, either as cestui 
que trust, or purchase, it is therefore not necessary to decide whether, if he 
stood in that capacity, he could avail himself of the fraud to defeat the 
sale. (346) He claims as a purchaser at a constable's sale, under a justice's 
execution against Graves, issued and levied after the sale of the deed in 
trust; the question therefore is, had Groom at the time of the levy and sale, 
or at the sale, such an interest as could be sold under that execution? If he 
had not, the defendant is a mere stranger, and however much to be regretted, 
appears in the character of an intermeddler, not though in the opprobrious 
meaning of that term—it appears that he has acted honestly. But if such be the 
case, that is, if the property was not subject to the execution, he cannot 
avail himself of the fraud practised by Brown and others—if it be fraud. I 
believe no where can be found a more lucid and satisfactory opinion upon the 
subject than the one given by Chief Justice Spencer, of New-York, in the case 
of Bogert v. Perry & others, 17 Johnson, 351,—to this therefore I refer. They 
have in New-York, as regards this point, a statute similar to ours of 1812, 
both, in substance, taken from the statute of Charles. It is evident, that 
independent of that statute, Groom, had not such interest as could be sold 
under an execution at law; he had nothing but a mere equity, at most a mixed 
trust, or a chose in action, neither of which an execution at law could 
affect. Our act provides, that it may be lawful for the sheriff, or other 
officer to whom a writ shall be directed, at the suit of any person upon a 
judgment then had, or hereafter to be had, to go make and return execution to 
the party suing, of all the goods, lands, &c., as any other person shall be 
possessed or seised in trust of, for the person against whom the execution 
issued, and that said lands and goods shall be held by the purchaser at 
execution sale, free from and discharged of the title and incumbrances of the 
trustee. These are not the words, but is the substance of the act. Tf there 
had been a doubt upon reading the first part of the statute, whether a mixed 
trust such as this could be sold, where part is held for one person and one 
purpose, and part for another person and another purpose. I think the doubt 
would (347) have been removed by that branch of it which divests the seisin 
out of the trustee, and vests both his estate and the estate of the cestui que 
trust in the purchaser. It could not be designed by the legislature to word 
this wrong, and it will not be attributed to them, when there are proper 
subjects on which the act can operate, and coming more within its bounds—a 
person seised or possessed in trust for another, not one seised in trust for 
one for one purpose, and to another for another purpose; where the formal and 
nominal title is in one in trust for another. By confining the statute to such 
cases, no injury is done, for the trustee had no other duties to perform than 
to permit the cestui que trust to enjoy the property. There is no possible way 
to reconcile the statute to any thing like common justice, but to say that the 
estates shall be apportioned, and all shall be taken out of the trustee, and 
with the trust estate vested in the purchaser, except what will enable the 
trustee to perform the trusts to others; in this case, it would leave an 
estate in the trustee of which I cannot well conceive. What is it? As much as 
will pay Pierce? What then is the nature of the estate which the purchaser 
has? He has Groom's right to the surplus, and the trustee's legal title to the 
property out of which this surplus is to be raised. If the trustee could find 
property which would bring the debt to Pierce, and no more, he might sell it, 
and then the balance of the property in kind would belong to the purchaser at 
execution sale; sell as much as will pay Pierce, the balance is the 
purchaser's—the trustee has nothing to do with it, both legal and equitable 
title is in the purchaser. The purchaser might say to him, take your pound of 
flesh, but not one pennyweight more. How the purchaser at the trustee's sale 
stands, who purchased one article which overwent the debts of the remaining 
cestui que trust, I know not; as to the amount of the debt the side was good, 
and bad for the balance; for that power which he once had to sell, being 
dependent on his title, was taken from him— as to part of the article the 
purchaser would have a (348) right to it, and none to the other. I cannot see 
the extent to which it may be carried. By such sales, speculation would be 
encouraged, but would be placed upon unequal grounds. One might have correct, 
and another incorrect information. I think that the legislature intended to 
leave such interest (entirely untouched by the act) to the jurisdiction of a 
Court of Equity, where the property itself would be sold, and the money 
divided according to the rights of the parties.

This is a hard case on the defendant: but I cannot see how he can prevail in 
this action.

By the Court,

Judgment affirmed.

Approved. Gillis v. McKay, 15 N. C., 173; McKay v. Williams, 21 N. C., 398; 
Gowing v. Rich, 23 N. C., 553; Thompson v. Ford, 29 N. C., 418.

Additional Comments:
North Carolina Reports, Volume 11
Cases Argued and Determined in the SUPREME COURT of NORTH CAROLINA.
For December Term 1825 and June Term 1826 
by Francis L Hawks (Vol. IV)
Annotated by Walter Clark
Richmond: James E Goode Printing Company, Printers
1897

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