Wake County NcArchives Court.....William Jones, Joseph & William Peace V. 1819
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Deb Haines http://www.genrecords.net/emailregistry/vols/00003.html#0000719 January 30, 2009, 12:58 pm

Source: Nc Reports
Written: 1819

Joseph and William Peace v. William Jones

From Wake

May Term 1819

A garnishee summoned upon an attachment stated that the debtor had executed to 
him certain deeds of trust for real and personal property, to secure three of 
his creditors: which property was sold at public sale upon a credit, the 
purchasers giving notes negotiable at the State Bank. That the sums secured by 
the deeds of trust, had been discharged by a like amount out of the proceeds 
of the sale, leaving a surplus of $1,208 dollars 20 cents, for which A. B. had 
given two notes payable to C. D. who had indorsed them in blank. A. B. was 
also summoned as a garnishee, and declared his willingness to pay the money on 
the notes. The Plaintiffs in attachment are entitled to have Judgment of a 
condemnation of this money; for,

If the garnishee had received the surplus in money, the purposes of the trust 
deeds being satisfied, it would have been money received to the use of the 
debtor, and might by him have been recovered in indebitatus assumpsit.

The law is the same, whether the surplus be in money or in notes, and upon a 
refusal to deliver the latter, the debtor would be entitled to an action of 
trover.

The attachment law makes notes not yet due, whether given for money or 
specific articles, subject to that process. And it is no objection that the 
notes are given for the purchase of property in which the debtor had only an 
equitable interest.

Whether the property be liable to execution, is not the criterion to determine 
whether it be attachable, otherwise the attachment law could not operate upon 
bonds and simple contract debts, &c.

As soon as the purposes of the trust deeds were satisfied, there was but one 
equity remaining, and that was in the debtor, whose right to the money, had it 
been received, could have been enforced at law.

The Plaintiffs were creditors of the Defendant by specialty to the amount of 
$363.87, and sued out an original attachment against his effects, which was 
levied upon sundry articles, and Peter Browne, Esq., was summoned as 
garnishee. The subject of his garnishment, upon which the questions submitted 
to this Court arose, was, that prior to his being summoned as garnishee, Jones 
had executed to him certain deeds of trust, for real and personal property, to 
secure, three of Jones's creditors; which property was sold at public sale 
upon a credit of three and six months, the purchasers giving notes negotiable 
at the State Bank. That the sums secured by the deeds of trust had been 
discharged, by a like amount out of the proceeds of the sale, leaving a 
surplus of $1,208.20, for which R. Cannon gave two notes payable to W. Rogers, 
who had indorsed the same in blank; that he had no beneficial claim upon the 
property of Jones, nor did he believe that the creditors, for whose benefit 
the deed had been taken, had. But he submitted to the Court, whether any 
process from a Court of Law could affect the equitable interest which Jones 
had in the personal property contained in the deed: and whether the two 
negotiable notes were liable to the Plaintiff's demand, although they were 
taken for the balance of the Defendant's equitable interest in certain real 
estates, inasmuch as that balance, in virtue of a prior equity, had been 
converted into personal property. The questions arising on Mr. Browne's 
garnishment, were referred to this Court.

Taylor, Chief-Justice: If Mr. Browne had received the surplus in money, the 
purposes of the trust deeds having been executed and extinguished, it would 
have been so much money received to the use of Jones, and might have been 
recoverd by him in indebitatus assumpsit; the law in such case, implying a 
promise to pay. For the quality of every such trust is, that what remains 
after paying the creditors, belongs to the assignor. And although the usual 
remedy against a trustee, for a misapplication of the trust fund, is by a bill 
in equity, yet at law, an action of assumpsit will lie, 5 (258) Term. 601, 
Willes 405. The law must be, the same, whether the surplus be in money or in 
notes, and upon a refusal to deliver the latter, Jones would be entitled to an 
action of trover; Salk. l30, 282, for the garnishment proves that the notes 
belong to him. It seems to be a better criterion, whether property be liable 
to attachment, to ascertain what would be the rights of the Defendant in the 
attachment against the garnishee, than to enquire, whether the property would 
be liable to an execution against the Defendant. For the attachment law makes 
notes not yet due, whether given for money or specific articles, subject to 
that process; which things clearly cannot be taken in execution. But, if the 
properly being liable to execution, were a test of its being attachable, it 
would hold good in this case, as to all the property in the garnishee's hands, 
which was not necessary to satisfy the creditors; and if a levy had been made 
by a creditor of Jones's upon the property, before the sale, the surplus, 
after paying the trust creditors, would have belonged to such judgment 
creditor. So that the first doubt suggested in the garnishment, seems to be 
answered by the act of 1812, ch. 14, making trust property, real and personal, 
liable to execution. The other suggestion admits of the same answer. The real 
property is converted into personal, in virtue of a prior equity, only so far 
as the trust creditors had a lien upon the property. To the extent of those 
debts the equity was prior; but when that object was accomplished, there was 
but one equity remaining, and that was in Jones, whose right to the money, had 
it been received, was of that kind, which, it has been shewn, a Court of Law 
would have enforced.

Considering, then, the general scope and spirit of the attachment law, the 
property which it renders liable to the process, "estate and effects," and how 
easy it would be for an absconding debtor to evade its provisions, by 
suffering his property to be sold under a trust, deed, for negotiable 
securities, the Court are of opinion, that judgment should be rendered for the 
Plaintiffs on the garnishments of Mr. Browne and Mr. Cannon; more especially 
as all the parties concerned are before the Court, and the drawer of the notes 
declares, in his garnishment, his willingness to pay the money.

This view of the case is taken from the garnishments alone; but from the 
parties concerned in this transaction, it is fair to presume, not only that 
the deed of trust, was drawn in the usual, but in the best form. That form is, 
to insert a covenant upon the part, of the trustee, to restore to the cestui 
que trust the surplus remaining after the payment of debts; in which case 
Jones would have had an indisputable legal remedy.

Note — R. Cannon was also summoned as a garnishee in this case, and in his 
garnishment declared his willingness to pay the money on the notes.

Cited: Gillis v. McKay. 15 N. C. 174; Coffield v. Collins, 26 N. C. 492; 
Gaither v. Ballew, 49 N. C. 490; Sexton v. Ins. Co., 132 N. C, 3.

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