Wayne County, NC - Jane Bennett v. Jacob Merritt

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Jane Bennett against Jacob Merritt and others

North Carolina Reports, Vol. 59 - December Term, 1860 to June Term 1863

Where the agent of a trustee received money, arising from the sale of 
trust property, made by collusion with him, it was Held, not to be a 
defense to a bill against such agent to follow the funds in his hands, 
that he had paid the money over on liabilities which he had incurred 
for the trustee.

Where trust property is wrongfully sold by a trustee, by collusion with 
another, who did not, however, receive any part of the price for which 
the property sold, it was Held, that the principle of following the 
trust fund, in its converted state, does not apply to such other 
person.

Case removed from the Court of Equity of Wayne County.

Thomas Bennett, of the county of Sampson, died about the year 1857, 
leaving a widow, the present plaintiff, Jane, and one daughter, 
Virginia, his distributees, and the defendant James R. Parker 
administered on his estate. Afterwards, in August, 1857, Virginia, the 
daughter, died, leaving her mother, the said Jane, her sole 
distributee. J.R. Parker also administered on her estate. The said 
Parker took possession of the personal estate of both, consisting of 
slaves, household furniture, stock of horses, etc., carriage, growing 
crop, provisions on hand, notes, etc., on several individuals. In 
March, 1858, the defendant Jacob Merritt insinuated himself into the 
confidence of the plaintiff and married her, she having first made a 
deed of marriage settlement, securing all her property to her sole and 
separate use, and constituting himself (the said Merritt) her trustee. 
It turned out that Merritt, at the time of this marriage, was a married 
man, and had a wife then living in the State of Alabama, and was 
otherwise a very faithless and unworthy man. Shortly after the marriage 
with Mrs. Bennett, he set himself to work by harshness and 
intimidation, to get her property in his hands, and to sell all of it 
he could get. Parker, the administrator, who seems to have understood 
the character of Merritt, thwarted him as much as he could in his 
designs of despoiling Mrs. Bennett of her property, and kept much of it 
in his hands, while it appears that the defendant Monk, an uncle of 
Merritt, aided and abetted him in his designs. It appeared that Mrs. 
Bennett was induced, after the marriage, to remove from her homestead 
in Sampson to a place called Magnolia, in Duplin County, belonging to 
Monk, and he admits that he advised their removal to this place, but 
says it was from kind and benevolent motives.

It is alleged in the bill, and admitted, that Merritt made a conveyance 
of all his interest in the slave property, which had belonged to Mrs. 
Bennett, to the defendant Monk, but he says that this conveyance was by 
no means made in fraud of the cestui qui trust, but for a valuable
consideration, to-wit, the indemnity of him (Monk) for debts paid and 
liabilities incurred by him for the said Jacob. It appeared that 
Merritt succeeded in getting two of the slaves, Hillory and Ellender, 
which he sold for $...., and delivered $900 of the money to Monk, who, 
in his answer, says he paid it out on liabilities which he had incurred 
for Merritt, and he goes into a list and minute account of such 
payments. Monk answers that he had no knowledge how the money arose, 
but the proofs on this subject, in the opinion of the Court, are 
sufficient to fix the knowledge upon him.

Merritt got possession of another slave belonging to Mrs. Bennett, by 
the name of Dilsey, and in company with Monk was proceeding to carry 
her out of the State to sell her. On arriving at Goldsboro, they 
consulted an attorney, who told them they could not sell the slave 
unless they got the authority of Parker, the administrator. They then 
went back to Parker, who executed a bill of sale to Monk for Dilsey, 
and he conveyed her, in like manner, to Merritt, who took her to 
Richmond and sold her and received the money for her. Monk, in his 
answer to this allegation, says that Dilsey was an unmanageable slave, 
and had lately run away, and that her mistress was displeased with her, 
and wished her sold. He denies receiving any part of the purchase 
money.

The prayer of the bill is for a decree of nullity of the marriage, and 
that Monk deliver up, for cancellation, the conveyance of the property 
to him by Merritt, and that he account for the value of all the 
property belonging to Mrs. Bennett which was sold by Merritt, and for 
the $900 received by him, as being the proceeds of her property, also 
for a decree against him for the price of Dilsey, and also a decree 
against Merritt for an account of all the property which came into his 
hands.

The case was set for hearing on the bill, answer, exhibit and proofs, 
and sent to this Court by consent.

Pearson, C.J. The allegation that at the time of the marriage the 
defendant had a wife who was then living, is clearly proved; of course 
his marriage with the plaintiff was void, and she is entitled to a 
decree of “nullity of marriage” so far as she is concerned. She is also 
entitled to a decree making void the deed by which, in contemplation of 
marriage, she conveyed her estate to Merritt, in trust, for her sole 
and separate use. She is also entitled to a decree that the conveyance 
of the slaves, made by Merritt to Monk, shall be surrendered and 
cancelled, so as to remove the cloud from her title.

We are also satisfied by the evidence that the $900 which Merritt 
handed over to defendant Monk, to secure him against the liabilities 
which he had entered into for Merritt, was money received by Merritt 
for the two negroes, Hillory and Ellender, and, on the ground of 
following the trust fund, the plaintiff is entitled to a decree against 
Monk for that amount. He faintly denies notice, but that is clearly 
fixed on him, and the ground on which he puts himself in respect to 
this money, to-wit, that he had paid it to the creditors of Merritt, to 
whom he had become liable as surety for Merritt, will not avail him. 
That money, in his hands, was a part of the trust fund, and he knew it; 
consequently, Merritt, as a trustee, had no right to apply it to the 
discharge of his debts, and the defendant Monk had no right to do so 
for him.

In respect to the woman Dilsey, we have had more difficulty in coming 
to a conclusion. She was conveyed by Parker to Monk, and he made a bill 
of sale to Merritt, for the purpose of enabling Merritt to sell her. 
Merritt did accordingly sell her, but it does not appear, according to 
proofs, that Monk received any part of the purchase money; on the 
contrary, we are satisfied that Merritt used the money received by him 
as her price himself; so the principle of following the trust fund, in 
it converted state, does not apply, and putting out of view the 
averment that the women Dilsey was thus sold by the consent of the 
plaintiff because of the slave’s insubordination, and also the averment 
that it was done under the advice of respectable counsel, we can see no 
ground on which the defendant Monk can be made liable in respect of 
this slave, even if we suppose he acted collusively, and became an 
actor in the transaction with an intent to aid Merritt, the trustee, to 
get into his hands this negro and sell her, and appropriate the 
purchase money to his own use; for when Monk takes the ground that no 
part of the money can be traced to his hands, he can not be reached on 
the principle by which, in equity, he can be made liable.

The defendant Merritt is chargeable with all the funds which came to 
his hands, by reason of the sales made by him or otherwise.

As to the other property, the deed executed by Merritt to Monk does not 
include it, and there is no proof of his having taken it into his 
possession, so there can be no decree in respect to it. So the 
plaintiff must be left to her own vigilance in gathering it up. There 
will be a decree against Parker for an account.
Per Curiam Decree Accordingly

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