Rodney v. Shankland , 1 Del. Ch. 35 ( 1818 )

Ridgely, Chancellor

upon examination, at some length, of the agreement of February 1Ó, 1787, concluded that Neill was bound by it to pay the whole debt' of Shields ; and proceeding to consider whether the administrators had, in equity, any remedy under the agreement against Neill’s executor, the Chancellor said :

The defendant, Shankland, contends that the administrator of Shields, and that Wright, the sheriff, were not parties to the agreement of 10th of February 1787; and, therefore, that there is no privity between the complain ant and the defendant; and, consequently, that the complainant cannot prosecute this suit on the said agreement against Neill’s representative; that if the complain ant.had any cause of action, it was against Wright, the sheriff, and his executors, for the money levied under the Venditioni Exponas, upon which the land was sold; and that his remedy was at law, both according to the rules of the common law, and the provision of the Act of the Genera] Assembly entitled “ An act for establishing Courts of Law and Equity within this Government.”^*

That Shields’ representatives had a remedy at law against the sheriff for the balance of the sales of the land of John Little, after the payment of Neill’s judgment, is too plain a proposition to be denied. Neill bad recovered the first judgment, Shields’ administrators the second; and consequently after the payment of Neill, the whole real estate of John Little was bound for this judgment of Shields’ administrators. And at law, the Sheriff was liable for having applied any part of the purchase money arising from Little’s real estate to the Messrs. Fisher or to Warden, in preference to Shields’ administrators; but it would be monstrous in a court of equity to allow Neill to make such a defence in violation of his agreement of February 1787; and that too, after he has received the full benefit of that agreement. What would be the consequence ? It would be this—Shields administrators must sue the sheriff; the sheriff must sue the Messrs. Fisher; and they must enforce at law the agreement of 1787 against Neill. Thus, a circuity of action must be produced, and justice could not be done. Such a course would be manifestly unjust; because,as nothing could be recovered at law, more than the nominal sums given for the several parcels of the land, the full amount of Shields’ judgment, which Heill agreed to pay, and which was part of the consideration for the five hundred acres of land, would be fraudulently withheld by Heill. He would thus take advantage of his own wrong; and that too, after he had agreed to be purchaser and had substituted himself as paymaster for the full amount, instead of the sheriff, to Shields’ administrators. How,the truequestion is,whether Shields’ administrators, not being parties to the agreement of 1787, can compel Heill, or his representative, to execute that agreement. At law, it is certain that they cannot, because they were not parties to the contract; and if equity will not afford a remedy, their case is hopeless.

In speaking of privity, it may be necessary to take a very slight view of Hses at Common Law, as connected with this subject. To the execution of a Use two things were absolutely necessary,—confidence in the person and privity of estate. All who came in, in privity of estate, or with notice, or without consideration, are bound by it. And in 1 Co. Rep. 122. b., it is said that although a stranger purchased land from a feoffee to uses for a valuable consideration, yet if he had notice of the former uses, he would be compelled to execute them. According to 2 Com. Dig. Title Chancery, 627. (4. c) ; Title Notice (4. c. 1), notice of a trust makes a person privy; as, a person with notice of a trust, judgment,mortgage or other incumbrance, shall be affected by it. Sec. 1 Eq. Ca. Ab. 332 : 2 Com. Dig. 627, 717.

How, it is evident that Heill had complete notice of this judgment of Shield’s administrators; that he engaged to pay it; that he purchased the land subject to this judgment : and that the advantage or convenience which he derived from being allowed to purchase as he did was a sufficient consideration in equity. The question then occurs, whether Shields’ administrators have any remedy in equity. The counsel for the complainant cited the case of Dutton vs. Dutton, 2 Eq. Ca. Ab. 739. p. 4. There, D, having more than £3,000 per annum, married M, the plaintiff, who had £10,000 portion, and settled £1,000 per annum upon her for her jointure ; and the greatest part of D’s estate was settled upon the first and every other son in tail-male successively,as is usual in marriage settlements. D, ran greatly in debt, and J, his eldest son, being of full age, D, on calculating his debts and estate, agreed with J to convey all his estate to him, and J covenanted to pay all D’s debts and allow him £500, per annum as a rent charge for his life ; and further (upon which the question arose) thatJ should, indemnify D from, all his debts, and from the charges and expenses for the maintenance of the said, M, she being then separated by consent. M brought a bill against D and J, to have an allowance for her maintenance, &c., Lord Chancellor Cowper ordered M to be allowed £200 per annum. He said that by this covenant to indemnify D from maintaining M, his wife, J had taken upon himself the charge of maintaining her, and, as to this purpose, stands in D’s place, who is bound to give his wife an allowance, if he voluntarily separates from her; and he said that he took J in this case to be in the nature of a trustee for the wife, so far as a reasonable allowance for her maintenance was concerned.

It is not easy to distinguish, in principle, the difference between the right of the wife in this "case of Dutton vs. Dutton, and the right of Shields’ administrators to sue in equity. In both cases the covenantors made an engagement for the benefit of a person not a party to the covenant, and as they both received a sufficient consideration it is quite as reasonable that ifeill should be considered in the nature of a trustee for Shields’ administrators, so far as to pay the judgment, as that J should be a trustee for the maintenance of the wife. The counsel for the complainant cited also Lechmere vs. Carlisle 3 P. Wms. 211, to this effect, that every cestui que trust, whether a volunteer or not, or be the limitation under which he claims with or without a consideration, is entitled to the aid of a court of equity,to avail himself of the benefit of a trust, (p. 222;) and that the forbearance of the trustees shall not prejudice him, (p. 215.) In these cases the principle seems to be fully established, that the person for whose benefit a trust is created may compel the performance, although he may be no party to the contract. It is to be observed that Shields’ administrators were not mere volunteers. They had a lien,prior to Neill’s engagement,on the land of John Little, which Neill, for his own accommodation, agreed to satisfy. I might refer to cases of marriage settlements,'—Osgood vs. Strode. 2 P. Wms. 245 : Vernon vs. Vernon, 2 P. Wms. 594 : Goring vs. Nash, 8 Atk. 186,—where persons, not parties to the articles and from whom no consideration flowed, were permitted to enforce their specific execution. It is true, the principles of these cases do not strictly apply to this ; but they prove that equity will not compel a person to sue upon a covenant, in the name of trustees, when circuity of action may be prevented, and when equity can afford a more adequate remedy to the person for whose benefit the covenant was made, by his suing in his own name ; and that it is not an objection that the party claiming under a covenant is a volunteer, and that the consideration did not move from him, if the party making the articles had a sufficient consideration. In the Supreme Court of the United States, 5 Cranch, 322, Riddle Co., vs. Mandeville and Jameson, it was decided that equity will decree the payment to be immediately m&de by the person ultimately responsible, to the person who is actually entitled, to receive the money. That was a suit brought in equity by the holder of a promissory note, to recover its amount against a remote endorser. In a suit between the same parties, that Court had previously determined that the plaintiff was without remedy at law. Although there were some particular circumstances in that case, yet the' Court, in the opinion delivered by Chief Justice Marshall, laid down the law broadly, that equity will make that party immediately liable, who is ultimately liable at law. There, as well as in this case, the plaintiff had no remedy at law. This doctrine is confirmed in a subsequent case in the same court, 7 Cranch, 69, Russel vs. Clark's Executors, as well as the doctrine that notice of a trust makes theperson having such notice a trustee. The latter point is first mentioned by the Court (p. 97) thus; “ it also “ appears, that in September 1796, Robert Murray & Co., “ assigned to Loomis and Tillinghurst certain personalities “ in trust. This assignment was surrendered to Clark “ (the plaintiff) and Nightingale (his deceased partner) “ in consideration of notes to a large amount, in which “ Loomis and Tillinghurst were bound for Robert Murray “ & Co. It appears that Clark and Nightingale are other- “ wise secured with respect to these notes. At least, there is “ reason to believe that they are secure. Clark and Night- “ ingale having taken this assignment, with notice of the “ trust, take it clothed with the trust. They are trustees “ for the same uses, and to the same extent with Loomis “ and Tillinghurst. A paper appears in the cause which “ purports to be the assignment to Loomis and Tilling- “ hurst. The assignment is in trust; first, to repay t-hem- “ selves any sums which they may pay on account of cer- “ tain undertakings made by them for Robert Murray & “ Co.; and secondly, in trust to pay to Joseph and Wm. “ Russell, all such monies as they shall be liable to pay, as “ guaranty as aforesaid, to Nathaniel Russell upon bills, “ &e., reciting the bills for which this suit is instituted. “ It is settled in this court, that the person for whose ben- “ efita trust is created, who is to be the ultimate receiver “ of the money, may sustain a suit in equity to have it “ paid directly to himself. This trust being to pay Joseph “ and Wm. Russell a sum which they are liable to pay to “ Nathaniel Russell, and being created in such terms that “ the money is certainly payable to them, the purposes of “ equity will be best effected by decreeing it, in a case like “ the present, to be paid directly to Nathaniel Russell. “ Indeed, the court ought not to decree a payment to “ Joseph and Wm. Russell without security that the debt “ to Nathaniel Russell shall be satisfied.”

This case pointedly supports the complainant in sustaining his suit to recover money.directly to himself, of which he was to be the ultimate receiver. And it may be remarked that the plaintiff, Nathaniel Russell, was not a party to the assignment made to Loomis and Tillinghurst; neither was it a trust to pay immediately to him any money, but only “ to pay to Joseph and Wm. Russell all such “ monies as they shall be liable to pay as guaranty as “ aforesaid to Nathaniel Russell (the complainant) upon “ bills.” There, the trust was for the indemnity of J. and W. Russell on account of such monies as they shall be liable to pay to Nathaniel Bussell. But as the trust was ultimately for the benefit of Nathaniel Russell, although he was no direct party to the assignment (or deed of trust,) it was the opinion of the Court that the purposes of equity would be best effected by decreeing a payment of the money directly to him. In the case before us, Neill promises to make a direct payment to Shields’ administrators; and on this agreement, I have no hesitation, upon the above authorities, and upon the reason and justice of the demand, to decree payment to Shields’ administrators.

Afterwards the amount due on the judgment of Luke Shields’ administrators against John Little’s executor was ascertained, and a decree for its payment entered against the executor of Henry Neill, deceased.

* lst. Vol. Del. Laws, 132 : Digest of 1829, p. 103, sec. 25, passed between 1726 and 1736. This act expressly prohibits the old Court of Common Pleas, in which equity jurisdiction was then vested, from entertaining any matter for which there was remedy at common law.