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AMERICAN

LAW REPORTS

ANNOTATED

VOL. 47

CAVANAUGH BROTHERS HORSE COMPANY

V.

WILLIAM A. GASTON et al., Exrs., etc., of Henry Nawn, Deceased.

Parties, § 10

Massachusetts Supreme Judicial Court - June 1, 1926.

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right to enforce promise under seal.

1. A third person cannot maintain an action on a sealed instrument to which he is not a party.

[See annotation on this question beginning on page 5.]

Accounts, § 2- when action lies.

2. An action at law on an account stated lies only where there have been transactions previous to the statement of the account which created the relation of debtor and creditor.

[See 1 R. C. L. 208, 210; 1 R. C. L. Supp. 65; 4 R. C. L. Supp. 13.]

Accounts, §2 action to compel payment.

3. An action at law upon an account stated is inapplicable to enforce a promise to pay the debt of another. Parties, § 13-who can enforce promise to pay debt.

4. A promise under seal to a debtor who conveys property for that purpose to pay his debts can be enforced only by the promisee.

Limitation of actions, § 116 when

runs.

5. The Statute of Limitations be-
gins to run upon a cause of action
for breach of trust upon an open dis-
avowal of the alleged trust, or at least
upon actual notice to the person in-
terested of the breach.

[See 17 R. C. L. 708, 796; 3 R. C. L.
Supp. 723, 734.]
Evidence, § 1554-sufficiency-ab-
sence of promise to pay debt.

6. That one to whom property was
conveyed for payment of debts did not
sign instruments obligating him to
pay certain claims may be inferred
from statements made in his lifetime
denying any promise, considered in
the light of the fact that he returned
the property to the grantor without
making the payment.

EXCEPTIONS by plaintiff to rulings of the Superior Court for Suffolk County (Hall, J.) made during the trial of an action at law on an account stated which resulted in a verdict for defendants. Overruled.

The facts are stated in the opinion of the court.

47 A.L.R.-1.

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Mr. Frederick J. Smith, for plaintiff:

The transfer of John Nawn's real estate to Henry Nawn in 1900 was a voluntary assignment for the benefit of creditors, with Cavanaugh Brothers as beneficiary, establishing an express trust.

Andrews v. Tuttle-Smith Co. 191 Mass. 461, 78 N. E. 99.

No privity of contract is necessary to support an action at law against the trustee by the plaintiff.

Mason v. Waite, 17 Mass. 560; Hall v. Marston, 17 Mass. 575; Arnold v. Lyman, 17 Mass. 400, 9 Am. Dec. 154; Carnegie v. Morrison, 2 Met. 381; Dow v. Clark, 7 Gray, 198; Rogers v. Daniell, 8 Allen, 343; Prescott v. Ward, 10 Allen, 203; Derome v. Vose, 140 Mass. 575, 5 N. E. 478; Gould v. Emerson, 99 Mass. 154, 96 Am. Dec. 720; Underwood v. Boston Five Cents Sav. Bank, 141 Mass. 305, 4 N. E. 822; Gannon v. Ruffin, 151 Mass. 204, 24 N. E. 37; Bouve v. Cottle, 143 Mass. 313, 9 N. E. 654; Henchey v. Henchey, 167 Mass. 77, 44 N. E. 1075.

Plaintiff might have enforced execution of the trust.

New England Bank v. Lewis, 8 Pick. 113; Ward v. Lewis, 4 Pick. 518; Dedham Bank v. Richards, 2 Met. 105; Bryant v. Russell, 23 Pick. 508; Draper v. Putnam, 7 Allen, 172; Andrews v. Tuttle-Smith Co. 191 Mass. 461, 78 N. E. 99.

Henry Nawn would be estopped to deny this trust, as the terms of it are contained in a writing under seal signed by him.

Ward v. Lewis, 4 Pick. 518; Drury v. Fay, 14 Pick. 326; Morrill v. Lamson, 138 Mass. 115.

There was a vested right in the Cavanaughs as beneficiary, under which the assignee, Henry Nawn, is liable if he devest himself of the trust property without providing for the beneficiaries.

Noyes v. West, 3 Cush. 423; Frost v. Gage, 1 Allen, 262.

If he returns the property to the assignor or reconveys it to him, a creditor who did not consent to such retransfer is entitled to enforce the trust, even if the estate was solvent and only one creditor unpaid.

Noyes v. West, supra; Carney v. Dewing, 10 Cush. 499; Fitch v. Workman, 9 Met. 517; Dimmock v. Bixby, 20 Pick. 368.

If there was a misapplication of the

trust property innocently made by the trustee, who thereby devested himself of the trust, he would be liable.

Ward v. Lewis and New England Bank v. Lewis, supra.

The mortgages, or one of them, was an equitable mortgage of Cavanaugh Brothers, to which the Statute of Frauds is no defense.

Campbell v. Dearborn, 109 Mass. 130, 12 Am. Rep. 671; Potter v. Kimball, 186 Mass. 120, 71 N. E. 308.

As between the trustee and cestui que trust in an express trust created by sealed instrument, where the trustees still retain the proceeds of the trust, the Statute of Limitations has no application, and no length of time is a bar.

Farnam v. Brooks, 9 Pick. 212; Fuller v. Cushman, 170 Mass. 286, 49 N. E. 631; Perry, Trusts, 6th ed. § 863.

The trust being established, the burden is on the defendant to prove that the trustee executed it, that the property was sold or turned into cash, and that Cavanaugh Brothers were paid.

Ashley v. Winkley, 209 Mass. 509, 95 N. E. 932; Cosmopolitan Trust Co. v. Mitchell, 242 Mass. 119, 136 N. E. 403.

If there was any question upon the evidence as to when the Statute of Limitations began to run, if at all, the defendant was not entitled to a directed verdict.

Kellogg v. Tompson, 142 Mass. 76, 6 N. E. 860; Trudeau v. Poutre, 165 Mass. 81, 42 N. E. 508.

Messrs. E. C. Thayer and Edward Bangs for defendants.

Wait, J., delivered the opinion of the court:

The plaintiff declared, in contract, that it and Henry P. Nawn accounted together on November 1, 1918; that a balance of $3,913.08 was found due from Nawn which he agreed to pay but never paid. The defendants, in addition to general denial and payment, pleaded the statute of frauds and the statute of limitations. The case was referred to an auditor who reported findings of fact upon which, unless the statutes of frauds and of limitations constituted a defense, the defendants, as executors of Henry P. Nawn, would be liable. At the trial before a jury, the plaintiff put in

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