Donegan v. Baker & Holmes Co.

Citations

• 73 Fla. 241

Syllabus

<p>1. A corporation being heavily indebted, and whose debts exceeded its available assets, after consultation with some of its creditors, executed a deed to D., conveying certain real property for a stated consideration, and took from D., the creditors consenting, a paper writing in which D. agreed to hold the amount agreed upon as the purchase price for the real estate, for the following purposes: “First, deduct the recorded mortgage indebtedness against the property and pay the same; second, take the remaining moneys and disburse to the best advantage for the creditors as shown by the list below, it being understood that this list shows the names and amounts due all the creditors to whom the Ludlam and MacDonough Company (the corporation) are indebted.” Held: That the fund in the hands of “D.” constituted a trust fund for the' benefit of certain creditors to be disbursed by “D.” ascording to his directions “to the best advantage of the creditors.”</p> <p>2. The transaction recited in the above headnote was not a novation because the debts of the corporation were not extinguished by it, nor were the claims of the named creditors cancelled by the trustee’s obligation.</p> <p>3. In a suit by a cestui que trust for a distribution of a trust fund the trustor or person creating the trust is not a necessary party.</p> <p>4. Where a Court of Chancery assumes jurisdiction of a cause for one purpose, which is the principal object of the suit, it will proceed to the settlement of the entire case.</p>