Woodside v. Grafflin

Citations

• 46 A. 968
• 91 Md. 422
• 1900 Md. LEXIS 54

Syllabus

<p>Right of Owner of Stock Pledged by Agent Without Authority to Follow Proceeds When Agent Has Made a Deed of Trust for _ Creditors — Use of Proceeds of Property by Agent for Benefit of Principal — Subrogation—Appeal by Trustee — Final Order.</p> <p>Petitioner, who was entitled to an interest in certain shares of stock as distributee of an estate, executed a power of attorney to a co-owner authorizing him to manage these shares as well as other property for the benefit and convenience of all the owners. This agent caused the shares to be put into his own name and pledged them as security , for a personal loan to himself. He afterwards made to defendant a deed of trust for the benefit of his creditors. The defendant paid off the loan and released the shares of stock. A petition was filed in the cause in which defendant administered the trust estate as assignee for creditors, setting forth the claims of the joint owners of the stock and the evidence established the allegations. Held,</p> <p>rst. That the agent held the shares of stock so transferred to him in trust and the petitioner is entitled to his share of them or their proceeds against the trustee and all parties other than bona fide purchasers for value, and is not merely remitted to the enforcement of a claim as a general creditor of the agent.</p> <p>2nd. That the fact that the agent may have used the proceeds of the pledge for the benefit of a corporation in which all the parties were interested does not throw upon the petitioner the burden of proving that such proceeds were not used for his benefit; and the evidence in the case was to the contrary.</p> <p>3rd. That because the trustee used the funds of the estate in paying the debt for which the slock was pledged does not entitle him to be subrogated to the rights of the pledgee.</p> <p>An appeal lies from an order directing a trustee under a deed for the benefit of creditors to pay a sum of money claimed to be due as the proceeds of property held in trust