Opinion
11-08-1895
STEVENS v. BOSCH et al.
Charles H. Hartshorn, for complainant. F. W. Ward and George M. Keasbey, for defendants.
Bill by Frank Stevens, as trustee under the will of Clark Hammond, deceased, against Joanna C. Bosch, James E. Howell, and others, to ascertain the amount of a certain trust fund, of which Alfred Lister, deceased, a former husband of defendant Bosch, was trustee, and over which complainant was appointed as his successor. The cause appears on demurrers to the bill. Overruled.
Charles H. Hartshorn, for complainant.
F. W. Ward and George M. Keasbey, for defendants.
PITNEY, V. C. The complainant was appointed by the orphans' court of the county of Essex trustee to execute the trust created by the will of one Clark Hammond, in place of Alfred Lister, deceased, who was the trustee named in the will. The object of the bill is—First, to ascertain the amount of the trust estate which was received by Lister in his lifetime; and, second, to recover the same from the estate of which he died seised. Lister, by his will, after directing the payment of his debts, gave the whole of his estate, which consisted entirely of land, to his widow, Joanna C. Lister (who has since intermarried with one Bosch), and appointed her executrix thereof. There was no personal estate. Mrs. Lister conveyed all the lands (with a trifling exception) of which her husband died seised to the defendant Howell, in trust for the payment of certain debts of a corporation in which Lister was interested, and of a certain partnership of H. S. Miller & Co., of which ho was a member. The allegation of the bill is that Lister received at least $6,000 of the estate of Hammond which he failed to properly invest, so that his estate is liable to pay that sum, at least, with arrears of interest, to the complainant; and the equity relied upon is that the debt due the estate of Hammond was the individual debt of Lister, and should be paid out of his estate before the partnership debts of H. S. Miller & Co., and before any of the debts of the corporation of which he was a member.
The demurrer states two grounds: First. Misjoinder of causes of action, viz.: (a) A suit to ascertain the amount of the trust fund in the hands of the executrix of Lister, and (b) to declare the same a lien upon certain lands. Second. Lack of parties, both complainant and defendant.
There is no misjoinder of causes of action. The suit has a single object, namely, to recover from the estate of Alfred Lister, in whosesoever hands it is found, the amount due from him to the estate of Hammond. The ascertaining of the precise amount due is a mere incident. The main object of it is to follow the assets of the estate into the hands of the assignee of the devisee, and to enforce a lien thereon given both by the statute and by the will of the decedent. The authoritiescited for the contrary position, when carefully examined, do not sustain it. Salvidge v. Hyde, 5 Madd. 138, Jac. 151, was a creditors' hill against an executor to settle the estate of the testator, and also to set aside a sale made by the executor to a purchaser who was made a party. The vice chancellor, as reported in 5 Madd., held the bill not to be multifarious, and I think his reasoning is sound. He was reversed by Lord Eldon, on appeal, for reasons which Lord Cottenham explained in Attorney General v. Cradock, 3 Mylne & C. 85, at page 90. And see Campbell v. Mackay, 1 Mylne & C. 003. The object of the present bill is not, as in Salvidge v. Hyde, to have a general settlement of the estate of Lister, but to ascertain simply the amount due from him. All the parties to the bill are interested in both the questions, and the two are indissolubly connected.
It was suggested that the complainant should first establish the amount due from the estate of Lister, and then file his bill against the grantee to establish his lien upon the lands. But the complete answer to that suggestion is that the grantee, as trustee, is engaged in selling the lands and distributing the proceeds among the creditors of Lister, and, by the time the first suit would come to a conclusion, the estate would probably have been disposed of and distributed among divers creditors in different parts of the country.
Upon the question of multifariousness or misjoinder, the judges all agree that it is impossible to lay down any rale applicable universally, or to say what constitutes or not multifariousness as an abstract proposition, but that each case must be determined upon its own particular facts, and in the exercise of a sound discretion by the court as to what will best tend to the promotion of justice in a particular case. Vice Chancellor Van Fleet, in Ferry v. Laible, 27 N. J. Eq. 146, at page 150, says: "The question is not one of principle, but of convenience, addressed to the sound discretion of the court." And Justice Depue, in Railroad Co. v. McFarlan, 31 N. J. Eq. 758, says: "The rule with regard to multifariousness, whether arising from the misjoinder of causes of action, or of defendants therein, is not an inflexible rale of practice or procedure, but is a rule founded in general convenience, which rests upon the consideration of what will best promote the administration of justice, without multiplying unnecessary litigation on the one hand, or drawing suitors into needless and unnecessary expenses on the other." The present case resembles that of the foreclosure of a mortgage against an assignee by deed with warranty of the mortgaged premises, who has not assumed the mortgage, and where the amount due upon the mortgage is open to dispute. Clearly, in such a case the original mortgagor and bondsman should be brought in, and the amount due upon the mortgage established as against him, as a part of the foreclosure proceeding.
Next, as to want of parties: It is alleged that the cestuis que trustent under the will of Hammond should be made parties complainant, and that the cestuis que trustent of the defendant Howell should have been made par ties defendant.
With regard to the first allegation, the bill shows that the estate was devised to the trustee in trust to pay the income to the testator's daughter during her life, and at her death to divide it among his children and grandchildren. The daughter is still living, and hence the trustee is not a mere naked formal trustee holding the legal title, without any active duties to perform except to pay it as soon as received to his cestui que trust, but he is entitled to hold the fund upon a continuing trust, with active duties; and the object of the present suit is simply to recover the estate from the hands of the holders of the estate of the former trustee. In such case the general rule laid down in the books that cestuis que trustent are necessary parties complainant does not apply. Story, Eq. Pl. § 215a. The cases cited by counsel, to wit: Tyson v. Applegate, 40 N. J. Eq. 305; Brokaw v. Brokaw, 41 N. J. Eq. 223, 7 Atl. 414; Cool's Ex'rs v. Higgins, 25 N. J. Eq. 116; Allen's Ex'rs v. Roll, Id. 163,—are all distinguishable on the ground that in those cases either the complainant was a bare trustee, and was not entitled to hold possession of the fund when recovered, or the interests of the cestuis que trustent were adverse to those of the complainant. The distinction above pointed out is treated of by Mr. Calvert in his book on Parties (2d Ed., 1847, pp. 277, 278), and several cases are there cited illustrating the distinction, to which I add the case of Reeve v. Richer, 1 De Gex & S. 624, 17 Law J. Ch. 86. This is not a suit to administer a trust, or in which the construction of it or the rights between trustee and cestuis que trustent are at all involved. The trustee here represents his cestuis que trustent, and the case is clearly within one of the exceptions mentioned by Justice Dixon in his opinion in Smith v. Gaines, 39 N. J. Eq., at pages 549, 550.
The next specification of want of parties is that the cestuis que trustent of the defendant Howell should have been made parties. I am of opinion that this objection, as well as the others, cannot prevail. So far as the bill shows, the names of the persons for whom Howell holds the estate in trust are wholly unknown to the complainant, and the allegation is that they are not only unknown to the complainant, but, if known, are so numerous as to make it inconvenient and improper to bring them all in. The defendant Howell represents them, and they are clearly within a familiar exception to the rule that all the cestuis que trustent must be made defendants. The defendant Howell will have no difficulty in protecting himself by giving to each of his cestuisque trustent notice of the suit and its objects; and, if he is embarrassed by any lack of harmony among them, he may take such means to protect himself as he shall be advised. At present I can only be governed by the allegations of the bill, which show a clear case for omitting Howell's cestuis que trustent.
The bill had another aspect which requires consideration. The allegation is that the trust fund amounted to at least $6,000; and, as evidence of this, it is stated that the former trustee, Lister, made his bond for $6,000 to a third person, and secured it by a mortgage of certain of his own real estate; and that subsequently he procured an assignment of his own bond and mortgage to himself as trustee of Hammond, and held it as such at the time of his death; and that the bond and mortgage are still in existence, and at the moment of the argument were in the possession of the complainant. The allegation with regard to this bond and mortgage is that the property covered by it is entirely insufficient to secure it, and that, if it was intended as an investment of so much of the fund, it was a breach of trust. The bill prays a foreclosure of this bond and mortgage, and certain judgment creditors of Mrs. Bosch, the devisee of the deceased trustee, were made parties, and brought in as subsequent lienors upon the mortgaged premises. Among these is Henry S. Miller, the former partner of Lister, the trustee, and he demurs to the bill on the ground of multifariousness, alleging, among other things, that so much of the bill as prays foreclosure has no connection with the other part of the bill, and renders it multifarious. Before the argument came on, complainant moved to amend his own bill by striking out the clauses praying foreclosure, and making the judgment creditors of Mrs. Bosch parties as lienors. The motion was granted, the only question being as to whether it should be granted upon payment of costs as against Miller. The object of adding the prayer for foreclosure was evidently to save the costs of a separate suit for foreclosure. If the complainant succeeds in enforcing a lien upon the lands conveyed to Howell as trustee, and those lands should be insufficient, after paying complainant, for the purpose of the trust vested in Howell, then be will be entitled to have the bond and mortgage in question assigned to him, and to foreclose it; or it may be that the court would, upon his application, stay the execution of the decree against him until the amount which might be realized out of the mortgaged premises should first be ascertained by an actual foreclosure and sale; and I am not at all sure that, if the complainant had not moved to amend, I should have finally held that the bill was rendered multifarious by the part stricken out. The complainant is acting in perfect good faith as an officer appointed by the court to execute a trust, and, as Miller is interested in the execution of the trust given to Howell, I do not see how he is injured by the introduction of a foreclosure into this bill, and therefore decline to give costs.
I will advise that the demurrers be overruled.