Greason v. . Keteltas

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 493 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 494 The trustees under the will of John Gardner took an estate in fee; and although that estate was not absolute, but determinable upon the death of the three children of the testator, the whole legal title was, nevertheless, during the continuance of the estate, vested in the trustees. By virtue of this title, the trustees had authority to grant leases for such length of time, and upon such terms, as they might think proper, and at law all such leases would be valid. *Page 495 But although good at law, whatever may be their terms, they are, nevertheless, subject to the supervisory jurisdiction exercised by courts of equity over every species of trust. As, however, the will in this case contained no limitation, either express or implied, upon the powers which the trustees possessed as incident to their legal estate, the only ground upon which a court of equity can interfere with leases executed by them is, that such leases are to be regarded, in view of the duration of the trust estate, and the object of the trust, as an abuse, or grossly improvident exercise by the trustees of the powers with which they are clothed. In all such cases, if the trustees act honestly, and with a reasonable degree of prudence and foresight, their acts are to be upheld. Under the proof adduced in this case, there would seem to be very little ground for imputing to the trustees any want of good faith, or even of the most scrupulous care and caution, in the execution of their trust. Taking into consideration the situation of the property covered by the lease in question, and also the condition of the trust fund, the conduct of the trustees in the premises would seem to have been reasonable and proper, and in accordance with the principles adopted by judicious individuals in the management of their own estates similarly situated. The objections taken to the validity of the lease, therefore, cannot be sustained, either upon the ground of a want of power, or of an abuse or improper exercise of such power on the part of the trustees. But it does not necessarily follow that the judgment can be sustained. There are some difficulties growing out of the nature of the action, and the manner in which it was tried. The original object of the suit, as disclosed by the prayer of the complaint, was to enforce a specific performance of the covenants entered into by the trustees; and had the covenant for a renewal or extension of the lease been made to depend upon a failure or refusal on the part of the *Page 496 trustees to choose an appraiser, there would, perhaps, have been no difficulty in sustaining the action in that aspect, as a judgment or decree, that unless the defendants should voluntarily select an appraiser they should renew the lease, would have been unobjectionable. As, however, the covenant to renew is dependent entirely on the failure to pay, and there could be no such failure until the value was ascertained, the only decree for a specific performance, which the court could make, would be one compelling the defendants to choose an appraiser. It is well settled that courts of equity will never entertain a suit to compel parties specifically to perform an agreement to submit to arbitration. (Gourlay v. Duke of Somerset, 19Ves., 431; Agar v. Macklew, 2 Sim. Stuart, 418.) To do so, would bring such courts in conflict with that policy of the common law which permits parties in all cases to revoke a submission to arbitration already made. This policy is founded in the obvious importance of securing fairness and impartiality in every judicial tribunal. Arbitrators being selected, not by law, but by the parties themselves, there is danger of some secret interest, prejudice or bias in favor of the party making the selection; and hence the opposite party is allowed, to the latest moment, to make inquiries on the subject. So scrupulously is this right of revocation guarded, that it is not lost, although the submission has been actually made a rule of court. (Mitchell v.Harris, 2 Ves., 129, notes 3, 4, Sumn. ed.) But an additional reason for the refusal of courts of equity to entertain jurisdiction in such cases is, that it is against their policy to make decrees which they cannot enforce. If the arbitrator be named in the decree, this would violate the policy of the law as to the right of revocation; and if not named, the decree could readily be evaded by choosing an arbitrator who would refuse to act. In view of these principles it is clear that the plaintiff cannot maintain this as an action for a specific performance; *Page 497 and there is, so far as I can see, no other ground of equity jurisdiction to which it can be referred. If the leases were valid, the only remedy of the plaintiff is by an action at law, to recover damages for a breach of the covenants which they contain; and as the complaint sets out the covenants at length; the substitution of the defendant, Keteltas, together with Thomas and McCarthy, as trustees; the death of McCarthy, and the absolute refusal of Keteltas to select an arbitrator, it contains all the facts essential to an action upon the covenant, if such an action can be maintained. Although parties who act in respect to the property in their hands in the capacity of trustees only are not ordinarily under any obligation, in executing the duties of their trust, to enter into any personal covenants in relation to the trust property, yet, when they voluntarily do so, they are not only themselves bound to perform such covenants, but those who succeed to their rights as trustees are also bound, so long as they retain the control of the property to which they relate. (Simons v.Bolland, 3 Mer., 547; Attorney-General v. Morgan, 2Russ., 306; Wedgwood v. Adams, 6 Beav., 600.) The successors are chargeable, in such cases, as assignees of the property, by virtue of their pernancy of the profits. Executors are chargeable personally upon the same ground. (Helier v.Casebert, 1 Lev., 127; Sackvill v. Evans, Freem., 171.) If the assignees would avoid this responsibility they must divest themselves of the trust estate. By the lease in question, the parties "mutually covenanted" that, at the expiration of the term, the value of the buildings should be ascertained by two sworn appraisers, one of whom should be chosen "by each of the said parties." There is no doubt that this was a personal covenant, and binding as such upon the trustees; and as the defendant, Keteltas, has succeeded by substitution and survivorship to all the rights of the original trustees, this covenant, which attaches itself to the estate, is obligatory upon him so long as he retains the title to the premises. *Page 498 This leads, of course, to the conclusion that the action is strictly an action at law; that it should have been brought against Keteltas alone, and have been tried by a jury and not by the court. The only serious questions in the case, therefore, are, whether the error in respect to the mode of trial, or in respect to the form of the judgment, as being against all the defendants instead of against Keteltas alone, are sufficient to reverse the judgment. Had these objections been taken at the proper time and in the proper form, they would, no doubt, have been fatal to the recovery; the first as to all the defendants, and the last as to all except the defendant, Keteltas. But the objection in respect to parties was not made at all; and that in respect to the mode of trial, only as a part of the motion to dismiss the complaint. The right to a trial by jury in a proper case is absolute, and any decision of the court, overruling or denying such right, would be plainly erroneous. But it is a right which can be wavied; and if a party who is entitled to it enters voluntarily upon a trial by the court, without objection, he would ordinarily, no doubt, be understood as consenting to that form of trial. In this case the defendants not only remained silent on the subject of a trial by jury until after the judge had entered upon the trial, but the objection, when stated, was insisted upon only as one of the reasons for dismissing the complaint. In this aspect it was, of course, overruled. It could afford no ground for dismissing the complaint. If the defendants intended to insist that the cause, if tried at all, should be tried by a jury, they would have raised the question before entering upon the trial, or at least would have persisted in the objection after the motion to dismiss the complaint was denied. Upon the whole, I think there is no error of which the defendants can avail themselves upon this appeal. The judgment should be affirmed, with costs. *Page 499