Martzell v. Stauffer

The opinion of the court was delivered by Rogers, J. Wendal Martzell, made his’last will and testament, and among other matters devised as follows: Item. It is my will that my two sons, John and Christian, shall buy a piece of land for my son Philip, with the necessary buildings, of the value not less than five hundred pounds, and with the said Philip's consent, and they shall help him with farming utensils, horses, cows, wagon, and such other articles, that he would want, to cultivate — 400 — the land, if bought; but the title, (if any land is bought,) shall be made to his children, and their heirs and assigns forever. He shall and may live on it, and draw all the income of it, during life, but no deed shall be made to him, as aforesaid. Item. It is my will, that there shall be always, a certain person appointed by my executors, who shall have the sole care of him, and his property. Should it be considered, to be more advantageous for him and his children, not to buy land, then the money shall be put out upon interest, or my sons, John and Christian, may keep it upon interest, and pay him as much of the interest as may be necessary for his maintenance. Rut if my son Philip, should at any time after some years trial, shall appear a sober, industrious person, to the satisfaction of my sons, John and Christian, and the man so appointed to take care of him and his property, then they may pay his share to himself, or do as might be thought best. * The testator appointed John Martzell and Abraham Riest executors. John Martzell and Christian Martzell the sons, are dead; Abraham Riest is the surviving executor. In pursuance of the power in the will, <and this we think a good execution of the power,) Abraham Riest, the surviving executor, appointed in the first instance Samuel Ensminger, guardian and trustee of the person and estate of Philip, and afterwards, by a subsequent arrangement, appointed" the defendant, Christian Stauffer. Christian Stauffer received in money and goods, (which the jury would have been warranted in finding, were afterwards converted into money,) two thousand three hundred and ninety dollars. The plaintiff offered to prove, (and in giving judgment in this cause we must take it proved,) that Christian Stauffer was in failing circumstances at the time suit was commenced, and that he afterwards assigned all his property for the benefit of certain preferred creditors. The plaintiff also proved, that Stauffer declared that he did not care much whether he gained the suit or not. He would keep it in court, until the whole estate was spent. No land was purchased by the sons for Philip’s use. It was fully proved, that Philip continued an habitual drunkard, until his death. This is an action of indebitus assumpsit, brought by the cestui que trust, against an insolvent and fraudulent trustee, and the question is, whether in Pennsylvania, the fund under such circumstances may be recovered. If we had a Court of Chancery, the remedy would be plain. It is a settled principle of that court, that an executor or other trustee, who mismanages or puts the assets in jeopardy by his insolvency existing or impending, should be prevented from further interfering with the estate, and that the funds should be withdrawn from his hands. Elmendorf v. Lansing, 4 John. C. R. 565. Monell v. Monell, 5 John. C. R. 296. — 401 — Batten v. Earnley, 2 P. Will. 162. Utterson v. Main, 3 P. Will. 334.4 Brown. 277. It is the common practice of the Court of Chancery, to compel the insolvent or fraudulent trustee, to give security, or to bring the money into court, and where that is done the court appoints a receiver. The fund in the hands of the receiver, abides the further order of the court. In a case such as the present, a Court of Chancery would, without hesitation, compel Stauffer tp bring the money into court. If the evidence is to be believed, he has grossly and fradulently mismanaged the fund, and has been guilty of a wanton and wilful breach of trust. In Batten v. Earnley, a case in some respects like the present, the Chancellor in the case of an executor, because he had expressed himself in words, threatening to defeat an annuity, directed the master to see a sufficient part of the personal estate, in the hands of an executor, set apart and assigned to a trustee, in trust to secure the annuity. All the cases show, and particularly the one just cited, the control which that court uses to prevent the mismanagement and abuse of trust, when there is good reason to believe that mismanagement or abuse is intended- As then, we have no Court of Chancery, we are obliged from necessity, and to prevent a failure of justice, to resort to our common law action, which, although a less direct and a more clumsy mode has been made effectual in many cases, to affect equitable relief. This suit can be sustained on equitable principles, and those principles, although we are destitute of a court, whose peculiar business it is to give them effect, have been recognized, and engrafted into our system of jurisprudence, from the earliest decisions of which any note has been taken. It is almost useless to enumerate instances of the kind. They are familiar to all in the least acquainted- with the jurisprudence of the state. Many of them have been mentioned in Bixler & wife v. Kunkle, 17 Serg. & Rawle, 298. These rules, as is there said by Justice Pod, who delivered the opinion of the court, have become rules of property. The principle I take to be this: Equitable relief has been invariably granted, when it can be done consistently with the forms known to the common lato. , In Pennsylvania, says Chief Justice Tilghman, in Cope v. Smith’s executors, 8 Serg. & Rawle, 115, the court hold themselves bound to administer equity, in all cases, where the forms of law do not restrain them,. In the action of ejectment, for instance, which is very little trammeled by form, they consider that as done, which a court of equity would decree to be done. They will permit a purchaser of land to recover it from the seller, when he has paid all the purchase money, according to the contract or tendered it, and brings it into court. So in an action on, the bond, they will permit the obligor to make any plea which would entitle him to relief in equity. These principles have been engrafted in — 402 — the juridical code of this state, from time to time, and were, m truth, indispensable to prevenía failure of justice. Brown v. Furer, 4 Serg. & Rawle, 217. Here the action is indebitatus assumpsit, which is as little trammeled by form, as an ejectment. The remedy is in the nature of a bill in chancery, and may well be made a means of withdrawing a fund from a fraudulent trustee, without doing violence, either to the form or the principles of the action. Sir William Blackstone, in speaking of a Court of Chancery, says, in these early times, the chief judicial employment .of the Chancellor, must have been in devising new writs, directed to the Courts of Common Law, to give remedy in cases where none was before administered. And to quicken the diligence of the tílerks in Chancery, who were too much attached to ancient precedents, it is provided by Statute West. 2, 13 Eliz. 1. c. 24, that, whensoever, from thenceforth, in one case a writ shall be found in Chancery, and in a like case falling under the same right and requiring like remedy no precedent of a writ can bes produced, the elerks in Chancery shall agree in forming a new one, and if they connot agree, it shall be adjourned to the next Parliament, when a writ shall be framed by consent of the learned in the law, lest it happen, that the court of our lord the king, be deficient in doing justice to the suitors. And this accounts for the great variety of writs of trespass on the case, to be met with in the register; whereby the suitor had ready relief, according to the exigency of his business, and adapted to the special reason and equity of his very case. Which provision, says the excellent commentator, (with a little accuracy in the clerks of the Chancery, and a little liberality in the judges, by extending rather than narrowing, the remedial effects of the writ,) might have effectually answered all the purposes of a court of equity, except that of obtaining a discovery by the oath of the defendant. And this was also the opinion of Fairfax, who is said to have been a very learned judge, in the time of Edward, the 4th, and the opinion derives strength by the fact, that the distinction between law and equity, as administered in different courts, is not at present known, nor does it seem ever to have been known, in any other countries, at any time, except England, and some of the states of this Union. As we have no clerk in Chancery it is the duty of the courts themselves, so to fashion our remedies, as to administer relief to suitors, according to the exigency of their business, and adapted as near as may be, without violence to the forms and boundaries of action, to the specialty, reason and equity of his very case. And unless some liberality is shown by the courts, in this respect, we must give up the boast of the Common Law, that there is no wrong without a remedy, as this case most fully shows. If as has been contended here, where there is a right, as Chief Justice Tilghman says, in Brown v. Furer, 4 — 403 — Serg. & Rawle, 217, we must not suffer it to be said, that there is no remedy, (and this, it must be remembered, seems to have been tfie grounds ¡of the decision of the District Court,) the fund went necessarily into the hands of the cestui que trust, it would be difficult to answer the objections, that a recovery would defeat the intention of the testator, as it is manifest he wished 'to prevent Philip controlling the fund, unless his habits were materially changed. The object of the suit, however, is to preserve the fund. To prevent waste, mismanagement and fraud, on the part of the trustee, and this only can be done by layinghands on the money, and placing it at the disposal of the court, and this may be effectually done by controlling the process of the court, by an order endorsed on the execution directing the sheriff to bring the money into court, in compliance with the mandate of the writ. The court might enter a special judgment, which, perhaps, would be the better way, or merely control the execution of the writ, and which ever way is thought the most advisable, the effect will be the same. The bill in Chancery is in the name of the cestui que trust, and so here, in analogy to the Chancery remedy, may be brought by him, especially when the executor, who has the power of appointing the guardian, under the will, assents to the suit. It has been asked, what power has the court over the money, after it is recovered, what disposition can they make of it? and this, I confess, is the most difficult part of the case. I, however, consider that the qbjection is in some measure obviated by the particular circumstances of this case. The recovery of the fund from the trustee, virtually discharges him from the duties as trustee, and leaves the power of appointing another trustee (under the direction of the court,) to the surviving executor. When the money is recovered and an appointment made, he will be entitled to receive, under the orders of the court. Whether the court would have a general power to appoint a trustee, a receiver, to manage the fund, according to the directions of the will, I give no opinion, because, I have no opinion to give, and it is not necessary at this time, to form one. It would be a reproach to our system of jurisprudence, if a wrong, such as this, admitted of no remedy, and this would be the case, unless the action can be supported; and this leads me to consider the argument drawn from the act of 29th Marcix, 1823. It is said that the legislature has in that act given ample remedy to the cestui que trust, and if this were so I acknowledge it would be an argument, difficult to answer, as this action can only be defended upon the ground that it is necessary to prevent a failure of justice. I have looked into the act, with an anxious desire to find that it embraced the case of a trust created by will, but I cannot bring myself to believe, that the legislature intended to embrace it. It would not — 404 — seem to me, that a case, such as the present, was in their contemplation, but extends only to trusts created by conveyance, assignment or transfer. It would be doing violence<to language, to extend the construction so as to embrace a trust created by will. The legislature have, from time to time, invested the courts with certain specific chancery powers. The act of the 24th of March, 1818, gave an adequate remedy against the assignee or trustee, under the act for the relief of insolvent debtors, and the assignees, under a voluntary or compulsory assignment. The act had reference principally to an assignment by debtors, in failing circumstances, which has become very common in Pennsylvania, by which a legal preference is mostly given to creditors, for whose benefit the assignment is made. Further to extend the remedy, they passed the act of the 29th of March, 1823, in which a more prompt and summary remedy is given in certain cases specified, but which cannot be made fairly to include trusts created by will, and I do not feel myself at liberty to supply an omission, either designed or accidental. Had it occurred to the members of the legislature, that a more prompt and summary remedy was wanted in cases of such trust, I have no doubt they would have been included. But there is no reason why we should extend the operation of the act further than the words and the intention of the legislature will fairly warrant. If the legislature would at once vest full power in the courts, in all cases of trust, and also include cases of fraud and accident, it would prove a most salutary and beneficial change, but until this is done, we must continue to administer equitable relief, under the common law form, so as to attain justice, and prevent injustice and fraud. We are of opinion, that the plaintiffs bad a right to shew the insolvency of Christian Stauffer, and that Mraham Riest assented to the suit. We are also of the opinion, that the exception to the charge has also been sustained. Other points were mentioned in the argument, which it is immaterial to notice, as it is believed that these principles embrace the whole case. Judgment reversed and a venire de novo awarded.