Mowry v. Hawkins

Carpenter, J. On the 21st day of March, 1887, there were standing on the books of a joint stock corporation eighty-three shares of the stock in the name of James D. Mowry. On that day the defendant, as sheriff of the county, having levied an execution on the stock, posted the same for sale. Mowry, claiming that he held the stock as trustee for his wife, and that it was standing in his name by [458] mistake, brought a suit for an injunction to restrain the defendant from selling the same. There was a judgment for the plaintiff in the Superior Court, and the defendant appealed. The stock was purchased with funds belonging to the estate of David Smith, deceased, who was the father of Mrs. Mowry, and died testate. By his will he gave the use of his estate for life to Mrs. Mowry and the remainder to her children. Mowry and one Johnson were executors and trustees under the will. The stock was sold to James D. Mowry, trustee, and he was appointed attorney to make the transfer on the books. When the transfer was made and the old certificates were surrendered and a new one taken, the transfer was made and the certificate issued to James D. Mowry instead of James D. Mowry, trustee. He did not notice the mistake at the time. It is found that it was a mistake, and the mistake of the secretary, and that Mowry “ paid nothing for the same out of his individual funds or property, and that the stock was in fact held by him as trustee for his wife.” The first question arising under the first reason of appeal is, whether the court erred in not ruling, as requested, that James D. Mowry did not hold the stock as trustee of the estate of E. Louise Mowry. The ground of this claim is that Mrs. Mowry was not the owner of the stock, that it was paid for by the executors with funds of the éstate of David Smith, and hence that they were the real owners; that is, that Mowry was trustee for himself and his co-executor as executors, or as trustees for Mrs. Mowry as to the life estate and for her children as to the remainder. Even if this were so it would not follow that the defendant would have a right to sell it for the benefit of a creditor of Mowry. Its only effect would be to defeat the present action on a technicality—a result we should be loth to reach. But we are disposed to take a different view of the case. We do not deny that a party must recover in the capacity in which he sues. If he sues as trustee for his wife he must show a right to recover in that capacity. In this ease wo [459] can regard Mm as her trustee. The executors, who were also trustees, had power to invest the estate. They invested a portion of it in the purchase of this stock. Instead of taking the title in themselves jointly they took it in the name of James D. Mowry, trustee. The transfer does not specify whether as testamentary trustee or as a statutory trustee for his wife. The finding however makes it plain that the latter was intended. No question is made, or can be made, as to the power of the executors to make the investment in that way. Nor can we see, aside from the mistake of the secretary, that Mrs. Mowry, her children, or the executors will be harmed by it. The fact that she did not own the stock, but only the income, cannot have the effect in law to prevent him from being her trustee in respect to the stock during her life. It was legally competent therefore for the court to find, as it did find, and it is strictly true, that he is her trustee. Under the 5th, 6th, 7th, 10th and 11th reasons of appeal, the defendant claims that the stock standing in the name of James D. Mowry “ on the books of the corporation, was open to attachment and execution in favor of his creditors, no matter in what capacity he held the same.” This, as a legal proposition, is altogether too broad. In the absence of fraud stock may stand in the name of one which belongs to another, without being liable to attachment for the debts of the nominal owner. That must be so as to all creditors who have not been misled or deceived by it, and as to those who are advised as to the true state of the title. In this case there is no pretense that the attaching creditor had been misled or deceived, and it is admitted that the defendant, who may fairly be regarded as the creditor’s agent for that purpose, was notified of the true ownership of the property soon after the levy of the execution. A husband who is trustee for his wife cannot make her property liable for his debts simply by investing it in his name. A public statute cannot be thus easily repealed by one who may have an interest in repealing it. Under the 8th and 9th reasons of appeal the defendant [460] claims that “ James D. Mowry, trustee, is estopped to assert title in himself or to deny that of James D. Mowry.” The argument by which this claim is supported is ingenious rather than sound. The question is not whether James D. Mowry, trustee, is estopped by his acts as such, but whether E. Louise Mowry is estopped by the acts of James D. Mowry. So far as he took part in purchasing the stock he acted as executor of David Smith. That he intended that it should vest in himself as trustee for his wife cannot be denied. So far as he took part in vesting the title in himself, and so far as he united with the secretary in making annual reports of the condition of the corporation to the town clerk, he was acting as president of the corporation. In no sense was he then acting as her trustee, and we fail to see that he did any act as such by which she can be es-topped. The statute provides that he may not sell his wife’s property unless she joins in a written conveyance thereof. It is difficult to see how a sale can be effected by means of an estoppel against her will. We will not undertake to say that there can be no case in which it can be done. It is enough for our present purpose to say that there is no. estoppel that will affect her in this case. It may be true, in a certain sense and for certain purposes, that what he knew as president of the corporation he knew also as an individual and as trustee; but that is an insufficient reason for depriving her of her property. Under the 13th reason of appeal the defendant claims that the plaintiff has adequate remedy at law. This claim does not seem to be seriously pressed. But if it is, it is enough perhaps to say that it does not appear to have been made in the court below, and under the rule cannot of right be claimed here. But aside from that, this is an action by a trustee to protect the rights of parties beneficially interested. A destruction or radical change of the trust property may be prejudicial to those interests, inasmuch as an action for damages may be a very inadequate remedy. There is no error in the judgment appealed from. In this opinion the other judges concurred.