Eldredge v. Putnam

Cole, J. The learned counsel for the plaintiff insists that it was error on the part of the court below, to sustain the demurrer on the ground that James Patrick was a necessary party plaintiff. At the same time the counsel frankly admits the general rule to be, that, in actions to obtain an accounting and settlement of a trust fund, all persons interested in such accounting and entitled to share in the distribution are necessary parties; but he claims that the facts stated in the complaint bring the case within one of the well recognized exceptions to that rule. An exception is, that where each beneficiary is entitled to an aliquot part, such as a quarter or half of an ascertained and definite trust fund, each may sue for his portion, as was done in Hubbard v. Burrell, 41 Wis., 365, without making the other beneficiaries parties. Such, he says, is the [207] case at bar. But Hubbard v. Burrell is quite distinguishable from this case. There no accounting of the trust fund was necessary, and no such relief was demanded in the complaint. The decision proceeds on the ground that the trustee held a definite and ascertained sum for the plaintiff, and that James Hubbard had no interest in the subject matter of the suit. It was therefore said, in the opinion, that there was no reason why the plaintiff could not have a separate action to recover his share held by the trustee. According to the complaint, the plaintiff’s assignor, Erwin Evelith, and James Patrick were to receive, as payment for their services in selecting, examining and locating the lands described for the defendant and William S. Patrick, one-eighth of the proceeds of the sales of such lands, less one-eighth of all taxes and interest paid on the same while held by the defendant and William S. Patrick. It is stated that, by an agreement between Evelith and James Patrick, for the lands which were examined and selected by them jointly, each was to receive an undivided one-sixteenth of such sales; while for those which each separately examined and selected, the party so selecting was to receive the entire one-eighth. The number of acres selected by each separately, and by Evelith and Patrick together, is stated. It further appears that all the lands were sold by William S. Patrick, in whom the legal title was vested for that purpose, for the joint benefit and profit of himself and the defendant; and the price received per acre on such sales is alleged. It does not appear, however, that there was ever any accounting and settlement of these various transactions between the defendant and William S. Patrick; though it is stated that the latter died in Pennsylvania in January, 1877, leaving the defendant the sole surviving promisor and trustee, under the written acknowledgment of trust set forth in the complaint. The plaintiff then alleges, upon information and belief, that, during the year 1877 and before the commencement of this suit, the defendant herein fully accounted [208] to and with, and fully paid and satisfied, the said James Patrick for all money, claims and demands due, owing and belonging separately and individually to him, the said James, by reason of the matters and things before set forth. It is further averred that, in the autumn of 1873, William S. Patrick rendered to the plaintiff a false, imperfect and partial account of the sales made by him, from which it appeared that the separate share of the plaintiff, computed according to the price per acre given, was about the sum of $1,300, only about $85 of which has ever been paid. It is then stated that the plaintiff did not learn, until after the death of William S. Patrick, that this accounting was false and fraudulent; and it is averred that he has not since assented to nor acquiesced in such accounting. It is alleged that at divers times while the defendant and W. S. Patrick were owners of the lands, certain taxes were paid by them, but at what times or to what amounts the plaintiff is unable to state, except that the sum of $14.62 was paid by them for the taxes of 1872. The relief asked is, that the partial, imperfect and fraudulent accounting be set aside and held of no effect; that an accounting may be had between the plaintiff and defendant of all the sales and adventures in said lands, and of and concerning the profits, proceeds and receipts of the same and the whole thereof; and that, after deducting such sums as should of right be deducted in the premises, the plaintiff may have a judgment against the defendant for such sum as shall, on such accounting, be found due him for his individual and separate share of the purchase money received by William S. Patrick and the defendant, or either of them. We have thus given at some length the more material parts of the complaint, in order to show the purpose and scope of the action. It will be seen that the object of the suit is to set aside the' alleged fraudulent settlement or accounting made with the plaintiff by W. S. Patrick in 1873, and for a general accounting of the sales and profits from all the lands, as well [209] those selected by Evelith and James Patrick together as those lected by each separately. All these various matters have ■ he examined, and the amounts of taxes paid by the owners, „ith the interest thereon, have to be ascertained and adjusted. How it can be successfully maintained that James Patrick is not interested in these matters, and is not a necessary party to the account to he taken, it is difficult to understand. The defendant may well insist that if all these transactions are to he inquired into and overhauled, James Patrick should be before the court, so that the accounting should be final. At all events, it would seem clear that the facts do not show that the plaintiff is entitled to a certain share of a fixed and definite trust fund, so as to bring the case within the rule of Hubbard v. Burrell and that class of cases. On the contrary, the presence of James Patrick would seem to be absolutely necessary to taking the account and granting the relief sought. Ho question is made as to the necessity of making the legal representative of W. S. Patrick a party, though there would seem very cogent reasons for doing so. W. S. Patrick was the party who made the alleged fraudulent settlement with the plaintiff, and it does not appear that the defendant was privy to or connected with that fraud, except that it may he presumed he was benefited by it, as he and "William jointly shared in the profits of the speculation. However, we express no definite opinion upon the question whether the legal representative of W. S. Patrick should be before the court, since no point was made upon it in the argument. Rut as to the necessity of making James Patrick a party, in view of the relief sought, we are clear that he should be brought in. But it was further said that the complaint shows that James Patrick’s interest in the fund has wholly ceased, and therefore that he need not be made a party. We have referred to the allegation that the defendant had fully accounted with and fully paid James Patrick for all moneys, claims or demands due and owing to him separately and individually. A ques [210] tion was made whether this averment was intended to embrace matters in which James Patrick was jointly interested with the plaintiff, or whether it did not exclusively refer to such lands as he alone selected and examined, and for which he was to receive the entire one-eighth of the proceeds. But, giving to the allegation its widest scope, we still think it does not dispense with the necessity of making James a party to the general accounting. We have already sufficiently stated our reasons for that view, and need not repeat them. The counsel for the plaintiff referred us to a number of cases which decide that when a person answerable in contract to two jointly, settles wdth one of them so that that one has no longer any real interest in the matter in dispute, it amounts to a severance of the cause of action, and the debtor is liable in an action at law to the other alone. This doctrine was recognized or acted upon in Strohn v. Hartford Fire Ins. Co., 33 Wis., 648; Carrington v. Crocker, 37 N. Y., 336; and Boston & Maine Railroad v. Portland, etc., R. R. Co., 119 Mass., 478. But the doctrine of these cases does not apply here, where a full accounting is sought in equity. There the invariable rule is, that all interested in the account are necessary parties, either plaintiffs or defendants. It follows from these views, that the order of the circuit court must be affirmed. By the Gowrt. — Order affirmed.