Williams v. West

Le Grand, C. J., delivered the opinion of the court. This case comes before the court on an appeal from an order of the chancellor, overruling the demurrer of the appellant to the bill of the appellees exhibited against him. The seventeen causes assigned, by way of demurrer, will be examined in the order of the- classification to which they severally belong. The demurrer admits the truth of all the facts and averments of the bill, and the questions presented for our consideration, arise out of the facts so admitted. The first three causes of demurrer relate to the alleged agency of the appellant. The point of the first and third is, that the bill exhibits no title in the complainants to the discovery or relief sought in that behalf; and that of the second and seventh, that it establishes no privity between complainants and defendant, as respects his acts as agent. The bill after stating the execution of the deed, the assumption of the powers of the trust by Pierce and McDonald, that, they, in pursuance of the authority conferred on them by the deed, appointed James West their attorney, to sell and dispose of the property conveyed, with power to apply the proceeds in execution of the trust. That West, by virtue of the power thus conferred on him, performed various duties in the sale of property and collection of debts, from the date of his appointment in 1805, until his death, in the latter end of 1809, and, during that time, had advanced to or for the preferred creditors, or. to or for the use and benefit of the trust, — 195 — or for account of the trustees, the sum of $2898.48, over and above his receipts as agent of the trustees. That these advances were frequently recognised by the trustees and have been but partially paid. The bill further states, that after the death of West there was awarded to his estate, by arbitrators, with the consent of the trustees, the further sum of $7000 for the services of West, rendered by him to the trustees as their agent and attorney; that to the extent of these claims and allowances, they being made for proper costs and expenses attending the execution of the trust, the trust was relieved from the burthens of the first class of preferred creditors. The bill then proceeds to state, that after the death of West, on the 25th of February 1810, by letter of attorney under seal, the trustees appointed the appellant their agent and attorney, and conferred upon him the same power which had been formerly conferred on West; that the appellant, as such agent, afterwards adopted, acted upon, ratified and acknowledged the claims of the appellees as administrators of West, and, from the time of his appointment to the filing of the bill, had knowledge of the claim, as one entitled to be paid out of the trust estate, in preference to the claims preferred in the schedule annexed to the deed. The bill further alleges, that the appellant, as agent and attorney, took into his possession, all and singular, the books of accounts, vouchers, documents, receipts and evidences of debt, muniments of title, deeds and correspondence, as well of West, as of the trustees, and undertook to manage the sales, collections and receipts of the trust and its funds, and also the payment of its charges, debts and creditors; that the trustees had left to the appellant, and as his duty, to pay off the charges and debts in their just and equitable order, and that the appellant, as agent, assumed and undertook to do so, and did in, fact, from time to time, between the years 1810 and 1832, pay appellees various sums of money. These averments, and they are by the demurrer admitted to be true, undoubtedly establish a sufficient privity between the parlies to this suit to give the appellees a standing in — 196 — court. They show an acknowledgment of the justice of the claim and a recognition of its binding character. It would be difficult to imagine how more clearly privity between the parties could be shown, than by the assertion on the one side of a claim, and an acknowledgment of it on the other, and this is precisely the case as it appears before this court on bill and demurrer. The same remark may be made in regard to the first and third reasons assigned in support of the demurrer. The bill avers, that the appellant, as agent, took into his possession the books, vouchers and documents of West, and that he has not settled any account with the complainants. These facts clearly entitle them to a discovery of the true condition of the fund, and the state of the accounts between them as the representatives of West and himself as agent. The fourth, fifth, fifteenth and sixteenth causes urged in support of the demurrer are in substance the same. They present the point, whether the personal representatives of Pierce and McDonald are necessary parties to this proceeding. As the case is disclosed to us, we are of opinion, that the personal representatives of neither Pierce nor McDonald are necessary parties to this proceeding. The bill substantially avers, that from the time of his appointment as agent, he has had the exclusive control of the funds of the trust, together with all the evidences of title and of debts due to the estate, and that neither the executors or representatives of the original trustees ever intermeddled with the trust, and that the appellant never accounted with them. These facts establish his relation as that of a trustee, holding the assets of the estate for the benefit of the cestui que trusts, and, as such, accountable to them for their proper administration. The eighth and twelfth reasons urged on behalf of the appellant are, in substance, the same, although somewhat different from each other in the language in which the point is presented. The first announces the proposition, that the .claims set up by the appellees are not proper to be paid out — 197 — of the trust estate. The latter asserts that complainants are not, nor was West, a creditor under the trusts of the deed. The deed clearly authorised the original trustees to appoint an agent and to pay all proper expenses and costs attending the execution of the trust, and the bill avers, that a sum of money was advanced by West in furtherance and in aid of the purposes of the trust; that this sum was ascertained, as also a proper amount for compensation for his services as agent, and that the tiustees devolved on the appellant the obligation to pay these sums out of the trust estate, and that he undertook so to do, and in fact did, in part fulfilment of his undertaking, partially discharge the duty and obligation which he assumed. It is, therefore, apparent from the deed itself, that the original trustees did not exceed their powers in the appointment of "West as agent, and the bill avers, that the appellant recognized both the claims and the appellees, the one as just, and the other as the proper persons to receive the payment. What we have said disposes also of the sixth and fourteenth reasons which turn the appellees over to the private estates of Pierce and McDonald. The thirteenth objection urged is, that these claims are legal demands. It is unquestionably true, if there be a full, adequate and complete remedy at law, equity will not interfere to grant relief. But in the case made by the bill it appears, the appellant has never settled an account, and that he is in possession of the vouchers of West. One of the principal objects of the bill is to obtain from him an account, the production of the award of the arbitrators in favor of West, to the end that an account may be had for the purpose of ascertaining whether he has not trust funds justly and properly applicable to the payment of the balance due to the complainants, and that their claims may be accurately ascertained. These are all matters obviously within the jurisdiction of a court of equity. The ninth and seventeenth reasons suggest, that the cestui que trusts, under the deed, are material and necessary parties. — 198 — The bill avers, that none of the second class creditors ever signed the deed, and that the complainants are ignorant whether any of the creditors of the first class remain unpaid, and prays that the appellant may discover which of them, if any, are now unpaid, to the end, that if necessary, they may be made parties thereto. When this information is had, it will be time enough to determine whether or not they should be made parties, which can be done at any time before final decree. The eleventh reason assigned in support of the demurrer is, that the bill is multifarious, in suing appellant as trustee and as agent. It appears, that on the death of the trustees mentioned in the deed, the appellant w;as, by a decree of Baltimore county court, sitting as a court of equity, appointed trustee, on the 21st September 1836, for the closing of the trust, according to the terms and conditions of the deed. It is not at all times an easy task to ascertain what will render a bill obnoxious to the charge of multifariousness. But in the case made by the bill now before ns wre experience no difficulty. The rule is sufficiently well explained by the chancellor in his opinion in this case, and by the authorities brought together in 8 Gill, 7. The principle seems to be this, that a complainant shall not be permitted to join in the same bill claims of an entirely different character and growing out of transactions in which the party charged acted in dissimilar capacities. For instance, a party will not be permitted to unite in the same bill a claim against the defendant, contracted by him in his private capacity as a citizen, with one arising out of his contracts made while acting as a public officer. The reason of the rule is, that the defendant shall not be compelled to complicate his defence by combining matters which have no necessary connection wdth each other. But this reason cannot exist in a case like this. From the first association of the appellant with the trust estate of West to the present time, he had occupied in truth but one capacity, that of a fiduciary. He had, whilst agent, under the power of attorney appointing him, the same power he has enjoyed since he became trus — 199 — tee. There could be no doubt, that if he had, as trustee, received from a third party a debt due to the estate he could be held responsible as trustee for it, and we can discover no difference between such a case and the one presented by the record. The moment he became trustee under the appointment of Baltimore county court, by operation of law, trie funds and assets which he previously held as agent became assets in his hands, for which he was liable to account as trustee. It is precisely like the case of a person receiving, as administrator, a sum of money which belongs to his ward. In such a case he would be regarded as holding the money as guardian and not as administrator. The remaining objection, is one to the jurisdiction of the high court of chancery. It is said, that the decree of Baltimore county court, sitting as a court of equity, whereby the appellant was appointed trustee to execute the trusts of the deed from West to Pierce and McDonald, gave that court exclusive jurisdiction over all the subsequent proceedings of the trustee. And, moreover, that this jurisdiction could only be exerted by a continuation of the proceedings in the particular case in which Williams was appointed trustee. We cannot concur in this view. It may be admitted that it was competent for Baltimore county court to allow to be engrafted on the proceeding which had been commenced on the motion of Tiernan and others, the suit which is now the subject of our consideration; but it does not necessarily follow from this, that the parties could not seek relief by original bill as they have done in this instance. As we understand the decree of Baltimore county court, it fulfilled its intended office when it invested the appellant with the powers which had been possessed by Pierce and McDonald under the deed of West. He was by it appointed trustee ££for the closing and settling up of the aforesaid trust of the late James West, according to the terms and conditions of the said trust heretofore executed by the said West to and in favor of Humphrey Pierce, and Alexander McDonald.” There was no requirement in the decree that the appointee should — 200 — make any return to, or abide by any further order of the court. It did, in fact, nothing more than substitute the appellant for the original trustees, and like them he could be held to an accountability on an original bill filed for that purpose. By adopting this course there could not be, by possibility, any conflict of jurisdiction. The original proceeding could establish nothing but the appointment of Williams, and this fact could in no manner prejudice his rights in an independent suit otherwise than they would be affected by it had that original proceeding been extended so as to embrace the entire subject of the administration of the trust. Besides this, we think the objection should have been urged in the county court, before the removal of this case to the high court of chancery. After the removal it comes with but slight force from the party at whose instance it has taken place. We agree with the chancellor in opinion, and for the reasons given by him, that the act of 1824, which authorises removals from the county courts to the court of chancery ought not to receive the construction contended for by the able solicitor of the appellant. We have,, of course, only expressed our views of the case as exhibited by the bill of the complainants, the truth of all the statements and averments of which is admitted by the demurrer interposed by the appellant. We, of course, express no opinion upon the rights of the complainants, as they may arise out of the facts which may be exhibited by the further proceedings in the cause. When such discovery is made, it will be time enough to apply the principles which have been recognized in the case of Collinson vs. Owens, 6 Gill and Johnson, 4. Order overruling demurrer affirmed, and cause remanded for further proceedings.