Cockey v. Leister

Tuck, J., delivered the opinion of this court. The appellant was appointed trustee by a deed dated the 15th of July 1854, in which Levi Leister, the plaintiff, and Nicholas Leister were parties grantors, with the other heirs at law of Abraham Leister, for the purpose of selling his real estate, for distribution, after paying the expenses of the trust, and the balance of his debts not satisfied by the personal estate; the deed providing that the distribution should be made “under the direction of the circuit court, all points of dispute as to — 128 — advancement, or any other matter that may arise in the premises, to be adjusted by said court.” The appellant accepted the trust, filed his bond in the clerk’s office, under the act of Assembly, and made sale of the property in September of that year, and in February 1855. On the 18th of September 1855, the appellant filed a petition on the equity side of the circuit court, setting forth his proceedings under the deed, and asking the court to distribute the proceeds of sale, but it does not appear that the fund was ever brought into court. An order was passed referring the petition to the auditor, and a distribution was afterwards made, by which Nicholas Leister was allowed <$520.05. This account was ratified nisi, but it does not appear to have been finally confirmed by the court. On the day designated for the final ratification, the trustee filed a petition craving allowance for certain expenses, which appears to have been the last proceeding in the cause; the order endorsed on this petition, not having been signed by the judge, we deem of no effect. Meanwhile, however, between the date of the deed and the filing of the trustee’s original petition, to wit: on the 13th of November 1854, the appellee, a creditor of Nicholas Leister, a non-resident, sued out an attachment on warrant, and laid it in the trustee’s hands, to bind the debtor’s interest in the proceeds of sale. The case was tried on the plea of nulla bona, and the verdict having been rendered against the garnishee, he appealed. ' At the trial, the plaintiff relied upon the facts substantially stated above, as shown by the entire proceedings on the equity side of .the court, and asked the court to instruct the jury that whatever funds of the defendant, Nicholas Leister, the jury shall find, from the evidence in the cause, are in the hands of the garnishee, are subject to the attachment in this case,” which prayer was granted. The garnishee offered two prayers, which were refused, to the effect, first, that the plaintiff was not entitled to recover, because he had adduced no sufficient evidence that any certain sum of money was in the hands of the garnishee, subject to the attachment; and, secondly, because the trust.created b.y the deed remained unsettled, and no action — 129 — at law could be maintained until a sum certain was ascertained to be in his hands, due to the defendant, by a final settlement, of the trust. The appellant is not in the attitude of a trustee in equity, appointed by a decree to make sale of property^, and accpunt with the court for the proceeds. In such a case an attachment will not lie to affect the trust funds in his hands. It was so adjudged as to receivers in the case of Farmers Bank of Del., vs. Beaston, 7 G. & J., 421. The reason of the doctrine there announced, applies with equal force to trustees in equity, and to funds of which they may have charge, and it was so held by the late Chancellor, in Bentley vs. Shrieve, 4 Md. Ch. Dec., 412. Property or funds so situated, are under the control of the court, and may be withdrawn at any time from the trustee’s hands, in which event he could not respond to a judgment of condemnation, except out of his own estate, which would be manifestly unjust; and to allow one court to interfere in this manner with funds under the dominipn of another, might not only produce confusion in settling the trust, but also lead to conflict of jurisdiction. Besides, a trustee, like a receiver, is appointed on behalf of all the parties, and if loss occurs, without his default, the estate must bear it. Elliott vs. The U. S. Ins. Co., 7 Gill, 320. And it might happen that the judgment of condemnation would exceed the amount for which, on a statement of his accounts, the trustee would be liable to the defendant in the attachment suit. We do not wish to be understood as applying this rule to a trustee in equity, where the trust fund has been distributed by the auditor, and his account finally ratified by an order or decree directing the trustee, with the funds in his hands, and not brought into court, to apply the sqme accordingly. See the Act of 1831, ch. 321. This, tqo, is a conventional trust, to which the plaintiff and defendant were both parties, and which the appellant accepted on the terms mentioned in the deed; that is, that the fund should be distributed under the direction of a court of competent jurisdiction, by which not only the rights of the parties could be ascertained, but ¿.he trustee \yould Ije protected qgainst — 130 — the parties themselves. We gather from the deed that there were some matters of difference between the heirs at law of Abraham Leister, which they could not settle, or which they preferred to have adjusted by the court, and, for that amicable purpose, ordained this trust. Now if, instead of this mode, a bill had been filed by some, against the others, to have the land sold, and these questions determined in that form of proceeding, the attachment now sought to be enforced could not have been maintained against a trustee appointed by the court. Does it make any difference how the property becomes trust property, or how the trustee may be appointed, if the fund is to be distributed in equity? In either case the fund may be brought under the control of the court, and here one of the intended consequences of the deed was to place the proceeds of sale under its protection and jurisdiction, for, at the time of, the trial, they were in that predicament. It may be, as urged on the part of the appellee, that a person cannot, by creating a trust of this kind, for his own benefit, place his property beyond the process of his creditors, and delay and hinder the recovery of just demands, but this is not the question before us, for it does not appear that the defendant was indebted to the plaintiff at the date of the deed; on the contrary, his account bears date after that time, and there is no proof on the subject. Besides, the parties are not in that attitude. The plaintiff is himself a party to the deed, and has stipulated with the garnishee that the fund should be distributed in a particular court, where questions about advancement, and other matters of dispute, were to be determined, before it could be known how much, if anything, was coming to the defendant. And now he impleads the trustee in another court, where these questions cannot be adjudicated, and seeks to bind the fund in his hands, while the proceedings are still open in the equity court, and the account distributing the fund, for aught that appears, is yet liable to exception, and the sum awarded Nicholas Leister may be reduced by reason of some of the controverted matters which the trust was designed to have adjusted. In that case he might be required to pay more than the trust funds would meet; for, if pending this appeal, — 131 — the equity court shall have ascertained that the defendant was advanced, or for airy other reason was not entitled to the amount allowed him by the auditor’s account offered in evidence, and this judgment should be affirmed, we are not aware that the garnishee would have any redress against its payment. A trustee ought not to be subjected to the consequences of such multiplicity of suits, and may avail himself of the objection without pleading specially, because the subject matter of the defence is presented by the plaintiff himself. 13 Howard, 335. By the attachment laws, a garnishee has the right, of appearing to the action and confessing judgment for the amount in his hands, and have his costs allowed out of that sum. We think tSiat a person cannot be charged as garnishee, where his legal relation to the fund is such that he cannot take advantage of that provision in the law, and this we take to have been the predicament of the appellant; for, although the deed of trust showed that Nicholas Leister had an interest in the property, it was impossible for the garnishee to have confessed judgment until his proportion of the proceeds of sale had been ascertained by the equity court. The cases cited are unlike the present. In that of State vs. Krebs, 6 H. & J., 31, the proceeds of the land were in the hands of the commissioners, and the sum due the defendant in the action had been ascertained, when the attachment was laid. The court decided that the money might have been sued for by the husband, and that it followed, as a consequence, that it might be attached by iiis creditor to pay a debt due by him. The court had nothing to do with that fund; it was in the hands of the commissioners, and a proper subject of a suit at law. In Hertle vs. Schwartze, 3 Md. Rep., 366, the fund in controversy was a purely legal claim, not depending on the proceedings of a court of equity. There is no doubt that equitable interests may sometimes be attached, as in. Ford vs. Philpot, 5 H. & J., 312, and other cases referred to; but where there is an unsettled trust, like the present, another doctrine prevails. In Nelson,, Excr. of James, vs. Howard, 5 Md. Rep., 327, a suit at law was maintained against the — 132 — executor of a trustee, but the tillst had been closted; And the trustee had promised to pay an ascertained balance due the cestui que trust. (Decided June 15th, 1858.) It follows, from the views here expressed, that the court erred in granting the plaintiff’s prayer, because there was no evidence to show that the defendant was liable in the attachment — the proof offered having had relation only to his possession of funds As ti'ust/ee: — and, as to the defendant’s prayers, if he was liabife as garnishee; he was only chargeable to the extent of Nicholas Leister’s interest; As ascertained in equity, And this had not been determined: Judgment re'oerSed*, and rio procedendo.