Cowman v. Colquhoun

Yellott, J., delivered the opinion of the Court. These appeals are from the decree of the Circuit Court of Baltimore City, granting the relief prayed for to Alice E. Colquhoun, one of the complainants in the bill filed in the cause, and dismissing the bill as to the other com-plainants. The defendants below, Cowman and Kirby, are the appellants in the one appeal, and the complainants below, Ghequiere, Stearns and wife, and Walter S. ■Long, in the other. The complainants are the grandchildren of Robert Carey Long, who, by his last will and testament, admitted to probate on the 26th day of Eebniary, 1833, gave, devised and bequeathed all his property, real, personal, .and mixed, except certain legacies specially designated, to his son, Robert C. Long, Jr., and his son-in-law, John E. Wells, in trust, for the uses and purposes therein mentioned. • In the fifth clause of said will are the following ■ provisions: “.When my daughter Sophia, or the youngest of the survivors shall attain the age of twenty-one years, then ■my said trustees shall divide the net income of-the property, real, personal, and mixed, quarterly or half-yearly, among my eight children, namely: Ann, Margaret, Jane, Robert, Harriet, Sarah, Eleanor and Sophia, or among the survivors of them, and the issue of such as may be deceased, in just proportions, a whole part to each survivor, and a whole part among the issue of such as may be deceased ; and my said trustees shall continue this division from time to time, so that the part of such as decease, Avithout issue, shall be divided among the survivors, and — 131 — the issue of such as decease leaving issue, so long as any of the above named of iny children shall survive, and at the decease of the last, my said trustees, or such successors as they shall appoint, shall proceed to make a division by sale, or otherwise, of the property, and apportion the same among the issue of my children equally, share and share alike.” The hill of complaint avers that both of the trustees named in said will are now dead; but discloses the further fact that several of the children of the testator are still living. It thus becomes apparent that the period has not yet arrived when, under the provisions contained in the fifth clause of said will, there is to he a division by sale, or otherwise, of the property, and an apportionment of the same among the issue of the children of the testator, equally, share and share alike. It appears, however, from the averments in the bill and the proof in this cause, that on the 22nd day of February, 1831, a hill was filed in chancery ; in which hill all the children of the testator were either parties complainant or defendant, except Robert O. Long, Jr., who, having made a deed of trust of his interest in the property, was represented by his trustees. The hill asks for “a sale of the real and leasehold estate of the said Robert Carey Long, late of the City of Baltimore, deceased, still remaining unsold and in the hands of the said trustees under his will, and that the proceeds arising from said sale he invested in safe and productive securities, subject to the same uses and purposes as are limited, declared and mentioned in and by the said will, of and concerning the said estate, and the income and revenue thereof.” In this suit the Chancellor passed a decree dated 25th of April, 1831, granting the relief prayed for in the bill of complaint, and appointing David Stewart trustee, who, under said decree, made sale of the property in question. The whole of the proceeds of this sale, exclusive of costs — 132 — and commissions, was audited to Robert O. Long, Jr., and John E. Wells, the trustees named by the testator in his will,-“in trust, for the uses and purposes of the last will and testament of Robert O. Long.” This report of the auditor was “ratified and confirmed” by the Chancellor, “and the trustee is directed to apply the proceeds accordingly, with a due proportion of interest that has been or may be received.” A deed bearing date May 5th, 1838, was executed and delivered by the trustee, David Stewart, to Edward Laroque, the purchaser, from whom, through mesne conveyances, the defendants below derived their title to the property now in controversy. It thus becomes apparent that, by the decree of a Court of competent jurisdiction, there has been a transmutation of the corpus of the estate, and that the funds into which the realty was converted, passed into the hands of the trustees named in the will. By the provisions of the will these funds were to remain in the hands of said trustees or their successors, until the death of all the children of the testator; an event which has not yet occurred, as several are still living. Not until the death of all the children can the grandchildren claim a distribution of the corpus of the estate; and for payment to them of their portion of the accruing income, the will clearly designates the trustees or their successors as the proper parties to whom application should be made. The complainants in this cause have, however, elected to proceed against the present holders of the real estate sold'under the decree of the Chancellor. This proceeding is based upon the assumption of a tenancy in common. Not having been made parties to the proceedings in chancery, they claim that their undivided interest in the estate was not affected by the decree. If they are tenants in common, an averment in their bill of complaint, taken in connection with the answer of the defendant Cowman, would exclude them from relief in a Court of equity. — 133 — They aver that the defendants hold “in contravention of their rights,” or, in other words, obstruct them in the enjoyment of their rights in the property as tenants in common. The defendant Cowman, in her answer, denies that she holds “said property in contravention of the rights of the complainants;” but this negation is put upon the ground of the non-existence of such rights. She asserts “a title clear and freed from the claim of any such persons.” Here is a distinct, unequivocal and absolute denial of the title of the complainants. In a case of this sort, when there is an assertion of title by the one party, and a peremptory denial of such title by the other, together with an exclusive perception of the profits for a long period, and other acts indicating an adverse holding by the tenant in possession, and knowledge of such adverse holding, and laches on the part of the claimant, relief cannot be afforded by a Court of equity. A Court of law is the proper forum for the determination of the controversy. In the case of Boone vs. Boone, 3 Md. Ch. Dec., 497, the title of the complainants, claiming as co-tenants, being disputed by the defendants, the Chancellor refused to decree a partition, and sent the' complainants to a Court of law to establish their title ; citing in support of his decision, Wilkins vs. Wilkins, 1 John. Ch. Rep., 111; Cartright vs. Poultney, 2 Atk., 380; Willet, Ex’r vs. Beall, 2 G. & J., 468. In the very recent case of Hecht vs. Colquhoun, in 57 Md., 563, a case nearly identical with the one now under consideration, the controversy growing out of the same will, this Court decided that equity could not afford relief j and that if there were any remedy it should be sought for in an action of ejectment. In the case of Boone vs. Boone, the Chancellor passed an order designating twelve months as the period within which the complainants should proceed to establish their — 134 — title at law; in the meanwhile retaining the bill for future action dependent upon the result of the suit in ejectment. No such order could be properly passed in this -cause ; it being apparent that the complainants could not, at present, enforce their alleged rights in a Court of law. • The trust created by the will of the elder Long is a subsisting trust. Pour of the children of the testator yet survive, and not until the death of all of them, does the trust terminate by a division of the corpus of the estate among the grandchildren. Until the occurrence of that event the complainants have no rights except as recipients of their portion of the income. This they must receive from the trustees appointed by the will, or their successors. The original trustees are dead, but the duration of a trust is not dependent upon the lives of those appointed to execute it. There is no extinguishment of such estate produced by the death of the fiduciary agent. “It is a rule that admits of no exception, that equity never wants a trustee, or in other words, that if a trust is once properly created, the incompetency, disability, death, or non-appointment of a trustee shall not defeat it.” 1 Perry on Trusts, sec. 38. The defendants in this cause assert an adverse claim to the real estate held by them, and the intervention of the trustees controlling the corpus, and clothed with the legal title, would be necessary if there were any ground on which an action of ejectment could be successfully maintained. The mode of procedure is clearly pointed out in the case of Hecht vs. Colquhoun, where it is said: “ If it had been the purpose of the complainants to ask a Court of equity tojsupply a trustee to manage the trust, in the place of those who have died, and in default of appointment of their successors according to the terms of the will, it would have been wholly unnecessary, and so far as we can see from the averments' of this bill, improper to make these defendants parties to such a proceeding. — 135 — Suoli appointment could have been made simply upon the application of the complainants themselves, without adverse proceedings against any one, and the trustee so appointed would be the proper party to protect their rights and interests under this trust, and to assert title to the property against the defendants, or any other stranger in adverse possession thereof.’’ The remaining question is important, as its determination may interpose an obstacle to future unnecessary litigation. That question relates to the effect of the decree of the Chancellor upon the rights now in controversy. Did the decree in chancery operate an extinguishment of the equitable title of all the children and grandchildren of the testator to the property specifically designated in the will, and transfer their rights to the trust-fund created by the sale and audit under said decree ? The sale decreed by the Chancellor was not for partition and distribution. There was no destruction of the corpus, bat merely a transmutation from unproductive real estate into productive funds to he invested for the purposes of the trust. The trustees could have accomplished this object ,by an execution of the power given them by the will. Had they done so the result would have been an extinguishment of the equitable title of the eesluis que trust. to the realty, and its transference to the fund created by the sale. In the eighth clause of the will the testator directs that “if there should be no debts owing, then my, said trustees are to sell only such as may be unproductive, or likely to so continue, and invest the proceeds more advantageously." At the time of the institution of the proceedings in chancery, the contingency contemplated by the testator had arisen. There were debts owing, and the productive real estate had been sold in order to provide funds for the payment of those debts. The remaining property was, in its existing condition, inadequate for the purposes of — 136 — the trust. It was the duty ef the trustees to sell, “ and invest the proceeds more advantageously.” They omitted to perform this duty. An omission to perform a duty, by one acting in a fiduciary capacity, is a neglect to perform such duty. ■ The Act of 1785, ch. 72, sec. 4, provides “That if any person hath died, or shall die, leaving real or personal estate to be sold for the payment of debts, or other purposes, and shall not by will or other instrument in writing,- apjDoint a person or j^ersons to sell or convey the same property, or if the person or persons appointed for the purpose aforesaid shall neglect or refuse to execute such trust,- or if such person or persons, or any of them,, shall die before the execution of such trust, so that the sale cannot be made for the purposes intended, in every such case the Chancellor shall have full power and authority, upon application or petition from any person or persons interested in the sale of such property, to appoint, such trustee or trustees for the purpose of selling and conveying such property, and applying the money arising from the sale to the purposes intended, as the Chancellor shall, in his discretion, think proper.” These provisions of the Act of 1785 are embodied in the Md. Code, Art. 16, sec. 66, and in Fulton, et al. vs. Harman, et al., 45 Md., 266, this Court says: “It is not required that all the parties interested in the sale should join in the application for 'the appointment of a trustee under this statutory provision, but the Court may appoint a trustee and direct a sale upon the application of only a part of those interested.” In the proceedings in chancery all the children of the testator, except Robert C. Long, Jr., who was represented by his trustees, were made parties. The averments in the bill disclosed the fact that the- productive property, “ constituting in a great measure the source from which the testator expected his said trustees to be able to meet the — 137 — provisions of the trust created, had been sold to .satisfy the debts of the said testator, and the heirs subsisting on said property.” The bill further avers that the income from the remaining property is “scarcely adequate to meet the first provision of said trust for the support of those of the testator’s daughters now entitled to the benefit of that provision.” A sale is asked for and an investment of the proceeds in “safe and productive securities,” for the benefit of the cestuis que trust, in conformity with the provisions of the will. Under a commission, the proof taken fully established the fact that the property was unproductive and, in its existing condition, inadequate for the purposes of the trust. On this proof the Chancellor decreed a sale. This sale was ratified and confirmed, and the proceeds were audited to the trustees appointed by the testator, “for the uses and purposes of the last will and testament of Robert C. Long, deceased.” The report of the auditor was “ratified and confirmed,” and the trustee “directed to apply the proceeds aecordingly.” It thus becomes apparent that the decree of the Chancellor merely changed the corpus of the estate, which mutation could have been produced by the action of the trustees in executing the power contained in the will. The Chancellor decreed that to be done which the trustees omitted or neglected to do. The Act of 1785 clearly authorized the proceeding; the real estate was sold under the decree of a Court of competent jurisdiction; and the equitable title of the cestuis que trust to the property in controversy was extinguished by said decree and the deed from Stewart, the trustee, to Baroque, the purchaser. From what has been said it follows, that the decree of the Court below establishing the claim of Alice E. Colquhoun to the relief sought for must be reversed; and the — 138 — decree dismissing the bill as to the other complainants affirmed, and the hill dismissed. (Decided 29th March, 1883.) Decree in favor of Alice D. Golquhourt reversed. Decree dismissing the hill as to the other complainants affirmed ; and hill dismissed. Robinson and Irving, J., filed the following separate opinion: We agree that the decree appealed from in this case must be reversed, and that Alice E. Colquhoun, the appellee, is not entitled to the relief for which she has prayed; but we rest our concurrence in the decree to be passed, solely upon two grounds — first, that as against Miss Cowman, the appellee cannot proceed directly in her own name, but, being a cestui que trust only, should have first secured the appointment of a trustee through whom to work out any rights she was supposed to have. And, secondly, because of her laches in delaying for so long a period, to assert her rights. Conceding that the Chancellor’s decree passed in 1831 did not bind the appellee because she was not a party to the trust, (upon which we express no opinion,) still Miss Cowman, and those under whom she claims acquired title under a sale made, under that decree, in 1838, since which time the appellant and those under whom she claims have been holding under color of title, and the appellee took no step, to assert her supposed paramount right, until after such delay as renders it inequitable to grant her relief. Appellee’s mother died in August, 1850, and her right to participate in the revenues of the trust at once arose. She was of full age in 1849, and was twenty-two years old when her mother died. . This bill was filed in December, ISII, — 139 — more than twenty-seven years after her right accrued. She has shown no sufficient excuse for her delay. Being, upon the death of her mother, one of the beneficiaries of the trust, she must be presumed to have known of her rights, and ought to have asserted them. We think the case clearly covered hy the repeated decisions of this Court on the subject of laches, and especially by the case of McCoy, and others vs. Poor, 56 Md., 197.