Case ID: wis_169/html/0050-01.html
Source: Caselaw Access Project
Author: {"author": "Owen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Laughlin, Appellant, vs. Griswold and others, imp., Respondents.
    
      March 6
    
    April 2, 1919.
    
    
      Trusts and trustees: Equity: Action to determine rights and duties: Parties: Courts: Jurisdiction: Nonresident defendants: Service of summons by publication: Statute construed.
    
    1. Equity has jurisdiction over all matters relating to trust property, and in the execution and administration of the trust, in all cases of doubt as to their rights and liabilities and what their conduct should be, trustees are entitled to and should seek instruction and direction from the court.
    2. Under a complaint showing that plaintiff as trustee is entitled to the sole or joint possession of trust securities; that he is excluded from physical possession thereof by one of the defendants; that his right to sole possession is challenged by another defendant, who is attempting to act as a co-trustee, claiming to have been appointed, by a third defendant, to be the successor of a deceased co-trustee named in the original deed of trust; and that under said deed of trust plaintiff’s legal right to make a required inspection of the trust securities in the absence of his co-trustee, if there is a co-trustee, is uncertain, plaintiff is entitled to an adjudication fixing his rights, duties, and liabilities with reference to the trust property and settling all such controversies in one suit, all persons making claims hostile to his alleged rights in and to the property being made parties.
    3. Where, in such a case, the deed of trust defining the rights of the parties is an executory contract relating to personal property easily movable and of a transient situs, and no personal judgment is asked against any one of the defendants, the action is not one over which any court has,exclusive jurisdiction, but may be maintained in a court of the state in which the property is located, even though defendants making hostile claims thereto are residents of another state or of different states. .
    4. Sec. 2639, Stats., authorizes service of the summons by publication in such case upon the defendant who claims the right to appoint a co-trustee and upon the defendant claiming to be such co-trustee, they being residents of another state, a cause of action against them being stated, and the relief demanded consisting in excluding them from an interest which- they claim in the personal property, located in this state, constituting the trust estate.
    5. Service by publication upon the cestui que trust is also authorized, she being a nonresident and having an interest in the property. The purpose of the action by the trustee being to fix the status of the property and the rights and duties of the parties, and the cestui que trust being a necessary party, the complaint states a cause of action against her within the meaning of said sec. 2639, Stats., even though it does not seek to deprive her of anything.
    Appeal from an order of the circuit court for Milwaukee county: John J. Gregory, Circuit Judge,
    
      Reversed.
    
    
      The appeal is from an order setting aside the service of the summons upon defendants Emily Griswold, Ellen Griswold, and Morris Tucker, service having been secured pursuant to an order of publication.
    It appears from the complaint that on the 31st day of' June, 1894, one Joseph L. Griswold by a deed of trust conveyed to Henry D. Laughlin and Charles W. Baker, trustees, certain securities consisting of first-mortgage bonds aggregating $40,000, to hold in trust for and during the remainder of the natural life of Emily A. Griswold, the interest and income therefrom to be devoted in the manner therein provided to the maintenance and support of' said Emily A. Gris-wold. The trustees were directed to keep said bonds at all times in the vault of some safe-deposit company, to be designated by the trustees; the coupons were to be clipped from said-bonds and deposited with the defendant Central Safe Deposit & Trust Company, of Cincinnati, for collection, and when collected said Trust Company is required by the terms of the deed of trust to pay $200 per month to Emily Gris-wold so long as she shall live. Said trust deed contains a provision that “The box in which said securities are kept is to be opened only in the presence of both trustees, or by one of them in the presence of said Joseph L. Griswold, but an actual inspection of the trust securities at least once a year is enjoined;” also that “In the event of the death of Henry D. Laughlin prior to that of said Emily A. Griswold, then said Joseph L. Griswold shall, by an instrument in writing under his hand and seal, and acknowledged before a notary public, appoint his successor in this trust, and the person so appointed shall thereupon succeed to all the rights and obligations, in respect of this trust, granted or imposed by this instrument on said Laughlin. In the event of the prior death of said Baker, said Emily A. Griswold may nominate his successor, and if acceptable to said Joseph L. Griswold he shall be appointed by the joint instrument of both, executed in the manner above described; otherwise his successor shall not be appointed, but the trust thenceforth administered by the surviving trustee, or his successor.” No other provision is made for the appointment of successors to the trustees.'
    It is further provided that all moneys on hand and still unexpended proceeds of coupons collected as well as the original bonds (except five certain bonds of the value of $5,000 which said Emily A. Griswold was empowered to dispose of by her last will and testament) were to be returned to Joseph L. Griswold upon the death of said Emily A. Gris-wold, and that the trustees may dispose of certain of the bonds and reinvest the proceeds in other securities under certain conditions.
    On the 25th day of September, 1911, by an appropriate instrument, said Joseph L. Griswold conveyed to his daughter, ■ Ellen Griszvold, all his right, title, and interest in and to said securities, and directed that his trustees turn over said securities to said Ellen Griswold upon the death of Emily A. Gris-wold. Joseph L. Griswold died May 3, 1915; Charles W. Baker, one of the trustees, died April 14, 1917, and thereupon defendant Ellen Griswold assumed to appoint Morris Tucker as successor to Charles W. Baker.
    At the time of the commencement of this action said securities were deposited in a box in the vault of the Wells Building Company, of Milwaukee. The complaint alleges that the said Wells Building Company refuses to allow plaintiff access to said deposit box and to the securities deposited therein, which access is necessary to the plaintiff to enable him to inspect the trust securities as by said trust deed required, and clip the interest coupons therefrom as they become due and payable, and otherwise perform the duties of said trust; that Morris Tucker claims the right to act as co-trustee with plaintiff under said deed of trust and claims the right of joint possession of said bonds and securities, which claim the plaintiff refuses to recognize. It is also alleged .that the defendant John M. Wood and Ellen Griswold are the executors of the will of Joseph L. Griswold, deceased, and as such executors claim the right to said securities.
    The complaint demands judgment that the plaintiff be adjudged and decreed to be the sole trustee of said trust and to have the sole possession of the securities belonging to said trust fund; that the defendant Wells Building Company be required to admit plaintiff to its vault and to have access to said securities, and that defendants Morris Tucker, John M. Wood, and Ellen Griswold be enjoined and restrained from interfering or attempting to interfere with the bonds and securities now deposited in the safe-deposit box in the vault of the defendant Wells Building Company, or interfering with plaintiff’s right of possession thereto as trustee under said deed of trust; that the rights and interest of all parties to this action to said trust fund and income therefrom, and the bonds and securities comprising the same, be ascertained and determined by the court, and that plaintiff as such trustee have the judgment and direction of the court as to execution of said trust and the final disposition of said trust fund. Service was made on all defendants except Wells Building Company pursuant to an order pf publication. Respondents appeared specially and moved to set aside the service of the summons as to them, resulting in an order setting the service aside and dismissing the action as to them, from which order plaintiff appealed.
    For the appellant there was a brief by Edgar L. Wood of Milwaukee, attorney, and Fred B. Silsbee of Chicago, of counsel, and oral argument by Mr. Wood.
    
    For the respondents there was a brief by Lawrence A. Olwell of Milwaukee, attorney (on special appearance), and Morris Tucker of St. Louis, Missouri, of counsel, and oral argument by Mr. Olwell.
    
   Owen, J.

Respondents insist that plaintiff’s quarrel is entirely with the Wells Building Company and involves simply his right of possession of the trust securities which is denied him by that defendant; that as to that defendant he has a complete remedy at law; that no cause of action is stated against respondents; that they have no property in this state, which is a prerequisite to service of summons by publication, for which reasons the circuit court acquired no jurisdiction of them and the service of summons was properly set aside. This is not a broad view of the situation and its adoption would not give impetus to the wholesome tendency of courts to dispose of all controversies between parties or relating to one subject matter in one action.

The complaint shows this situation: The property sought to be recovered is trust property. Plaintiff is entitled to the sole or joint possession thereof. He is excluded from its physical possession by the Wells Building Company. His right to the sole possession is challenged by defendant Morris Tucker, who claims to be co-trustee by virtue of his appointment thereto by defendant Ellen Griswold to succeed Charles W. Baker, co-trustee under the original deed of trust, now deceased. The deed of trust provides:

"The box in which said securities are kept is to be opened only in the presence of both trustees, or by one of them in the presence of said Joseph L. Griswold, but an actual inspection of the trust securities at least once a year is enjoined."

Should the interference of the Wells Building Company with plaintiff’s physical possession of the securities be removed, his legal right to make the inspection in the absence of Tucker, who claims to be co-trustee, would be uncertain. As trustee he is„ entitled to an adjudication by a court of equity fixing his rights, duties, and liabilities with reference to this trust property, and, in accordance with the settled policy of this jurisdiction, to dispose of all such controversies in one suit. All parties making claims hostile to his rights in and to the property as he alleges them to be should be made parties to such an action.

The complaint alleges that the defendant Ellen Griswold claims the right and has assumed to appoint defendant Morris Tucker as co-trustee in place of Charles W. Baker, deceased, and that said Tucker “now claims the right to act as such trustee under said deed of trust, jointly, with the plaintiff, and is attempting to so act and has demanded of the plaintiff that the plaintiff recognize and treat the said defendant as such co-trustee under said deed of trust, and that he be permitted to have the possession and control of said bonds and securities, jointly with the plaintiff, and access to said deposit box, which demand the plaintiff has refused. . ..” The plaintiff, who is endeavoring in good faith .to discharge the duties which he has assumed under the deed of trust, should not be left to decide the question of Tucker’s right to act as co-trustee, at his own peril and at the risk of becoming a wrongdoer. Equity has jurisdiction over all matters relating to. trust property, and in the execution and administration of the trust, in all cases of doubt as to their rights and liabilities and what their conduct should be, .trustees are entitled to and-should seek instruction and direction from the court. 2 Perry, Trusts (4th ed.) § 476a; Hill, Trustees (4th Am. ed.) 843; Stephenson v. Norris, 128 Wis. 242, 107 N. W. 343.

The deed of trust, which defines the rights of the parties, is an executory contract relating to personal property of an easily movable nature and of a transient situs. No personal judgment is asked against any of the defendants. It is not an action over which any court has • exclusive jurisdiction.' No reason is perceived why a court having jurisdiction over the property is not an appropriate forum in which to maintain the action. Although respondents are all residents of Missouri, it may- well happen that parties similarly situated be residents of different states, in which case jurisdiction by any court except one having jurisdiction of the property would be difficult, if not impossible, of attainment.

It only remains to be considered whether the statute authorizes service by publication on respondents. Sec. 2639 provides:

“Service of the summons may be made without the state or by publication upon a defendant against whom a cause of action appears to exist, ... on obtaining an order therefor as provided in the next following section, in either of the following cases: ... (3) When the subject of the action is real or personal property in this state and the defendant has or claims a lien or interest, actual or contingent, therein, or the relief demanded consists wholly or partially in excluding the defendant from any interest or lien therein.”

The situation as to respondents Ellen Griswold and Morris Tucker comes squarely within the terms of the statute. The complaint states a cause of action against them, that is, it asserts that they are claiming rights inimical to those of the plaintiff, and which the plaintiff has a right to have settled to the end that the trust estate may be orderly and lawfully administered. Morris Tucker claims the right to act as co-trustee under his appointment by Ellen Griswold, and Ellen Griswold claims the right to appoint a co-trustee. By their claims, therefore, they claim an interest in the personal property constituting the trust estate, and the relief demanded consists in excluding them therefrom’ We see no room to contend that the statute does not provide for service of the summons on them by publication thereof. This may not be so clear as to Emily Griswold, but to our minds it is just as certain. She responds to the call of the statute requiring that she have an interest in the property. True, it is not sought to exclude her from that interest, but the statute is in the disjunctive. It is not necessary that she have an interest her exclusion from which is a part of the relief sought. If she have an interest, the require'ments of sub. (3) are met. Does the complaint state a cause of action against'her? It does not in the ordinary sense. It does not seek to deprive her of anything. But this is an fiction brought by her trustee to have his duties determined. It is not necessarily an adverse proceeding, its purpose being to declare the status of the property and fix the rights and duties of the parties. It is generally held that in such an action all cestuis que trustent are necessary parties. Hill, Trustees (4th Am. ed.) 845. In this sense it does state a cause of action against her. The service by publication on respondents was authorized by and pursuant to the statute, and should not have been set aside..

By the Court. — Order appealed from reversed, and cause remanded for further proceedings according to law.

Kerwin and Rosenberry, JJ., took no part.