Case ID: ad_7/html/0066-01.html
Source: Caselaw Access Project
Author: {"author": "Williams, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gilbert M. Husted, Respondent, v. David Thomson, as Trustee of the Estate of Benjamin Lord, Deceased, Appellant.
    
      Trust—a beneficiary cannot sue the Vrustee at 1cm as for money had a/nd received, until an accounting lias .been had ■.—continuing the action against a substituted trustee.
    
    The remedy of beneficiaries of a trust against a trustee, where the trust is open and continuing and the accounts of the trustee have not been settled and adjusted and the balance ascertained, is by an action for an accounting in equity; and an action at law, either for money had and received, or in any other form,, can-hot be maintained in the first instance.'
    Where an action has been brought against the trustee by a third party, the beneficiary of the trust must either become a party to such action and have the amount of his share definitely ascertained therein, or else bring a separate action himself for such relief, before he can maintain an action at law against the trustee for the amount to which he is entitled.
    Where the original trustee has died and a successor has been substituted in his ' place, and it is not shown that he received the trust money or that lie is under any personal obligation to pay it, the action cannot be continued against him.
    Appeal by the defendant, David Thomson, as trustee of the estate of Benjamin Lord, deceased, from a judgment of the Supreme Court in favor of the plaintiff, enteréd in the office of the clerk of the county of New York on the 25th day of January, 1896, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 6th day of February, 1896, denying the defendant’s motion for a new trial made upon the minutes.
    The action was brought to recover the amount of plaintiff’s interest in the estate of Benjamin Lord. The testator died July 5,1851, leaving a will wherein he disposed of a considerable estate, consisting of real and personal property, and Augustus Crmkshank subsequently became a trustee, under such will. The trustee brought an action for the construction of the will and the settlement of the rights of the parties thereunder, and this, plaintiff, Husted, was made a party defendant in that action. A decree was first entered therein in December, 1887, but that decree was set aside and a new trial was had and another decree was entered March 30, 1894, which, among other things, determined that this plaintiff, Husted, was entitled to the part or portion bequeathed and devised to Lavinia Knapp, being one-eleventh part or share of the estate. There was in that action no accounting had as to the amount of the estate, or the amount which this plaintiff was entitled to be paid.
    An action was brought by some of the parties interested in the estate against Cruikshank', as trustee, for an, accounting, and to fix the amounts which such parties were entitled to receive as their share of the estate, and a final decree was entered in that action March 6,1890 (after the entry of the first decree but before the second trial and the entry of the second decree in the former action), which determined that there was then in the hands of the trustee, after payment of the costs of the action, $87,653.83, which was on deposit in the United States Trust Company of New York city, and subject to distribution among the persons interested in the estate, and it was provided in and by such decree that all persons not parties to that action, having an interest in the estate not determined by that decree, might thereafter come in and be" made parties thereto, and have their interests adjudicated and determined. This plaintiff was not a party, and never did apply to coiné in and be made. a party to that action and to have his interest in the estate determined, and the amount to which he was entitled never was determined in that action. There seems never to have been any determination as to the amount of the estate in the hands of the trustee after the second trial of the action for the construction of the will, and the entry of the decree therein of March 30, 1894, or the amount of the estate to which this plaintiff was entitled as the one-eleventh part of the estate.
    April 29, 1890, nearly two months after the entry of the decree in the action for an accounting by the trustee, and four years before the entry of the last decree in the action for the construction of the will, this plaintiff brought the present action against Cruikshank as trustee. After the commencement of this action, Cruikshank died, and June 6, 1895, this defendant was substituted as a trustee in his place, and is now such trustee. The defendant testified he had received as trustee $3,437.34, and had not* received any other amount in cash securities or property of any kind; that proceedings against Cruikshank’s estate for an accounting had been commenced,, and were still pending. The record shows there was also controversy as to the ownership, at the time of the trial, of the one-eleventh share óf the estate claimed by this plaintiff.
    
      George Putmam Smith and Louis A. Noble, for the appellant.
    
      Jacob F. Miller, for the respondent.
   Williams, J.:

This is an action at law, and we are clearly of the opinion it cannot be maintained upon, the facts appealing in the record. The general rule, well established, is, that “ the remedy of beneficiaries of a trust, against a trustee where the trust is open- and continuing and the accounts of the trustee have not been settled and adjusted and a balance ascertained, is in an action for an accounting in equity; and that an action at law either for money had and received,, or in any other form, will not lie in the first instanced (Van Camp v. Searle, 147 N. Y. 150-161; Husted v. Cruikshank, 14 N. Y. Supp. 526.) In the latter case, which is the same we are now considering, the Court at General Term in this department, on demurrer to the complaint, held'that the action being one at law would not lie to recover plaintiff’s share in this estate merely because it had been determined that the plaintiff was entitled .to the one-eleventh part of the estate, there having been no accounting to determine the amount of such share -which. the trustee was to pay to. the plaintiff. It was not alleged in the complaint that the action hereinbefore referred to had been brought for an accounting, and the decree of March 6, .1890, had been, entered. This fact .is alleged in the present complaint, and Was proved on the trial and it is claimed that upon this additional showing, this action at law can be maintained. We think not. Even in the action for an accounting the amount of the share of this plaintiff was never ascertained at all. And even if it had been determined as of that date, still the action for a construction of the will had not then been determined. Proceedings were subsequently had therein, another trial took place,' and another decree was entered. It was very likely additional expenses were incurred by the trustee in that action, and a new: accounting to some extent at least would have been necessary in order to determine the precise amount of the fund in the hands of .-the trustee to be distributed and the exact amount to be paid to each beneficiary under the will. Moreover, this plaintiff never became a party to that action for an accounting, and it was not determined that at that time he rather than his assignees was entitled to be paid the amount of the one-eleventh interest in the estate, whatever the amount might be.

This action at law cannot, therefore, be maintained. The plain-tiff must, in the action for an accounting brought by others, become a party and have the amount of his share definitely ascertained therein, or else bring a separate action himself for that purpose and obtain the same relief in such action before he can maintain such an action as this at laxv.

The theory of such an action as this is that the amount to which the plaintiff is entitled has been definitely ascertained by judicial determination and that the trustees’ only duty is to pay over. In effect the action is personal in its nature for a failure of duty on the part of the trustees. It is in the nature of an action for money had and received by the trustee for the plaintiff. (Power v. Hathaway, 43 Barb. 214, 219.)

The original trustee having died and the defendant having been substituted in his place, the action cannot be continued against him, it not being shown that he has receix'ed the money or is under any personal obligation to pay xxdiat he had not received.

Our conclusion is that the learned trial court erred in denying the defendant’s motion to dismiss the complaint and directing a verdict for the plaintiff.

The judgment should be reversed, xvith costs of the appeal, and judgment ordered for defendant dismissing plaintiff’s complaint, with costs.

Van Brunt, P. J., Rumsey, Patterson and Ingraham, JJ., concurred.

Judgment reversed, xvith costs of appeal, and judgment ordered for defendant dismissing complaint, with costs.