Court Opinion

ID: 9809422
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:12:51.215215+00
Date Added: 2024-06-11T12:29:16.285314
License: Public Domain

Davis, J.,
(dissenting). This action is brought by Warren, the new or substituted trustee, against the executors of the deceased trustee to recover a sum of money in the.ir hands which came to their testator as trustee.
*196The defendants allege that there are conflicting claims, to the fund; that the administrator of Martha J. Thigpen asserts a claim to it, and that A. T. Bruce & Co. also assert a claim to have a judgment which they obtained against their testator for a debt in the 6th class paid out of the fund, and that the fund is not sufficient to pay these claims if it shall be adjudged that both are to be paid. They ask to have the validity and regularity of the judgment against their testator determined, and “ if said judgment is valid and their testator responsible therefor they ask that the same be decreed to be paid out of the fund.” It came rightfully into their hands, subject to the trusts which attached to it in the hands of the testator.
As was said by the Court in Guion v. Melvin, 69 N. C., 242, upon the death of the trustee “ the real property descends to the heirs and the personalty goes to his administrator (or executor) clothed with the trusts.”
I think the executor or administrator, if there is no doubt or dispute as to the right of the cestui que trust to receive the fund, may safely pay it directly to such cestui que trust without waiting for the appointment of a new trustee, and such payment would be a discharge of the estate of his testator ; but if there be any doubt or question as to who is the proper person to receive the fund, or if the testator or intestate has incurred any liability in respect to the trust property, he has a right to have that question settled before he is required to part with it, and in the settlement of that question (which under the old practice was of equitable jurisdiction) he has a right to have all conflicting claimants made parties.
Under the old practice would not the settlement of this trust have been a subject of equitable jurisdiction, and would not the Court have required all parties interested to be before it?
If the testator was living would he not have the right to demand, before parting with the fund, that all conflicting *197claims thereto be determined? If so, is it not equally clear that-his executors who find the fund in their hands not simply the subject of conflicting claims between cestui que trusts, but with a responsibility of their testator, protected before they can be required to surrender the fund? If it shall be that the judgment of A. T. Bruce & Co. ought to be paid out of the trust fund, but the-substituted trustee when he gets the fund in his hands shall refuse to pay it and the executors of the deceased trustee shall be made to pay it under the judgment against their testator, will they not be sub-rogated to the rights of Bruce & Co., and have cause of action against the plaintiff?
It will not do to say that that is not probable, for that is the very question that they ask to have settled in this action, and which is resisted.
Ruffin, J.,
in Hoover v. Berryhill, 84 N. C., 132, says “that Courts of Chancery had but few, and those very simple rules, for determining the proper parties to a suit, and that a leading one was that every person who had an interest- in the subject matter of the suit should be a party thereto, and this with the twofold idea of making it safe for the defendant to perform the decree and of avoiding unnecessary litigation.” Again in Barrett v. Brown, 86 N. C., 556, it is said “ a better reason for the rule (requiring all parties to be before the Court) seems to be given in 1 Daniel’s Chancery Practice, 240, where it is said to depend upon the intention of the Court to do complete justice by deciding upon and settling the rights of all the persons interested in one action, so as to prevent future litigation and to render the performance of the decree perfectly safe to those who may be compelled to act under it.”
I think that the conclusion at which I have arrived, that the defendants have a right to the protection asked for by them, is fully warranted by the cases cited and the authori*198ties referred to in them, and by Adams in his treatise on Equity, § 315, et seq.
Where an interest exists which requires protection, it is possible that a claim exists in respect to that interest, and the defendant is entitled to have all such claims settled together, so that the matter may be completely and effectually disposed of. -
The judgment in this very action seems to be pregnant with the “ future litigation” indicated by the answer of the defendants. It provides “ that after paying the costs and expenses and reserving to himself proper commissions and counsel fees, the plaintiff shall hold the residue of said fund until the rights of the various creditors secured in said trust shall be ascertained.”
If the testator of the defendants has incurred any liability in respect to the trust fund in their hands as executors, and that is one of the rights “ to be ascertained,” why may it not be — why ought it not to be — settled in this action? Why subject them to the hazard of having to pay the judgment of Bruce & Co. against their testator and then litigate with the very plaintiff in this action, the question now raised as to whether it ought not to be paid out of the trust fund ?