Court Opinion

ID: 6664467
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:05:06.269272+00
Date Added: 2024-06-11T16:00:17.499640
License: Public Domain

Archer, C. J.,
delivered the opinion of this court.
The complainant, Wayman, one of the trustees, having received large sums of money for the purpose of repairing the injury which the trust estate has sustained in the transfer of the stock belonging to the trust estate, and being thus, himself, liable to account with the trust estate, for the moneys thus by him received, could not as a complainant be entitled to a decree without such accounting.
The authorities cited establish the power of the court to cause him to assume a different position in the controversy, and that he might be made a defendant instead of a plaintiff, that justice between the parties may be effectuated.
Such a course would, however, be attended with delay, and we do not deem such a proceeding necessary in this case. In 1 Keen, 618, the master of the rolls in delivering his judgment says: “there have been cases in which the court, with the view to substantial justice, has overcome the difficulties arising from a misjoinder of plaintiffs. In the case of Mosley vs. Taylor before Sir William Grant, and which is cited in 2 Young & Jer. 520, under the name of Mosley vs. Lord Hawke, a tenant for life, on whose instigation and for whose benefit a breach of trust had been committed, was joined as plaintiff with the other cestui que trusts in a bill against the trustees, who objected to *354any relief being granted in that state of the record; but the objection was overruled, and a decree made against the defendant, and the offending tenant for life, who was one of the plaintiffs.” This authority would justify a decree against Way-man, one of the plaintiffs, for any sum which may be found to be due from him, without the necessity of a change in the proceedings.
The complainant, Wayman, should be made to account for all the moneys received by him, and for the stocks transferred to him in part satisfaction for the wrongful transfer of the pi’operty of the trust estate.
It does not clearly appear to us from the proceedings in the cause, in what manner, and in what character, the stock of the Savings Institution was transferred by the administratrix of Samuel Jones to him; whether as security merely for the claim of the trustees against the estate of her husband, or in part payment of the same. Nor does it appear to us, satisfactorily, if the same had been transferred merely as a security, and not in payment, whether any act of Wayman, for which he could be held accountable, conduced to the loss consequent upon the failure of that institution.
We may likewise observe, that there is some obscurity in the record in relation to the amount of Farmers and Merchants Bank stock, which was transferred by Mrs. Jones to the trustees, to repair the injury arising from the transfer of the stock of the cestui que trusts.
From the above considerations, we think it would be premature to pronounce any judgment in respect to these stocks against Wayman, but shall leave this matter for investigation in the Court of Chancery, when the account shall be taken.
We shall also leave open the question, what interest, if any, shall be charged against Wayman, as when the account shall be taken, other evidence may be adduced than that which the record before us now furnishes.
For such sum, if any, as upon such accounting shall happen to be due from Wayman, he should be held responsible to the trust estate.
*355The administratrix of Samuel Jones should be held accountable in due course of administration for such sum as the complainant shall be unable to recover from Wayman, to the extent of the assets which have come to her hands.
The injury which the trust estate has sustained will be repaired by the payment of a sum, equivalent to the price at which the stock was sold, when the transfer was made by Jones and wife.
When a sum equivalent to this shall be paid, it should be invested for the benefit of the cestui que trusts under the will of Larkin Shipley, as well Mrs. Jones, as her children. It is true Mrs. Jones participated in the transfer of this stock, but she wras a feme covert under the dominion of her husband, and ought not on this account to be visited with penalties or forfeitures. She claims herself nothing on account of dividends; but if the fund is made good, we can perceive nothing in her situation, or the circumstances surrounding the transfer, which should forfeit her interests in the trust estate for the purpose of swelling the interests of the cestui que trusts in remainder. Forfeitures are certainly not viewed in a favorable light by a court of equity, and of all cases, this would seem to be the least suitable for the application of such a principle.
If in stating the account against Wayman, and charging him with such interest as his conduct may justify, the balance found due from him, when added to the sums paid into court, shall be found to be greater than will be necessary to reinslate the trust estate, the surplus thus created should be decreed to Mrs. Jones.
If by such accounting by Wayman, and by Mrs. Jones administratrix of Jones, such a sum should not be found due from both, as added to the sum paid into court, will be sufficient to reinstate the trust estate to the amount of the stock transferred by Jones and wife, then we are of opinion that the balance necessary to accomplish this object should be paid by the Farmers and Mechanics Bank of Frederick, and by the Westminster Bank, and that should the decree against Wayman or the administratrix of Jones be unavailing in yielding to the *356cestui que trusts the amount which they shall be decreed to pay, then the said Banks ought to he held responsible for any deficiency that may occur.
In thus determining the ultimate responsibility of the Bank, we proceed to assign the reasons which have conducted us to this conclusion.
It is unnecessary to enquire whether a court of equity could entertain jurisdiction as against the Banks, over the subject matter of this claim, no such question having been raised in the Court of Chancery, and this court being prohibited by the act of 1841, ch. 163, from allowing any objection to be urged to the jurisdiction of the court below, when no such objection was there taken.
The stock in controversy was transferred on the hooks of the Bank of Westminster on the 8th April, 1846, to Stockett and Wayman, as trustees under the will of Larkin Shipley, for the benefit of Anne Jones, wife of Samuel Jones, during her natural life, and after her death for the purposes prescribed in sáid will, and pursuant to an order of the Chancery Court, dated 20th January, 1826.
Thus the Bank of Westminster, by this transfer, had notice of the trusts with which the stock was clothed, and that the complainants were the legal proprietors of the stock, and its officers being the trustees of the stockholders, could not without making the Bank responsible, by any negligence or mistake allow the title to pass to the stock by a transfer by any other persons than the trustees, without involving the Bank in responsibility.
This Bank continued its operations, but with a change of name to the Farmers and Mechanics Bank of Frederick, and with a change of the location of the mother Bank to Frederick, and a change of the branch from Frederick to Westminster.
By the act of 1829, ch. 35, the mother Bank and its branch at Westminster were made independent of each other, and on the application of the stockholders each was incorporated as a separate and independent Bank.
By the act of 1826, ch. 107, sec. 12, it was directed that *357books should be kept at Frederick, in which should be fairly entered the names of the stockholders, and the amount of stock belonging to each, and transfers should be made on the books of the Bank on proper application by the stockholders.
Such a slock list as was demanded by this law, was not kept by the Bank, in consequence of which the Bank as it was then incorporated, consisting of the mother Bank at Frederick and its branch at Westminster, would have become responsible for any injury which had proceeded from such neglect; and had the transfer been made before the Banks became independent of each other, by the charters granted to each, by the act of 1829, ch. 35, the responsibility of the Bank as then chartered, would have been beyond all question.
In consequence of the error above adverted to, in not keeping an accurate stock list, the Frederick Bank allowed the transfer to he made, whereby the injury complained of has resulted, after the law of 1829, ch. 35, which created the two Banks, separate and independent Banks, and the inquiry is, whether, under such circumstances, both Banks are not responsible ?
The act, of 1829, ch. 35, by separating the mother Bank and its branch, and creating them independent Banks, did not affect their former liabilities, and such is the express declaration of the act,. Now from the omission to form a proper stock list, the injury has resulted to the trust estate. For the consequences resulting from this neglect of duty, the Bank of Westminster became liable and remained subject to this liability, upon the change of its name to the Farmers and Mechanics Bank of Frederick. This responsibility was in no degree lessened by the separation of the Banks, but each after the separation, ought to be held liable in equity for this neglect of duty, in proportion to the capital of each. The present Bank of Westminster cannot throw the entire loss, if any is to happen, upon the present Farmers and Mechanics Bank of Frederick, upon the ground that this latter Bank permitted the transfer by Jones and wife to the Wilsons, because, the cause of that transfer was the neglect of duty in the former Bank, of *358which the Westminster Bank was a constituent part, and on this account equity would seem to demand that she should participate in such loss as shall occur from the negligence adverted to.
It has been urged that lapse of time constitutes an available defence for the Banks. To this proposition we cannot agree. So far as the complainant, Stockett, is concerned, there is no evidence that he ever knew of the conversion and sale of the stock, until these proceedings were commenced. Nor is there any evidence that the cestui que trusts in remainder, were ever aware that they had been deprived of their property by the transfer of the stock, until the institution of these proceedings. There is therefore not the slightest ground to impute acquiescencé. Besides, the cestui que trusts, except Mrs. Jones, had no immediate possessory title to the beneficial interest, and have not yet, as Mrs. Jones is still living, and therefore clearly, there could be in this case no bar from lapse of time.
Nor can the Banks claim exemption from the fact that Way-man may have been reimbursed. There is no proof that Stockett joined in any receipt which may have been given by Wayman, or that he, in any manner, ever sanctioned his receipt of the money paid by Mrs. Jones.
The decree of the Court of Chancery will be reversed, but without costs, and the cause remanded to that court for further proceedings.
For any costs incurred by the trustees by this decree, they ought to be allowed out of the trust fund.
DECREE REVERSED WITHOUT COSTS, AND CAUSE REMANDED.