Court Opinion

ID: 7135187
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:23:06.837668+00
Date Added: 2024-06-11T16:14:36.256940
License: Public Domain

Opinion or the court by
CHIEF JUSTICE BURNAM —
Reversing.
In February, 1896, David Wilson, doing business as a private banker under the name of the Exchange Bank of David Wilson & Co., at Flemingsburg, Ky., made a gen*674eral deed of assignment of all- of Ms property to the appellees, R. K. Hart and J. H. Sousley, for the benefit of' all of his creditors equally. The assigned estate was settled in a proceeding instituted by the assignees in the Fleming circuit court in March, 1896, to which all the creditors were made parties, and received 10 per cent, of their respective demands, which was paid to them under an order of the court. At the April term, 1901, of the Fleming circuit court, the following judgment was entered in the .proceeding: “All the matters in controversy herein having been fully settled, the assignees are now discharged, and they and their sureties are now relieved from any further liability. herein on their bond as such assignees or otherwise, and the cause is filed away.” In September, 1901, Barney Cassidy instituted a suit in the Fleming circuit court against the assignee, Hart and Sousley, and Watson Andrews as administrator of David Wilson, who died! pending the litigation, and Watson Andrews as an individual, in which he set out all the foregoing facts and alleged that he was a creditor of Wilson, that Andrews as administrator of David Wilson had taken possession of the books of Wilson belonging to the bank, which he alleged were of the value of $175, and sought to have them sold for his exclusive benefit. Andrews, as administrator ol Wilson and in his individual capacity, filed an answer, which he made a cross-petition against Hart and Sousley, in which he alleged, in substance, that he was a creditor of David Wilson, deceased; that he had qualified as his administrator; that the assignee had been discharged by a judgment of the Fleming circuit court as assignees and released from further liability as such; admitted that the books sought to be attached showed claims due the estate of Wilson in excess of the valuation placed thereon by *675plaintiff, which had not been collected by the assignees previous to their discharge; and claimed that as administrator of David Wilson he was entitled to hold the books and collect the unadministered assets shown thereon for tiie benefit of his creditors. And in the third paragraph of his answer he alleged that, in the event the court should be-of opinion that he was not entitled to the possession of these books in his capacity as administrator of Wilson, he was interested in the collection of the indebtedness due as shown by the books as a creditor; that the assignees. Hart and Sousley, had grossly neglected their duties, had made fraudulent and 'improvident compromises, wasted the assigned estate, and had been discharged from any further connection therewith by a judgment of the Fleming circuit court in the proceeding supra; denied their right to further administer the trust or hold possession of the books; and asked that a receiver be appointed to wind up the trust; and that he be allowed to prosecute and defend for all the creditors of David Wilson, who were’ too numerous to be brought before the court; and that the books, consisting of ledgers, memorandum boobs, cash books, and all other property belonging to the assigned estate not administered by the assignees, should be turned over to the) receiver, who should hold the books and any moneys realized therefrom for the benefit of all the creditors of Wilson.
General demurrers were filed by the assignees to the petition of Barney Cassidy, and they also filed general demurrers to each paragraph of the cross-petition of Andrews, all of which were sustained by the trial court and the existing attachment discharged, and a judgment entered that Hart and Sousley, as assignees of David Wilson, were entitled to the possession of all the books and *676memorandum belonging to the bank and the assigned estate, and that they should be delivered to them; and Andrews has appealed.
The deed' of assignment of Wilson vested all of his interest in the assigned property in the assignees .for the benefit of his creditors; and his death did not have the effect of revoking the trust thus created so long as there remained any debts due by him at the date of his assignment,. nor to deprive his creditors of any right which they acquired by the deed of assignment. See Gardner v. Letcher, 16 R., 778, 29 S. W., 868, and West v. Gribben, 23 R., 311, 62 S. W., 869. Nor did the order of the Fleming circuit court discharging the assignees from all further connection with the trust estate and releasing their securities from all further liability in connection therewith have this effect. Equity will not allow a trust to fail fop want of a trustee, nor can there be any doubt that a trustee may be discharged from further connection with the trust by a court of competent jurisdiction, and a new trustee or receiver appointed to administer the trust, either upon his own application or that of a creditor or party having pecuniary interest in the trust estate. See Bur-rill, Assignm. (3d Ed.), section 469. It seems to us that the necessary effect of the judgment of April, 1901, was to create a vacancy in the position of assignee. Appellant does not seek in this proceeding to surcharge or falsify any former settlement made by the assignees. All he asks is that the court by proper orders will appoint a receiver to look after assets which he alleges- have not been collected, and apply them equally for the benefit of all the creditors. Upon the averments of the cross-petition he was entitled to the relief sought. But it would not be proper to decree a .sale of the bank books, themselves. They are the *677evidence of the assets of the trust estate, which belong alike to all the creditors, and which should be preserved for! their inspection upon proper application and at proper time.
For reasons indicated, we think the chancellor erred in sustaining a demurrer to the third paragraph of the appellant’s, (Watson Andrew’s) cross-petition, and adjudging the former assignees entitled to the absolute custody and control of the hank books and papers of the assigned estate. The judgment is therefore reversed, and cause remanded for proceedings consistent with this opinion.