90 S.E. 805 | N.C. | 1916
This action was brought by the plaintiffs as the executors of Mrs. Louisa C. F. Barbee for the cancellation of a certain contract for the sale by the defendant of a tract of land containing 150 acres described in the will of Mrs. Barbee and therein directed by her to be sold by her executors. The provisions of the will relating to the matter are as follows:
"6. It is my will, and I so direct, that my farm of about 150 acres in northeast part of High Point, N.C. being developed by my three sons, C. A. Barbee, W. F. Barbee, Fred C. Barbee, by contract, with my consent, shall be laid off in lots and sold in lots of such size as may be deemed best by my executors.
"7. It is my will and desire, after these lots are laid off, if any or all of my children desire to purchase a lot or lots, they have a right to do so before a sale, three good reliable citizens of High Point to value said lots and my executors to make deeds to the same, provided they shall accept the lots at the valuation placed upon them by the appraisers and be charged to them as part of their distributive share of my estate. Also one lot known as the Warren Pemberton lot, on the south side of the Barbee farm, 100 feet front, 200 feet depth, containing one-half acre, more or less, between Anthony Tilman and M. J. Wrenn's property, to be sold and the proceeds to go to my estate.
"8. I give my executors power to sell all lots or property of any kind, either privately or publicly, as may be deemed best by all concerned. I *708 want all my children to express their opinion as to the management of the estate, but in case they cannot agree upon what is reasonable, then let the majority decide.
"10. All the balance of my estate shall be equally divided among my children, share and share alike, as follows: A. E. Barbee, C. A. Barbee, W. F. Barbee, F. G. Barbee, F. M. Barbee, C. C. Barbee, and Mrs. L. L. Wellborn."
The children of Mrs. Barbee entered into a written agreement with her executors, the material part of which is as follows:
"Whereas, further, A. E. Barbee, F. M. Barbee and wife, Edna Barbee, C. C. Barbee and wife, Josephine Barbee, J. S. Wellborn and (655) wife, L. L. Wellborn, all the heirs at law of the said Louisa C. F. Barbee, with the exception of C. A. Barbee, W. F. Barbee, and F. G. Barbee, heirs and executors, are desirous of waiving all rights and privileges which they may now or hereafter have under items 7 and 8 of the last will and testament of the said Louisa C. F. Barbee, in so far as the said items 7 and 8 apply to the property lying in the northeast part of the city of High Point, and mentioned in item 6 of the said last will and testament, vesting in the said executors, C. A., W. F., and F. G. Barbee, full power and authority to sell all lots or property as mentioned in items 7 and 8 of the said last will and testament, either privately or publicly, as they may deem best, with the right to fix and establish prices from time to time as in their opinion are just and proper, and to make all deeds, bonds for title, and other necessary papers for the proper management and disposition, selling and marketing the said property as mentioned in item 6 of the said last will and testament."
The executors contracted with the defendants to sell for them the said tract of land at the aggregate sum of $85,000 upon terms and conditions as to size of lots, prices for the same, and commissions, or compensation to be paid by the plaintiffs, as executors, to the defendants out of the surplus for the services rendered by the latter and the costs and expenses of the sales.
In section 8 of the complaint, the plaintiffs alleged: "That the heirs at law and devises of plaintiffs' testatrix, other than the plaintiffs herein, have notified and demanded that plaintiffs rescind the contract and agreement aforesaid with the defendants herein, the said heirs contending that the plaintiffs herein had no power or authority as executors of the last will and testament to make and enter into such a contract and agreement with the defendants."
The defendants, in their answer, aver that they have no knowledge or information sufficient to form a belief as to the truth of the *709 allegations of section 8 of the complaint above set forth. They also aver that since the contract was made by them with the executors, they have made the necessary surveys to be made for the purpose of dividing the land into lots, about five hundred and sixty in all, and have had streets and sidewalks laid out on the same, and have advertised the lots for sale and have been put to much labor and expense in attempting to perform their part of the said contract, the sums actually expended and the reasonable value of their services amounting in all to about $5,000, and that all they had done in the performance of the contract was known to and approved by the executors and the beneficiaries named in the will of Mrs. Barbee. That defendants have sold a number of the said lots at (656) the total price of $1,940, with the knowledge and approval of the plaintiffs and the beneficiaries under the will, and that since said sales were thus made the plaintiffs have interfered with the defendants in their efforts to sell the remaining lots, to their damage $15,000. Defendants pray that the contract be specifically enforced and for an injunction restraining the plaintiffs from further interfering with the sale of the lots and the execution of the contract.
Plaintiffs allege that the contract is a cloud upon the title to the real estate, and pray for judgment, "That the paper-writing purporting to be a contract and agreement between the parties thereto (plaintiffs and defendant) in regard to the real estate aforesaid be declared void and of no effect, and that it may be canceled of record, and for other and further relief to which they may be entitled."
Plaintiffs moved in the court below for a judgment upon the pleadings, and demurred ore tenus in this Court to the answer, defendant agreeing to treat the motion also as a demurrer.
The court denied the motion for judgment, taxed the plaintiffs with the costs of the motion, and they appealed.
We are unable to decide the questions raised upon the argument and discussed in the briefs of counsel, for the reason that all the necessary parties to be affected by the judgment are not now before the Court. It will be observed that this is not the case of a devise of the land to the executors, as trustees, for the purpose of sale, but the will merely gives them a naked power of sale, and when this is the case "Whatever is not given away to some person must descend. The heir takes, not by the bounty of the testator, but by force of the law, even against the express declaration of the testator to the contrary. If the will does not devise the land, but creates a power *710
to sell it, then, upon the execution of the power, the purchaser is in under the will, as if his name had been inserted in it as devisee. But in the meantime the land descends, and the estate is in the heir. The power is not the estate, but only an authority over it and a legal capacity to convey it. These are elementary maxims." Ferebee v. Proctor,
In a case substantially like this in principle, it being a suit by a trustee to remove a cloud from the title, the Court said: "It is presented as fundamental error that Mrs. Rice and her children were necessary parties to the suit by the trustee. It is a general and well established rule that in suits by or against a trustee for the recovery or defense of property the beneficiaries are necessary parties. There are exceptions to this rule, as where the number of beneficiaries would render it *711
inconvenient to make them parties and where it may be presumed that it was the intention to invest the trustee with power to prosecute or defend suits in his own name. This case does not come within the exceptions. The deed does not clothe the trustee with authority to prosecute or defend suits for the property, and the circumstances do not raise a presumption that it was intended to give him such power. This was a proceeding in equity to cancel certain transfers and enforce a trust, and a chancery court will not entertain a bill unless all the parties in interest are before it. This is a wise and salutary rule, for, without it, the (658) trustee might by collusion, through the medium of a court, deprive the beneficiaries of the trust of valuable rights, when, if notified of the suit, they might protect themselves." Monday v. Vance,
It is generally said that a trustee represents the cestuis que trustent
to such an extent that he may sue in his own name touching matters which affect the proper execution of the trust, and this may be taken as true for most purposes. Our statute declares that "a trustee of an express trust may sue without joining with him the person for whose benefit the action is prosecuted. A trustee of an express trust, within the meaning of this section, shall be construed to include a person with whom or in whose name a contract is made for the benefit of another." Revisal, sec. 404. This section applies where the trustee is in a position, and wholly free, to represent the cestui que trust impartially and without having any interest of his own to subserve or protect; but we do not deem it applicable, so as to exclude the beneficiary as a necessary party where the trustee has exceeded his powers or the question is whether he has done so and the interests of the beneficiary may be seriously affected by its decision.Sampson v. Mitchell,
If the contract between the executors and the defendants was authorized by the terms of the will creating the power, and is beneficial to thecestuis que trustent, they have the right to enforce it; and if not so, and it is injurious to them, they should have the right to be heard in protection of their interests, and besides, in the latter case, the trustee could not be said to be their proper representative.
In R. R. v. Bowler, infra, it is said: "If the cestui que trust bring a suit against a third person, to whom the trustee has assigned the property in violation of the trust, the trustee should be made a party, for he is ultimately bound for the due fulfillment of the trust. (Story's Eq. Pl., sec. 209; Bust v. Dennet, 2 Brown's Ch., 225; Land v. Blanchard, 4 Hare, 28.) Notwithstanding the assignment to Ernst and Keith, Bowler continued to occupy the relations of trustee for appellant and in an action by the beneficiary to recover the trust property his representative should be made a party. But if it be doubtful, in cases in which no settlement of accounts is necessary, whether the representative of the deceased trustee is an indispensable party, there can be no doubt but that Bowler's heirs are necessary parties to this action. This suit is in respect to the property held, in trust for them, by Ernst and Keith. It is not prosecuted merely to establish a debt, or create a charge which the trustees will be compelled to satisfy out of the trust property, but it involves an absolute recovery of the property itself. In such a case the beneficiaries, who have the equitable and ultimate interest to be affected, as well as the trustees, are necessary parties. (Story's Equity Pl., sec. 207; Mitford's Equity Pl., by Jeremy, 176-179.)" C. and L. Railroad *713 Co. v. Bowler's Heirs, 72 Ky. (9 Bush), 468, 484. "Cestuis que trustent are not, it seems, necessary parties to suits against trustees to compel the specific performance of contracts except where some question arises touching the power of the trustees to executed the contract or their authority to act under it. But where a bill in equity involves the title to the cestuis que trustent to the property in dispute, or where they are interested not only in the fund or estate respecting which (660) the question at issue has arisen, but also in that question itself, they are necessary parties."
Here the executors have a naked power to sell and convey, the legal title being in the heirs or devisees, which cannot be divested except by a valid execution of the power.
It is contended by the plaintiffs, and they allege, that the beneficiaries join in this contention, that the contract with the defendants is invalid as not in its nature being within the scope of the power given by the will, there being no limit as to the time of its performance, and, further, that by its terms the executors have divested themselves of the power to sell the property advantageously, and have in other respects abdicated their power and office as trustees. These questions affect the merits, and are postponed for consideration until all necessary parties are brought in, so that they can be concluded by the final decree.
Whether the instrument executed by Josephine Barbee and others to the executors conferred any greater power than the latter already had under the will, or whether by it Josephine Barbee and others merely waived the right to buy the lots, under section 7 of the will, and the right to be heard as to the management of the estate, under section 8, we need not decide, as the legal effect of the instrument must be determined with the other questions involved after they are made parties. It would, therefore, seem, in any view of the case, that those interested in the property under the will should be made parties, and especially is this course essential where the suit is one to clear the title and it is important that all interests be foreclosed by the decree.
The case is remanded that further proceedings be had therein not inconsistent with this opinion. The costs of this Court will be divided between the parties, the plaintiffs paying one-half and the defendants the other half.
Remanded.
Cited: Bank v. Thomas,
(661)