17 Ga. 223 | Ga. | 1855
By the Court.
delivering the opinion.
It is a well known general rule, that all persons materially-interested in the subject, should be made parties to the bill, so. that the Court may be enabled to do complete justice, by deciding upon and settling the rights of all interested, and future litigation may be prevented.
Where a suit, by a trustee, is on account of any matter which concerns the execution of the trust, then the case falls within this general rule ; and unless some reason of necessity forbids it, the cestui que trust must be made a party. In such case, the cestui que trust has an immediate and material interest in the subject-matter of the suit, and it is proper he should be made a party. (Kirk vs. Clark, Prec. in Ch. 275. Adams vs. St. Leger, 1 Ball & Beatty, 181. Douglass vs. Horsfall, 2 Sim. & Stu. 184. Malin vs. Malin, 2 John C. R. 238.) “ Where a trustee is prosecuting a claim for a cestui que trust, the latter should be a party.” (Fish vs. Howland, 1 Paige Ch. R. 20.)
The general rule is correctly stated, by the Counsel for the plaintiff in error. It is that Courts of Chancery will not allow* a trustee to encroach upon the capital of a trust estate, nor sanction an expenditure exceeding the income of the estate.
But this rule has exceptions. If the commissions can be paid out of the income or interest of the capital, they should be so paid. Cases may occur, however, where this cannot be done, and then the commissions may be paid out of the body of the fund. Suppose a trustee is appointed for one year, to the management of a large and troublesome trust property, occupying much of his time and care; and yet, from some unavoidable cause, (not arising from fault of his) no income is produced by it during the period of his trust, and up to the time of its termination ? At his settlement with the cestui que trust, he would certainly be allowed compensation out of the corpus of the fund, or there would be no remedy for his right.
This record presents a case of somev'hat similar exigency. There was no fund provided by the will, specifically, out of which this compensation was to be paid. It had to be paid, then, either out of the corpus of the fund or out of the interest. The answer of Mrs. Foster, the administratrix, shows, that by the direction of the surviving trustee; Daniel Grant, (who has been removed and is now represented by William V..
It will be remembered, that he was not acting as trustee for Mrs. Grant, but as administrator for Thomas Grant, Jr., and he paid the whole interest away by the order of the surviving trustee; feeling, perhaps, that he had no right to resist that order, or confiding in the belief that the trustee would see justice done to him. Thus, by no fault of his, there was no fund left out of which these commissions could be paid, except the corpus of the property. In such case, upon the principles which we have recognized, they may be paid out of the capital of the trust fund. Especially is this equitable here where the cestui que trust, one of the complainants, has received and enjoyed the fund in the shape of income, out of which Col.. Foster might have reserved payment, and where this interest,, out of which he might otherwise have reserved these commissions, was thus paid by the directions of the surviving trustee. It does not seem equitable and just, that under such circumstances, the cestui que trust, and the representative of that trustee, should compel him or his estate to respond to the full amount of the ten thousand dollars.
The interests of the remainder-men is another thing. This is not a proceeding by them. If they have cause, or may have cause to complain, against any one, (which we by no means decide,) it should be against that trustee by whose directions the interest was all paid out to the cestui que trust; and the law allowing commissions to the trustee, and payment of expenses to Coli Foster for his management of the fund, could not be carried into effect, without encroaching on the body of this fund.
These expenses are like expenses of administration, and they
Indeed, one of the answers insists that the reasonable charges, commissions, and expenses of Col. Foster in the management of this fund, while winding up the estate of his intestate, T. Grant Jr., in collecting the notes, &c. which duty Daniel Grant, the surviving trustee, insisted he should take upon himself, fully amounted to this sum, and that it was retained to meet these charges, &c. This seems to have been in the issues presented the Jury, and if we look upon that feature of the charge under consideration, as delivered secundum subjeetwm materiam, and apply it to the claim of Col. Foster, as administrator of Thomas Grant, Jr., for his services, commissions, &c., in the management of this trust fund, it is easy to see that the Court was right in holding, that under the circumstances to which we have already referred, Col. Foster’s representative was entitled to the compensation out of the body of the fund.
Looking to the facts of the case, and applying the. charge to ■them, we see no good ground for complaint.
Let the judgment be affirmed.