43 Colo. 456 | Colo. | 1908
delivered tbe opinion of tbe court:
This is an appeal by tbe administrator witb tbe will annexed of tbe estate of John L. Jerome, deceased, from a judgment allowing a claim against tliat estate as of tbe first class. - Tbe claim of appellees was allowed as of tbe first class upon tbe ground
“Where any executor, administrator, guardian, conservator or trustee has received money as such, his executor, administrator or conservator shall pay out of his estate the amount thus received, and not accounted for, which shall compose the first class.”
The claim was first filed by the appellee, George IT. Jerome, for himself personally and as attorney in fact for the other appellees, in the county court, in which the administration of the estate was being conducted. From the petition filed on behalf of these parties, it appears that nineteen persons in all were interested in the fund, but George II. Jerome did not pretend to represent the eleven other persons' named as having an interest in the fund. In the county court the claim was allowed as of the fourth class, from which the appellees appealed to the district court. The judgment of that tribunal was to the effect that the claim of George H. Jerome and others be allowed in the sum of $33,375.00, as a claim of the first class; that the administrator pay that sum to The International Trust Company, designated by the court as the successor' in trust of the deceased, to be field by the trust company for the use and benefit of the parties lawfully entitled thereto, until the entry of an order of a court of competent jurisdiction directing the distribution of the funds among such parties. The circumstances in which the deceased became possessed of the fund which is the basis of the claim of appellees are substantially as follows:
In 1886 Milton Jeróme, of Chicago, departed this life, leaving a widow, but no children. By his will his widow, brothers and sisters were to receive the income of his estate in proportions particularly designated, and when his wife, brothers and sisters were dead, the estate was to be divided between his
Counsel for the administrator contend that tbe funds in question are not trust funds; that the district court erred in allowing the claim of appellees as a claim of the first class instead of a claim of the fourth class, for the reason that it did not appear that the alleged trust fund or the property in which it was invested ever came into the hands of the administrator ; that the statute making a claim based upon a trust fund a preferred claim over other creditors is unconstitutional, because it impairs the obligations of the contracts of the latter; and that the county court had no jurisdiction of the cause instituted by appellees.
These are interesting and important questions which we decline to pass upon, for the reason that in our opinion the point made by counsel for appellant, that the judgment in favor of the appellees is erroneous in that there is a fatal defect in the lack of necessary and indispensable parties, is well taken, and for this reason the other questions should not be determined in the absence of such, parties.
It is urged by counsel for appellees that the question of a defect of parties was waived by the appellant not demurring upon this ground, or in some appropriate way presenting that question to the trial court, and in joining issue and going to trial. The rule invoked does not apply where the court cannot proceed to judgment without the presence of others who are not parties to the proceeding. — Peck v. Peck, 33 Colo. 421; Homestead M. Co. v. Reynolds, 30 Colo. 330; Colo. State Bank v. Davidson, 7 Colo. App. 91.
“The court may determine any controversy between the parties before it when it can be done without prejudice to the rights of others, or by saving their rights; but when a complete determination of the controversy cannot be had without the presence of other parties, the court shall order them to be brought in.”
This is but a declaration of the general rule that all who are interested in the subject-matter of an action should be made parties thereto, so that complete justice may be done and the rights of ¿11 parties in the subject-matter .of controversy finally determined. — Mitau v. Roddan, 84 Pac. (Cal.) 145. According to the averments of the petition filed by appellees, .upon which they base their right to the fund in controversy, there are eleven parties interested in that fund who are not parties to the proceeding which they instituted. The fund was created and deposited with the deceased to secure all parties interested therein against loss upon an obligation which they had executed. The interested parties are entitled to interest on this fund, but until the period of distribution arrives, they are not entitled to any part of the principal. That period has not arrived. The conditions of the bond executed by deceased to secure this fund by virtue of which the obligees would be entitled thereto, have not been fulfilled; so that neither the obligees nor their representatives are entitled to this fund, or any part thereof. If the fund is recovered from the estate, it must be kept intact, and so administered as will result in its being so used and applied as to effect the purpose for which it was originally created, and deposited with the deceased. The trial court realized this by appointing a trustee, and directing the administrator to pay to it a sum of money which equalled the fund.
It is urged by counsel for appellees that the administrator has no right to appeal, and they therefore ask that his appeal be dismissed. There are cases where the administrator may not appeal, of which Barth v. Richter, 12 Colo. App. 365, and Virden v. Hubbard, 37 Colo. 37, are examples. An examination of these cases, however, discloses that the administrator had no interests to protect in his representative capacity, and for this reason could not appeal. The case at bar presents an entirely different state of facts. By §4731, 3 Mills’ (Rev.) Stats., it is provided that administrators, in their official capacity, shall prosecute and defend on behalf of the estates represented by them. By § 4815e, ibid., the right of an administrator to appeal is conferred. The purpose of conferring this right is to enable him to more fully protect the interests committed to his care. The administrator represents the creditors and the whole of the estate, and it is his duty to take such steps as are necessary to prevent injury to the interests which he. represents re-
The estate which the appellant represents is insolvent. There are a number of claims, aggregating several thousand dollars, which have already been allowed, and claims amounting to several thousand more which are in process of adjudication. The funds and property in his hands which he can apply to the payment of debts against the estate do not equal in amount and value the claim of appellees, as allowed by the trial court; so.that if that judgment should be carried into effect, there would be nothing left in the hands of the administrator to apply to the payment of the other debts against the estate. It follows, therefore, that the rights of the creditors of the estaté other than appellees were injuriously affected by the judgment'of the district court, and as the administrator represents these creditors, he was aggrieved by such judgment in his fiduciary capacity.
The judgment of the district court is reversed and the cause remanded for further proceedings according to law. Reversed and remanded.
Chief Justice Steele and Mr. Justice Helm concur.