Fraser v. Charleston, CASE No. 891

CASE No. 891 | S.C. | Jul 17, 1880

The opinion of the court was delivered by

McIver, A. J.

This is an appeal from an order refusing a motion, submitted by the city council of Charleston, to allow them, as assignees of certain of the legatees of the testator, Joseph "Whaley, to intervene for the protection of their rights as such assignees, and to require that another legatee be made a party, and that in the meantime, and until the further order of the court, the receiver be restrained from distributing the funds in his hands belonging to the estate of said testator.

The first question presented is whether these legatees were necessary parties. This is a creditor’s bill, and there is no doubt of the general rule that to such a bill legatees are not necessary parties. This, however, is because the executor, being the representative of the legatee, is supposed to be capable and willing to protect their interests, and, therefore, there is no necessity for the presence of the legatees. Story’s JEq. PL, §§ 140, 141, 150. Where, however, the executor is insolvent, the rule is different, (Calvert on Parties 26,) and especially where, as in this case, the executbr is not only insolvent, but has been removed from office, as it were, upon the ground of misconduct, and has been thereby declared not only incompetent, but has been rendered incapable of representing the legatees. The reason of the rule ceasing, the rule also must give way, and the general doctrine that all persons having an interest in the object of the suit ought to be made parties becomes applicable. As long as there was any one before the court capable of representing the interests of the legatees, no necessity existed for making them parties. But when there is no such representative before the court, and especially when, as in this case, the person appointed as such representative — the executor — has been declared unfit to be entrusted with the administration of the assets of tjie testator, not merely upon the ground of negligence or want of capacity, but upon the allegation and proof of the grossest fraud, he certainly cannot be regarded by a court of equity as the representative of the legatees, one of whom is a minor, and, therefore, peculiarly entitled to the protecting care of the court. In such a case the legatees must necessarily represent their own interests, and, for this purpose, must be brought before the court as parties. The receiver, though invested with many powers, and charged with many of the duties of the executor, cannot be regarded as the representative of the legatees. He is “ the mere hand of the court.” As to persons not parties to the case, even the court cannot, by any order it may make, affect their rights. The legatees, deriving their rights under the will, must, of course, take them subject to any restrictions or conditions contained in the will, and, therefore, when there is an executor duly appointed and qualified, the legatees take their rights subject to the right and duty on his part, derived from the will, to represent their interests. Where, however, he is displaced or otherwise rendered incapable of representing them, they must then represent their own interests, as there is no power, without their consent, authorized to appoint a person to represent them.

What steps they may or ought to take for the protection of their interests, after they have been made parties, we regard it premature to discuss now. Whether they may, under these proceedings, contest the validity of some or all of the claims brought against their testator’s estate, or whether it will be necessary for them to institute separate proceedings against each of the judgment creditors, or whether they may not apply-to the court for an order directing the receiver to contest some or all of such claims, as he was permitted to do by the decree of Judge Wallace, affirmed by this court, are questions which are not yet before us in a practical form, and cannot, therefore, properly be now considered. The legatees, undoubtedly, had a right to be let in as parties, and to have the receiver restrained from distributing the fund until they could have an opportunity of asserting their rights in such a form as they may be advised.

We do not think this motion comes too late. It may be true that it would now be too late for the city council, in its original character as one of the defendants, to interpose the objection of a want of proper parties, (Clark v. Tompkins, 1 S. C. 119; Featherston v. Norris, 7 S. C. 472,) but, as assignee of the legatees, it is a totally different person, in law, and entitled to the rights of its assignors, who, never having been made parties, never had the opportunity to make the objection. We are unable to perceive how the case of Rice v. Mahaffey, 9 S. C. 281, applies; for there the defendant sought, by a new action, to obtain the benefit of a defence which he had neglected to interpose to the previous action brought against him by the plaintiff, and the court held that this could not be done by a separate proceeding. But so far from holding that the desired relief could not be, obtained in the original action, language is used which implies that, in a proper case and upon a proper showing, such relief might be obtained in the original action. The language referred to is: “If by any mistake he may have suffered injury, the court has extensive power, and, upon motion, can grant relief by leave to amend or otherwise, according to the nature of the case. Such proceedings are not separate, but are in their nature supplemental, and are part of the original action.” Thcwhole point of that case, therefore, is that a separate proceeding was not the proper mode of obtaining the relief desired, but, if obtainable at all, it must be sought under the original action.

It is said, however, that though the legatees might have had the right to be made parties for the purpose of contesting claims against the estate of the testator, yet the city council, as their assignees, have no such right. First. Because the assignment was not intended to give such right; and, second, because, if it did, it purports to assign a right to institute legal proceedings to set aside a judgment on the ground of fraud, and such an assignment would be void “ as contrary to public policy, and as savoring of the character of maintenance.”

According to the view which we take of this matter the motive which induced the legatees to make the assignment cannot affect its validity. They may have been prompted by the best or the worst of motives; the fact, nevertheless, appears that it is, in effect, an ordinary assignment of their interest in a legacy, which, not being impeached for fraud, want of consideration or anything of the kind, must have the effect of an ordinary assignment of a legacy. It may be, and doubtless is, true that these ladies, actuated by consideration for the memory of their deceased uncle, highly creditable to them, would not have been willing, for the sake of mere personal gain, to engage in a contest which would render it necessary to cast discredit upon a loved though erring relative, and yet, from consideration for an innocent third party who had suffered heavy losses by the misconduct of their uncle, they might have been willing to enable such third party, as far as lay in their power, to repair losses thus occasioned. At all events, they have made an absolute assignment of their interests under the legacy to the city council, who have thereby been invested with all the rights of the assignors.

Nor do we think that there is any ground for the position that the assignment is void as “ contrary to public policy and as savoring of maintenance.” The argument to sustain this position is based upon the assumption that the thing assigned was the right to institute proceedings at law to set aside a judgment -for fraud, but according to our view, such au assumption is without foundation, for the thing assigned was the legacy, or. the interests of the assignors (two-thirds) in the legacy, given originally to Maria Evans Morris, and we are unable- to see why. such an assignment is not just as valid as the assignment of any other chose in action. The fact that it may become necessary for the assignee to institute legal proceedings to protect the thing assigned from unjust claims brought against it does not invest the transactions with the character of maintenance, for the thing assigned is not the mere right to bring an action to set aside a judgment for fraud.

We think, also, that the grandson of Maria Evans Morris, who is entitled to the remaining third of the legacy originally given to her, is a necessary party, and that the motion requiring the plaintiffs to make him a party should have been granted. The fáct that no motion to that effect has been made on his behalf cannot affect the question, for, when it is brought to the attention of the court that any person who is a necessary party, in order that a complete determination of all the matters involved in an action may be had, has not been made a party, the court may, of its own motion, require such person to be made a party in order that there may be a complete and final disposition of all matters involved in the case, (Neeley v. Anderson, 2 Strob. Eq. 262,) especially where, as in this case, the absent party is an infant.

The judgment of the Circuit Court is reversed, and the case is remanded to that court for such further proceedings as may be necessary in conformity with the principles herein announced.

Willaed, C. J., and McGowan, A. J., concurred.