Garner v. Thorn

| The Superior Court of New York City | Nov 15, 1878

Speir, J.

It is apparent, from the foregoing concise statement of the complaint, that the one subject-matter of the action is the trust, and the cause of action the several violations and misappropriations of which it has been the subject.

The object of the suit is a legitimate one, and peculiarly appeals to a court of equity to accomplish its purpose. If the allegations are true, and as such they are to be taken on this demurrer, this is an unjustifiable and inexcusable disregard of the plain performance- of a duty voluntarily assumed by executors and trustees, and a willful and fraudulent appropriation by them and the other defendants of funds devoted, in terms, for the protection and support of the beneficiaries of the trust. It is clear that the plaintiffs are entitled to the protection and relief of the court. The only question here is, whether they must seek it by separate suits against each of the individuals implicated in the transactions, or whether they are at liberty to bring them all into court in one suit.

The complaint recites but one connected history of this trust fund. It begins with its origin under the will of Thomas Garner, Sr., and comes down in one unbroken line through the various trustees and other defendants to the present time.

Although it appears that all of the defendants were not .jointly concerned in every act of wrong, there are a series of acts on the part of the persons concerned in its management, and produced by the same fraudulent intent, which contributed to the injury of the plaintiffs. The question is, whether the several matters charged are so distinct and unconnected as to render the joining of them in one bill a ground of demurrer ? Chancellor Kent, in Brinkerhoff agt. Brown (6 John. Chan., 139), a leading case, says, after citing several cases: “ The principle to be adduced from these cases is, that a bill against several persons must relate to matters of the same nature and having a connection with each other, and in which all the defendants are, more or less, concerned, though their rights in respect to the general -subject of the case may be distinct.” Again, he says: “ The remedy would, of course, be varied and adapted to the case of each individual defendant if the general charge of fraud should be established; and if it should only be established in part as against some of the defendants and not as against others, the decree would also then be adapted to the proof. I do not see that this circumstance can create any difficulty in sustaining the bill. It is cheapest and best, for the interest of all parties, that the subject of all the fraud, in all its parts, should be investigated and settled in one suit (See, also, Fellows agt. Fellows, 4 Cowen, 682; Story’s Equity Pleadings, 285, 285a, 286 and 286a, and cases cited). The whole doctrine seems to be summed up in section 539.

The general rule in equity pleading being thus established it follows that demurrers of this kind should be cautiously received. The pleader in every complicated case embracing a series of fraudulent transactions among various defendants, intimately and more remotely connected as the present one, must, find much difficulty and peril attending the selection of proper parties.

We have here four’ several demurrers interposed to the complaint, in- substance the same, specifying nine supposed different causes of action. It is now well settled that the Code has not essentially altered the rules of equity pleading as it regards multifariousness. Indeed, the comprehensive, vague and uncertain language of the four hundred and eighty-fourth section seems to be intended to apply to equitable actions which frequently embrace complicated acts and transactions relating to the subject-matter of the action which it would be desirable to settle in a single controversy and should not interfere with settled doctrines of equitable procedure, pleadings, parties and remedies (Pomeroy on Remedies and Remedial Rights, 496 ; Wyles agt. Suydam, 64 N. Y., 198).

The objection is taken that here there is an improper joinder under the four hundred and eighty-fourth section of the Code. The objection is based upon the fallacy of supposing that the cause, of action is the trust fund, whereas the cause of action, as before stated, being the violations and misappropriations of the trust, it is plain that these causes arise out of transactions connected with the same subject-matter of action, which is the trust itself. The error consists, I think, in not clearly distinguishing the question of proper or necessary parties to a suit in equity from the question-of misjoinder of causes of action, and of confounding the distinct prayers for relief with distinct causes of action. An attentive reading of the different branches of the prayer for judgment and the nine supposed different causes of action specified in the demurrer will show that the real grounds of demurrer are •founded upon the several grounds for relief. The latter may be wholly omitted in the complaint, yet the plaintiffs would be entitled to such relief as they could establish upon proper proofs of alleged facts. The prayer for judgment is not demurrable.

Among other examples the counsel takes the case of the Harmony Mills as being improperly joined as defendant. The prayer is, that by an interlocutory judgment, or otherwise, it may be compelled to execute a suitable instrument ratifying and confirming the mortgage of $710,000, and that the defendants Johnson and Thorn and the executors and trustees of William T. Garner, deceased, as stockholders, may be compelled to give their written consent thereto. It appearing in the complaint that this mortgage was executed, without the assent of the stockholders, by the trustees, and was intended as a money payment of the trust fund on the books of Garner & Co.; that the stock of the corporation was, in fact, nearly all owned by that firm and is wholly an insecure and impi-oper investment, and constituted as it stands, a security for the trust money, can there be a question but that it is a proper and necessary party; and that a separate suit is not necessary to secure the relief asked for in the bill \ It is true an action might be brought against the firm of Garner & Co., or against the estate of Thomas Garner, Sr., to rescue the trust money from their hands and correct the informality in the mortgage; but a court of equity, in view of the conduct of the several defendants as set forth in the complaint, will not, I apprehend, consent to any measures of delay or unnecessary expensive litigation whereby the whole fund may be absolutely squandered and lost to these plaintiffs. These statements are not made as separate and distinct causes of action against the several defendants, but a cause of action is alleged, by which they are all affected, and in respect to which they are necessary parties.

It is claimed by defendant’s counsel that the main and primary object of the suit was the removal of.the defendant Thorn, as trustee, and that is the cause of action set forth. In this 1 think the learned counsel are mistaken. As before stated, and which clearly appears from the complaint, the cause of action consists in the several violations and misappropriations which the trust estate has suffered in passing through the hands of the various defendants, and with which they have been more or less connected. The restoration and preservation of the trust fund is the primary and important subject-matter of the action. If the court, in the exercise of its equitable powers, should conclude on .the whole case that the removal of Thorn is necessary for the protection of the fund, it will then remove him.

The issues presented in the complaint are not such as are required to be separately tried by a court of equity, and although the reliefs growing out of the bill and prayed for in respect to the several defendants are according to their respective liabilities, it is still but one subject-matter of action.

The demurrer should be overruled and judgment ordered for the plaintiffs with costs. ■