3 Wis. 367 | Wis. | 1854
By the Court,
This is a bill filed by the complainants, to remove the defendant Beall as trustee, under an assignment executed by Charles Greisse to said Beall, in trust for the benefit of the creditors of the said Charles Greisse; and for an account, injunction, and other relief.
The bill is filed by William Geisse, Edward C. Geisse, Herman C. Geisse and Theodore Geisse, partners under the name and firm of Wm. Geisse & Sons and Herman C. Geisse on his own behalf, all of Philadelphia, in the State of Pennsylvania, against Samuel W. Beall, Charles Geisse, and numerous other defendants, all of whom, except Beall and Charles Geisse, are alleged to be creditors of the said Charles, and interested in the trust estate under the assignment set forth in the bill, and the only creditors.
The bill alleges, that on or about the 18th day of March, 1850, the said Charles Geisse then and theretofore doing business as a merchant at Fond du Lac, in this Stale, being unable to meet his liabilities, and for the purpose of making provision for his creditors, exesuted and delivered on that day an assignment, to the defendant Beall, of all the estate of the said Charles, in trust for the benefit of his creditors, preferring some. That Beall accepted the trust, and entered into and took possession of the trust estate, to the value, as believed, of $20,000 or $25,000. That from the time of entering upon the trust, he, the said
The defendant Beall, in his answer, admits the making of the assignment, and that he accepted, and entered upon the duties of the trust; denies, or attempts to explain or avoid the specific allegations of indiscreet or fraudulent management of the trust estate, and denies that he has appropriated the same or any part thereof to liis own use, except as he has charged the same to himself. He also admits, that by the terms of the assignment, the complainants are the creditors of Charles Geisse, but says he has been informed and believes, that the complainants and others in said assignment mentioned as creditors of Charles have re-assigned to the said Charles, their rights and interests under the said assignment, and that they now have no interest in the trust estate, or at most a contingent interest therein, the precise nature and extent of which he is unable to state. He also denies that the said complainants have ever, by themselves or agents, applied to him for an amount of the trust property, or of his application thereof, or that he has refused to comply with such request, except that Herman C. Geisse has applied to him for money on account of said assignment, while a creditor’s bill was pending against Charles, to which he (Beall) was made a party, as trustee, with the intention of contesting the validity and lona fides of the preferences given by the assignment to H. C. Geisse and the
The defendant Beall does not directly deny the validity of the claims of any of the oestuis que trust, under the assignment, nor allege any facts or circumstances which tend to render them questionable, even if such could be made available to him, nor does he attempt to give any amount or value of the pi’operty which came into his possession, though he admits he received the trust estate, nor of the disposition made of the same, (except in two or three instances in answer to specific charges in the bill, and those of trifling amount compared with the alleged value of the whole estate) nor does he allege any reason why he does not, or ought not to account.
Wilson & Slauson answer, that they are judgment creditors of Charles Geisse to the amount of $2000 and upwards. Admit the execution of the as_ signment, but allege, on information and belief, that the same is fraudulent and void, and was made to hinder and delay creditors. They also allege on information and belief, that the pretended indebtedness of Charles, to Herman C. Geisse and to Geisse & Sons, set up in the bill of complaint, has no existence in fact, but it is in whole or in part fictitious and fraudulent, and is set up for the purpose of more effectually
A large mass of testimony was taken and submitted, and upon the hearing, the Circuit Court made decree, dismissing the bill with costs. From this decree the complainants have appealed to this court.
It is quite obvious, that the interests of the defendants to this bill are very different. Wilson & Slau-son only, of all the number, appear here to sustain the decree of the court below.
The complainants claim as cestuis que trust, under the assignment, and seek to render the trust estate available; to remove the present trustee, and to compel him to account for the estate which has come into his hands as such. This claim Wilson & Slau-son resist, so far and so far only, as it may possibly interfere with the prosecution of their judgment to satisfaction out of the same property or a sufficient portion thereof.
The rights, interests and duties of the defendant Beall rest upon no such foundation. He stands in the light of a simple trustee, liable to account to any person lawfully interested in the property. As such: trustee he is bound to disclose, upon the proper complaint of the eestuis que trust, all of the trust property of every description, which may have come to his hands. It is no excuse for not accounting, that the assignment under which he holds is fraudulent and void as against creditors. It is void if void at all, as against creditors only; and it is optional with them, to treat the instrument as void and disregard the claims of the trustee or assignee, or to hold him to a rigid accountability for the trusts he has voluntarily assumed. It would be singular indeed, if an
We speak here of the duty and liability of the trustee to render an account;of the trust estate which came to his hands; not of the appropriation or distribution of the proceeds. But we may here ask, what right has the assignee to question the demand of the
But there is no controversy here among creditors, which can be made available to the defendant Beall. Wilson & Slauson, it is true, allege in their answer, a fraudulent preference of the complainants. But that is no reason why a court of equity should refuse to hold the trustee who has got all the property, to accountability. If the court should ever see fit to remove him, and order the proceeds in his hands to be paid into court, it would be abundantly able to protect all the eestuis que trust, and order an equitable distribution. How are Wilson & Slauson, on the one hand, or Beall on the other, to be injured ? If, Wilson & Slauson have regarded the assignment as void, (and as to creditors it be so) and have proceeded at law, and levied upon property, of course for so much Beall would discharge himself in his account rendered. If the assignee has converted the whole estate, then it is for their interest that the account should be rendered and the fund secured for legal distribution. It does not appear that they have attached the funds in Beall’s hands; and if they had,
We have observed, that whether this deed of as signment be void as to creditors or not, it is void as to creditors only. As to all the world except creditors it is good and valid: And it is void as to those creditors only, who choose so to consider it. The creditor who chooses to regard it as void, may pursue his remedy at law and satisfy his debt out of the debtor’s property in case the assignment proves to be fraudulent. But his option is not compulsory upon other creditors. They may hold the deed as valid, and hold the trustee to the faithful management and application of all of the estate which becomes available to him under the assignment.
Nor can the fact be made available to the trustee^ in avoidance of his liabilities as such, that the creditors, or cestuis gue trust, have made arrangements in regard to the distribution of the estate, different from that prescribed by the assignment. And this brings us to the consideration of the instrument, under date
It is claimed, that, by this arrangement, one of the leading trusts, declared by the assignment, that in favor of Wm. Geisse & Sons, was extinguished, by voluntary relinquishment, and that therefore it ought not to be executed at all. We do not so understand the arrangement. William Geisse & Sons do not absolutely relinquish their interest in the assignment, but by the instrument of the 23d of July, 1850, they simply declare another trust of their share or interest, that is, they relinquish their share unto Charles Geisse in trust for the purposes expressed in the deed of the other creditors of the 29th of June, 1850. They have still an interest in the original assignment in the application of the estate to the purposes of the trust created by them. Authorities need not be quoted to
In any aspect of the case, we do not perceive that the relations of the defendant Beall to the creditors or any of them, are in the least affected by the con
Nor are we able to perceive, that the duties or obligations of the trustee are removed by the agreement of the creditors for the appointment of another trustee. He held his appointment under the assignment, and the creditors, by assenting to the assign-medt, ratified his appointment, and they could not remove him and substitute another trustee without his consent, or the intervention of a court of equity. The appointment of Charles Geisse, therefore, as the common trustee of all the creditors, to receive and distribute the funds under their agreement of the 29th June, 1850, by no means released Beallfrom his obligations as trustee. Nor was it necessary that Charles Geisse should become complainant to enforce the trust committed to him. He might decline to act at all, and there is no evidence of his acceptance of the trust. The duty of the defendant to account to the cesiuis que trust named in the assignment must therefore.remain the same, for the trusts declared followed the property by him received and attached to it, or the proceeds thereof. And in the event of his removal, the trust could not fall, for it is a maxim in equity, that “ a court of equity never wants a trustee.”
Without pursuing this branch of the subject further, we think the complainants have made a case, which entitled them to an account from the trustee. This, though specifically required, he has utterly failed to do. He has neither stated an account himself nor exhibited facts which would enable the complainants to state one. He has wholly neglected to answer the bill in this particular, or to render any excuse for not doing so. Yet he admits his character
The next question presented is, whether from the bill, answer and proofs, a court of equity ought to interpose its authority for the removal of the trustee.
It is not necessary to cite authorities here in support of the power of a court of equity to remove a trustee, when the safety of the fund, or the due execution of the trust shall require it. The cases cited by counsel and others, leave no room for doubt. We do not deem it necessary, either, to recapitulate the evidence in this case ; for it seems to us apparent, as well from the relations of the parties, as from the conduct of the defendant, that to ensure the due execution of the trust, a change in its administration is indispensable, and the facts in the case render the exercise of this power of the court an imperative duty.
It remains only to consider the equities of the defendants Wilson and Slauson. The defendants set up in their answer that the assignment was made to hinder, delay and defraud the creditors of Charles Geisse, and for that reason void, and also is void on account of the fraudulent admission of a debt as due to Wm. Geisse & Sons. We are not aware of any proof offered to sustain these allegations contained in the answer, but there is proof tending to show the genuineness of the indebtedness referred to. Unless, therefore, the assignment is void for reasons appearing on its face, the defence cannot stand upon these grounds.
But we do not deem it necessary to decide whether this assignment comes within the rule laid down in
The execution of the instrument of the 29th of June, 1850, on the part of Wilson & Slauson, is sufficiently proved. We are not informed as to the objections made to the testimony. We have examined the papers carefully, but have been unable to discover any objections taken to the interrogatories filed, or to the answers, when the commission was executed, or upon the hearing in the court below, though it is quite probable that among papers so various and voluminous it may have been overlooked.
But it is objected, that the testimony, if admitted, shows a case contradictory to that made by the bill, and hence shows the complainants out of court.
We have already given our views in regard to the arrangement made between the creditors themselves, so far as the defendant Beall is concerned. Those remarks will, in a measure, apply to the case of the defendants, Wilson <fe Slauson. It did not change the relations of any of the creditors with the trustee. It affected only the distribution of the estate, and might very properly be set up by the creditors defendant for that purpose. But, as it seems to us, it could have this effect; and no more.
Again, it is contena ed, that the instrument of the 29th of June is inoperative, as no delivery thereof to Charles Greisse is proved.' But we do not think such proof necessary. This arrangement was among the creditors only. Charles might accept the trust or he
Nor do we see any objection to the availability of this evidence on the part of the complainants, in the fact that Charles Geisse is made a party defendant, instead of being a party complainant. This bill is not filed to enforce the trust created by the last agreement among the creditors, but to procure an account and to save the trust estate, and to enforce the trusts created by the assignment of Charles Geisse to Beall ; and, unless the former shows the complainants Wm, Geisse & Sons, to be devoid of interest therein, it cannot be said to show them out of court. We have already attempted to show that they had a remaining* interest in the application of that trust estate, and hence were competent parties complainant. Charles Geisse was, indeed, a necessary party to the suit, not on account of his relations created by . the agreement of the creditors of the 29th of June, 1850, but on account of his
We dr not understand the object in the introduction of this proof to be, to set up a new and different right or title from that claimed by the bill, but merely to show that Wilson & Slauson had recognized the assignment of Charles Greisse as valid. For this purpose it was competent, as proving the acts and declarations of these defendants. What effect the last agreement may have in determining the respective right and equities of the cestuis que trust, perhaps in the
It has not been our intention, at this time, even if the case were prepared for it, to attempt to adjudicate upon the respective rights of the cestvds que trust named in the assignment, any further than was absolutely necessary to dispose of the several questions raised on the appeal. These we have endeavored to discuss and decide, so as to indicate, in some degree, some necessary proceedings when the case shall have gone back. It has seemed to us highly important, that the court should exercise its authority in the preservation of this estate, and not allow the trusts to fall, for want of a trustee, responsible, competent, and willing to perform the duties thereby imposed. It is also clear that a full, minute and complete account should be rendered of all and
"We &0 not perceive that it is necessary for us to jntimate any further, our views of this case. No account has been rendered, and the subject of distribution did not come up in the court below. When the court shall become possessed of assets, the case will assume new features.
The decree of the Circuit Court must be reversed, and the cause remanded.