In re the Estate of Kingsbury

51 Mich. 623 | Mich. | 1883

Sherwood, J.

This is an appeal from an order of the •circuit judge of Kent county, made for final distribution of the assets of the insolvents.

In 1876 Kingsbury and Bennett were partners, doing business in the city of Grand Rapids, and the firm was insolvent. The firm had property and Kingsbury had individual property, but both the firm and the individuals composing the same were insolvent. On the 22d of April, 1876, the-firm, and Kingsbury, individually, by the same instrument,, made a general common-law assignment for the benefit of' all the creditors of the firm and Kingsbury, without preference, to Truman H. Lyon. Bennett had no individual property covered by the assignment. Lyon collected all the-assets of the firm and nearly all belonging to Kingsbury, and died without completing the trust.

Under the order of the circuit court, Julius Houseman was, on the 6th of September, 1881, appointed in his place, ^* and entered upon the discharge of his trust, June 12th, 1882, and on the • same day the court made an order requiring-creditors of the insolvents to file proof of their respective-claims with the register of said court, on or before July 17, 1882. Among the claims filed under this order was appellant’s claim of $4391.94 against the firm, and also the same indebtedness to the same amount against the individual assets of Kingsbury. The indebtedness and amount thereof are not contested. The indebtedness was upon two notes-made by the firm, payable to the order of S. O. Kingsbury and endorsed by him, and secured by his mortgage on real estate. The mortgage had been foreclosed and the property all sold, and the proceeds applied to the payment of the-notes, and the claim now presented was for the unpaid balance.

On the 28th day of November, 1882, Houseman, as trustee, by his petition to said circuit court, showed he had executed his trust, and that he then had of assets of the firm $1120.69 and of the individual assets of Kingsbury, $1246.-35 ready for distribution, and asked the order of the court approving his account, and forvthe direction of the court in making distribution of the assets collected.

On the hearing of this petition the appellant appeared before the court, and claimed to be entitled to a dividend from both funds on the debt he represented, which the court denied, and entered an order that appellant elect from which fund he would take his dividend; that he could not have a dividend from both, and if be failed to make Ms election, the trustee, in making distribution, would take appellant’s dividend from the copartnership fund. From this order appellant took his appeal to this Court, and we are asked to review the proceedings of the eircnit judge in the matter and reverse the order appealed from.

On examination of the case the question of jurisdiction at once presents itself and is the first to be disposed of.

The cause was argued and submitted by counsel for the respective parties at the June term of this Court. The question, however, now suggested, was not raised on the argument or presented in the briefs of counsel on either side; and the discussion of the subject by them at the present term, on re-argnment, has failed to give us any new light upon the question, or point out any provisions of law to support the proceedings had at'the circuit.

The whole subject of trusts is one of equitable jurisdiction, well defined, and the general practice under the various branches has been of long standing, both in England and this country, and has become a part of the remedy itself, and no departure therefrom can be had, except authorized by statute or by the rules of court clearly making the change.

"We have been referred to the provisions of chapter 148 of the Compiled Laws as furnishing sufficient authority for the proceedings taken in this case, but a careful examination of this chapter satisfies us that the provisions referred to apply to real estate, and not to pei’sonal trusts. It is conceded by counsel there is no other statute upon which the act*ion at the circuit can be based. We are therefore left to the original jurisdiction of the court of chancery to furnish the remedy sought by the appellant in this matter.

Whenever a trust has been created, and the trustee ap-. pointed dies, or for other cause is incapable of discharging the duties of the trust, equity, when properly invoked, will appoint some suitable person to complete the execution of the trust; and upon proper proceedings taken in his behalf, or upon the part of any party interested in the trust property or fund, the court will furnish such aid as may become nec-essaiy, from time to time, in the proper administration of the trust, but in any case such proceedings cannot be instituted by petition. When they are taken all parties interested must have notice of the same, either actual or substituted, and on petition the latter cannot be obtained. Proceedings of this kind can only be had by bill of complaint. All parties may then in some way be properly brought before the court, which has ample power to do whatever may be just and equitable in the premises.

The petition in this case presented for the appointment of the trustee was not the proper proceeding to be taken. It gave the court no jurisdiction to make the appointment, and all action had thereunder is without proper authority.

The appeal must be dismissed, but without costs to either party as against the other.

The other Justices concurred.