Letcher's Trustee v. German Nat. Bank

134 Ky. 24 | Ky. Ct. App. | 1909

Opinion of the Court by

Judge Hobson

— Reversing. '

Susan McKnight died a resident of Boyle county in 1869. By her will, which was duly probated, she devised one-half of her estate to William J. Wright in trust for the use of her grandson Alexander Letcher, the income to be paid over to him during his life. If he died childless, the estate passed to Susan Wright, the wife of the trustee. If he died leaving children, the estate was to go to them. The trustee qualified 'and took possession of the estate, amounting to $1,513. He held it until his death in 1902. Susan Wright then qualified as trustee, executing bond with J. E. Bowman as her surety. She lived in Washington, D. C. Bowman lived in Springfield, Ohio. In August, 1903, Letcher filed a suit in the Boyle circuit court, in which he sought to have the trustee removed on the ground that she was a nonresident of the state, and was not managing the estate properly. Mrs, Wright was brought before the court by constructive process, and an order was entered removing her as trastee and appointing- in her stead W. S. Lawwill. He was directed to take charge of the trust fund. One thousand dollars of the trust fund had been invested by the original trustee in 10 shares of stock in the German National Bank of Covington. Lawwill as trustee then brought this suit against the German National Bank, in which he sought to have the certificate held by Mrs. Wright canceled, and a new certificate issued to him as trustee. He also prayed that the hank be directed to pay to.him the dividends on the stock. Mrs. Wright notified the bank that she claimed the stock as her property. She was not made a party to .the action. The bank filed an answer in which it controverted the allegations of the petition, and pleaded that by a by-law of the bank enacted pursuant to the act of Congress a new certificate of stock could not be issued by it until the old certificate was produced and canceled. The circuit court upon a submission of the case dismissed the plaintiff’s petition, and he appeals.

If the court had rendered a judgment against the bank, that judgment would have been no protection to the bank when sued by Mrs. Wright, as she was not a party to the proceedings. She had been appointed trustee by the Boyle circuit court, and the court which appointed her had jurisdiction to remove her, and to appoint another in her stead. Courts of chancery 'have the power to remove a trustee who goes out of the jurisdiction. Am. & Eng. Ency. of Law, 979. A proceeding to remove a trustee is a proceeding’ in rein and notice 'to her of that proceeding by constructive process was sufficient; for-she qualified in the court and derived her power from its authority, and, in order for the court to revoke that authority, it was only necessary that she should have notice of the proceeding. But, when the trustee appointed in her stead seeks to obtain specific property, in which she Claims .an interest, she must be made a party to the suit, for the bank here was not a party to the suit in which she was removed as trustee, and is not bound by the judgment in that case, and no right of Mrs. Wright against the bank can be affected by the judgment entered in that case. Yet the circuit court should not have dismissed the petition because Mrs. Wright was not made a party to the action. H© should have required her brought before' the court, and, when she is brought before the court, as she may be by constructive process, the court may make an order if the proof warrants it, directing the bank to pay to Lawwill' as trustee the dividends on the stock. If Mrs. Wright appears in the action, he may require her to produce the certificate of stock which she now holds, and, if she does not appear, he may enter an order canceling her certificate of stock, and directing the bank to issue a certificate of s.tock tó Lawwill as trustee. The bank cannot by its by-law tie the chancellor’s hands or disable itself from performing its duties to others. This is a proceeding in rem. The bank is in this state. What'the plaintiff seeks is simply a certificate evidencing his right, and this he may Obtain in this suit against the bank when Mrs. Wright has been brought before the court 'by constructive process. The present certificate is to her as. trustee.

There is a radical defect in the plaintiff’s record as it now stands. He took the deposition of a witness, and had him to copy into his deposition certain excerpts from the record of the Boyle court. The court’s record cannot be proved in this way. The only way in which the judgment of the Boyle circuit court can be shown is by a copy of the record properly certified. In the same way the records of the county court must be shown by authenticated copy. The reason for this rule is that, unless there is a complete transcript of the record, it cannot be known with certainty what the court decided or that it had jurisdiction of the parties.

We gather from the record that one object o£ the proceeding is to secure for Letcher what are termed the increments of the fund. The original trustee seems to have invested the money wisely. The stocks in which he invested it are now worth in the market much more than $1,513. Letcher is entitled to the income on the whoile fund during his life, but he is not entitled to the increase of the fund by reason of the fortunate investments of the trustee. First Nat. Bank of Carlisle v. Lee, 66 S. W. 413; 23 R. 1897.

Judgment reversed, and cause remanded for further proceedings consistent herewith.