42 W. Va. 641 | W. Va. | 1896
The appellants, John L. Briscoe et al. tendered their petition in the chancery cause of Ann P. Marshall’s executor et al. against John H. Hall et al., in the Circuit Court of
The facts set out in the petition are as follows: Mrs. Ellen Waters, deceased, by her last will and testament, among others, made the following devises: “I give and bequeath to my cousin, John Hall, of Jefferson county, State of West Virginia, to him, his heirs and assigns, my farm, situated in Jefferson county, state of West Virginia, which I purchased in the year 1874, with funds belonging to my separate estate, of Edward Tearney, administrator of Thomas Briscoe, deceased, he paying to my executor twelve thous- and dollars, in five equal annual payments, bearing interest from the date of my death, such payments to form part of my estate in the hands of my executor, and to be disposed of as hereinafter” provided. But in case my said cousin, John Hall, refuses to take said farm at the valuation aforesaid within one month from the date of probate of my will, such refusal to be in writing, signed by him, I then authorize and empower my executor to sell said farm, and direct and will that the proceeds of sale, together with other parts and portions of my estate, shall be applied to the payments of my debts, funeral expenses, legacies, pecuniary and residuary, as hereinafter devised. I will and direct my executor to pay to my cousin, John Hall, of Jefferson county, West Virginia, such sum of money as may be necessary to procure suitable head and foot stones to mark the graves of my mother and myself, not to exceed, however, the sum of seven hundred dollars, and, after my death and burial in the churchyard alongside of the remains of my mother to erect the same;, and I hereby request and direct my said cousin, John Hall, in case he survives me, to see that my remains are interredin the graveyard in Virginia beside those of my mother, all expenses of which I direct to be paid out of my estate. I give and bequeath to my cousin, John Hall, the debt of fifteen hundred dollars which he now owes me. I give and bequeath to my cousin, John Hall, of Jefferson county, state of Virginia, the sum of three thousand dollars in trust, to have and to hold the same, and to pay theinterest accruing thereon to my brother,
It is settled law that, “when trust funds are invested in land by a trustee, and the title is taken in his own name, an implied trust will be raised in favor of the cestui que trust:’ Webb v. Bailey, 41 W. Va. 463 (23 S. E. 644); 27 Am. & Eng. Enc. Law, 162. In 27 Am. & Eng. Enc. Law, 250, the law is stated as follows: “If the property has wrongfully passed beyond the control of the trustee by an authorized sale or otherwise, it is the beneficiary’s right to follow it, wherever he can identify it and claim it on behalf of the trust.” Also (Id. 257): “If a judgment creditor of
Counsel for the appellees lay particular .stress on the word “wrongful,” as used in connection with the conversion of trust funds, and insist that, as the trustee, John Hall, had the right to have and hold this fund, and pay the interest thereon, he was thereby authorized to buy land with it for his own benefit, which would immediately become subject to his individual debts, and thereby defeat the trust. Such a disposition of the fund, while not morally wrong on his part, would yet be wrongful towards the beneficiaries, within the meaniug of the law, and would make the land liable for or take the place of the trust fund. It is the duty of the trustee to keep the fund in such shape that it can always be identified, and, as long as he does this, lie is guilty of no nrnral or criminal wrong; but a court of equity will substitute the investment for the fund. When the trustee, Hall, withheld the amount of the trust fund from the payment of the purchase money which he had agreed to pay in accepting the terms of the devise, he thereby created a charge on the land in favor of the beneficiaries to the extent of the trust fund; for, in law, it was a wrongful conversion of the fund, without properly securing the same, and the law raises an implied trust, against him and all persons having notice thereof. As between the Marshall debt, however, and this fund there can be no priority, although the trustee, Ross, and Judge Marshall had notice, about which there seems to be no question, for the reason that the Marshall money was used to pay off another
. Counsel insist that petitioners are barred from participating in the proceeds of the sale of the land, except as to any surplus that may remain after the payment of the claims audited, by the provisions of chapter 139, p. 883, of the Code. In the case of Benson v. Snyder, 42 W. Va. 223 (24 S. E. 881) Judge BranNON says: “I think all specific lienors, such as vendors holding liens by executory contract or by reservation in a deed, attachment liens, liens by mortgage, legal or equitable, or legacies charged by will, must be made.formal parties; and, if not made such parties, they are not bound by a convention of lienors by publication of notice to lien-holders, under section 7, chapter 139, of the Code.” This would apparently limit the lien holders who are subject to the provisions of this section to judgments alone; but, whether this be the law or not, this section is certainly not broad enough, and was never intended, to apply to equitable trusts. The plaintiffs in the suit, through the trustee, Ross, one of them, had full notice of this trust, having been effected by him, and he was fully aware of the names of all the beneficiaries, and they should have been made formal parties to the suit. If the decrees therein were before this Court, it would be compelled to reverse the same, in harmony with its former decisions. Bank v. Watson, 39 W. Va. 342 (19 S. E. 413). But the only question now presented is as to whether the court erred in not permitting the petition to be filed. To this the answer is obvious. The petition, without naming them, asks that the plaintiffs and the defendants in the original bill be made defendants thereto, and without further process be required to answer the same. The petition should be so amended as to set out all parties by name, and, in case of their failure to appear, should be remanded to rules for process thereon, and the court should grant to the petitioners suck relief as the nature of their case demands, as indicated in this opinion. Goff v. Price, and Morgan v.
The decree complained of is reversed, and this canse is remanded to the circuit court for further proceedings in accordance with the rules of equity.