80 W. Va. 273 | W. Va. | 1917
Upon this appeal, awarded to defendant Emma M. Ice and others to review the decrees rendered September 22, 1915, February 1 and May 26, 1916, the questions of primary importance are, first, whether in a suit by trustees to set aside
Except in so far as the decree alleged to have been assigned by Cecil B. Highland as receiver to the plaintiffs, I. D. Morgan and J. S. Robinson, trustees for themselves, John M. Hart and others, discloses,’ neither the original nor the amended bill furnishes any information of the facts and circumstances upon which the decree is predicated, or the source or origin of the trust relation between the plaintiffs and the beneficiaries of that relation. The. caption of the bills does shoAV that Morgan and Robinson, trustees, sue on behalf of themselves, John M. Hart and others, and the first paragraph of the original bill alleges that plaintiffs were duly appointed by mutual agreement of the above named beneficiaries, stockholders of the Bank of Smithfield, and that as trustees they were empowered and authorized to collect and reduce to their possession on behalf of the beneficiaries all claims and assets then due or to become due from any source whatsoever.
On August 2, 1915, plaintiff I. D'. Morgan, as surviving trustee of himself, John M. Hart and others, filed an amended bill,, introducing other persons as parties defendant, and alleging the death of J: S. Robinson, his co-trustee, and
By decree of September 22, 1915, the deeds attacked by the bills were annulled as fraudulent as to the creditors of Emma M. Ice, except the grant to Flanagan, who, because of the undenied allegation of the payment by Mrs. Ice of the consideration therefor and her relationship to the grantee and her vendor, was adjudged to hold the title to lot 72 in Paden City as trustee for the sole use and benefit of her co-defendant Emma M. Ice. By that decree the balance of $2736 due on the decree assigned to plaintiffs was held to be a lien on the lands conveyed, and an order of reference entered to ascertain and report the real estate owned by the defendant debtor and the liens thereon and their priorities.
The first appearance of the defendants Emma M. Ice, C. L. Burdick and Lory F. Ice was by way of exception to the report of the commissioner, filed January 10, 1916, the prior decrees having been rendered upon the bills taken for confessed. The decree of February 1, 1916, overruled these exceptions, confirmed .the report, ascertained the real estate owned by Emma M. Ice and the liens thereon as reported, and directed a sale of the lands to satisfy the liens, and appointed a commissioner to execute it. Their second appearance, together with H. L. Flanagan, was in open court, upon a notice given by them returnable May 2, 1916, that being the first day of the May term, that they then would, as they did, move the court to rehear, reverse and set aside the decrees of September 22 and February 1. The grounds of the motion were, first, that the bills were insufficient in law to support the default decrees; second, want of proper parties, designating those declared to be omitted improperly; third, that, the suit was not matured and ready for hearing on the date of the first decree, and for other errors apparent on the record. The decree of May 26, 1916, overruled the motion so made, and confirmed the sale made pursuant to the decree of February 1. This motion of course was made under the authority of sections 5 and 6, ch. 134, Code, in order to afford the court an opportunity to correct its own errors,
The ground first assigned by the notice of the motion has the same effect as a challenge to the sufficiency of the two bills. It says they are not sufficient in law. Is that objection well taken ? It is, unless it can be said it is unnecessary to make the beneficiaries in a trust parties to a bill seeking to enforce it as a lien upon real estate, or unless it is unnecessary under proper procedure to aver the authority of the receiver to assign the decree obtained by him in a different suit.
The appellee, the surviving trustee, virtually concedes in his brief that the beneficiaries of the trust are proper, if not necessary, parties. But he argues that appellants can not now raise that question, nor the question as to the authority of the receiver to assign such decree; and, further, that these defects, if such they be, were not specified in the notice of the motion to reverse. The first contention is based upon the theory that, although duly summoned, appellants can not now complain of the default decrees, because they failed to' appear to the cause for any purpose, save to except to the report of the commissioner, and not thereafter until the motion made by them to rehear and reverse the decrees. As to these subordinate contentions, it suffices to say that the statute is intended to afford a defendant an opportunity, indeed makes it his duty, to move to set aside a decree by default as a condition of the right to apply for a writ to review the decree. Otherwise, the statute is purposeless, and the defendant remediless, in the absence of such motion. The misapprehension of counsel seems to be due in part to the conception that appellants should have pointed out more definitely the particulars in which the bills are' insufficient. But we are of opinion that this is not necessary, and that the general charge that the bills are defective is sufficient to require an examination to determine whether the pleadings present a good cause for relief.
The usual and better procedure requires that the beneficiaries in an active trust, should be made parties plaintiff or defendant in a suit to enforce the trust. The authorities,
Furthermore, the authorities are uniform in holding that bills such as we have before us should allege therein the source of the authority under which the trustees act and of the assignment which they seek to enforce as in this case. Where the assignor is also a party, and has opportunity to affirm or controvert the allegation that he made the assignment or caused it to be made, and the authority under which he acted in so doing, such particularity in the pleading may not be necessary. A receiver of an insolvent state banking
That these allegations could readily have been supplied by counsel, whose brief evinces careful preparation, is apparent; because therein it is stated that since the recovery of the decree by the receiver he “has made a settlement with the creditors of the bank, and, under sanction of a court order, has assigned all unliquidated claims and assets in his hands to the trustee plaintiffs herein for the benefit of the stockholders named as beneficiaries, they having 'provided the receiver with funds for the complete settlement with the creditors of the bank”. Had the pleader exercised the same caution in preparing the bills, the pleadings would not perhaps be subject to the criticism now urged against them. But we think this is a fatal omission.
That omission, however, would not, as appellee contends, warrant reversal of the default decrees under chapter 134, nor upon appeal, but for the first ground assigned as basis of the motion to reverse, and the fourth ground or general assignment of ‘ ‘ errors apparent on the face of the record. ’ ’ These assignments challenge the sufficiency of the pleadings as if by demurrer thereto. The fourth ground, as held in George v. Zinn, 57 W. Va. 15, brings before the appellate court all the errors of law in the decrees. To support a default decree, the bill must be sufficient to stand the test of a demurrer. Although in Globe Insurance Co. v. Reed, 19 Ind. App. 203, Dame v. Coceti, 79 Pac. 296, McAllister v. Kuhn, 96 U. S. 57, and Crogin v. Lovell, 109 U. S. 199, it is held that upon error to revei’se a judgment by default such defects in
We think the other grounds of the motion are without merit. Aden B. Ice, of whom the bills allege Emma M. Ice purchased lot 72 solely with her own funds and fraudulently procured him to convey it to C. L. Burdick and her to reeonvey it to H. L. Flanagan, was not a necessary party, as no relief was prayed against him and his rights are in nowise affected by the decrees. Kirby v. Steele, 65 W. Va. 719. And the third ground of the motion is not well taken, since under the statute a defendant against whom an order of publication is taken is required to appear within thirty-days after the first and not the last publication thereof, as appellants contend.
We therefore reverse the default decrees, and remand the cause, with leave to plaintiff to amend the bills, if he be so. advised, conformably with the principles herein announced, and otherwise to'proceed therein according to the principies •governing courts of equity. (
Reversed and remanded.