Prewett v. Land

| Miss. | Oct 15, 1858

HARRIS, J.,

delivered the opinion of the court.

This cause, with two others involving the same principles (No. 8604, and No. 8605), is submitted to us, on appeal, from the Chancery Court of Monroe county.

The bill was filed, by the appellee, against appellants, to subject the “ trust fund,” in the hands of the trustee, to the payment of an account, for goods, wares, and merchandise (filed as Exhibit B. to the bill), alleged to have been purchased by Mrs. Boggan, one of the beneficiaries, for herself and her children, who are the remaining objects of the trust. A decree was rendered, in the court below, in favor of appellee, for the amount of the account and interest, against appellant, ordering the money to be paid, in three months from the date of the decree, and on failure, directing the commissioner to seize and sell a sufficient amount of the trust property, to pay said sum and costs, and divesting the title of said property out of the trustee, and vesting it in the commissioner for that purpose. From this decree this appeal is prosecuted, and its rendition, both upon the facts in proof, as well as the principles of equity involved, assigned as error.

The doctrines of a court of equity, in subjecting trust property to the payment of the debts of the cestui que trust, are derived from its general jurisdiction to enforce the proper execution of trusts for the advantage of those interested. Courts of equity do not, however, undertake to control the dispositions of grantors, when they are legal; or to mould them into new forms, or to_other or different purposes than those expressed by, or naturally arising out of the instrument of trust. Nor do they assume to create or confer additional rights, benefits, or obligations on the parties, to those originally designed by the grantors. They simply aim to enforce the*execution of such rights, powers, and duties, or such just and beneficial discretion, as are given or contemplated by the instrument creating the trust, when, from any cause, the trustee fails or refuses to discharge his duty, in relation to the trust subject. It was never intended to defeat the beneficial operation of these conveyances, in guarding the objects of the trust against their own extravagance, ignorance, or weakness, as well as against the wickedness of scheming sharpers, who usually profit by their misfortunes. It was not designed, by courts of equity, to make the trustee the mere agent of the beneficiaries, to aid them in squandering the estate without the power of restraint or discretion, where both have been vested in them by the deed. In its very nature, a trust is an equitable interest in property, distinct from the legal title or ownership.

“ In other words (says Judge Story), the legal owner holds -the direct and absolute dominion over the property, in view of the law; but the income, profits, or benefits thereof, in his hands, belongs, wholly or in part, to others; and these uses, benefits, or charges, constitute the trusts, which courts of equity will compel the legal owner, as trustee, to perform in favor of the cestui que trust, or beneficiary.” 2 Story’s Eq. Juris. § 964. Unless some interest, power, or discretion, for that purpose, is vested in the trustee, by the terms of the trust, or by necessary implication, even in a court of equity, the beneficiaries can have no use or property in the corpus of the trust estate, but only a right to the enjoyment of the proceeds, as distinct from the property itself. 2, Story, § 968, p. 313. The cestui que trust, has a property in the use, while the property, or the body of the estate, belongs to the trustee, for the purposes expressed in the grant. Like any other property, this use is alienable, or may be disposed of, in invitum, by operation of law. Hence a married woman may have a separate property, or a use, and may charge it, in the same manner, she may charge her other separate estate in equity; but she has no power to charge, in any manner, by her act, the estate over which she has no control, and the title to which is vested in another. The deed of trust is the law of her title and interest. If the deed, therefore, only entitles her to the proceeds of the trust property, she is incapable, in any manner, of asserting successfully a greater interest than such proceeds, by virtue of the trust. Aylette v. Ashton, 1 Mylne & Craig, 105, 111; 2 Story, § 1397 (note 3). Where, however, the legal title to the property is vested in a trustee, for the benefit of a married woman, and by the terms of the instrument, a separate estate, in the use and enjoyment of the property itself, as well as the proceeds and income, is secured to the wife; she may, in such case, in equity, charge the estate, or corpus, as well as the proceeds.

But even in deeds of trust, making conveyance of property to trustees, for the support and maintenance of married women, and their children, or giving discretion to the trustee, to use the corpus of the estate for such purpose, it is obvious, that courts of equity, in the exercise of their undoubted general jurisdiction over the subject of trusts, and to prevent a total failure of justice, as well as the object of the trust, will compel the trustee to its performance. See 2 Story, § 961, p. 310. In such cases, while the court will thus control the discretion of the trustee, it will not make the extravagant or reckless conduct of the beneficiary the measure of its discretion, but will see that the power it exerts is a necessary and proper one, for the benefit of all concerned, and that its exercise is demanded for the preservation of the subject, or the present and future interests of the beneficiaries.. It will not allow its discretion to be forced into subservience to the indiscretion of improvident beneficiaries or inhuman chapmen, who have produced the necessity which they plead.

Were we to admit, therefore, that in the case before us, both the trustee and the court, by the terms of this deed, have the power to direct the sale of a portion of the trust property to pay this debt, the question arises, ought the court to compel the trustee, under the circumstances here, to exercise it.

It is admitted, that where discretion is thus given, it is only limited in its exercise by the necessity which invokes its aid, and to the means at command. Nor will the court look alone to the future, in the exercise of its power, but it will regard with favor the claims of those whose generosity or charity has led them to relieve the wants and necessities which the trustee should have satisfied out of even the body of the estate, if it could not have been done otherwise. But while the court will be thus liberal in its discretion to the benevolent and upright, it is called upon by every principle of duty, justice, and humanity, to watch with unremitting care and jealousy, the improvident contracts and liabilities, which are thus presented for its sanction, and against which these trusts are usually designed to guard.

The proof here shows that the defendant, Mary Ann Boggan, the mother of the other beneficiaries, and who has contracted this debt, has only a life estate in the proceeds of the property, to be enjoyed in common with her children; they are all to be maintained and supported out of it, at tbe discretion of the trustee, under the control of a court of chancery. To allow her, at her pleasure, to charge the estate, with all debts that she may see fit to contract, without reference to the necessities of the children, present and future, or even to her own future, would be to substitute her discretion for that which the grantor, under the law, has vested in this trustee, and which a court of equity can alone supervise.

The parties are without remedy at law, and in presenting themselves here, they must show a case in which it would have been the duty of the trustee to sell the property, for the benefit of the mother and children. They cannot ask a court of equity to do what the trustee rightly refused to do. What necessity is shown to have existed ? The record, so far as direct proof of necessity for the sacrifice of one or more of the negroes, is wholly silent; it is not only pregnantly dumb as to the existence of such necessity, but on its face, when we come to examine the character and amount of these several accounts, they afford strong evidence of the absence of such necessity; there is not even proof of the sale and delivery of the articles. So far as it could affect the trustee, or the interests he represents, the acknowledgment of Mrs. Boggan, even when her signature is proved, could only be evidence against her, and not against the other defendants in this case. The articles purchased shows that there was no such necessity as would authorize the sale of minors’ property.

But again, no such decree as that rendered here, could have been legally made in the absence of the minor children of Mrs. Boggan. In the case we are considering, leave was granted to amend the bill, so as to make them parties, but such amendment does not appear in the record; nor does it appear that process was either served on them personally or otherwise. A guardian ad litem was appointed for them, who appears and answers for them; but the court had no jurisdiction over them, until service of process, to make such an order, and this upon general principles, as determined by this court, in Stanton v. Pollard, 24 Miss. R. 155.

In the other case leave was granted, the bill amended, and guardian ad litem appointed, who filed his answer, but no service of process shown on the minors by the record.

The allegations of the bill are also insufficient to found a decree for the sale of the trust ‘property. The object of the bill in its inception, was evidently to reach the proceeds of the trust property; and hence, we presume, the omission to make the children of Mrs. Boggan parties. It was founded on the idea that Mrs. Boggan had a separate property in the proceeds, which she had the right to •charge with the payment of her debts in equity. As a bill to reach the property itself, upon the ground that the trustee had discretion to sell or .dispose of it, and that circumstances existed which required the exertion of his power, it is defective, because it does not state the facts showing such necessity, with sufficient particularity of detail, as to make it apparent that the trustee neglected his duty in this respect.

It is insisted, however, that the trustee ought to be estopped from setting up his defence here, because the debt was contracted on the faith of his title, and his promise to pay.

To this it may be answered that, for the personal engagements or contracts wdaich the trustee may be liable, a full and adequate remedy exists at lawn Such contracts or engagements can give the court no jurisdiction to render a decree against him, in this proceeding ; n.or can he be permitted to prejudice the trust by any such arrangement, not sanctioned by the deed.

The objection taken by counsel for appellant to this proceeding, on the ground that the appellee had not obtained a judgment at law, is not tenable. That doctrine is applicable to legal demands, seeking the aid of a court of equity to subject equitable assets. The party thus seeking the aid of equity, must first exhaust his legal remedy, by judgment, execution, and nulla bona. But this doctrine is not applicable to equitable demands, where the party is without legal remedy, and must, therefore, resort in the first instance to a court of equity. See Mitchell v. Otey, 23 Miss. 239; Swett v. Penrice et ux. 24 Ib. 416.

Let the decree be reversed, and bill dismissed.

The counsel for the appellees asked for a reargument, to the end that the decree should be amended, so as to subject the interest of Mrs. Boggan in the trust property, to the payment of the debt; but a reargument was refused.