44 N.J. Eq. 211 | N.J. | 1888
The opinion of the court was delivered by
From the order dismissing the petition and denying the application to open the proceedings, and permit the defendant to make defence, aud the order overruling the exceptions to the master’s report and the final decree, the defendant has appealed. The appeal also brings up the interlocutory decree — the final decree involving the merits of the case as settled by the inter
The reasons assigned for reversal are—
First. That the other grandchildren are necessary parties. The account of the executor on file is a final settlement of the estate. The balance reported in hand is the residue, after payment of debts and expenses, to be distributed or applied according to the directions in the testator’s will. In suits by creditors or specific legatees for satisfaction of their demands the residuary legatees need not be made parties. In such a suit residuary legatees are interested consequentially only from the circumstance that the recovery of the debt or legacy will reduce the residue, and under such circumstances the executor is regarded as the representative of all persons interested. Story’s Eq. Pl. §§ 140, 141. But that rule does not apply to this case. The testator directed the division of his estate, after the death of his wife, among his grandchildren. The event on which the distribution was to be made has occurred, and primarily the period for distribution has arrived. The testator made provision for the support and maintenance of those of his grandchildren who were children of his daughter Sarah, and conferred upon his executor power to pay to'any of his grandchildren, on attaining majority, a fair and just proportion or share of the residuary estate. How far these clauses in the will control or affect the residuary disposition is one of the controversies in this case. In that controversy the persons entitled under the residuary disposition have a direct interest. One of the questions in dispute is, whether the complainants are entitled to have support and maintenance, having regard to the entire residuary estate. On this question the beneficiaries under the residuary clause are entitled to be heard. A decree against the executor in this suit would be no answer to a suit by the persons entitled under the residuary clause for immediate distribution. The case is therefore subject to the rule that in a suit which relates to the residuary estate all persons interested in the residue must be made parties. Sherrit v. Birch, 3 Bro. C. C. 229; Parsons v. Neville, Id. 365; Brown v. Ricketts, 3 Johns. Ch. 553; Devoue v. Fanning, 4 Id. 199; DeHart
Second. That the interlocutory decree, which settled the merits of the case, was made without the appellant being properly brought into court, and without opportunity being allowed him to present the merits of his defence. The petition presented to the Chancellor was not an application for a rehearing. A re
On the facts presented by this petition the decree was not only made in a suit in which the defendant was not summoned and to which he never appeared, but also upon a record which did not present the merits of the case.
The testator designated the fund from the produce of which the support and maintenance of the children of his daughter Sarah, during minority, should be made. But he vested in his executor the exercise of judgment with respect to the amount which should be necessary therefor. He also delegated to his executor the power to pay to any grandchild, on attaining majority, a fair and just proportion or share of the residuary estate, if in the judgment of the executor it would be for the advantage of such grandchild. The powers granted are in the nature of trusts, but nevertheless they are discretionary in the sense that they are to be executed by the executor in the exercise of his judgment. Where the power given to trustees is wholly discretionary to do or not. to do a particular thing, in their discretion, the court has no jurisdiction to lay a command or prohibition upon the trustees as to the exercise of that power, provided their conduct be bona fide, and their determination is not influenced by improper motives. 2 Lewin on Trusts (8th ed.) 612. Where the power is coupled with a trust or duty, the court will enforce a proper and timely exercise of the power; but if it be given upon a trust to be exercised
A court of equity may make an allowance for maintenance out of the income of an estate given to a trustee for an infant, although the instrument creating the trust contains no provision for maintenance, and there is a direction that the interest shall accumulate; and, in making such allowance, the court will be governed entirely by a consideration of the amount of the infant's estate and the expenditure required for the maintenance of the infant in his station and condition in life. 2 Perry on Trusts § 615; 2 Lead. Cas. in Eq. 711, 714, 716, notes to Eyre v. Countess of Shrewsbury. But another principle applies where the testator has himself provided for the support and maintenance, and has directed that so much of the income of a fund in the trustee's hands should be applied therefor as, in the judgment of the trustee, might be necessary for that purpose, especially where the fund itself ultimately goes to other beneficiaries and is subject to a power in the trustee, in his discretion, to anticipate the distribution of the fund. In such cases the court will not take upon itself to regulate the maintenance, but will leave it to the judgment of the trustee, and will not interpose if the trustee has exercised a discretion within the limit of a sound and honest execution of the trust. 2 Lewin 614; Livesey v. Harding, Tamlyn, 460; Douglas v. Andrews, 3 Jurist 949; Costabadie v. Costabadie, 6 Hare 410; Brophy v. Bellamy, L. R. (8 Ch. App.) 798; Tempest v. Lord Camoys, L. R. (21 Ch. Div.) 571.
In Costabadie v. Costabadie the testator gave all his real and personal estate to his wife, upon trust, that she should receive the rents and profits, and pay and apply the same to her own use and to the use of the children of their marriage, agreeably and ac
A court of equity will examine into the conduct of a trustee in the execution of his discretionary powers, and will assume control over the trustee’s conduct, and if need be will take upon itself the execution of the trust. But the court will exercise this prerogative with great caution, and will not displace the trustee from exercising his functions, unless, upon a consideration of the reasons and grounds upon which he has acted, it appears that he has abused his trust, and that his acts in the premises have not been within the limits of a sound and honest execution of the trust. In this case, the execution of the trust has been taken from the trustee and delegated to a master in-a^ a suit of which the trustee had no knowledge, and by a decree made ex parte and without an answer, which would have enabled the trustee to submit the grounds and reasons upon which he acted. In In re Lofthouse, L. R. (29 Ch. Div.) 921, the court, having disapproved of the amount allowed by the trustees for the maintenance of an infant, under a power of this character, suspended judgment, to allow the trustees to make a new offer, which the court approved in the place of the sum ordered by the Vice-Chancellor. In re Gadd, L. R. (23 Ch. Div.) 134, and Tempest v. Lord Camoys, 21 Id. 571, are illustrations of the reluctance of the court to interfere with the discretionary powers of a trustee, although it may disapprove of the trustee’s acts. From the bill in this case it appears that there was a dispute with respect to the fund from the income of which the complainants were entitled to support. That controversy being decided, the judgment of the executor with respect to the amount necessary for the complainants’ support and maintenance remained as a substantial discretionary power to be exercised by the executor. Every allegation of fact in the bill may be true, and yet there may be no substantial grounds on which to take
The order denying the defendant’s application for' leave to appear and answer is an appealable order within principles heretofore adjudged. Camden and Amboy R. R. Co. v. Stewart, 6 C. E. Gr. 484; Woodward v. Bullock, 12 Id. 507; Day v. Allaire, 4 Stew. Eq. 303, 315; Beach v. Fulton Bank, 2 Wend. 225.
Hor did the defendant lose his right to a hearing upon the merits by laches or waiver. The merits of the case were substantially disposed of by the interlocutory decree, and the defendant had no knowledge of the pendency of the suit until after that decree was made. He appeared before the master upon advice that he could then present his case, and had no knowledge that he was foreclosed until about the time of the hearing on exceptions to the master’s report, and he then first learned how he had been brought before the court, and the nature, particulars and character of the admissions that had been made in his behalf, and he thereupon promptly made this application. 7
There should be a reversal, and the record be remitted, to the end that the bill may be amended in the matter of parties, and that the defendant be allowed to plead, answer or demur thereto.
Decree unanimously reversed.