91 N.J. Eq. 503 | N.J. | 1920
The opinion of the court was delivered by
The attack on the decree covers items and classes of items claimed by appellant as credits in his account and disallowed below, and the general theory of the cáse as formulated by the vice-chancellor. We may say at this point that we concur in his theory as the correct one, and as dispositive of practically all the points urged on this appeal. At the same time we deem it best to consider them specifically as presented.
The first point stated is' that appellant “is entitled to credit for all payments to Herrick enumerated in Schedule H of the Keen report.” •
An examination of the schedule shows that the payments claimed are not within the terms of the trust agreement; and it is not seriously claimed that they are. They would fall, if anywhere,' under section 1 of the Schedule A attached to that agreement, and which in the opinion set out above is paraphrased rather than quotéd. It reads: “All commissions and expense according to contract this day made between the Villa Site Company, of Haworth, New Jersey, and Wilbur R. Herrick and Kate Minor Holbrook.” This agreement, as noted by the vice-chancellor, provides a definite commission of thirty-three and one-third per cent., with certain qualifications not now material, except a limit of $150 per month over specified disbursements. The payments specified in Schedule H seem to have no logical relation to any such scheme. It is now suggested that they are a fair substitute for it; and that payments made to Herrick and. not authorized by the trust should be charged against his equitable interest under the trust agreement. As to the first suggestion, we agree with the vice-chancellor that the payments were made not as a trustee, but personally or as an officer of the Villa Site Company, and while in the latter case no
The second and third points relate to items for which credit is claimed, and which appear in Schedule H as, “sixty-four checks, $1,480.42; ninety-one checks, $3,391.84.” As to these, there seems to be no evidence whatever except that in Copeland’s passbook these totals are entered as of checks paid out of the trust account. The checks themselves were not produced and there is nothing to show their respective dates, amounts, name or payee, or for what given. The duty of a trustee to keep proper accounts and submit proper vouchers is too well settled to need discussion; and while in some cases he may be excused from producing vouchers, the burden of proof of all items of discharge is on him. The subject was recently discussed by the present chancellor in Smith v. Robinson, 83 N. J. Eq. 384. On these claims there was no proof worthy of the name.
The fourth point is a similar- claim for allowance of what is called the “Gray National Bank” note, also' in Schedule H. An examination of this instrument shows it to be signed by “T. W. Holbrook, Vice-Prest.” (of the Haworth Improvement Company as Copeland testified) to the order of H. C. Copeland. Nowhere does the name of Villa Site Company appear thereon; and why it should be fastened on the assets of that company is not made plain.
The fifth point is a repetition of the claim relating to sundry disbursements in Schedule H, and is covered by what has been said under the first point.
. The sixth point is, that even if the moneys disbursed by Copeland were paid without regard to the terms of the trust agreement, the company should not be allowed to lift the trust deed (tantamount to a mortgage) unless on repayment of all moneys
“Dh& trastea As enibittad 'to be allowed * * * foi* all Ms .proper expenses owt of pocfeet, which inidudie ial'1 paymiemibs expressly authorized by the instrument of trast; all reasonable 'expenses in carrying out the directions .of the trust, 'ain'd, dm the absence of any such direefóioms, all expenses reasonably necessary for (the .security, protection, and preservation of ibhe trast property, or for the prevention, of a. failure of the trust. * * * Wlhere a trustee .properly advances money for any of the above1memtioned obgteebs, so that he As anitiitiled to reimb.ursem'emt, he also has a lien as security for the claim, either upon the corpus of the trust property or upon, the income, as 'the case may b'e; but for moneys improperly paid there is mo lien.” Pom. Bq. Jur. § 1085.
This was the rule adopted by this court in Turton v. Grant, 86 N. J. Eq. 191. Applying it to the present case, we agree with the vice-chancellor that the moneys disallowed, so far as shownj to have been actually paid, are not shown to have been paid for purposes that bring them within the scope of the rule; and hence are not proper either for allowance in the account or for a basis of lien. Thisi result disposes also of the eighth and last point.
The seventh point is, that the Haworth Improvement Company had no equitable interest in the subject-matter of the suit, and that consequently there should have been no adjudication in the decree recognizing the receiver of that company. In answer to this it is sufficient to say that a reading of the deeds made contemporaneously by the Haworth Improvement Company and its sister concern, the Villa Site Company, to Copeland, and the trust agreement reciting such deeds and describing in detail the properties and setting out the terms of the trust, makes it quite obvious that the Haworth company became a cestui que trust on terms substantially identical with those affecting the Villa Site Company.
These considerations lead to an affirmance of the decree in all respects.
For reversal — None. ' ‘