Whitney's Appeal

22 Pa. 500 | Pa. | 1854

The opinion of the Court was delivered by

Knox, J.

Wm. Whitney presented his petition to the Court of Common Pleas of Philadelphia city and county, for a citation to compel James Whitaker to settle an account as trustee of A. W. Adams & Co. Whitaker demurred to the petition. The Common Pleas sustained the demurrer, and the petition was dismissed by a decree of that Court, from whose decision this appeal was taken.

The petition set’s forth that Andrew W. Adams and Greorge W. Hobson, of the firm of Andrew W. Adams & Co., of the county of Philadelphia, on the 19th day of November, A. D. 1847, executed an assignment to James Whitaker, of all their estate, real, personal, and mixed, situate, lying, and being within the limits of the state of Delaware, in trust, to pay all the creditors of the said firm, without preference or distinction.

That the said James Whitaker then and there accepted the trust, and received on account thereof the sum of $16,899.70 from certain insurance companies, which he still retains in his hands as trusts aforesaid.

That the said trustee never gave bond, filed an inventory or account, but that he executed a certain paper (a copy of which is annexed) on the 26th February, 1848, by which he claimed to be a creditor of Adams & Col to the amount of $6800, which he attempted to appropriate to himself out of the trust fund contrary to law and equity.

After showing the interest of the petitioner as a creditor of Adams k Co., the prayer is for a citation in the usual form.

It is objected to the petition, 1st. That the trustee could not be called upon to account in the Court of Common Pleas, because he had neither given bond nor filed an inventory, and that the remedy was to have him. dismissed from his office as trustee.

2d. That it did not appear that the moneys received from the insurance companies, were embraced in the assignment.

3d. That before the purchase of the judgment by the petitioner, by virtue of which he became interested in the fund, Whitaker had transferred to a general assignee of Adams k Co.

Other objections were taken, but the above-mentioned embrace everything that it is necessary to notice.

The first position relied upon here by the defendant in error, and upon which it is said the 'cause was decided in his favor in the Common Pleas, is that a trustee who has acted as such without complying with'the requisitions of the Act by giving bond and filing an inventory, cannot be compelled to file an account exhibiting the condition of the trust estate. In other words, that the jurisdiction of the Common Pleas depends upon the performance of these statutory duties.

There is no warrant for such a conclusion in our Act of Assembly relating to assignees or trustees, and nothing to justify it in the previous decisions of this Court.

The 7th section of the Act of 14th June, A. D. 1886, “relating to assignees for the benefit of creditors and other trustees,” enacts, that “ It shall be lawful for the Court of Common Pleas of the proper county, on the application of any person interested as co-trustee or co-assignee, to issue a citation to any "assignee or trustee for the benefit of creditors, whether appointed by any voluntary assignment or in pursuance of the laws relating to insolvent debtors and domestic attachments, requiring such assignee or trustee to appear and exhibit under oath or affirmation the accounts of the trust in the said Court, within a certain time to be -named in. such citation.”

Thus it will be seen that power is given to the Common Pleas to require an account from all assignees or trustees for the'benefit of creditors, and not simply those that may have voluntarily placed themselves under its jurisdiction, by giving bond and filing an inventory. The test is whether the person called upon to account is an assignee or trustee for the benefit of creditors, and not whether he has performed his duty as such trustee or assignee.

There would be plausibility in the argument of the defendant in error, if it could first be shown that he was not a trustee or an assignee until he had given bond and filed his inventory; but the law is not so. The assignment takes effect upon the day of its execution and delivery, whereas the inventory may be filed within thirty days thereafter, and the bond is to be given “ as soon as the inventory and appraisement shall be filed.” In Dallam v. Fitler, 6 W. & Ser. 323, it was held by this Court that a sale of goods by an assignee who had not given bond passed a perfect title.

Upon what principle is it that a trustee, who has received moneys belonging to the'trust without giving security, shall hot be held to the same strictness as one who has complied with the statute in this respect? Can he say that, because he received the money wrongfully, he may rightfully retain it ? True, he may be discharged from the trusts, but suppose those interested prefer to make him account, shall he be permitted to shield himself by his own neglect of duty? He is charged with having received money as a trustee, and required to account fór it. The answer is, “ True, 1 have received it, but, as I gave no security for its faithful application, I am beyond the jurisdiction of the Court and' cannot be compelled to render an account to those interested'in-the fund.”

We are referred to the case of Shelby v. Bacon, 10 Howard 56, as sustaining the decree of the Common Pleas. The réspect which we entertain for the decisions of the Supreme Court of the United States, would induce great caution in determining -similar questions in a different manner from that tribunal; but, in a case like the present, the decision of that Court is not of binding authority with us. The contest here is between citizens of our own state, involving the construction to be given to our own statutes, without reference to any provision of the constitution of the United States or of federal legislation. With this Court rests alike the authority and responsibility, and we cannot rely upon the judgments of others for an exposition which is required at our hands.

In Shelby v. Bacon the complainant filed a bill in the- Circuit Court of the United States, against certain trustees for the benefit of creditors under an assignment made in Pennsylvania, and conveying property lying out of the state. The trustees pleaded that they had filed their accounts in the Common Pleas of Philadelphia, and that these accounts had been settled by that Court. The Supreme Court held that notwithstanding this they were bound also to file their account in the Circuit Court; and among other reasons upon which the decision was based, it is stated that the plea was defective in not setting forth that an inventory had been filed in the Common Pleas and bond given by the assignees; and the judge who delivered the opinion seemed to think that this was necessary to give the Court jurisdiction. As there were other and broader grounds upon which the decision of this ease rests, it is not likely that the question of jurisdiction received from the distinguished judge or from the Court, whose organ he was, that careful and attentive consideration which would doubtless have been bestowed upon it under other circumstances, and which if given would, it is believed, have led to a conclusion entirely different from that heretofore stated.

The Act of 14th June, 1836, relating to “ assignees for the benefit of creditors and other trustees,” was intended more to determine how the jurisdiction of the Court of Common Pleas over trustees should be applied, than to give the jurisdiction itself. This is done by the Act “ relating to the jurisdiction and powers of the Courts,” the 13th section of which gives to the Supreme Court and the several Courts of Common Pleas, the jurisdiction and powers of a Court of Chancery, so far as relates to “ the control, removal, and discharge of trustees, and the appointment of trustees, and the settlement of their accounts.” And in addition thereto, to the Court of Common Pleas for the city and county of Philadelphia, is given the powers of a Court of Chancery, so far as relates to “ the case of trust-moneys and property, and other moneys and property made liable to the control of said Courts;” and fourthly, “ the determination'of rights to property or money claimed by two or more persons, in the hands or possession of a person claiming no right of property therein.”

The revisers of our code, in presenting the Act “relating to assignees for the benefit of creditors and other trustees,” observed, that “ the design of the bill is to declare in what manner the jurisdiction, given to the several Courts of Common Pleas over trustees by the fourth article of the eighteenth section (second clause thirteenth section) of the bill relating to the jurisdiction and powers of the Courts, shall be exercised in the principal cases usually arising.”

"We cannot deny to the Common Pleas jurisdiction so plainly given to it by the legislature, even although the federal courts refuse to admit the conclusiveness of its decrees; nor can we permit a party to oust such jurisdiction by a plain neglect of duty upon his part. What he will not do of his own-option, he must be compelled to perform by the mandate of the Court.

As to the second and third objections: it sufficiently appears by the petition, that the moneys charged to have been received by the assignee arose under the assignment; and it is also clear that the petitioner, by the purchase of the judgment, obtained all the rights of the original creditor. The effect of the assignment from Whitaker to Harrias, the general assignee of Adams & Co., cannot now be determined: if it was a proper disposition of the trust fund, it will protect Whitaker hereafter; but it cannot be interposed to prevent an account. The remaining objections to the prayer of the petitioner are of no avail in this proceeding.

The decree of the Common Pleas dismissing the petition is reversed, and the record is remitted to said Court, with directions to require the assignee, James Whitaker, to file an account according to law.