66 S.E. 588 | N.C. | 1909
Action to recover damages for the wrongful killing of Turner Wright.
The action was instituted by Cornelia Wright, as administratrix of Turner Wright, deceased, on 1 August, 1907, against the Caney River Railway Company, C. J. Morrow, trustee for creditors of the Wood-Galloway Company, operating the road at the time, under a sub-lease, and William Whitmer Sons, Incorporated, original lessee of defendant road and one of the principal creditors of the Wood-Galloway Company; and there was evidence to show that on 13 July, 1907, Turner Wright, intestate of plaintiff, an engineer, while operating an engine in one of defendant's trains, was killed by the giving away of a defective *511 trestle of defendant company's road, and under circumstances indicating negligence on the part of defendants. (530)
Defendants answered, denying that plaintiff was the duly qualified administratrix of deceased; denied that the trestle was negligently constructed, claiming that same was caused to give way by the wrongful conduct of two boys in turning a stream of water on the foundation of the trestle, and thus constituting this intervening negligence of responsible and independent agents as the proximate cause of the injury, and offered evidence in support of these allegations. Defendants contended, further, that in any event the defendant C. J. Morrow, trustee, was not responsible for the wrong in his official capacity as trustee, nor could the trust funds held by him be subjected to the claim of plaintiff.
It further appeared that, by virtue of an attachment issued, there were funds of the company in control and custody of the court available for satisfaction of the claim, if it should be declared a valid charge against the trust estate.
Issues were submitted, and responded to by the jury, as follows:
1. Was the plaintiff's intestate domiciled in Yancey County at the time of his death? Answer: Yes.
2. Was the plaintiff's intestate, Turner Wright, killed by the wrongful act and negligence of the Caney River Railway Company, as alleged in the complaint? Answer: Yes.
3. Was the plaintiff's intestate, Turner Wright, killed by the wrongful act or negligence of the defendant C. J. Morrow, trustee, as alleged in the complaint? Answer: Yes.
4. Did the plaintiff's intestate, Turner Wright, by his own negligence, contribute to his death, as alleged in the answer? Answer: No.
5. What damage, if any, is the plaintiff entitled to recover? Answer: Six thousand dollars.
Judgment on the verdict for plaintiff, and defendants excepted and appealed.
After stating the case: The defendant company was organized under a charter conferring the power of eminent domain and the privilege of constructing tramways, railways, etc., for the transportation of passengers and freight, including logs, lumber, timber, etc.; and while its chief purpose was, no doubt, to exploit certain timber lands and market the timber growing thereon, for all purposes relevant to the present inquiry it is considered and held as a railroad and (531) subject to the regulations and liabilities affecting such companies, *512
including the statute known as the Fellow-servant Act (Hemphill v. LumberCo.,
It is chiefly urged for error that the defendant C. J. Morrow, trustee, has been held liable in his official capacity and the trust fund subjected to the payment of this claim; but we are of opinion that, on the facts presented here, the objection cannot be sustained. It is true, as a general rule, that a trust fund cannot be subjected to legal liability by reason of the torts of the trustee or his agents and employees, but this doctrine ordinarily exists in the case of passing trusts, or, when active, in those instances where the power and duties of the trustee are so defined and restricted by the law, or the provisions of the instrument under which he acts, that the principle of imputed responsibility similar to that which obtains in the case of principal and agent does not and cannot prevail.
Thus, in McLean v. McLean,
"For the purpose of carrying this trust into effect, it shall be the duty of C. J. Morrow, trustee, aforesaid, after giving a bond in the sum of $15,000, with good and sufficient security, to be approved by the Unaka National Bank and City National Bank, of Johnson City, Tennessee, to at once take charge of all said property for the benefit of said creditors, to take an invoice of the whole of said property as early as practicable and as convenient, and to furnish a copy of said invoice to each of the creditors above named; to immediately deliver said lumber, on sticks, in piles or other conditions, on board the cars at Huntdale, North Carolina, from there to be shipped, under the direction of William Whitmer Sons, Incorporated, or other persons whom the majority of the creditors in money may select, for which said William Whitmer Sons, Incorporated, are to receive five per cent commission on entire sale of lumber and trade discount two per cent thirty days for shipment; the said trustee making copies, one of which shall be preserved by said trustee, one to be forwarded to the said Whitmer Sons, Incorporated, and the third to be deposited in the Unaka National Bank, of Johnson City, Tennessee, for the use and benefit of the said creditors herein above named, and further copies with each of the other creditors above named. It shall be the duty of the trustee, aforesaid, to make an estimate of the quantity and value of all the standing timber or timber remaining uncut, of every character and description, and to furnish a copy of said estimate to William Whitmer Sons, Incorporated, and deposit one copy with the Unaka National Bank, of Johnson City, Tennessee, and each of the above creditors above named, for the use and benefit of the creditors hereinbefore named, and retain a copy of same in his own offices, which shall be subject to the inspection and examination by said creditors at any and all times, to be done at as early a date as practicable and convenient; to sell all the said standing timber remaining uncut for cash, to the best advantage to all the parties therein concerned; and, to make sale and disposition of (533) the aforesaid timber, it shall be the duty of the trustee, aforesaid, before any offer for said timber shall be accepted, to submit the price, in writing, to the creditors hereinbefore named; that the said trustee shall make monthly statement of the amount realized from the sale of said lumber and timber, on or before the first day of each month, and he shall at no time retain in his possession or control a sum greater than $5,000 of the proceeds of said sale, but he shall at all times deposit and *514 keep on deposit at the Unaka National Bank, of Johnson City, Tennessee, proceeds of said sale of the said timber and lumber, and shall distribute and prorate the money arising from said sale among the creditors herein named, less the expense of handling the same and the operating expenses of the Caney River Railway Company, which he may deduct from any moneys in his hands, furnishing an itemized statement, on or before the first of each month, of all expenses in conducting the said operation; and whenever he shall have on hand a sum equal to $5,000, the same shall be distributed among the creditors herein named, by prorating the amount according to the respective amounts due and owing each of the creditors above named.
"The said trustee shall receive as a salary the sum of $125 per month and his expenses from the time he enters upon his duty and until he discharges his trust, the same to be deducted and retained monthly in his monthly statement of expenses.
"It is further understood and agreed between the Wood-Galloway Company and the bank creditors, above named, that the said creditors shall have the right, and it shall be their duty, to furnish a competent inspector to inspect said lumber, whose duty it shall be to inspect and grade all such lumber, observing the rules prescribed by the National Hardwood Lumber Association; and the books and records of said trustee and inspector, aforesaid, shall at all times be open to the inspection of any or all of said parties concerned, their agents or representatives, to this transaction."
It will thus be seen that, under a lease to him, in his capacity as trustee, and under the powers contained in this deed, inter partes, the defendant C. J. Morrow, in the use and operation of the railroad, was acting throughout with the sanction and for the benefit of the creditors, the cestuis que trustent, and to a large extent under their supervision and control, and should be held responsible, certainly to the extent of the property conveyed and in evidence, for both the contracts and torts of their trustee, made and committed within the scope of his powers and in furtherance of their interests. Sawyer v. R. R., 142 N.C. (534) 1; Jackson v. Tel. Co.,
Not only is this true under the general principles of imputed responsibility indicated in these cases, but on authority more directly apposite, the defendant Morrow should be held liable in his official capacity. Thus, in Mersey Docks Board v. Gibbs, Lord Westbury lays down the position that trustees may render the property of their beneficiaries liable to third persons for an act done by them in the exercise of their trust. And in Bennett v. Wyndham, 4 De G. F. J., 259, it was held that trustees should be indemnified out of the trust estate, by reason *515 of a recovery had against them for negligence of employees in carrying out an order given in the management of the estate.
Applying the same principle in the case of Miller v. Smythe,
And a ruling substantially similar has been made by our own Court inCheatham v. Rowland,
But in our case the beneficiaries were parties to the deed; the operation of the road for their benefit was clearly contemplated, its expenses provided for, and they were expressly given the right of interference *516 and control in the main purpose of the trust, to wit, the disposition of the lumber, etc.
Other decisions apparently adverse were rendered, on the ground that the claim was asserted in a court of law, and a recovery could not be made effective without threatening the integrity of the trust fund and the entire frustration of its chiefest purposes; but no such objection can obtain here, in a court having full jurisdiction of legal and equitable issues, and where a part of the trust fund is in the control and custody of the court and available in satisfaction of the claim.
We must not be understood as questioning in any way the position upheld in Taylor v. Mayo,
In Mitchell v. Whitlock, supra, the principle referred to is thus stated: "A trustee, purchasing goods or incurring any other liability, is personally liable for the payment thereof, unless his liability is limited by an agreement, expressed or implied, with the creditor."
In Taylor's case, supra, it appeared that Charles Davis, a retiring trustee, having a claim for fees and expenses, giving him a lien on the trust assets, turned over the fund to his successors, who gave him their written obligation, signed as trustees, that they would apply the funds of the estate in payment of his claim as they came to hand. The estate having become insolvent and the assets exhausted in suit by the administratrix of Davis, the trustees were held individually liable, and the principle was declared: "That if a trustee, contracting for the (536) benefit of the trust, wants to protect himself from individual liability in the contract, he must stipulate that he is not to be personally responsible, but that the other party is to look solely to the trustee."
But in neither of these cases was it held that the trust estate could not also be held responsible to the creditor, or that the defendants, the succeeding trustees, on payment of the demand, could not be reimbursed from the funds of the estate, if there had been such funds available for the purpose. And in the present case, no doubt, the defendant Morrow could have been sued and held liable as an individual, because the intestate was one of his employees; but responsibility also attaches to the trust estate, and will be imputed to the beneficiaries, who are parties to the deed and were allowed and took part in its actual management and control.
There is no merit in the other exceptions, and they were very properly not insisted on. The amendment allowed made no substantial change in the nature of the demand, and we have seen at the outset that our act as to fellow-servants applies to the defendant road and its lessees, *517
operating the same, as well. Further, the declarations of a person, on a question of domicile, as to his intent in going to a given place, are always considered relevant, certainly when reasonably free from suspicion. 1 Greenleaf, 162c. And the charge of the court as to the burden of proof is in accord with our recent decisions on the subject. Overcash v. ElectricCo.,
There is no reversible error shown, and the judgment below will be affirmed.
No error.
Cited: Blackburn v. Lumber Co.,