Dimmock v. Bixby , 37 Mass. 368 ( 1838 )

Wilde .T.

delivered the opinion of the Court. This is a bill by trustees under an assignment of the goods, effects, anc credits of insolvent debtors for the benefit of their creditors. The bill discloses the conflicting claims of the creditors, and other matters involved in the execution of their trust, and prays the aid and direction of the Court, and for indemnity. The creditors interested in the questions raised by the bill, and some of the debtors, are made parties to the suit. Several defendants have answered, but one of the creditors has demurred ; and two causes of demurrer are assigned :

1. Because the bill discloses no equity on the part of the plaintiffs, nor any right to the assistance of a court of equity ; and, 2. Because the bill is multifarious.

It is said, that the bill is peculiar and without precedent, That it asks the aid of the Court in settling partnership business ; in adjusting accounts ; in collecting debts ; in compelling persons to give up specific property ; in construing the deed of assignment; and its direction, in appropriating the trust funds. If these objections be well founded, still they dc not support the first cause of demurrer.

If the plaintiffs are entitled to the aid and direction of the Court, as to any of the matters alleged in the bill, and the only objection is, that the bill is complicated and multifarious, it may be removed by amendment. Or if it should appear, that the plaintiffs have a good claim for equitable aid and relief as to some of the matters set out in the bill, and not as to others, the demurrer should be overruled, unless the bill be multifarious. The only question of importance, therefore, to be determined on this demurrer, is, whether the plaintiffs are entitled to the aid and directions of the Court in any subject matter of the bill.

The general principle on which relief and direction are claimed, is, that trustees are entitled to the protection of a court of equity in the execution of their trusts. This is a familiar principle of equity, and ought to be liberally applied in all cases where the security of trustees, acting fairly, may require the application. Whenever a trustee doubts as to bis safety and security in complying with any claim of a cestui-quetrust, or doubts as to any other matter arising in the execution of his trust, his only prudent and safe course is, to wait foi the directions of a court of equity. The common course in such cases is, for the trustee to decline acting without such a sanction, leaving the cestui-que-trust to bring his bill to compel the execution of the trust. But it does not seem to be material, whether the trustee be a plaintiff or a defendant in the suit, the object of the application to the court being in either case the same.

In the case of Brooks v. Reynolds, 1 Bro. C. C. 183, it appears that certain trustees under a will had filed a bill against the plaintiff, Brooks, for the direction and indemnity of the court in executing their trusts ; and by the decree the will was established, proper accounts were directed, and it was ordered that the personal estates not specifically bequeathed should be applied to the payment of debts, &c. ; and in case of any deficiency, any of the creditors should be at liberty to apply to the court for further directions. A suit was afterwards brought by a bond creditor, and thereupon Brooks, the defendant in the first suit, brought his bill to restrain the creditor from proceeding at law, and an injunction was granted. It was objected in that case, as it is in this, that the bill was filed by the trustees, and that it had not the same effect as a bill filed by a creditor; in which case there would be an order for the creditors to come in. But the chancellor thought there was no difference.

So in the case of Curteis v. Chandler, Maddock & Geldart, 123, which was a suit by a trustee for the execution o' the trust under the direction of the court, the bill was sustained, and the general principle was laid down, that a trustee has a right to the protection of the court in the execution of his trust. There are exceptions, it is said, as where the act required to be done leads to no responsibility, and the motive of the trustee is obviously vexatious. But it is added, if the trustee would have been entitled to the assistance of the court as a defendant, it could not be denied him because he asked it as plaintiff.

In Buccle v. Atleo, 2 Vern. 37, the plaintiff, being executor, brought a bill against all the creditors, to-the intent they might, if they would, contest each other’s debts, and dispute who ought to be preferred in payment. One of the creditors demurred, for that the bill contained multiplicity of matter But the demurrer was overruled ; and it was held, that the bill was well brought, and that it was a safe way for an execu tor to take.

This case is noticed by Lord Talbot, in the case of Morrice v. The Bank of England, Cas. Temp. Talbot, 224, and he remarks, that bills of that kind had been discountenanced, because the court was satisfied, that they had no right to take away the preference that one creditor might gain over another by his legal diligence ; and because such bills might be made use of by executors, to keep people out of their money longer than they would otherwise be, yet he sustained the bill in Morrice v. The Bank of England, which prayed for protection and indemnity in making payment according to the decree of the court, the plaintiff being an executrix, and that the defendants should be restrained from proceeding at law. Lord Eldon also, in Rush v. Higgs, 4 Ves. 638, seems to doubt the decision in Buccle v. Atleo, and asks how a suit can be brought against all the creditors. But in neither of these cases, nor in any other that I am aware of, is it doubted, that an executor or trustee is entitled to the protection of the court and their directions in the execution of his trust, in a case reasonably requiring such directions. The Court doubtless would discountenance a bill brought for the purpose of delaying creditors in receiving their debts, or which otherwise might be injurious to the cestui-que-trust. But no such objection can be made to the present bill. Some of the questions raised are not free from doubt and difficulty, which it might be unsafe for the trustees to decide, without the directions of the Court, which we think they have a right to claim ; and that they were not obliged to wait until they should be sued by the creditors, which might occasion unnecessary delay ; for no action would lie against the trustees until the funds should be collected and ready for distribution, or the trustees should have in some respect violated their duty.

It is objected, that a case for relief is not set forth in the bill, because it does not appear that the trustees can be involved by mistake in any responsibility, as they are not liaole to the creditors sepaialcly, either at law or in equity. L is true, that creditors must join in a bill brought for the purpose of compelling a distribution of the trust fund ; but if the trustees should violate their trust, by mistake or otherwise, to the injury of a particular cestui-que-trust, he would have his remedy in equity. So if there should be a breach of the plaintiffs’ covenants, to the injury of any one of the covenantees, he could maintain an action at law without joining the other covenantees. For though a covenant to several be joint in its terms, yet if the interest and cause of action of the covenantees be several, and not joint, the covenant shall be taken as several, and each one may recover for his particular damage.

Then as to the other objection, that the bill is multifarious, it is said, that it demands several matters of different natures, against several defendants, thereby loading them with an unnecessary burden of costs. A demurrer for this cause will hold only where the plaintiff claims several matters of a different nature, and not where one general right is claimed by the plaintiff, although the defendants may have separate and distinct rights. This bill prays relief and directions as to the conflicting claims of the creditors, and as to the order in which they are to be paid ; and it prays relief against the debtors, and seeks to enforce the claims of the plaintiffs against them. These two branches of the bill are founded on distinct rights, and ought not to have been joined.

But the only debtors named in the bill are the Commercial Bank and Joseph Hibbert of St. Domingo ; and the bill has been dismissed as to the former, and it does not appear that the latter is within the jurisdiction of the Court. If, however, he has become a party, the bill is to be dismissed as to the claim upon him, and the objection to the form of the bill no longer holds.

Demurrer overruled.