Peck v. Ingraham , 28 Miss. 246 ( 1854 )

Mr. Justice HANDY

delivered the opinion of the court.

On the 10th February, 1842, the president and directors of the Grand Gulf Railroad and Banking Company, by deed conveyed, assigned, and delivered to John Lindsay and Alfred Ingraham, all their property, real and personal, effects, choses in action, and evidences of debt, with a few specified exceptions, to be held by them, “ and the survivor of them, and the heirs, executors, administrators, and assigns of such survivor,” in trust for the payment of the debts of the corporation. During the same year Lindsay died, after the trust had been accepted by the trustees; and on the 1st December, 1842, the corporation and Ingraham, the surviving trustee, executed a new deed, by which they conveyed, assigned, and delivered to the said Ingraham and George Read, all the property, effects, choses in action, evidences of debt, &c., embraced in the original deed, to be held by them for the same uses, and subject to the same trusts specified in the original deed; which latter trust was accepted by Ingraham and Read. Among the assets assigned, was a note made by the plaintiffs in error, on which suit was pending in the name of the corporation at the time of the assignment, and on which judgment was afterwards recovered. Subsequently the corporation was dissolved by proceeding of quo warranto, and Ingraham and Read filed this bill in chancery, alleging that they were without remedy at law to enforce the judgment, and praying an account of the amount due upon it, and a decree against the defendants for its payment. ■

The answer admits the material allegations of the bill, but makes defence on two grounds: first, denying that Ingraham, the survivor of Lindsay, and the corporation had any power to make the second deed, or to convey to Read any title or interest in the trust assets; and second, insisting that in the pleadings in the suit in which the judgment sought to be enforced was rendered, the corporation had admitted, that the note sued on had been transferred to Lindsay and Ingraham, and the judgment was thereby of'record for the use of Lindsay and Ingraham, who were the real plaintiffs, the bank being but a nominal party to the suit; and, therefore, it is insisted that the remedy to enforce the judgment is complete at law.

The chancellor decreed in favor of the complainants, and the case is brought here by writ of error sued out by the defendants.

The first and most important question presented for decision is, whether the original- deed of trust gave to Ingraham, the surviving trustee, the power to make the second assignment, and thereby clothe Read with the powers of a trustee for the uses and purposes stated in the original deed.

■ It is insisted in behalf of the plaintiffs in error, that the assignment to Lindsay and Ingraham was a personal trust and confidence, which could not be delegated except such power were clearly conferred by the deed creating the trust to them. That principle is unquestionable, and is not denied. But it is contended in behalf of the defendants in error, that the authority to make the second deed is given by the terms of the original deed, and this point we will proceed to consider.

It has already been stated, that the estate granted in the original deed was to Lindsay and Ingraham, “ and to the survivor of them, and the heirs, executors, administrators, or assigns of such survivor.” But for the words “ and assigns of such survivor,” it is not denied that there would have been no authority in the surviving trustee to make the assignment to Read. Let us, then, examine what is the legal import of the word “ assigns ” in such instruments.

It is said that the power to assign a trust, cannot be exercised by the heirs, personal representatives, or assigns of any trustee, unless the authority be thus limited by the terms of the original power. Hill on Trustees, 184. Sir Edward Sugden draws the distinction between powers to be executed by the donee, and those which extend to his assigns, and lays it down that the donee of a power not annexed to an interest may delegate the power, by virtue of an express authority in the deed by which it was created. 1 Sugd. Pow. 223. And it is said by another author, of high authority, that the grantor may authorize the survivor of several trustees, to commit the trust to any one whom he may name. 2 Spence, Eq. Jurisd. 38. In Cook v. Crawford, 13 Sim. 97, where two or more persons and the survivor and the heirs of the survivor were appointed trustees to execute a trust, and the word assigns is not introduced, as connected with the original trust, the surviving trustee could not devise the trust, because the power does not embrace his assigns.

The principle upon which these authorities proceed is, that the grantor may confer upon the trustee the power to delegate the trust, and that such authority will exist by the grant to the trustee and his assigns; and we do not perceive how this conclusion could be well questioned, without annulling an important limitation contained in the deed, one which must be presumed to have been introduced advisedly.

Against this view it is urged, that it never could have been the intention of the grantor to confer trusts of so great importance and responsibility upon unknown persons, and even upon the heirs of the survivor, who might be infants, or upon unknown administrators, residing possibly out of the State, and incapable of executing the trust, but who by the strict terms of the deed, would be capable in law of taking the trust equally with the assigns. This objection is in part supported by the case of Titley v. Wolslenholme, 7 Beav. (29 Eng. Ch. R.) 426; lb. 435, in which the doctrine is asserted that, under a power to trustees, and the survivor of them, his heirs and assigns, the survivor cannot make an assignment inter vivos, but may do so by testament. The reasons given for this distinction are, that the trust is presumed to be a personal confidence, from the duties and responsibilities of which the trustee cannot, of his own authority, during his life relieve himself, but that he might transfer them by will when he could no longer perform them personally, and that this may be presumed to have been contemplated by the grantor; and again, that it cannot be assumed that the author of the trust placed any personal confidence in unknown persons, to whom the trust might be transferred by the trustee during his life. It is said that the word “ assigns,” could not be considered as meaning the persons who may be made such by the spontaneous act of the trustee, to take effect during his life; but it may be considered as meaning the persons who may be made such by will.

We are unable to perceive the justness or force of this reasoning ; and so far as we have been able to find, it stands unsupported by other authority. It is fully met and answered by the remarks of Wilmot, quoted with approbation by Sugden. He says: “ There is a necessity for trusting persons who cannot be personally known, in order to effectuate men’s intentions in the exercise of that dominion which the law gives them over their property. There is nothing absurd in trusting persons unknown.It is then said that this power may devolve on infants, idiots, or lunatics, or such a number of female heirs as will make their agreement very improbable, and equivalent to a disability; . . . . but it is no reason against the creating such a power, that by an accident it cannot be exercised.” 1 Sugd. Pow. 146, 147. And its fallacy is made apparent by the remarks of Sir William Grant in Cole v. Wade, 16 Ves: 45, 46. He says, “ Though it seems very -incongruous and inconsequential to extend to unknown and unascertained persons, the power which personal knowledge and confidence had induced the testator to confide to his original trustees and executors, yet I am not authorized to strike these words out of the will upon the supposition, though not improbable, that they were introduced by inadvertence or mistake. I do not apprehend that a bequest actually made or a power given, can be controlled by the reason assigned. This assigned reason may aid in the construction of doubtful words, but cannot warrant the rejection of words that arc clear.”

As to the suggestion that the conferring the trust was a personal confidence which it cannot be presumed the grantor intended should be transferred to another, during the trustee’s life, it is susceptible of two very satisfactory answers: first, that the terms employed, “ the survivor or his assigns,” necessarily import the power of transfer by the survivor, -which is unrestricted by any other terms employed in the instrument, and must, therefore, be understood as having been intended to have their full legal force, and consequently, that they confer the power of assignment whether by will or deed inter vivos. Second, the power to delegate and assign the trust to others being clearly conferred in the deed, it is as much a matter of personal confidence granted to the trustee to be exercised at his discretion, as the personal grant to himself; and although the grantor might not know the persons to whom the trust might be assigned, yet the selection of such persons was.a part of the very confidence which he intrusted to the original trustee. And when such a power is granted in general terms, it is doing violence as well to the legal import of the words as to the presumed intention of the grantor, to say that the power of assignment was not intended to be conferred.

We cannot, therefore, yield to the authority of Titley v. Wolstenholme, as it appears to us not to be founded on sound reason or supported by authority.

In the case of the Union Bank of Tennessee v. Ellicott et al., 6 Gill & Johns. 363, a deed of assignment in all material respects like the deed to Ingraham and Read was sustained by the court of appeals of Maryland.

In support of the conclusion to which the authorities above cited would lead, it is not to be overlooked that by the second deed, the corporation gave its assent to the substituted assignment, and it is stated that many of the creditors consented to it. It may be true, that the corporation, having parted with the legal title by the former deed, could not resume it, by the consent of Ingraham, and make a fresh conveyance of the legal title; but upon that point we express no opinion. Yet the deed was valid as signifying the assent of the corporation, a party interested in the trust, and, in one event, one of the cestuis que trust, to the exercise of the power of assignment by the surviving trustee.

Upon a careful consideration, we are of opinion that the original deed gave the power of assignment to the surviving trustee, and that the title of Ingraham and Read as trustees is-valid in law.

The second question raised is, whether the trustees had the right to sue out execution at law on the judgment, and therefore have no ground to come into equity to enforce it.

It appears, that pending the action at law, the defendants pleaded the transfer of the note sued on by the corporation to Lindsay and Ingraham; to which it'was replied that the suit was then prosecuted for the use of Lindsay and Ingraham ; and thereupon judgment was rendered for the plaintiff! It is contended in behalf of the plaintiff’s in error, that by these proceedings Lindsay and Ingraham became parties to the suit, and entitled as such to sue out execution in the name of Ingraham as surviving plaintiff.

We do not consider this position tenable. It is true, the record shows that Lindsay and Ingraham were the beneficiaries of the suit, and that it was carried bn for their use. But this did not make them parties to the suit in a legal sense. If judgment had been rendered against the plaintiff, an execution could not have been issued against them for the costs, nor could they have maintained a writ of error in their own names. A person may be entitled to the use and benefit of a suit and not be technically a party to it; as, for example, a suit may be prosecuted in the name of a party holding the legal title in his own name, but as trustee for another who may be entitled to the avails of the suit; and that may appear in the pleadings ; yet that would not make the cestui que trust a legal party to the suit. And such appears to be the attitude of the suit in question; for the replication, which was admitted by a demurrer, states that the suit was carried on for the use and benefit of Lindsay and Ingraham. We do not think that, under such a state of case, Lindsay and Ingraham are parties to the suit, and that such a case is within the provisions of the statute. Hutch. Dig. 842. And this has been substantially held by this court in the case of Ingraham and Read v. Snodgrass, at November term, 1850.

We are of opinion that the decree of the chancery court is correct, and it is accordingly affirmed.