Colt v. Colt , 4 S. Ct. 553 ( 1884 )

111 U.S. 566 (1884)

COLT & Another
v.
COLT, Executrix.

Supreme Court of United States.

Argued April 18th, 21st, and 22d, 1884. Decided May 5th, 1884. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF CONNECTICUT.

Mr. Charles E. Perkins and Mr. Alvan P. Hyde for appellees.

MR. JUSTICE MATTHEWS delivered the opinion of the court. He stated the facts in the foregoing language, and continued:

The first inquiry upon this appeal manifestly is, as to the effect to be given in this suit to the decree of the Superior Court of Connecticut; for, if as set up and claimed by the appellees, it is an estoppel by record, the matter of the bill is res judicata, and we cannot open it.

And in considering the grounds on which it is sought to repel the bar of this decree, we must disregard at once all that do not attack the jurisdiction of the court over the cause or the parties. It cannot be assailed collaterally for mere error. It follows, therefore, that we cannot notice the allegation that appellants were minor defendants, for whom a general guardian only, and not a guardian ad litem, appeared to defend; for the infants, having been properly served, were before the court, and are bound by its action, even if erroneous; the failure to appoint a guardian ad litem, at most, is error merely, and does not defeat the jurisdiction.

What was the proper method of proceeding against defendants, whether by general guardian or guardian ad litem, is a question local to the law of the jurisdiction, and, in the proceeding under review, was passed on by the State court. It found in the decree that "the said minors were duly represented by their guardians," and that finding cannot be questioned collaterally, as it is not a question of jurisdiction. Coit v. Haven, 30 Conn. 190; Christmas v. Russell, 5 Wall. 290; Thompson v. Whitman, 18 Wall. 457.

It seems to be in accordance with the general practice in Connecticut for a general guardian to be made a party and to defend for his ward, and that, in such cases, the appointment and appearance of a guardian ad litem are not necessary. Reeves' Domestic Relations, 267; 1 Swift's System, 217; 1 Swift's Digest, 61; Wilford v. Grant, Kirby, 114.

We dismiss, also, without further remark, those grounds of objection which seem to proceed upon some supposed breach of duty or trust on the part of the executors and general guardian in not making proper defence. The bill does not charge any such breach of trust, or seek relief on that ground; and any suggestions of that character cannot affect the integrity and effect of the decree of the Superior Court.

The objection that no question could be passed upon in that case affecting the rights of the complainants to the interest claimed by them in the residuary stock, because the time for the actual enjoyment of the legacy was postponed by the will until the youngest attained the age of majority, is equally untenable and has not been insisted upon. The interest was vested, and the question of distribution in right, if not in possession, was before the court.

This leaves, as the single ground on which the estoppel is opposed, that the executors, who by the will were trustees of the 500 shares bequeathed to the complainants, were not parties to the cause, nor before the court in their capacity as trustees, but only as executors; that, consequently, the title and estate held by them as trustees were not represented by any one competent to do so, and that, consequently, the decree, not binding the legal title of the trust estate, cannot operate upon the beneficial interest of the cestuis que trust.

This argument proceeds upon the assumption that, by the terms of the will, the natural persons who were appointed as executors of the will were also, but with a distinct title, made trustees for the appellant of the legacies given for their benefit; that there was vested in these trustees a separate and independent legal title and estate in the subject of the legacies, as much so as if they had been different natural persons; that that title and estate could not be affected by any judicial proceedings to which they were not parties as such trustees; and that the beneficial interest of the appellants is equally protected, as it was for that very purpose that the legal estate was vested in others as their trustees; and that consequently the decree set up as an estoppel is not an adjudication between the same parties as are now before the court in the present suit.

The language of the original bequest of the five hundred shares of stock is: "I also give and bequeath to my executors and their successors in said office," ... "in trust for the issue of said James B. Colt, lawfully begotten, the profits and dividends thereof to be applied to the education of his said issue, so far as the same may be necessary for that purpose, until the youngest surviving of said issue shall have reached the age of twenty-one years, when said stock and all accumulations thereof, if any, shall go to said issue, in equal proportions, as an absolute estate." And the codicil, which revokes that bequest, gives the same property "to the other children of my said brother," ... "to have and to hold to said other children of the said Christopher in equal proportions. This last bequest is in trust for said children, and the property hereby bequeathed is to be held by my said executors for said children in the same manner and subject to the same limitations as are provided in said original will in the bequest to the children of the said James B. Colt," &c.

We have no difficulty, notwithstanding the language of this bequest, giving the property, in the first instance, directly to the children, in holding, that it creates a trust for their benefit; but we have as little in holding, both as to it and the original bequest which it displaced, that the trust constituted was vested in the executors, in their official capacity as such, so that in case one or all of them had at any time ceased to be executors, he or they would, at the same time, have ceased to be trustees; and that in case a vacancy in the office of either of the executors had occurred and been filled, as provided in the will, by the appointment of a successor by the remaining executors, the trust would have devolved upon the new executors, virtute officii, so that the executors for the time being would always be the trustees, and so that whatever in their official capacity, as executors, they did in respect to the subject of this legacy, is to be imputed to them also in their character as trustees, and equally affected and bound the trust and its beneficiaries. The five hundred shares came into their hands as executors. It remained there for the general trusts of the administration of the estate until they were fully served. The possession of them, thereafter, the law imputed to them still as executors, but in trust for the special purposes, to which by the will they were appropriated. There was no change of possession; there was no change of the legal title; there was but a succession of uses, according to the terms of the will. They continued to hold this stock as executors, although in trust, until its actual payment to the legatees.

In the original bequest to the children of Christopher Colt in the will, of annuities for education and support during minority, and one hundred shares of stock payable on arriving at age, there are no words creating a trust; and yet the executors, in the mean time, were bound to them, in respect to these benefits and interests as executors, and yet in trust, quite as much as they were, in respect to the five hundred shares, by the words of that bequest.

As long as personal property is held by executors as part of the estate of the testator, for the payment of debts or legacies, or as a residuum to be distributed, they hold it by virtue of their office and are accountable for it as executors; that liability only ceases when it has been taken out of the estate of the testator and appropriated to and made the property of the cestui que trust. Bond v. Graham, 1 Hare, 482, 484; Arthur v. Hughes, 4 Beav. 506; Penney v. Watts, 2 Phillips ch. 149, 153; Hall v. Cushing, 9 Pick. 395; Dorr v. Wainwright, 13 Pick. 328; Towne v. Ammidown, 20 Pick. 535, 540; Newcomb v. Williams 9 Metc. (Mass.) 525; Conkey v. Dickinson, 13 Metc. (Mass.) 51; Prior v. Talbot, 10 Cush. 1; Miller v. Congdon, 14 Gray, 114; Adams on Equity, 251. "And it may be here observed," says Williams on Executors, 1796, pt. 4, bk. 2, ch. 2, sec. 2, "that when personal property is bequeathed to executors, as trustees, the circumstance of taking probate of the will is, in itself, an acceptance of the particular trusts. Therefore, where the will contains express directions what the executors are to do, an executor, who proves the will, must do all which he is directed to do as executor, and he cannot say, that though executor, he is not clothed with any of those trusts." Lewin on Trusts, 156.

But in whatsoever sense the executors were trustees for the appellants, what was the subject and scope of their trust, and of their duties as trustees? It embraced, it will be said, the 500 shares of stock bequeathed by the codicil. In respect to that their duties were defined. They were to hold it, collect the profits and dividends, and apply them to the education of the children while under age, and divide and pay it to them when they attained their majority. And in any litigation, involving the title or possession of that specific stock, which had been segregated from the body of the estate and appropriated to the uses of the trust, it might well be that the executors, in their distinct capacity as such trustees, were necessary parties, bound to protect the trust estate and property, without whose presence any judicial determination would be nugatory. How far in such a case their presence as parties is formal for the mere purpose of binding the legal title, or how far it is essential so as to impose upon them the active duty of defence, must depend upon the nature and terms of the trust, and the circumstances of particular cases. Mr. Calvert, in his work on Parties, p. 283, says: "The general inference to be derived from those cases, in which strangers file bills adversely to property held in trust, is that the cestuis que trust are necessary parties, and ought to have an opportunity of appearing in defence of their rights. Indeed, that it is the main duty of trustees of these cases to take care that all the cestuis que trust are before the court; this duty performed, they may abstain from taking part in the argument, and leave the cestuis que trust to carry on the contest." Holland v. Baker, 3 Hare, 73.

But the trust supposed did not extend to whatever else under the will the beneficiaries chose to claim; it certainly did not extend to the residuary stock at that time undistributed. That was still in the hands of the executors, as such; and in respect to it, they were under no duty to the appellants, other than that which they owed to all other legatees claiming an interest in it. They could not with propriety take part with one against another, for of that they were trustees for all who by law were entitled to share in it. The most that could be required of them, would be that, upon every question involved in the distribution, opportunity should be given for each legatee to obtain the judgment of the court upon his claims. It would have been competent and quite proper for the executors, when James B. Colt preferred his claim to share in the residuary stock, to have filed a bill in equity to obtain a construction of the will and the advice of the court. In that, they would have been complainants, as executors. They would have made all other legatees and distributees, or those claiming to be entitled as such, parties defendant. They could not make themselves defendants as trustees; and they could not file the bill as complainants in a double character and for different purposes, and represent inconsistent interests; although they could, as executors and complainants, set forth whatever case existed, with all its questions and claims, in which they might have inconsistent interests, officially and personally, bringing themselves before the court in every character in which they had an interest to assert or defend, and all others beneficially interested in the subject matter of the controversy. Their duty would have been, in such a case, fully discharged, if, as was done by James B. Colt, in the proceedings in question, the appellants had been summoned with their guardian, and, upon a fair statement of the case, their interests had been placed under the protection of the court, acting according to the forms of equity procedure. Nothing more could be required, as nothing more was needed for effectually securing the substantial justice of a full and fair hearing and determination for each party in his own right.

In the case as it was made they were present as executors of the will, having possession of the undistributed residuum of stock, asking the court for its judgment whether they should hold any part of it, and if any, how much as trustees for the appellants, all parties in interest being before the court and heard, or with the opportunity to be heard; in the case of the appellants, by guardian and counsel. The subject matter of the litigation was not any trust estate in property held by the executors for the appellants. It was the residuary stock, and the respective rights and interests of all the legatees in its distribution. The executors were not trustees for the appellants of their claim to share in this residuum in the sense of being bound to assert it adversely to all others, for whom equally they were trustees of the residuum, although that claim was founded on the interest of the appellants in the 500 shares which the executors did hold for them in trust. The very question was whether they had a corresponding interest in the residuum. If it should be judicially determined that they had, then, too, that interest would be held thereafter by the executors for them in trust as the other shares. But no such trust could arise until their right was established. And the executors were not bound, as against other legatees, to assume the burden of establishing its existence; much less were they at liberty to assume its existence before it was established. Their duty, both as trustees and executors, was fully performed when they invoked the judgment of the court, in the proceeding as framed, in the presence of all the parties beneficially interested. They were present also as executors, and therefore as trustees, so far as the determination and judgment of the court might render that necessary or important; for if that judgment had sustained the claim of the appellants it would have been a decree that the executors should hold the share of the residuary stock awarded to them in trust for them according to the terms of the will. It was, however, the other way, and declared that as to the matter in dispute the executors were not their trustees. That judgment, pronounced and acted upon, in our opinion, is conclusive as an adjudication in the present litigation, and precludes inquiry into the merits of the original claims and questions which it was intended to adjust and end.

For that reason

The decree of the Circuit Court is affirmed.