Soldiers' Orphans' Home of St. Louis v. Sage

The complaint charges that Jay Gould and Russell Sage have misappropriated 30,000 shares of the Denver Pacific Railway & Telegraph Company conveyed to them in trust by the Kansas Pacific Railway Company as collateral security for the payment of certain bonds known as “Kansas Pacific Consolidated Bonds.” The conveyance was by deed of trust made by the Kansas Pacific Railway Company to Jay Gould and Russell • Sage, as ■trustees, on May 1,1879. The complaint contains a very full specification of the manner in which the alleged breach of trust was accomplished, but which it is unnecessary to set out for the purpose of deciding the only question raised by the demurrer. The action is brought by the plaintiff, as owner of a portion of the consolidated bonds, on its own behalf and on behalf of other holders of such bonds, to compel restitution to the trust estate of the value of the converted securities, and for the removal of the trustees. The parties defendant are Russell Sage and George J. Gould individually, and Edwin Gould, George J. Gould, Howard Gould, and Helen M. Gould as executors and executrix of the last will of Jay Gould, deceased. It appears from the complaint that Jay Gould died subsequent to the acts complained of, and the defendant executors are charged as his legal representatives, under appropriate allegations. The defendant George J. Gould was substituted as trustee under

“That the defendants may be decreed to account for the proceeds of the trust stock taken from the trust, and for all premiums, dividends, interest, and profits for which they are legally accountable; that the defendants Russell Sage and George J. Gould may be removed from the trusteeship of the consolidated mortgage of the Kansas Pacific Railway Company; that the defendants may be enjoined from interfering with any of the trust property conveyed by the consolidated mortgage or belonging to the bondholders thereunder, and that a receiver be appointed of such property; and that the plaintiff may have such other or further relief as the circumstances of the case may require and to this honorable court may seem just.”

The defendant George J. Gould now demurs to the complaint on the ground that it does not state facts sufficient to constitute a cause of action against him individually. The point of the demurrer is best illustrated by the statement that if the words “as trustee, &c.,” had been added to his name in the summons the demurrer would not have been interposed.' As is stated by his counsel in the brief submitted, “It is because the plaintiff has not made him a party as a trustee, but individually, and has failed to state a cause of action against him individually, that Hr. Gould demurs. He is entitled at the outset to know in exactly what capacity the plaintiff sues him.” The point which is thus raised is a highly technical one, and does not commend itself to the court as deserving more recognition than the strict letter of the law may demand. There can be no doubt that in such an action as this the trustees are necessary parties. It is also plain upon the face of the complaint that George J. Gould has been charged as such by appropriate allegations. It is also evident that the pleader has not in fact or in intent charged or sought to charge him in respect to any matters of individual concern, or that any recovery could be had against him other than his exclusion from any further administration of the trust. The capacity, then, in which he is sued, appears upon the face of the complaint to be a representative one. He is impleaded as trustee, and, cannot be held to any responsibility in the action except in that relation. But he claims that while this may be true he has not been described in the summons or in the caption of the complaint “as trustee,” but that, on the contrary, the word “individually” follows his name in both places; that he has therefore been brought into the action only for the purpose of charging him in a personal, and not in a representative, capacity, and that, finding the complaint to be one affecting him only in the latter respect, there is no cause of action against him in reference to which he can be considered a party to the suit. I do not think this position to be a tenable one. In the first place, a demurrer does not run to the summons or to the caption of the complaint. It is confined to the allegations of the

“The first point made by the defendant is this: that the action is not brought by the plaintiff in a character representative of the deceased obligee. This is based mainly upon the omission of the word ‘as’ between the name of the plaintiff John L. Beers and the description of him, ‘executor of, &c., of John Beers, deceased,’ in the title of the summons and in the body of the summons, and in the title to the complaint. It is true that without that word in that position it has been sometimes held that the addition to the name of the party is but a descriptio personae, and does not give to him other than a personal or individual character in the action. But it has been held, on the other hand, that, though there be naught in the title of the process or the complaint to give a representative character to the plaintiff, the frame and averments and scope of the complaint may be such as to affix to him such character and standing in the litigation. Stilwell v. Carpenter, 62 N. Y. 639 , reported in full 2 Abb. N. C. 238 . In the case in hand the averments of the complaint are such that the defendant had full notice of the questions to be tried; that there was a definite issue presented for trial; that the judgment might show what was determined by it; and that any other question dependent upon the character in which the plaintiff sued

could be readily presented. It was plain from the complaint that the cause of action, if any, devolved upon plaintiff, as a representative of the deceased obligee, by the creation of a representative relation by the will."

I do not think that the fact that the question arose in reference to a plaintiff who was supporting the status which he claimed to have assumed when he voluntarily came into court affords any substantial ground for distinguishing this case on principle. The decision really seems to rest upon the proposition that the allegations of the complaint are paramount in determining the relation, whether personal or representative, in which the parties stand to the action, and that the test of the capacity in which a party sues or is sued is to be found in the complaint. The ¡learned counsel for the defendant claims that the present case is controlled by Austin v. Monro, 47 N. Y. 360 , and he rests the strength of his position upon that case as a precedent. The case in question was an action brought in terms against the defendants as executors; the complaint set up a contract with them as such, and the prayer for relief was a recovery from the assets of the estate. The whole purpose and intent of the pleader was to charg°e the defendants in their representative capacity only. The defendants demurred, and the demurrer was sustained, it being evident that, whatever claim the plaintiff might have against the defendants individually, he had none against the estate they represented. It was argued in support of the complaint that, at least, it presented a cause of action against the defendants individually, and should therefore be upheld. In sustaining the demurrer the court says:

“The form of the complaint and the substantive averments therein, as well as the form of the judgment demanded, characterize the action as against the defendants in their representative capacity, and -not against them individually.’’

It is true that the court also refers to the use of the words “as executors, &c.,” which followed the names of the defendants in the title of the action, as also indicating the character in which they were sued, but the context of the opinion shows that the complaint itself was considered to be the substantial test in the solution of the question, and I am therefore led to consider this case rather as supporting than as in conflict with the general principle which I have already stated. The complaint in the case at bar is not one having a double aspect. It presents and suggests only one cause of action in respect to the defendant George J. Gould,—a cause of action which can exist only against him in his representative capacity as trustee. Whatever judgment may ultimately be rendered in the action will be one either in his favor or against him in relation only to the trust estate. In other words, the judgment so rendered will have precisely the same effect as if the words “as trustee” had followed his name in the summons and title of the complaint. The case of Landon v. Townsend, 112 N. Y. 93 , 19 N. E. 424 , which has been referred to by counsel, does not affect the question under consideration. The circumstances of the case were peculiar, and the court also calls attention to the fact that neither the complaint nor the summons made any reference to the official character of the defendant. In

The demurrer is overruled, with costs, with leave to the defendant to answer within 20 days, on payment of costs.