Stevens v. Melcher — 6 N.Y.S. 811

Majority

p. 811

Stevens et al. v. Melcher et al.

(Supreme Court, General Term, First Department.

July 9, 1889.)

Headnote

1. Parties—Necessary Parties—Remainder-Men.

A testator bequeathed a sum to trustees for the benefit of his widow during her life, and directed the residue of his estate to be divided into three equal parts, in each of which a trust was created for his three children. He also provided that, if either of the two daughters died leaving a husband, he should he paid one-third of the proceeds of the trust for such daughter for his life, the other two-thirds to be paid to her children, as also the other one-third on their father’s death; that, if there were no children, then the principal of such trust should be disposed of in like manner as the capital of the trust for the benefit of testator’s widow, which was that it should be divided equally among the three children, the issue of any of them to take their parents’ share, if deceased; that if, at the death of the widow, there were no descendants of testator living, the trust fund and estate were to be divided into three parts, and given to certain designated persons. Held, that only the widow, her trustees, testator’s executors, the three children, and their trustees were necessary parties to an action brought by the trustees for an account of the sums paid to them for the widow’s trust, and of sums received by her as executrix of testator’s will, or chargeable to her on account of the principal or interest of said trust; and a stay of proceedings to bring in the grandchildren of the testator and the ultimate distributees was properly denied, they not being vested with present interests, within the meaning of Code Civil Proc. N. Y. § 452, which requires the court to direct other persons to be brought into an action, whose interests are to be injuriously affected, before a complete determination can be made.

2. Same—Death or Party.

Testator in his will devised one-third of his estate in trust to his son, the income of which was to be used, as far as necessary, for his support until 21 years of age, and between that age, and until he was 25, he was to have all the income of this share. When he attained that age the trustees were to pay him the whole of the principal and accumulations, except a sum stated, which they were to invest in trust for him for his life, which on his death was to be paid to his children, and the children of such child or children as were deceased. If he left no children, then the principal of such trust was to be paid to testator’s two daughters equally, or their descendants per stirpes, if either were deceased, and, if both were dead, their descendants should receive the whole, and, on failure of any issue of theirs, then as directed for the distribution of the trust in benefit of testator’s widow. The son-

p. 812

died a year or so after, aged 25, unmarried, without issue. Held that, as testator’s daughters were defendants in their own right in an action by the trustees of the widow against the widow for an accounting, a mere suggestion upon the record of the son’s death without issue would show that the daughters have succeeded to his interest.

3. Same—Administrators.

Where a certain amount was left by such son as his own property, the executor of his will, who has made no claim adverse to the rights of the widow, nor moved to be made a party to the action, and is not liable to be prejudiced in the determination thereof, is not a necessary party thereto.

Appeal from special term, New York county.

Action by Charles G. Stevens and George F. Richardson, trustees of Marietta R. Stevens, against John L. Melcher and Charles G. Stevens, executors, and Marietta R. Stevens, executrix, of the last will and testament of Paran Stevens, deceased; MariettaR. Stevens, individually; Ellen S. Melcher, Henry Leiden Stevens, Mary F. Paget, and Arthur H. F. Paget, her husband, Arthur Leary, Henry Leiden Stevens, Alfred Henry Paget, and George Cecil Stew-Art Paget, as trustees under the marriage settlement of said Mary F. Paget and her said husband; Marietta R. Stevens, Charles G. Stevens, and John L. Melcher, as trustees of said Mary Fiske Paget under said will; Charles G. .Stevens, John L. Melcher, and George F. Richardson, as trustees of Henry Leiden Stevens; and George F. Richardson and Charles G. Stevens, as trustees of Ellen S. Melcher. The complaint alleges, in substance, that Paran Stevens died April 25, 1872, leaving him surviving his widow, Marietta R. Stevens, And three children, to-wit, Ellen S. Melcher, wife of John L. Melcher, Mary Fiske Stevens, wife of Arthur H. F. Paget, and Henry'Leiden Stevens. That under a marriage settlement between Mr. and Mrs. Paget her interest in the million trust legacy was vested in trustees, thereby appointed, who were made parties to the action. That by his will he appointed his wife, Charles G. Stevens, his nephew, and John L. Melcher, his son-in-law, executors and executrix.' He also appointed said Charles G. Stevens and George F. Richardson, who married the sister of Mrs. Stevens, trustees for her under the will. He gave his wife the use of certain real and personal property in New York city and at Newport, and a legacy of $100,000, and he also gave the town of •Claremont, N. H., a legacy of $40,000. After making these and other bequests, all of which have been satisfied, except the Claremont legacy, and the legacy for the benefit of Mrs. Stevens, he directed the remainder of his estate to be divided into three equal parts, for the benefit of his three children, and Appointed said Charles G. Stevens and G. F. Richardson trustees for Mrs. Melcher, and appointed Mrs. Stevens, Charles G. Stevens, and Mr. Melcher trustees for Mrs. Paget, and appointed Mr. Richardson, Mr. Stevens, and Mr. Melcher trustees for his son, Henry Leiden Stevens. The complaint then alleged that the testator gave to said Richardson and Stevens, as trustees for Mrs. Stevens, $1,000,000, in which should be included, at a fair valuation, No. 1 State-Street block, Boston, to be applied to her use during life, and at her death the principal to be equally divided among his three children, the issue of any deceased child' to take the parents’ share; and, in case at the deatli of his wife tliere should be no descendants of the testator living, the principal of the legacy was given to collateral relatives and other parties named. That the testator owned a large amount of real estate in the city of New York, most of which was unproductive, and that his personal estate (which consisted largely of interests in hotels in New York, Boston, and Philadelphia) was insufficient to discharge all debts and all legacies, but wras sufficient to pay the debts and legacies, except said $100,000 legacy, and said million trust "legacy, the payment of which legacies would require all the personal estate, and a sale of the hotel interests, and still leave a deficiency to be made good from the real estate; and that as said hotel interests yielded a large income in proportion, to their pecuniary value, or to what could be realized on a sale

p. 813

thereof, it was to the interest of all parties that the same should, if possible, be retained.

The complaint then sets up the so-called “construction action,” or action No. 1, commenced in this court in December, 1872, and the proceedings therein, including .the interlocutory judgment of April 15,1873, and the final judgment of July 23, 1873, whereby it was, in substance, adjudged that the hotel interests (provided his other estate was sufficient to meet the other requirements of the will) should be held for the benefit of the three residuary estates, and the proceeds thereof treated as income and be paid to his children, and that the balance of the million legacy might be paid by the conveyance by the executors to said trustees of such portions of the real estate of the testator as might be agreed upon at the valuations reported by the referee in said action and adjudged by the court; and it was thereby further adjudged that, if it should become necessary to sell any of the said real estate to satisfy debts or legacies, any party to the action might apply to the court on the footing of said judgment. That by said judgments the value of the State-Street store was fixed at $105,000; the value of the apartment house premises on Broadway, Twenty-Seventh street, and Fifth avenue was fixed at $850,000; and the interest of the testator in the adjacent premises, Nos. 228 and 230 Fifth avenue, over and above the mortgages thereon, was fixed at a nominal sum; and the value of No. 3 East Twenty-Eighth street was fixed at $25,000. That the apartment house premises were subject to a mortgage of $425,000 held by the Dime Savings Bank, No. 228 Fifth avenue was subject to a mortgage of $70,000, and No. 230 Fifth avenue was subject to two mortgages, aggregating $70,000. The complaint then alleged the making of an agreement of October 28, 1873, executed by the executors, and by Mrs. Stevens as executrix and individually, and by her trustees; and that in pursuance of said judgments and agreement the executors and Marietta R. Stevens, as executrix, executed to the plaintiffs as her trustees two deeds, dated October 30, 1873, by one of which was conveyed as of April 25, 1872, the date of the testator’s death, the State-Street store, for the sum of $105,000, and by the other deed were conveyed as of May 1, 1873, “the apartment house,” and the interest of the testator in the adjacent premises, Nos. 228 and 230 Fifth avenue, and also No. 3 East Twenty-Eighth street, in said city, for the expressed consideration of $875,000, subject to said several mortgages; and said property was, as stated in the agreement of October 28, 1873, applied as of May 1, 1873, on the million legacy, as a payment of $555,000 over the mortgage, which sum consisted of $425,000 for the apartment house, $105,000 for the State-Street store, $25,000 for 3 East Twenty-Eighth street, and of $1 for interest in 228 and 230 Fifth avenue. That under said agreement Mrs. Stevens entered into possession of said premises, and received the income thereof, and continued so to do until October 1, 1879, and that her trustees were thereby left without money or funds; and that, notwithstanding she had violated the agreement by refusing to pay the taxes, interest, insurance, etc., and the trustees had given the 10 days’ notice required by the agreement, she refused to surrender the premises.

It also appears that in December, 1873, another action, known as “Action No. 2,” was commenced in this court under the advice of Mrs. Stevens’ then counsel, in which the executors and executrix, and the same parties individually and as trustees, were plaintiffs, and George F. Richardson and others were defendants, to procure a judgment for the sale of real estate to pay the balance of the million trust legacy, and that said action is still pending. That Mrs. Stevens, without the authority, consent, or knowledge of said trustees, tore down two houses on 228 and 230 Fifth avenue, and erected a new building, which was added to and incorporated in the apartment house, and that after the said conveyance to her trustees one of the foundation walls of the apartmept house premises settled, which necessitated the expenditure of

p. 814

$33,707.31 to restore and uphold said wall; and that, her trustees being without money, the executors, at their request, furnished said sum, and charged it to the plaintiffs as trustees; and that other sums, amounting to about $7,000, ■expended for repairs to the apartment house between April 26, 1873, and the date of the conveyance to her trustees, were, under the agreement of October •28, 1873, also charged to her trustees, and that Mrs. Stevens objected to such charge. That in violation of the agreement of October 30, 1873, Mrs. Stevens refused to pay the interest on the savings bank mortgage, and her trustees, ■still being without funds, applied to the executors to pay said interest on their account, and in accordance therewith the executors paid $14,875, November 16, 1877, and $13,433.29, May 8, 1878, for svtch interest. That in December, 1887, the Dime Savings Bank called in said mortgage, and it became necessary to pay thereon $125,000 so as to reduce it to $300,000, at which sum the trustees had, through the employment of one Wood, a broker, procured the New York Life Insurance Company to take it; and that said trustees, being still without funds, requested the executors to furnish said sum; and they, at the request and on the account of said trustees, paid on said mortgage $40,000, January 19, 1878, $35,000, January 26, 1878, and .$50,000 on May 11, 1878; and that said executors also, at the like request, paid $5,995.50 to Wood for his commissions and the expenses of examining the title; and they also paid $2,552.22, being the interest on said mortgage up to JunelS, 1878, when it was transferred to the New York Life Insurance Company. That the trustees claimed that said $125,000 so paid on the mortgage should be charged to the trustees as payment on account of the principal of the million dollars trust legacy. That Mrs. Stevens, as executrix, had collected large sums of money which she had not applied to the purposes of .the estate, but had retained, claiming to apply them to her legacy of $100,-.000, and to the interest thereon, and to the interest on the unpaid balance of the million dollars legacy, and refused to allow such moneys to pass through the hands of the executors, or of her trustees, but ignored them entirely. That the amounts so collected and chargeable to her up to May 1, 1874, were settled by a decree of the surrogate, entered July 29, 1876, at $123,538.68, without including any interest chargeable to herthereon; and that the amount retained by her from May 1, 1874, to May 1, 1878, was, exclusive of interest, $360,460.08, as appeared by accounts filed with the surrogate, and then un settled; and that the amount retained between May 1, 1878, and the commencement of such action, was $74,257.70; and the plaintiffs claimed that these sums should be charged to Mrs. Stevens as payments on account of interest on the million legacy. The complaint then demanded judgment that an account be taken of the sums paid plaintiffs for and in respect of the $1,000,000 legacy, and of the sums which the widow had received, or which she should be charged on account, either of the principal or interest of said legacy, and how much thereof is invested in the real estate conveyed to plaintiffs by the executor of Paran Stevens, deceased, etc.

Mrs. Stevens, individually, and as executrix, served her answer, March, 13, 1880. Mrs. Melcher, Mrs. Paget, and Alfred H. F. Paget, and George or Gerald Cecil Stewart Paget, trustees under her marriage settlement, appeared in this action, but put in no answer. Henry Leiden Stevens appeared in said action by attorney, and put in a general answer individually, and as one of the marriage settlement trustees of Mrs. Paget. Mrs. Stevens answered said complaint individually and as executrix, and in her answer claims, in substance, that neither the $33,707.31, for repairs of the apartment house, nor the $5,995.50 paid Wood on the transfer of said mortgage, nor the $125,-000, should be charged to her of her trust legacy; also that an alleged expenditure of $130,000 made by her in the construction of a new building on 228 and 230 Fifth avenue, in the place of that which she had torn down, should be reimbursed to her from the capital of said trust; and that, notwithstand

p. 815

ing the judgment of this court, the children were not entitled to the hotel interests, but that the same were applicable to the payment of said million trust legacy. She admits that she received and collected considerable sums of money belonging to the estate, and claims to apply the same to the payment of her legacy of $100,000, and the interest on that portion of the million dollars trust legacy which had not been paid over to her trustees, and also admitted that, if said moneys were so applied, said legacy of $100,000 was paid.

The trial of the action commenced before a referee in March, 1882; the testimony was closed on November 10,1883, the referee decided that the million legacy drew interest from the death of testator, and decided that the $125,000 and the $33,707.31 and the $5,955.50 were to be charged to the trustees, and credited to the executors as so much paid on account of the principal of the million trust, and that Mrs. Stevens was not entitled to be reimbursed for her expenditure in constructing the new buildings on 228 and 230 Fifth avenue; that the real estate of the testator was the primary fund for the payment of the balance of the million legacy and other unpaid legacies, and that it was amply sufficient to pay the same; and that (the real estate being sufficient) the hotel interests were not applicable to the payment of said legacy. That this action does not involve the settlement of the accounts of the executors in New York or in Boston, nor of the accounts of the trustees of the three residuary estates, nor of the accounts of the trustees of Mrs. Stevens relating to the Boston property, nor of Mrs. Stevens’ accounts relating to the property in Boston or the property in Newport, and that no other accounts are involved or are to be investigated in this action save the accounts between the plaintiffs as trustees, and Mrs. Stevens as their cestui que trust, in respect to tile New York property, and the accounts of Mrs. Stevens in respect of the moneys collected by her from the estate, and retained by and chargeable to her on account of the $100,000 legacy and interest thereon, and interest on her $1,000,000 trust legacy. Since the decision of the said referee the only proceedings before him (other than the settlement of the findings) have been the taking of said accounts between the plaintiffs as trustees and Mrs. Stevens as ■cestui que trust, and the determination (on the principles settled by him) how much has been paid for principal on said million legacy, and how much has been paid or is chargeable (to these plaintiffs or Mrs. Stevens) as payments for interest on the said million legacy. A motion was made by defendant Marietta It. Stevens before the referee to stay all proceedings until the plaintiff should bring in the executor of Henry Leiden Stevens and the infant children of Mr. and Mrs. Paget, and the parties who may ultimately become interested in the million legacy under the fifth clause in case of the death of Mrs. Stevens without leaving descendants of the testator, and that said motion was denied. The fact that the parties ultimately entitled to the principal of the million legacy after the death of Mrs. Stevens without leaving descendants of the testator were not parties to the action was brought to the notice of the referee prior to his decision of June 4, 1884, and that Henry Leiden Stevens died July 19, 1885, and that his death was known to all the panties immediately thereafter, and was brought to the attention of the referee in October, 1885, and was noted on the minutes on January 6, 1887, and that no suggestion has at any time been made that his executor, nor any of the persons before named, should be made parties. The referee, on June 8,1888, ordered Mrs. Stevens to bring down her accounts as executrix to May 1,1887, and to file such additional accounts on or before September 15, 1888; and the reference, on the application of Mrs. Stevens and her counsel, was adjourned to October 8, 1888; whereupon a motion was made for a stay of all proceedings until the plaintiffs should bring in the successor of Alfred H. Paget as marriage trustee, (he having died in August, 1888,) the infant children of said Mary Fiske Paget, and the ultimate distributees under the will of said Paran Stevens, deceased; and that said motion was denied on November 10th,

p. 816

and the reference adjourned to November 24th, previous to which date all proceedings herein were stayed by the order to show cause granted by the judge at special term.

On the hearing at chambers, Judge Lawrence denied the motion, and defendant Marietta B. Stevens, individually and as executrix, appeals.

Argued before Van Brunt, P. J., and Brady and Daniels, JJ.

Hoadly, Lauterbaeh & Johnson, (George Soadly and Delano C. Calvin, of counsel,) for appellant. Burrill, ZabnsJcie <& Burrill, (John E. Burrill, of counsel,) for respondents.

The plaintiffs are trustees under the will of Paran Stevens, deceased, for the benefit of Marietta B. Stevens, the appellant. To them, for that object, the testator, by the fifth paragraph of his will, gave and devised the sum of $1,000,000, including as part of it, at its fair value at the period of his decease, a store known as “No. 1 State-Street Block,” in the city of Boston, to hold, invest, and manage the same as a trust fund and estate, for the benefit of his wife, who is the appellant, during her natural life, and to collect the income and receipts therefrom, and pay the same over to her. After the decease of the testator property was conveyed to the plaintiffs as trustees by his executors, and appropriated to the support of this trust; and expenditures were made by them on account of such property. The appellant, also, in her capacity of executrix of the estate, received and used for her own benefit sums of money coming into her hands in that capacity. And a dispute existed as to the amounts expended and received in this manner for which the plaintiffs should be chargeable as her trustees in the administration of this trust. A leading, if not controlling, object was to obtain an accounting and settlement of the amount which in property and money had been appropriated to and expended about this trust. And this action was brought in the year 1879 to take that accounting, and secure a determination establishing the remaining amount necessary to fulfill the purposes of this trust. Issue was joined in the action chiefly by the answer of the appellant, and it was after-wards referred to a referee, before whom the trial has been progressing. After evidence had been taken concerning the rights and obligations of the appellant, the referee made certain decisions, which were believed to conform to and be required by the evidence. But they were not made as finally and certainly declaring and defining these rights and obligations, but were left subject to be modified or changed as the future proceedings in the action, mainly involving the accounting, should indicate to be equitable or necessary. The decisions made, therefore, by the referee, in no manner stand in the way of the consideration of this application upon its merits. It was in form first made before the referee himself, the position being taken on behalf of the appellant that the action could not be certainly or finally decided without bringing in additional persons as parties interested in the disposition of the controversy. The referee denied the application, but so far qualified his decision as not to permit it to stand in the way of the motion made at the special term. That motion was afterwards made, and the court, considering that the action was not defective for want of additional parties, denied the application for the stay; and the determination of this appeal depends upon the point whether the court was correct in taking this view of the situation of the litigation.

The testator, at the time of his decease, left the appellant, his widow, and one son and two daughters, surviving him. After providing by his will for the payment to the appellant of a legacy of $100,000, which seems to have been paid, and for the creation and administration of this trust and disposing of other property, and providing for the payment of other legacies, he directed the remainder of iris estate to be divided into three equal parts, and in each of these one-third parts a trust was created for one of his children. Dor the daughters the trusts were required to continue during the period of their re

p. 817

spective lives. At the decease of his eldest daughter Ellen, in case she shall leave her husband surviving her, then one-third of the proceeds of the trust are to be paid over to him for the term of his natural life, and the other two-thirds of the trust-estate are directed to be paid over to the children of that daughter, and the remaining third also to them, on the decease of her husband; and, should there be no descendants of the daughter living, then the principal of the trust-estate was, subject to certain contingent directions, directed to be disposed of as the capital of the million-dollar trust, for the benefit of the appellant, was to be disposed of and distributed upon her decease. And as to that the direction of the testator was that the principal of the fund and estate should be divided among his children in equal proportions, the issue of any child to take the share their parent would have taken if living. And in case, at the decease of his widow, there should be no descendants of himself living, then the fund and estate was directed to be divided into three parts,—one to be delivered to Charles G. Stevens, one of the plaintiffs, and Sarah I. Pease; another third to Sarah M. Stimpson, Catherine C. Hubbard, and Samuel P. Eiske, in equal parts; and the remaining third to Miranda Eislce, the sister of the testator, if she should be living, and, if not, then to his wife’s sisters, Carrie Richardson, Fanny Read, Harriet Read, and Annie Richardson, in equal parts. At the decease of his second daughter the executors were directed to pay and convey the principal of her third to and among her children in equal portions, the issue of any deceased child to take the share its parent would take if living; and, in case this daughter should not leave any descendants surviving her, then the executors were to pay and convey this third to his daughter Ellen and his son equally, or in case they, or either of them, should then be deceased leaving descendants, their descendants to take the share their parents would have taken if living; and, if either should then be deceased leaving no descendants surviving, the other, or, in case he or she should also be deceased, his or her descendants, should receive the whole of the principal sum of the fund; and, if there should be no descendants of the testator living, one-half of this third was directed to be paid and conveyed to-his wife, the appellant, if she should be living, and the other half, or, if she should be deceased, then the whole of the third, to the same persons, and in the same proportion, as had previously been directed in case of the trust fund created for the benefit of his widow, after her decease.

The other third of the estate was devised in trust for the benefit of his son-, Henry Leiden Stevens. The rents, income, and profits of this third were to be applied, so far as should be necessary, for the support of the son until he attained the age of 21 years; and, between that time and the attainment of the age of 25 years by the son, the executors were directed to pay over to him all the income of this share of the estate. When he attained the age of 25 years they were further directed to pay over to the son the whole of the principal sum, and the accumulations thereof, except $400,000, which they should continue to manage and invest as a trust fund for the benefit of the son during his.natural life; subject, however, to the proviso that, in case the principal of this third should be less than $400,000, then they should pay him $100,000 when he became 25 years of age, and keep the balance invested as previously directed. Upon his decease this fund, to be invested during life, was directed to be paid to the children of this son, the descendants of any child to take the share their parents would have taken if living; and, in case the son should leave no descendants, then the trustees were to pay and convey over the principal of the trust to the testator’s two daughters equally, or in case they, or either of them, should previously be deceased leaving descendants, the descendants should take the share their parents would have taken if living. And, if either should die leaving no descendants surviving, the other, or, in case she should also be deceased leaving descendants, such descendants, should receive the whole of the trust fund. And a similar direction was

p. 818

given as to this interest, in case no descendants oí his should be living at the time o£ the decease oí the son, as was in that event given for the disposition of his widow’s trust-estate after her decease.

The eldest of the testator’s daughters intermarried with the defendant John L. Melcher, and they are stated to have had one son, John Stevens Melcher, who, however, for some unexplained reason, was not named as a contemplated party in the application made for the stay. The other daughter intermarried with Arthur Henry Pitzroy Paget, and as the result of this intermarriage they have four infant children. ¡Neither the son of the eldest daughter nor either of these children was made a party to this action. And it has been' objected on the part of the appellant that they are necessary parties, without- whose presence in the action a final disposition of the controversy, especially that relating to the amount still unappropriated for the creation of the trust for her benefit, cannot be made. A like objection has also been taken on account of the omission to make as parties to the action the other persons named in the will of the testator, to whom his estate may ultimately be distributed in case of the decease of all his children and their children without leaving descendants. It has been made to appear that the personal estate of the testator, except that invested in the business of hotels, which is not to be appropriated to supply the residue of the trust fund, has been already exhausted in the payments of debts and legacies, and that the residue of the trust fund must be derived from the sale of real estate, or the appropriation of it directly to the object of this trust; and that the capital of the trust itself is a charge upon the real estate has already been determined in an action brought for that purpose, and finally decided by this court. But the amount to be realized from the sale of real estate to supply the balance of the capital of the trust or by the appropriation of real estate itself has in no manner been ascertained or determined. That is still an open subject of controversy in this action. And it is to be here tried and determined before any appropriation of other property of the testator or of its proceeds can be made for the establishment and administration of the trust in favor of the appellant. Whatever the balance upon the accounting shall be found to be, which it will be necessary to raise for this object, is a subject, if net the controlling subject, in this action. And when that has been ascertained the residue of the testator’s estate, so far as it may be required for that object, must be sold or appropriated to provide for it. And in that manner these respective thirds into which the residuary estate has been divided in trust for his children must be -affected, and correspondingly diminished; and the result will be that the property of the testator’s children devoted to their respective trusts must be affected by the final decision to be made in this action; and the owners of property who are to be in this manner affected by a legal determination are necessary parties to the action in which it is proposed to be made before such a determination can regularly be reached. The property to which they would otherwise be entitled is necessarily to be resorted to for the purpose of raising the fund for creating the capital of the trust, and they are consequently interested in contesting the amount asserted to exist in favor of the beneficiary under the trust to be capitalized through the result of the litigation. Persons who are so interested are not only entitled to be heard upon the amount which is to be charged against that property, but the charge cannot be regularly made until they shall have an opportunity to protect their own interests. The •case in this respect appears to be within the language of section 452 of the Code of Civil Procedure, which has required the court to direct other persons to be brought into the action, without whose presence a complete determination of the controversy included in it cannot be made. This section by this language has embodied no more than the preceding rule observed and enforced by courts of equity, and under this rule it has uniformly been held that persons whose interests are to be injuriously affected by the litigation must

p. 819

be made parties to the action before a determination in it can be secured. In the case of Holland v. Baker, 3 Hare, 68, it was held that persons interested in property as creditors, subject to an outstanding trust, should be brought before the court, before their interests could be impaired or declared by the result of the litigation; and the rule requiring interested persons to be made parties was defined and followed in Vetterlein v. Barnes, 124 U. S. 169 , 8 Sup. Ct. Rep. 441 ; and the principle as it was declared in Sears v. Hardy, 120 Mass. 524 , was approved by the court. That principle was then stated to be that, “to a suit against trustees to enforce the execution of a trust, oestuis que trustent, claiming present interests, directly opposed to those of the plaintiff, should be made parties, in order that they may have the opportunity themselves to defend their rights, and not be obliged to rely upon the defense made by the trustees, or to resort to a subsequent suit against the trustees or the plaintiff, or to take the risk of being bound by a decree rendered in their absence.” 124 U. S. 172 , 8 Sup. Ct. Rep. 442 . And this is the extent of the principle which has been applied to the adjustment of controversies of this particular nature. But it does not proceed so far as to require in this action that these children of the testator’s daughter shall be brought into it as parties, for they have not been vested with present interests, and will not in any event be injuriously affected by the determination of the suit. The persons who are to be so affected are the trustees and the beneficiaries in the trusts created for the benefit of the children of the testator. If the balance still remaining unappropriated to this trust for the benefit of the widow shall be larger, it will absorb only so much more of each of these thirds in trust in the remainder of the estate. If it shall be smaller, then correspondingly less. In no event will any other persons than these individuals be injuriously affected; for, whatever maybe the amount still remaining to be appropriated to the trust for the benefit of the widow, it will ultimately, after that trust shall be executed and ended, pass to these children of the testator’s children who shall be living at the time of the decease of the persons beneficially interested in the trusts. By the appropriation of the property to the trust they will be deprived of no substantial right or interest; for, in the event of their succeeding under the will to this property after the trust shall be exhausted, the property will be wholly returned to them. They accordingly cannot, in any respect, be injured by the result of this controversy relative to the settlement and ascertainment of the balance still misappropriated to the creation of the trust in favor of the widow; and as no injury can in any event come to them through the determination of this action, and they are vested with no present interests which can be affected or changed, they are not, either under the provisions of the Code or of this rule in equity, necessary parties for the determination of this action. And the same is equally the case as to the persons contingently and finally entitled in remainder to this estate, in case of a failure of the immediate issue of the testator’s children.

The testator’s son was born on the 21st of October, 1858, and died on the 10th of July, 1885, after his attainment of the age of 25 years. He was unmarried, and died without issue. And according to the will of the testator his interest in the principal of the trust fund appropriated for his benefit vested in equal shares in the testator’s two daughters. And in support of the application for the stay it was further objected that, as these daughters were not stated in the action to have taken these interests, the action was defective, and could not regularly proceed to the accounting until that statement should be made in the pleadings. But this objection is more specious than real, for each of these daughters in her own right is a defendant in the action, and a mere suggestion upon the record of the decease of the testator’s son without issue will exhibit the fact that the daughters have succeeded to his interest. And the same defense which will protect the interests of the daughters in the estate previously secured to them by the will of the testator will

p. 820

also equally inure to the protection of these subsequently acquired interests; and where that is the result of the decease of a party the action may be allowed to proceed without further pleadings or statements of the additional interests in this manner acquired. This has been provided for by section 758 of the Code of Civil Procedure, declaring that, “in ease of the death of one of two or more plaintiffs, or one of two or more defendants, if the entire cause of action survives to or against the others, the action may proceed in favor of or against the survivors.” And that appears to be sufficiently broad to include this part of the action. And Livermore v. Bainbridge, 49 N. Y. 125 , is, so far as this subject was there discussed, an authority sustaining this conclusion. There is, accordingly, no necessity for any amendment of the pleadings in the action presenting the fact that the two daughters have in this manner acquired the capital of the trust-estate appropriated for the benefit of the testator’s son.

A certain amount is claimed to have been left by the son as his own property, to be disposed of under the directions contained in his will, and for that disposition Arthur Leary was appointed and is acting as his executor. But this executor is shown to have made no claim adverse to any of the rights of the widow, so far as they are included in this action. Neither could he do"so, for the amount to which he may be entitled will in no manner be diminished or affected by the disposition of this action. Whatever that amount may be, it is a distinct and independent demand against the executors of the estate, liable in no way to be prejudiced, injured, or postponed by the decision of this action, and he for that reason is not required to be made, as executor, a party to it.

It further appeared that the testator’s second daughter, before her marriage with Arthur H. F. Paget, joined with him in a marriage settlement of her estate and property, and trustees were selected for its management and control. Four persons were named as such trustees, but two of them only accepted the trust, and entered upon the discharge of their duties under the settlement. These trustees were the testator’s son, Henry Leiden Stevens, and Alfred Henry Paget. The latter was the surviving trustee, and he died in the month of August, 1888. The marriage settlement secured the right to the other parties to it to appoint a successor to these deceased trustees. But they had not made that appointment up to the time of the application for the stay of proceedings. There was accordingly no person who could be brought in and substituted as a party to this action in the place of these deceased trustees, under the marriage settlement; and that is now necessarily represented by Mr. and Mrs. Paget, the beneficiaries under the marriage settlement, who are parties to the action.

The estate may be considered to have been unfortunate in being made the object of so much litigation, when one action, comprenensive as it could well have been made in its character, would have settled the construction of the will, and these conflicting disputes as to the residue still unappropriated to the trust for the widow, and then provided for raising the fund, or appropriating the property necessary for its complete establishment. That, however, was not the course which has been taken, but different actions have been brought, one of which has already been determined, and this, together with another, is still pending for the completion of the disputes between these parties. But after the present suit shall be definitely completed, and the amount ascertained still required to be added to the capital of the trust for the benefit of the widow, but little more than a formal proceeding will remain necessary to sell the property, or make a specific appropriation of such part of it as shall be required to consummate this trust. And as the case has proceeded so far and so long without objection to the incompleteness of its scope, and a substantial right of action is involved in it, no embarrassment should be interposed in the way-of its progress to the earliest practicable determina

p. 821

tian. A stay, under the circumstances, has not become necessary to promote the just settlement of the remaining part of the controversy between the parties; neither is it necessary to complete that adjustment to bring in any other or additional parties before the court. There are no interests to be inpaired which are not fully represented by the executors, who are defendants; the trustees in the several trusts created by the will, who are also parties; the beneficiaries in each of those trusts; and the two daughters, who have succeeded to the capital of the trust-estate provided for their deceased brother. They are all parties to the action. And the appellant herself has acquiesced too long in the present form of the litigation, now to object that the action has in any respect been deficient for want of additional parties. The order from which the appeal has been brought should be affirmed, with $10 costs and the disbursements. All concur.

Cases cited

Vetterlein v. Barnes 124 U. S. 169 SCOTUS 1888-01-09 p. 819
Livermore v. Bainbridge 49 N. Y. 125 N.Y. 1872-04-02 p. 820