Toronto General Trusts Co. v. Chicago, Burlington & Quincy Railroad

Majority

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Toronto General Trusts Company, as Trustee, App’lt, v. The Chicago, Burlington & Quincy R. R. Co. et al., Resp’ts.^[1]

(Court of Appeals,

Filed October 7, 1890.)

Headnote

1. Parties—Power of forbion trustee to sue m this state.

One Dunscomb, a resident of Canada, by his will gave the income of

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his estate to his ivife for life, and appointed Muirheid, of Philadelphia, Penn., as trustee. Mrs. Dunscomb, having received letters testamentary as executrix, transferred 161 shares of defendant’s stock to Muirheid as trustee, who surrendered it to the defendant, which issued new stock to him as trustee, and he sold it and converted the proceeds to his own use and died insolvent. Proper proceedings were taken in the Canadian courts, and plaintiff was appointed trustee to collect in the outstanding assets of Dunscomh’s estate, and brought this action to obtain the shares of its stock, or their value. After the commencement of this action, the parties to the Canadian action appeared in the Canadian court and plaintiff was appointed trustee of Dunscomb’s estate and directed to pay any moneys collected into court to the credit of the cause, the amendment to “take effect as of the date of said judgment.” Held, that plaintiff had legal capacity to sue in this state. - '

3. Same.

As plaintiff was clothed with the title to the trust estate in Canada by proceedings in the Canadian action, it could, standing upon that title, maintain an action here as trustee.

Appeal from, judgment of the supreme court, general term, first department, affirming judgment of special term dismissing plaintiff’s complaint.

On the 14th day of October, 1870, George H. Dunscomb, a resident of Coburg in the province of Ontario and dominion of Canada, made and executed his will disposing of his estate, in which he appointed his wife, Harriet Catharine Dunscomb, and his brother, John William Dunscomb, executors thereof, and afterward on the same day he executed a codicil to his.will as follows:

“ I, George Hoyles Dunscomb, in the within will mentioned, declare this to be a codicil to my last will and testament.

“ In the event of my having issue by my wife, Harrietta Catharine Dunscomb, I give, devise and bequeath to my said wife for the term of her natural life, the income from all the real and personal estate that I may die possessed of, and on her death to the child or children of our marriage now living or who may be living at the time of my death, or born after my death, to be divided equally among them, share and share alike.

“ The real and personal estate to be realized by my trustee, either at public or private sale, whichever may in the discretion of the said trustee be deemed best for the interest of my estate, at the death of my wife, and divided among the issue of my marriage as above directed.

“ And I do appoint Charles H. Muirheid, of the city of Philadelphia, in the state of Pennsylvania, in the United States of America, as trustee under this my will, to collect and receive and pay over the income of the trust estate, therein comprised, to my wife, if she survives me, during her life, and at her death to ■dispose of the said real and personal estate as above described.

“ And I bequeath to the said Charles H. Muirheid for his services as trustee, the usual commission.”

Thereafter the testator died and his will was duly proved and admitted to probate in Canada, and, John W. Dunscomb having renounced as executor, letters testamentary were issued to Mrs. Dunscomb. At the time of the death of the testator he owned one hundred and sixty-one shares of the capital stock of the Chicago, Burlington & Quincy Railroad Company, and Mrs.

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Dunscomb, as executrix, transferred the certificates of stock to Charles'H. Muirheid, as trustee, and he surrendered the certificates thus transferred to him to the railroad company, and it by the Hational Bank of Commerce as its agent, issued new certificates of the stock to him as trustee for Mrs. Dunscomb under the will of her husband. He subsequently sold the, stock, and the railroad company, through its agents, issued new certificates of stock to the purchaser thereof, and Muirheid converted the proceeds to his own use and subsequently died insolvent. Thereafter an action was commenced in the high court of justice, chancery division, in Canada, for thé appointment of a successor in the trust of Muirheid, in which Mrs. Dunscomb was plaintiff and the administrator of the estate of Charles H. Muirheid and George Hoyles Dunscomb, an infant son of .the testator, were defendants. In that action the plaintiff asked for relief that a new trustee be appointed in the place of Charles H. Muirheid, deceased, and that such new trustee be authorized to take, accept and receive the securities and have the management and control thereof according to the.provisions of the will and codicil of George H. Dunscomb, deceased, and to dispose of the income, revenue, dividends and receipts thereof in accordance therewith, and to carry the same into effect. The defendants in the action were properly served with process and brought into court, and all parties being in court, and upon reading the pleadings and affidavits, and after-hearing counsel, the court ón the 30tli day of May, 1883, ordered and adjudged, “that the Toronto General Trusts Company be, and they are hereby appointed trustees to collect and get in the outstanding assets and estate of George Hoyles Dunscomb, deceased, the testator • in the pleadings named, as they .accrue due, and to pay any moneys when collected into court to the credit of this cause, subject to further orderand it made provision for the costs of the parties to the action.

The Toronto General Trusts Company was by the Canadian law authorized to act as trustee in such a case and this action was commenced on the 6th day of July, 1883, and the foregoing facts, and other material facts were alleged in the complaint ,- and the complaint prayed judgment “ that the defendants be ordered to deliver and transfer to said plaintiff 295 shares of the said Chicago, Burlington & Quincy Bailroad Company, and to issue to this plaintiff, as trastee as aforesaid, certificates of stock for said 295 shares, and to pay to said trustee all dividends on said shares since the alleged transfer thereof, with interest thereon from the date the same were payable.

And plaintiff further prays that if it is impossible for the ' said defendant companies to issue or transfer stock to plaintiff that then, and in that case, the said companies be decreed to pay over to said plaintiff the value of said stock, together with all such dividends as aforesaid, and interest thereon, and that the plaintiff may have such other and further relief as in the premises as may be just, besides the costs of this action.”

After the commencement of this action, on the 27th day of July, 1883, the parties to the Canadian action again appeared in the

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Canadian court, and the following order was entered : “ This court doth order and adjudge that the Toronto General Trusts Company be, and they are hereby‘appointed trustees of the estate of George Hoyles Dunscomb, deceased, the testator in the pleadings named, and that they do pay any moneys when collected into court to the credit of this cause . subject to further order; " and “ that such amendment take effect as of the day of the date of the said judgment.”

This action was put at issue by answer on the part of the defendants and was brought to trial at a special term of the court, and the court after hearing the evidence produced by the parties dismissed the complaint on the sole ground that the plaintiff did not have capacity to sue in this state; and a judgment was entered in favor of the defendants. From that judgment the plaintiff appealed to the general term' where it was affirmed upon the same ground, and then it appealed to this court.

P. K. Pendleton, for app’lt; Flihu Boot and Frederic A. Ward, for resp’ts.

The complaint in this action was dismissed on the sole ground that the plaintiff did not have legal capacity to sue in this state; and therefore it is proper for us to consider only the question whether it did have such capacity.

The codicil t#>the will of the testator created a valid trust, and although there were no words of gift to the trustee, he took the legal title to the trust estate. Such a title is necessary for the purposes of the trust, and hence it must be presumed that the testator meant to give it. Oates v. Cooke, 3 Burr., 1684; Doe v. Homfray, 6 Ad. & Ell., 206; Doe v. Woodhouse, 4 T. R, 89 ; Leggett v. Perkins, 2 N. Y., 297 ; Tobias v. Ketchum, 32 id., 319 ; Killam v. Allen, 52 Barb., 605 .

Muirheid, the trustee, could have maintained an action in the courts of this state to recover any of the trust property by any one wrongfully detained here or for the wrongful conversion of such property, or for damages thereto. Such an action would not have been in a representative capacity, but in his own right as the legal owner of the property. It might have been necessary for him upon the trial of such an action to prove the will and put it in evidence for the purpose of showing his title; hut it would not have been necessary for him to have the will admitted to probate in this state. Williams on Executors, 2d Am. ed., 226, note, and 7th Bond, ed., 362, note; Judson v. Gibbons, 5 Wend., 224 ; Middlebrook v. The Merchants' Bank, 3 Keyes, 135; Smith v. Webb, 1 Barb., 230 . So much is true as to the trust property generally. But here there is more. The executrix of the will assigned this stock to the trustee, and the defendants issued to him as trustee a new certificate therefor, and thus he became the legal owner thereof, and could, as such, have maintained .an action here in reference to the same without probate of the will here, as a legatee under a foreign will of specific chattels can after assent to the legacy by the executor maintain an action here to recover such

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chattels being in this state without probate of the will here. So if Muirheid had legal capacity to sue here anyone to whom he lawfully transferred his title had the same capacity.

It, therefore, remains only to be inquired whether the plaintiff has succeeded to Muirheid’s title in such way that it has legal capacity to commence this action. It' is not disputed that under the law of its being it had the capacity to become trustee of this trust.

It was the plain purpose of the Canadian action to procure the appointment of a new trustee in the place of Muirheid, and that was a portion of the relief demanded. The action was brought in a court of general jurisdiction and the court had jurisdiction of the subject matter, and acquired jurisdiction of all the necessary parties. It had all the parties in open court, and upon proof and admissions rendered judgment which was properly entered. The judgment as entered was final, not interlocutory or provisional. It was somewhat informal and imperfect in its phraseology. But reading the complaint and considering the purpose of the action,and the relief demanded, there can be no doubt that it was the intention of the court to appoint the plaintiff trustee in the place of Muirheid. But whatever doubt there is as to the effect of the judgment as originally entered is removed by the order subsequently made amending the judgment nunc pro tune so as ho make it conform to the judgment as originally pronounced. Between the entry of the original judgment and the amendment thereof, no new rights had intervened, and hence the court had the power to amend the original judgment so as to cause it as amended to have effect as of the date of its original entry. Such amendment was in furtherance of justice and worked no injustice to any one. That the amendment under such circumstances was properly made cannot be successfully questioned. Wright v. Nicholson, decided in the United States supreme court March 3, 1890, and reported in 10 U. S. Supreme Court Rep., 487.

There can be no doubt, therefore, that the plaintiff was legally appointed trustee in Canada. While there was no formal transfer of the title of the trust estate to it, it was put in the place of Muirheid and took the same title he had, and it thus took the legal title as trustee to whatever there was of the trust estate.

Having thus been clothed with the title to the trust estate in Canada by proceedings in the Canadian action, can it, standing upon that title, maintain an action here as trustee? We think this question was erroneously answered in the negative in the court below.

It is the general rule that he who is the legal owner of property may maintain an action wherever it may be for its recovery, or for damages for its conversion. Generally his capacity to sue in such cases grows out of his legal ownership. It is believed that there is no exception to the rule where the legal owner sues in his own right, and not in a representative capacity. In such cases all owners stand upon the same footing. But the rule is somewhat modified when one sues in a representative capacity. Foreign executors and administrators cannot sue here for reasons of public

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policy. The courts will not lend tlieir aid to them in the removal of the assets from this state to the possible prejudice of domestic creditors. Petersen v. Chemical Bank, 32 N. Y., 21 . Yet such personal representatives may make transfers of property which will be recognized as legal here. They may execute valid releases of debts due here, and they may come here and remove property from the state whenever they can do so without being obiged to ask the aid of our courts, and foreign receivers and assignees, taking their title to property by virtue of foreign laws or legal proceedings in foreign courts, may come here and maintain suits in our courts when they do not come in conflict with the rights or interests of domestic creditors; and why may not. this trustee ? Its position is not like that of an executor or administrator, who is simply a representative of a dead person gathering in and administering upon property for the benefit of others. But it is more like that of the legal owner of property, who possesses it or brings suit about it for his own benefit. Its position is at best as favorable as that of foreign assignees of bankrupt and insolvent debtors, or of receivers of insolvent foreign corporations, who may come here and, by the comity of nations, maintain actions here when they do nothing to the prejudice of domestic creditors. In re Waite, 99 N. Y., 433 . Here there are no creditors who have any claims upon or interest in the property involved in this action.

We purposely abstain from examining the merits of this action, as they are not properly before us. We simply decide that the plaintiff has capacity to bring this action, and hence the judgment must be reversed, and-a new trial granted, costs to abide event.

All concur.