Petrie v. Petrie

7 Lans. 90

Opinion

Mullin, P. J.

By the will the real and personal property of the testator were conveyed to the executors in trust to pay debts and legacies. They are to be treated, therefore, as trustees, and as such they are to account in equity for the property so conveyed to them in trust. Part of the relief sought by the plaintiff is an accounting by the trustees; but to an action to compel an accounting all persons interested in obtaining an accounting must be made parties.

Story, in his work on Equity PL, § 219, says: “ Whenever different persons are interested in an account, though not in the same right, they should all be joined, as for instance heirs and personal representatives, residuary legatees and distributees, mortgagors and mortgagees, and their assignees. (Sortore v. Scott, decided in this department in March last.

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If the legatees whose legacies under the will have been paid gave to the executors agreements to refund, as they (the executors) had the right to require the legatees to give, they are still interested in the estate, and entitled to be heard on the accounting. But if no such agreement to refund was given, there are still several persons interested in the accounting who are not made parties.

To an action for an accounting by trustees the personal representatives of a deceased trustee are necessary parties, unless it is conceded that no part of the estate came into his hands. Even then, the protection of his estate would seem to require that his representatives be made parties. (King v. Talbott, 40 N. Y., 76 ; Sortore v. Scott, supra.)

Whether there are any personal representatives of Jost D. Petrie, a deceased trustee, does not appear; but if there are none, representatives should be appointed and made parties. His lieirs-at-law do not represent him for • the purposes of stating an account of the trust estate.

James Bowen, who is entitled to an allowance out of the income of the testator’s estate toward his education, and the children of Elizabetli Staring, toward whose education money is to be paid annually, are all necessary parties to the accounting.

It is unnecessary to name all the persons who should be, but who are not, made parties. It is sufficient to say that all should be made parties who have an interest in the estate ; and the complaint is defective so long as any such persons are omitted.

It was the duty of the trustees to determine what sum they would pay annually to the plaintiff and Charles L. Petrie toward their education, and out of the property of the estate to invest on interest such a sum, as principal, as that the interest would raise the sum decided to be necessary for their education. (King v. Talbott, supra.)

This could be done only in the contingency that the assets in the hands of the trustees were sufficient to pay the commissions of the trustees, funeral expenses and the debts of the estate.

After these were satisfied, then the plaintiff and Charles were entitled to have enough of the remainder of the estate invested to produce the amount to which they were entitled.

The will directs the amount which is to be applied to the education of Charles D. and the plaintiff, to be paid frpm the income of the estate. If this provision is construed strictly, it might preclude such an appropriation and investment as is suggested above, and compel the trustees to' keep the income together, and out of it to pay the legacies. But such a construction might result in depriving the plaintiff and Charles of the sum deemed necessary, for a part or all of the time, should the assets prove insufficient to pay the debts and legacies.

It would, therefore, seem to me the preferable mode in which to give effect to the intention of the testator to set apart a sum which would yield as interest annually the amount required.

A legacy for education, like one for maintenance, must he paid in preference to the general legacies given by the will, if the assets are sufficient for the purpose.

If, therefore, there is any doubt as to the sufficiency of the assets to pay all the debts and legacies, the plaintiff has the right to require the trustees to account, and to compel them to invest sufficient to yield as interest the amount deemed sufficient by the trustees to educate him.

To arrive at the condition of the estate, it is indispensable that the validity of the bequests be determined; hence, the necessity of asking in this action a determination of the validity of the bequest to the village of Little Falls, and for the education of poor children.

A cause of action against the representatives of Joram Petrie to collect assets which may have come to his hands cannot be joined with either of those above mentioned for two reasons.

1st. Because the plaintiff cannot maintain an action to recover. assets. Such ’ an action can only be maintained by the personal representatives of the latter.

2d. Because it is a cause of action separate and distinct from that for an accounting or to determine the validity of the legacies, and does not arise out of the same transaction within the meaning of the Code.

If the surviving trustee was insolvent (which is not charged) the plaintiff might maintain an action to restrain him from applying the funds of the estate to the payment of fictitious or outlawed debts, or committing any other breach of trust. When, however, the executor is solvent he may pay such debts as he pleases; but if he pays debts not legally chargeable to the estate he does so in his own wrong, and the payment will be disallowed in the settlement of his account.

The plaintiff says that he does not know that Moses Petrie is solvent; he should know that he is not before he can require the court to assume to control his action as trustee, or to remove him from the trust.

Other insurmountable difficulties in maintaining the action, as it is set out in the complaint, lie in plaintiff’s way; but it is unnecessary to refer to them more particularly, as the difficulties already suggested will enable the pleader to prepare a complaint that will obviate them.

The order of the Special Term must be reversed, and leave given to the plaintiff to amend his complaint on payment of costs of the demurrer and of this appeal. If he does not amend, then judgment is ordered in favor of the defendants on the demurrer, with costs:

Judgment accordingly.

Reported 6 Lans., 271.