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39 Mont. 495

Coram v. Davis

Montana Supreme Court

Decided October 23, 1909

Montana Supreme Court · decided 1909-10-23

<p>Trusts and Trustees—Termination of Trust—Profits—Accounting—Compensation of Trustees—Complaint—Insufficiency— Parties—Equity—Pleadings.</p> <p>Trusts and Trustees—Profits—Accounting—Fixing Compensation—Complaint—Insufficiency.</p> <p>1. The beirs of a decedent and certain claimants entered into a trust agreement whereby the trustees appointed were to receive and hold moneys derived from the estate, until final distribution. When the trust had been partly executed, and before final distribution of the estate, one of the parties to the contract brought suit against the trustees ashing, among other things, that they be made to account for profits received by them from moneys in their hands, and that their compensation be fixed. The complaint did not state to whom the funds belonged, or whether the trustees had made any profit from their use; neither was there any allegation that demand had been made upon them for sueh profits, nor that they had not been paid for their services or were claiming any compensation for them. Held, that the complaint was insufficient to give a eourt of equity jurisdiction for the purposes stated, and that a demurrer thereto was properly sustained.</p> <p>Same—Termination of Trust—Equity.</p> <p>2. Obiter: Where the objects of a trust agreement have been accomplished, and there is no longer any necessity for the intervention of the trustees, a court of equity will abrogate it, in a proper case, and its decision is of no concern to the trustees.</p> <p>Same—Termination of Trust—Trustees—Parties—Complaint—Insufficiency.</p> <p>3. A party invoking the aid of a court of equity must show affirmatively a necessity for its intervention; hence, where plaintiff’s complaint, in an action against the trustees seeking the abrogation of the trust agreement under which they were appointed, made no claim that the defendants had not properly fulfilled their trust, or that the agreement could not be terminated by the parties to it without the intervention of the court, or that complete relief could not be afforded plaintiffs without the presence of the trustees as parties, it was insufficient, and did not state a cause of action against the latter.</p>

Cited by 1 later decisions — most recently December 1926

1 state decisions

Relies on Matthews v. Thompson · Shade v. Bay Counties Power Co. · Tilton v. Davidson

Good law ✅— No negative treatment on recordhow we know

Affirmed · Decided 1909-10-23

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MR. JUSTICE SMITH

¶1delivered the opinion of the court.

¶2We «hall take the appellants’ statement, stripped of the argument therein contained, as the basis of our decision. The situation depicted is a novel one, and counsel confess their inability to find in the books any substantial precedent for the same. *503Does the complaint state a cause of action against the trustees? After a careful study of the pleadings, we have arrived at the conclusion that it does not, and that the district court was correct in sustaining the demurrers thereto.

¶3It appears that the trust has been partly executed, and that there remains in the hands of the trustees the sum of $92,275 on account of the claim of Thomas Jefferson Davis. "Whether this money belongs to Thomas Jefferson Davis or to the parties to the compromise agreement we are unable from the complaint to determine. At any rate, this amount is not due from the trustees until the final distribution of the estate, and plaintiffs do not claim the same; but they demand that the trustees be required to account to them for interest and profits thereon at this time. In view of the fact that it cannot be ascertained to whom the principal belongs, we think the court would not have been justified in assuming jurisdiction of the ease on account of the allegations relating to this matter alone. If the principal belongs to Thomas Jefferson Davis, the interest probably belongs to him also, if any interest is to be charged against the trustees. There is no allegation in the complaint that the trustees have made any profit from the actual use of the money. Neither is there any allegation that prior to the commencement of this action any demand was made of them for either interest or other profits. So- far as the complaint shows, the agreement between the parties was silent as to interest or profits. The courts have held that in certain contingencies a trustee is liable for interest, and in certain other cases that he is not. (See 28 Am. & Eng. Ency. of Law, 2d ed., 1080.) Whether or not a demand is necessary before suit brought depends upon the facts of the particular case. (Kerr v. Laird, 27 Miss. 544.) Ordinarily, a demand for an accounting is necessary, and the bill must contain an allegation that such demand has been made. (1 Ency. of Pl. & Pr. 98.) Again, there is nothing in the complaint to show that the trustees are claiming any compensation for their services, or to indicate that they have not been fully paid for all the services heretofore performed by them. *504Under these circumstances, a court of equity ought not to assume jurisdiction on account of the matter of compensation for the trustees’ services alone.

¶4The most serious question is whether the complaint states a cause of action against the trustees on account of the fact that the plaintiffs are entitled to have the agreement creating the trust abrogated, for the reason that its object has been accomplished. Plaintiffs maintain that there is no longer any necessity for the intervention of the trustees. The learned district judge intimated in his order sustaining the demurrers an opinion to the same effect, and counsel for the respondents in their brief say: “Let the parties themselves get together and dispose of the property as they will. This we admit they can do, even without the trustees’ consent.” If the facts set forth in the complaint are true, we see no reason for longer continuing the trust agreement; and a court of equity will afford relief in proper cases. (See Russell’s Appeal, 75 Pa. St. 269; Tilton v. Davidson, 98 Me. 55, 56 Atl. 215; Matthews v. Thompson, 186 Mass. 14, 104 Am. St. Rep. 550, 71 N. E. 93, 66 L. R. A. 421; Eakle v. Ingram, 152 Cal. 15, 100 Am. St. Rep. 99, 75 Pac. 566.) But let us remember that the plaintiffs are invoking the aid of a court of equity. In order to do this, they must show affirmatively a necessity for the intervention of the court. (16 Cyc. 227, 265.) They must show that the trustees are necessary or proper parties to the action, and state facts sufficient to compel the latter to answer the complaint.

¶5Let it also be remembered that since the commencement of this action the first parties to the trust agreement have by the plaintiffs been made defendants by leave of court. They may controvert the allegations of the complaint, or allow the matter to go by default, or, perhaps,, consent that the agreement be abrogated. If they pursue the latter course, then the trustees have confessedly no complaint to mqke; and, in view of the circumstances, it seems reasonable to suppose that if the trust agreement is indeed of no further benefit to them, and they have regard to their material welfare, which it is to be presumed *505they have, they will consent. At any rate, the trustees have no interest in their decision. They, the trustees, are not accused of misconduct, incomp eteney, neglect of duty, insolvency, or denial of their trust. In fact, no claim is made that they have not properly fulfilled that trust in every particular. They can have no possible objection to having the agreement set aside, either by consent of the parties or order of the court. (See Sturgeon v. Stevens, 186 Pa. St. 350, 40 Atl. 488.) They were appointed by the other parties to this action and can be removed by them; but they ought not to be haled into court and subjected to costs unless they have so conducted themselves, as that a cause of action can be stated against them or complete relief cannot be afforded the plaintiffs without their presence as parties. Neither of these conditions obtains in this case, so far as the allegations of the complaint enlighten us. The action can proceed to final judgment between the parties to the trust agreement, and, whatever the decision may be, need not and cannot concern the trustees.

¶6We conclude, therefore, that, as no facts are alleged in the amended complaint sufficient to constitute a cause of action against the respondents, the judgment of the court below should be, and, it is, affirmed.

¶7 Affirmed.

Mr. Chief Justice Brantly and Mr. Justice Holloway concur.
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