Gordon v. Small

Alvey, J., delivered the opinion of the Court. Mrs. Susan E. Ryan, a widow lady residing in the City of .Baltimore, on the 11th of May, 1853, executed a bond under her hand and seal, whereby she promised and obligated herself to pay, twelve months after demand, “to the order of John M. Gordon, Esq., trustee, for the sole and separate use of Mary Grant Small, lately Mary Grant Jackson, his executors, administrators, or assigns, the sum of six thousand dollars with interest from date, at the rate of six-per cent, per annum, payable half yearly; to which payment well and truly to be made,” &c. At the same time, and written on the same sheet of paper, she executed, under hand and seal, a deed or declaration of trust, with certain limitations as to the uses and disposition of the fund created by the bond. This deed of trust was made to the obligee in the bond, and recites the bond, and the fact that it had been duly executed and delivered by the obligor.

The deed professes to have been made in consideration of love and affection for Mary Grant Small, and for other reasons, and also the sum of five dollars. By this deed, according to its terms, its author granted, bargained and sold, conveyed, assigned and delivered, unto the trustee named, his heirs, &c., successors and assigns, the bond thereinbefore described, in trust, to hold the same, or, if and when paid, the principal sum thereof to be by him, or his successor in the trust, invested in either ⁵⁵³ real or leasehold estate, stocks or funds, or to he loaned out on mortgage, as he, or his successor in the trust, in his discretion, should think most beneficial for the parties interested. It then provides, that all the interest, rents, issues or net income of this trust fund, shall he paid over to Mrs. Small during her life, to her sole and separate use; and from and after the death of Mrs. Small, the trustee is required to “convey the said bond, if not then paid, or if paid, the principal sum thereof, or to convey and divide the estate in which it may then he invested, to and among her children, and their issue then living, share and share alike,” &c.; and in default of such children of Mrs. Small, or their issue living at her death, the trustee is then directed “ to convey the said bond, if not then paid, or if paid, the principal sum thereof, or the estate in which it may then he invested, to my oion right heirs forever, when this trust shall terminate.” And it is further provided that if Mrs. Small should die before the declarant of the trust, without child or children, the trustee should reconvey the bond, if not then paid, or if paid, should convey and assign the principal sum, or the estate in which it might then he invested, to the declarant herself, to her own use forever. It is admitted that both the bond and the declaration of trust were delivered to Jo.hn M. Gordon, the trustee, at the time of their date, and that he accepted, and has held the same, until they were produced- in Court by him in this cause, as exhibits with his answer.

It is also admitted that Mrs. Eyan regularly paid the interest on the bond down to the time of her death, directly to Mrs. Small; and that there was no demand made of Mrs. Eyan during her life for the payment of the principal sum; and that the principal sum remains unpaid, though demand thereof has been made of Eohert Mickle, the executor of Mrs. Eyan. Mrs. Eyan died in January, 1818, leaving a last will and testament, which has been duly admitted to probate, ⁵⁵⁴ whereby she devised and bequeathed her entire estate; and among the legacies were several pecuniary, and some specific; and Mrs. Susan Gordon Grady, a niece of the testatrix, was made the general residuary devisee and legatee of the estate. The testatrix was childless, and left surviving her several brothers and sisters, and the children of a deceased brother, as her heirs-at-law and only next of kin. Mrs. Small is now over forty-seven years of age, and has never had a child.

A few months after the death of Mrs. Ryan the original bill in this cause was filed by Mrs. Small, against John M. Gordon, the trustee under the deed, and Robert Mickle, the executor of the deceased. The objects of the bill were to compel the collection of the bond for $6000 from the estate of Mrs. Ryan ; to require the trustee to give bond; and that the trust fund might be administered under the direction and supervision of the Court. The bill was afterwards amended, whereby the heirs-at-law and next of kin of the deceased were made parties, and also Mrs. Grady, the residuary legatee, and her husband; all of whom answered. There is really no dispute in regard to the facts; the questions in the case are all purely questions of law.

The executor makes no controversy as to the existence and legality of the claim ; but, in his answer, he says, that whenever the Court shall decide to whom payment of the bond shall be made, it will be necessary that the person or persons, so entitled, shall produce the claim, duly authenticated, to him as executor, to be paid or satisfied in due course of administration of the estate. Mrs. Susan Gordon Grady, claiming as residuary legatee, by the answer of herself and husband, insists that the bond was a mere voluntary promise, without consideration, and therefore cannot be enforced against the estate of the obligor; but if that be not so, still, the bond is barred by the Statute of Limitations, and therefore cannot be enforced. Some of ⁵⁵⁵ the brothers and sisters of the deceased insist that, by legal construction of the limitation in the declaration of trust, to the right heirs of the declarant, they are entitled; while some of the other defendants submit their rights to the Court, and others again set up no claim, in their answers, to any part of the fund. The Court below decreed in favor of the complainant, that the executor of Mrs. Ryan should pay the amount of the bond to the trustee named in the decree, to he held in trust for the use and benefit of Mrs. Small, during her life, and at her death for her children, or their issue, if any then living; hut if no such child or issue he then living, the trustee is directed to transfer the trust fund, or the securities held therefor, to Mrs. Susan Gordon Grady, as residuary legatee under the will of Mrs. Ryan, absolutely.

It is from this decree that the present appeal is taken. The executor does not appeal; hut the appeal is taken by Mrs. Susan Gordon Grady, as residuary legatee, and five of the brothers and one of the sisters, of the deceased, claiming under the declaration of trust. On behalf of Mrs. Grady the decree is sought to he reversed on two grounds: First, that the bond was a mere promise of a gift, without consideration, and that the gift has not been so far consummated as to raise a trust that will he enforced by the Court; and, secondly, that if the bond he valid in its origin, it is now barred by the Statute of Limitations, and therefore not enforceable. But if these positions he found to he untenable, Mrs. Grady is then interested in maintaining the decree against the other appellants as well as against all other parties to it.

On the part of the other appellants, while seeking to' maintain the decree so far as it directs the payment of the bond, and thus opposing the positions taken on the part of Mrs. Grady, they seek to reverse the decree, so far as it determines that Mrs. Grady is entitled to the fund, as residuary legatee, on the death of Mrs. Small, without ⁵⁵⁶ child or issue of a child then living, on the ground that they are entitled to the fund under the limitation over to the right heirs of the deceased, contained in the deed of trust. Before proceeding to consider the questions thus presented, there is a preliminary question proper to he adverted to, raised on hehalf of Mrs. Wallace, one of the appellants, and that is, that all the legatees under the will of Mrs. Ryan are not made parties to the proceeding. This objection, we think, is wholly untenable. The general rule is well established that, as the executor is the trustee and proper representative of all persons interested in the personal estate, and has the duty cast upon him by law of protecting it against all improper demands, it is not necessary or proper to join either a pecuniary or a residuary legatee, or the next of kin, as parties to a hill against the executor for an account of the personal estate, however much interested such parties may he in defeating the claim upon which the suit is founded. 2 Wms. on Ex’rs, 1729 ; Brown vs. Dowthwaite, 1 Madd., 446; Lucas vs. McBlair, 12 Gill & J., 14.

There are exceptions, it is true, to this general rule, hut the exceptions are always founded upon very special circumstances, such as do not exist in this case, so far as the pecuniary legatees are concerned ; and as to the necessity of making the residuary legatee a party we are not called upon to decide. This preliminary question disposed of, we now proceed to the main questions raised upon this appeal. And first, as to the question whether there has been a perfected or an irrevocable trust declared, such as a Court of equity will take cognizance of and enforce, as against the estate of the declarant, and those claiming as volunteers under her, such as legatees and next of kin. Supposing Mrs. Grady, the residuary legatee, to he a proper defendant, this question is raised on her appeal; the executor making no question as to the validity of the claim. ⁵⁵⁷ It is conceded that the bond and declaration of trúst founded thereon were actually executed and delivered by Mrs. Ryan; and, according to all the authorities, the obligation on the bond was perfect at law.

The declaration of trust was also definite and perfect, requiring no other act on her part to complete the instrument declaring the trust, or to render certain either the objects of her bounty, or the nature and extent of the subject-matter of the trust declared. The trustee, holding the bond, having a right to demand and recover the fund at law, the formal and complete declaration of trust in regard thereto is considered in equity as equivalent to a legal transfer of the right to the estate to the cestuis que trust, and thus their rights are complete. And whether there was a valuable, or, indeed, any consideration for the bond, is not material, there being no pretence that it was obtained by fraud or any unfair means. The bond is, therefore, binding at law, and will not be relieved against in equity.

Treating it, however, as a voluntary obligation, it would not be paid in course of administration, so as. to prejudice debts incurred for a valuable consideration, but it will take precedence of legacies. This is not the case of a mere volunteer applying on an imperfect instrument to be considered cestui que trust; but the transaction was complete of itself, and the relation of trustee and cestui que trust was definitely and completely established; and where that is the case, a Court of equity will, though it be upon the application of a mere volunteer, enforce the execution of the trust against the person creating it, and all subsequent volunteers claiming under that person; but it is well established that the Court will not create a trust, or establish the relation of trustee and cestui que trust, by enforcing the performance of an agreement, or by giving effect to an imperfect conveyance or assignment in favor of volunteers. This is the rule laid down by Lord Eldon in the leading case of Ellison vs. Ellison, 6 Ves., 656 ; S. C., 1 Lead. Cas. ⁵⁵⁸ Eq., 199, and in note to that case, at page 205.

Indeed, the same rule had been laid down, with equal distinctness, in former cases and hy the highest authority. In the case of Lechmere vs. Earl of Carlisle, 3 P. Wms., 211, the Master of the Eolls, Sir Joseph Jekydl, in answer to an objection taken to the enforcement of the trust in that case, on page 222, said: “Neither is the objection that the plaintiff is a volunteer of any weight; for this is the case of a trust, and every