Gorsuch v. Briscoe

Robinson, J., delivered the opinion of the Court. In 1872, James A. Eden made a deed of trust for the benefit of his creditors, to the late Judge William Alexander. The trustee took possession of the property, and died without rendering any account. Among his papers, however, was found a statement in his hand-writing, showing his receipts and disbursements, and by which it appears that he was indebted to the trust estate in the- sum of §2743.70.

Upon the petition of the creditors, secured by the deed of trust, the appellee was appointed by the Court of Prince George’s County trustee to complete and settle the trust; and in that capacity he received from the estate of the late Judge Alexander §1963.88, leaving a balance of §779.82 due by the former trustee. In.the meantime, Gorsuch, the surety on Alexander’s trustee’s bond, conveys all his property to his wife, and this bill is filed by the appellee to set aside this deed, and to compel Gorsuch, as surety, to pay the balance due by Alexander, the former trustee. We-can see no objection to the appointment of a trustee by a Court of equity in a case like this for the purpose of settling the trust. The former trustee had died with trust funds in his hands unaccounted for, and the appointment of another trustee to take charge of the trust estate was but the ordinary exercise of equity jurisdiction.

So long as there was a trust in existence, a Court of equity would not permit it to fail. Assuming then that the Court had the power to appoint the appellee trustee, the question is whether Gorsuch is liable in a Court of equity as surety on the bond of Alexander, the former trustee, for money received by the latter, and which was unaccounted for at the time of his death. ⁵⁷⁶ In State, use of Oyster vs. Annan, 1 G. & J., 455 ,. where an audit was ratified without the knowledge of the trustee, and a number of suits were immediately thereafter brought on the trustee’s bond, it was held that an action at law would not lie against the bond, until the ratification of the audit and demand upon the trustee, and upon the ground, that a trustee is not in the situation of a common debtor who knows his liability, and whose business it is to seek and pay his creditors; that the rights of parties under a decree are known to the trustee only through the action of the Court, whose duty it is to determine the amounts to which they are- entitled. But in Brooks vs. Brooke, et al., 12 G. & J., 306 , where a delinquent trustee died intestate, and there was no administration, or estate upon which administration could be had, it was held that the sureties on the trustee’s bond were liable in equity, although no'demand had been made on the trustee in his life-time. After referring to the breach of the bond by the trustee, and the liability of the sureties in an action at law upon the