Clark v. Robinson

Sawyer, J.

It is entirely immaterial in what particular form the appeal in this case is prosecuted, whether by Clark, in his own name, as appellant, or by him in the name of Eollins as appellant. In either view, the substance of the proceeding is the same, viz. : to determine how much, if any thing, there may be in the hands of the executrix for which the estate of her testator may be charged as trustee; and by proper subsequent proceedings to determine the amount which is to be added to the list of claims on account of this liability, as Clark’s claim on this ac *589 count, against the estate. In either view, the first amendment is necessary, if Clark, prosecuting the appeal, whether in his own name or in that of Rollins, would avail himself, on the trial which may be had to establish an indebtedness of the estate for which the executrix may be charged as trustee, of any advantages which the law may give him beyond such as Rollins might claim for himself if he were prosecuting the appeal for his own benefit. The first question then, to be considered, is, whether on the trial of this appeal by Clark he may be entitled to any advantages as trusteeing creditor of Rollins which are denied to Rollins himself. If so, then the amendment is or may be necessary in order that it may properly appear upon the record that he is in a position to entitle him to those advantages ; and if it may be necessary, there is no just ground for denying it. To determine this question, it is only necessary to look to the position in which he stands in reference to this proceeding on the appeal, and the relation which this bears to the trustee suit. "When the proceedings in the trustee suit were arrested in the Court of Common Pleas, by the death of Robinson and the administration of his estate in the insolvent course, nothing further could be done, consistently with the laws, relative to the settlement of iusolven ¿ estates in that suit, under the laws regulating the trustee process, towards the determination of the question whether the estate was so indebted to Rollins that it, in the hands of the executrix, could be charged as his trustee, unless judgment against the estate as trustee could be obtained in the due course of proceedings, in accordance with the laws regulating trustee process before the expiration of the time limited in the commission for allowing claims against the estate. Even if judgment could be so obtained, the only mode in which it could be enforced would be by having it allowed and placed upon the list of claims. If it could not be so obtained before the expiration of the commission, the only course left to the creditor *590 was to move for a stay of proceedings in that court, and to present the claim, on account of which he is seeking to charge the estate as trustee, and prosecute it to a final determination before the commissioner, and on appeal in this court, in the mode preseidbed by law, for the allowance of claims against insolvent estates. The right of a trusteeing creditor in such case to charge an estate administered in the insolvent course, as the trustee of his debtor, can be tried in no other way than by presenting it to the commissioner, because in no other way can it be placed upon the list of claims and taken into account in the necessary subsequent proceedings for distributing the assets among the creditors. "When, therefoi-e, the plaintiff in this case was driven to abandon the course of proceedings prescribed by the laws regulating the trustee process for establishing his right as trusteeing creditor, and to adopt in their place those prescribed for the allowance of claims against insolvent estates, he did not thereby lose any of the rights which the former were designed to secure to him, so far as the latter are capable of being moulded to meet his case. The trial by jury, upon the appeal, takes the place of the trial by jury at the plaintiff’s election in the trustee suit, and it is for the same object, and to have the same effect as that, viz., to determine the questions whether the estate is or not chargeable as trustee, and if chargeable for how much ? The fact that, in order to enforce his claim, when the liability of the trustee is determined, by having it placed upon the list of claims, it is necessary for him to come to the trial by jury through this particular channel, to wit, the decision of the commissioner and the appeal therefrom, instead of coming to it directly at his election upon the disclosure, in no way modifies his rights as trusteeing creditor, or the course of proceedings on the trial for establishing his rights. The whole doctrine of the cases, Chapman v. Gale, 32 N. H. 141, and Rollins v. Robinson, 35 N. H. 381, is -based upon this view. To *591 hold otherwise, would be to render his right to present the claim to 'the commissioner, and to prosecute the appeal, a mere mockery, except in cases where the only question involved is the state of accounts between the principal defendant and trustee, as they would be exhibited in a suit between themselves. Where the plaintiff is seeking to charge the trustee upon other grounds than the existence of a liability to the principal defendant, which is valid as between them, as in the ease of proceedings which constitute, in law or in fact, a fraud upon creditors, or of payments made subsequently to the service of the writ, it would be idle to send the plaintiff with his claim in the name of the principal defendant to the commissioner, and thence by appeal to a trial by jury in this court, if, on the trial, he is to be held to prove his case as Rollins would be held to prove it on his appeal. In order, therefore, that it may appear upon what grounds the plaintiff stands, which may thus govern the course of the trial, the declaration should allege the state of facts constituting the peculiarity of his position, to wit, the institution and pendency of the trustee suit, the death of the trustee before judgment, the decree of insolvency, the presentation of the claim to the commissioner, its disallowance and the appeal. These facts being alleged, an issue is then to be framed, raising the question of the liability of the estate as trustee, and the trijil is to proceed in the course prescribed by the laws regulating trustee process for a trial by jury, at the election of the plaintiff in the trustee suit, as an incident to that suit, and also as an incident to the proceedings for ascertaining the claims against the insolvent estate. That the trial is had in one court, while the suit may be pending in another, will occasion no insuperable difficulty in the way of carrying out these views. Proper proceedings may readily be adopted, in such case, for giving to the trial the double effect of establishing the liability of the trustee under the suit, and determining the *592 amount of the claim to be added to the list of claims on account of it. Thus, upon its being established by the verdict in this court on the appeal, that the estate is chargeable, and for how much, this being certified to the court in which the action is pending, takes the place, under the suit, of the verdict on that issue in that court, and judgment being rendered thereon, with an order to stay execution against the estate as trustee, until a dividend is declared on the claims in the probate court, and then to issue only for the dividend declared on this claim, the amount of the judgment certified to this court will constitute the amount of the claim to be added to the list.

It results, from these views, that any testimony which would be competent on a trial had at the election of the plaintiff directly under the trustee suit, if it were had between him and the administrator of the estate, not represented insolvent, as trustee, would be admissible here. If, on such trial, the plaintiff' should lay the proper foundation for such evidence, by showing himself to be a bond fide creditor of the principal defendant, he would be in a position to impeach any transaction, between the principal defendant and trustee, which in law or in fact was a fraud upon creditors, and claims growing out of such fraudulent proceedings would not be allowed, to the prejudice of the plaintiffj in set-off' to the claim which might be shown to exist in favor of the principal defendant against the trustee. Any release of the claim, by the principal defendant to the trastee, made subsequently to the service of the writ, or, if prior, upon an agreement in fraud of creditors, would, upon the same ground, be void as to the plaintiffj though it might be good as between the parties.

The question whether, upon the trial, the plaintiff can introduce the testimony of the principal defendant depends upon sec. 28, chap. 208 of the Rev. Stat. 421. It provides that, upon disclosure made by any person summoned as trustee, the creditor may move the court that *593 the question whether such person is trustee or not, be tried by the jury, and upon payment of the trustee’s costs up to the time of filing such motion, unless the court shall restrict the same, an order shall be made, and an issue framed for the trial of such question ; and on such trial, the disclosure so made, and any other competent evidence, may be offered, and judgment shall be rendered on the verdict, as in other cases against trustees. In any such case the debtor may be a competent witness.

This case is clearly within the spirit — I think it fairly within the terms — of this section. If the suit had proceeded, in the first instance, against the executrix, as trustee, there would seem to be no room for doubt, that upon her making the disclosure which she has now made, the case would have been within the letter and reason of the enactment. To hold that the case of an administrator, summoned as trustee, is impliedly excepted from the operation of the statute, on the ground suggested in the argument, that if held to be within it, an undue advantage is given to the plaintiff over the administrator, who must be supposed to have no personal knowledge of the facts, would make the main object, at least one object of the act, the ground of the exception from its operation. The purpose of the statute is to give to the plaintiff an opportunity, by trial before the jury, to show the facts when they are not within the personal knowledge of the trustee, no less than when being known to him he may be .disposed to misrepresent them. One reason why the statute gives him the right to a jury trial, after disclosure, is because, upon the disclosure being made, it may appear that the trustee has no knowledge of the facts upon which his liability depends ; and as they must be supposed to be 'within the knowledge of the debtor, it transfers the question, at the plaintiff’s election, from the court, upon the disclosure, to the jury, upon the debtor’s testimony and other competent evidence. "Whether the administrator be summoned *594 as trustee in the first instance, or be cited in upon the death of the trustee, before disclosure, his rights and liabilities are the same. Rev. Stat., sec. 24, chap. 208, p. 421. The disclosure of the executrix then, in this ease, must be held to be the disclosure of a party summoned as trustee, within the meaning' of section 28. When made it gave the plaintiff the right to elect a trial by jury of the question of her liability as trustee, and this election was substantially made by the motion for a stay of proceedings in the suit, and for leave to carry the question to the commissioner, and, if it should become necessary by his adverse decision, to a trial by jury, in this coui’t, on appeal. The plaintiff’ stands precisely in the position contemplated by the statute, that of a trusteeing creditor, who, having taken the disclosure of the trustee, presents the question of his liability, not to the court upon the disclosure, but to the jury upon all such evidence as may be competent on a trial by jury for that purpose ; and his motion to stay proceedings in the suit, and for leave to present the claim to the commissioner, is none the less an election of a trial by jury, because he cannot obtain it directly, and without intermediate proceedings, consistently with the laws relative to the settlement of insolvent estates, but must arrive at it in the more circuitous method through the commissioner, and an appeal from his decision. The principal defendant may, therefore, be a witness, and the disclosure of the executrix is competent evidence on the trial in this case, as in the ordinary case of a trial of the trustee’s liability by the jury, at the plaintiff’s election after disclosure.

IJpon the question of a separate trial of the appeal, for determining the liability of the estate as trustee, from that Avhich may be had for determining the indebtedness of the estate to Rollins, as between him and the executrix, it is clearly within the power of the court to order it. It is a matter entirely within its discretion. It is obvious that if two causes, such as that prosecuted by Clark in the name *595 of Rollins, and that prosecuted by Rollins on his own account, standing as they do upon entirely different grounds, and sustained as each may be by testimony inadmissible in the other ease, should be tried together before the same jury, injustice might be done to one of the parties. The fact that Rollins may be a competent witness upon the trial of the liability of the trustee, would seem to be sufficient ground for allowing a separate trial upon the motion of either parly, as his testimony, given on the trial of that issue could hardly fail to influence the jury in his favor, or to his prejudice, in weighing his case against the executrix. The remaining question is, whether an amendment of the account annexed to the plaintiff’s declaration, is admissible, which describes the merchandise, set down in the account as merchandise received by Robinson from Hoit, without stating the kind or quantity. An amendment which should introduce into the account other articles than those covered by the general description, would be inadmissible. This proposes to give a more specific and particular description of the articles mentioned in the account as merchandise received from Hoit. It does not add to the account any subject of claim not before embraced in it, hut merely defines and specifies, with more precision, one already .included, and, if necessary to he made, it would seem to he admissible.