Smith v. Central Trust Co. , 12 A.D. 278 ( 1896 )

Barrett, J.

The order of the chancellor of New Jersey appointing Mr. Pennington trustee for the infants, Louise Condit Smith and Sallie Barnes Smith, is a conclusive answer to this action. By this order the chancellor adjudged that a trust for these infants was created by the will of their mother, Sallie L. D. B. Smith, and that Mr. Pennington should execute that trust in the room and stead Of the trustee named in Mrs. Sallie Smith’s will. The order also conferred upon Mr. Pennington all the rights, powers, duties and privileges incident to the appointment. This order was within the jurisdiction of the Court of Chancery of New: Jersey. Mrs. Sallie Smith, the testatrix, was a resident of New Jersey. She died there, and her will was executed and probated there. The proper construction of that will was clearly determinable by the courts of New Jersey, and the judgment of its Court of Chancery thereupon cannot be questioned here. The appellant attacks the chancellor’s exercise of jurisdiction upon the ground that the infants, represented by her as testamentary guardian, were not domiciled in the State of New Jersey. This' point is without merit. The chancellor’s jurisdiction did not depend upon the residence or domicile of the infants, but upon the creation and existence of the trust in the State of New Jersey. It was the fact that Mrs. Smith died a resident of that State, and that her will was probated there, which gave the Court of Chancery jurisdiction. Whether the chancellor exercised that undoubted jurisdiction regularly depended upon the practice of the court of New Jersey. Counsel cites-the law of New Jersey in support of his contention that notice of the application for Mr. Pennington’s appointment should have been given to the plaintiff, “ with whom they (the infants) were sojourning.” But we cannot consider this citation. It was neither alleged nor proved upon the trial. It nowhere appears in the record ; and, even if it had been alleged and proved, the failure to give such notice amounted to but a mere irregularity, not affecting the jurisdiction. If the appointment was irregularly or erroneously made, the New Jersey courts are open to the appellant. . She can only complain here of a lack of jurisdiction ; and that complaint, we have seen, is entirely unfounded. The conclusion is inevitable that the title to the property in question is vested in Mr. Pennington for the trust purpose specified in Mrs. Sallie Smith’s will, precisely as it was vested in the original trustee, George Condit Smith. This conclusion is not in the least affected by the incidents : First, that the property embraced within the trust happens to be within this State ; and, second, that the infants are now living here. The property is in the hands of the Central Trust Company merely as custodian for the trustee. It is quite immaterial where the trustee places the trust ..property;; . "Wherever he places it he must account therefor to the courts of Hew Jersey, and there'is not the slightest necessity for calling him into any other jurisdiction. It is true that the original" trustee, in 2>lacing the trust property in the- hands of- the defendant corporation, agreed that the"company""should collect the income and pay it to Ihim during his. lifetime, and upon liis death pay such income to the guardians of these children. -This, agreement,'however, was revocable at any time; The trustee certainly could not abandon his duty in fhvor of á trustee of his- own appointment, nor could, he vary the legal effect of Ms own death upon the"trilst situation. The •provision in his agreement Av-ith the trust company-, that, upon; his death, that company'should' pay the income" of,-the trust fund to the guardians of the children, is. plainly invalid. The trust company still holds-the property as custodian — as-custodian,now for the.new trustee, Mr. Pennington ; and that gentleman is alone authorized to receive the income and apply it as directed in Mrs. Sallie Smith’s will.

- ,'The -'plaintiff, as guardian- -of these children, has no right, as against the trustee,, either to the "principal or income- of these securities. What part of. the income she should receive from the trustee for the iSMap.ort and. maintenance ¡of .the children is something with which, wd ‘have nothing to do. . Mr. Pennington’s attorneys, in their letter-to the, 23laintifi’s counsel of April 1, 1896, very -properly-offered,, on Mr. "Pennington’s behalf, to submit that-question,to the chancellor qf Hew Jersey. But the offer was rejected, substantially for the . reasons now assigned for ■ the- reversal of the judgment below.¡ -" ' ; • ' ■ ‘ .....

It is claimed that the complaint should not, in any aé23ect of the cáse, have-been dismissed, and that the qdaintiff is entitled, at least, to know where -her‘ward’s property is, and w-liat is its- condition. The difficulty with this position i's that she is not entitled to know these things from the defendant - corporation.. She may ultimately be entitled to’ know them from the trustee; If at any time, she is denied-information by the- trustée, which it is his duty to furnish, or if "he misconducts himself in any manner with regard to his-trust,, she can file her bill against- him for an account, or fqr any appellate, reheff. in the Court of Chancery of Hew Jersey, The object of her present suit- is to -obtai-p a judgment,.first, that the "trustee has no interest in either the securities Or the income in the hands of the trust company; and, second, that the trust company account to her for the income. She is not entitled to either relief. She has no title either to the securities or the income, and the trustee alone has such title. It follows that the trust company is answerable solely to the trustee, and .that any information which the plaintiff requires witli regard to the property must be obtained from him, and not from the trustee’s custodian. The trustee was here brought in as a proper party to an action for an accounting against the trust company. He was not independently proceeded against -as a trustee who had refused information with regard to the trust estate, or who had in any way misconducted himself. He was simply an adjunct to the action, against the trust company for the purpose of shutting him out altogether — in other words, for the purpose, not of obtaining information or an account from a lawful trustee, but of settling the question whether he was a.trustee at all.

The judgment was in all respects right arid should be affirmed, with costs to each of the respondents.

• Van Bbunt, P. J., Rumsey, Williams arid Patterson, JT., concurred. •

Judgment affirmed, with costs to each of the respondents.