Cruger v. Halliday , 11 Paige Ch. 314 ( 1844 )

The Chancellor.

The objectioh appears to be well taken, that it does not sufficiently appear that either of the complainants, except Mrs. Cruger, were properly appointed trustees; so as to authorize them to join with her in this suit. If Whetten was properly appointed, then the number of trustees was not reduced to two, while he remained a trustee, so as to authorize the children or grandchildren to nominate, or the other trustees to appoint Strong as his successor. And if the allegation in the bill is not sufficient to show that he was regularly appointed, the objection is equally fatal as to the allegations of the appointment óf Strong and óf De Peyster respectively. It is true, the will provides for the appointment of new trustees when the number shall be reduced to two, by death, removal from the United States, or otherwise. But it is a settled rule of law that a trus--tee, after he has accepted the office, cannot discharge himself from liability by a subsequent resignation merely. He must either be discharged from the trust by virtue of a special provision in the deed, or will, which creates the' trust, or by an order or decree of the court of chancery, or with the general consent of all persons interested in the execution of the trust. And, in the present case, it is at least doubtful whether the concurrence of every person now interested in the execution of this trust, would render the resignation of a trustee valid; so as to authorize the appointment of another in his'place, without an order or decree of this court. They might indeed consent to his relinquishment of the trust, so far as to release him from personal liability to them if the trust fund should afterwards be misapplied, by his co-trustees, in consequence of his neglect to discharge the duties of a. trustee in conjunction with them. But that would not divest him of the legal title' to the trust property, and vest it in the other trustees exclusively; nor would it authorize them to appoint a new trustee, upon a contingency not provided for by the testatrix, in her will. In this case the trust was in part for the benefit of infaqts, and for other persons not in existence, or who were not in a situation to consent.

The revised statutes have authorized this court, upon the petition of a trustee, to accept his resignation and discharge him from his trust, under such regulations as may be established by the court for that purpose; and upon such terms as the rights and interests of the persons interested in the execution of the trust nay require. (1 R. S. 730, § 69.) If the bill had shown that Whetten presented such a petition to this court, and that the chancellor accepted his resignation and discharged him from his trust, that would have divested him of the legal title to the trust property; and would have vested it in the remaining trustees exclusively, unless the court had appointed another trustee in his place. And it would have been such a reduction of the number of trustees as was contemplated by the testatrix, by the use of the word otherwise, in her will. A reduction of the number, within the meaning of the will, might have occurred. by a removal of one of the trustees for cause, upon a summary application to this court; as authorized by the 70th section of the article of the revised statutes relative to uses and trusts. (1 R. S. 730.) But a simple recital in the bill, that Whetten having resigned his office of trustee, Strong was appointed trustee under the will, in his place, is not tantamount to an allegation that he had presented a petition to the court of chancery, and that the court had accepted his resignation and discharged him from his trust. For the person swearing to the bill, in its present form, would not be guilty of perjury, even if she knew that the court of chancery had never been called on to act upon the subject of the acceptance of Whetten’s resignation of the trust. A party coming into this court and claiming a right as a substituted trustee, under the will of a testator, should state all the material facts distinctly, in his bill, to show that such a vacancy had occurred as to authorize his appointment. (Welf. Eq. Pl. 89. Story's Eq. Pl. 206, § 241. Id. 214, § 257.)

Again; the will provides two modes for the appointment of the new trustees; one of which modes is the nomination of three freeholders, by the children, out of which three freeholders the existing trustees are to make a selection; and the other authorizes the trustees to appoint, in default of such nomination. Under such a power of substitution, it is not sufficient to allege generally that the new trustee was duly appointed a trustee under the will. But the complainant sh ould state in which mode he was appointed; to enable the defendant to know what were the facts in relation to such appointment, and to direct his inquiries accordingly. If there was but one mode in which the new trustee could be appointed, perhaps an averment that he was duly appointed, in the manner prescribed in the will, would be tantamount to setting out at length that the particular forms were complied with. The allegation in this case, however, is not as broad as. that. For in relation to Strong’s appointment it is, that he was duly appointed trustee under the will; not that he was appointed a trustee under the will in the manner and form required by or prescribed in the will. Such an allegation, would be equally applicable to the case of an appointment of a trustee under the will, by the court of chancery, in,the place of a former trustee whose resignation had been accepted, under the provision of the revised statutes before referred to.

For these reasons, the bill is fatally defective, in. not'showing a title in these complainants to institute the suit as trustees under the will of Margaret Douglass. The decretal order appealed from, is therefore erroneous,'and must be reversed, with costs. The demurrer must be allowed, and the bill must be dismissed with costs; unless the complainants, within forty days, pay the costs upon the demurrer and of this appeal, and amend their bill by showing that Whetten was appointed a trustee, in one of the modes prescribed in the will, specifying which, if he was so appointed ; and by also showing that his resignation was afterwards accepted by the court of chancery and that he was discharged from his trust. The amended bill must also show that the complainant Strong was properly appointed in his place, in one of the modes prescribed in the will; and that De Peyster was appointed in the place ofHalliday, stating the manner of his appointment.