Kent v. Lee , 2 Sand. Ch. 105 ( 1844 )

The Assistant Vice-Chancellor.

The charges in the bill relative to the defendants Eaton and Stevens, are said to be matters in which Lee and the other defendants have no interest or concern whatever.

Although Eaton and Stevens are called the complainant’s agents, and required to account to him, it is only in the sense that they were agents of the trustee and of the estate, and bound to account to the trustee as such, for the benefit of all parties ; not to the complainant as an individual, who is responsible to the others for their acts.

The articles state that it is impossible for the complainant to bestow his personal a’tention to the disposition or management of the property, and they therefore authorize him to employ an attorney or substitute, to do any act which he can do, except to execute conveyances; and they further provide that the trustee shall be liable only for gross misconduct or neglect.

There is no pretence of either of the latter having occurred. Messrs. Eaton and Stevens were successively attorneys or substitutes in the management of the property, and they received moneys belonging to the trust estate.

Now for whom did they act, and to whom must they account?

Unquestionably they acted for the whole of the stockholders, and they must account to the whole, or which is the same thing, to the trustee for them. The settlement of their accounts is a matter of as much interest to Lee as it is to the complainant, in proportion to the number of shares which have been assigned to Lee. And this settlement is an indispensable part of the process in ascertaining the state of the trust, the application of the proceeds, the distribution of the surplus, or if there be none, the apportionment of the deficiency.

Again, both Eaton and Stevens are stockholders and necessary parties as such. If it should' turn out that they are debtors to the trust in respect of their agencies, the court will be enabled •in this suit to lay hold of their shares of the proceeds of the sales and retain them for the payment of such indebtedness. The defendant Lee would have had good cause to complain if the complainant had omitted to bring these agents of the estate to an account, in connection with the settlement of the trust; especially if thereby any loss to the fund were likely to ensue.

The demurrer must be overruled.