Clay's Adm'r v. Edwards' Trustee

• Decision Date: 07 December 1886
• Parties: CLAY'S ADM'R, etc., v. EDWARDS' TRUSTEE, etc., and another.
• Court: Kentucky Court of Appeals

2 S.W. 147

84 Ky. 548

CLAY'S ADM'R, etc., v. EDWARDS' TRUSTEE, etc., and another.

Court of Appeals of Kentucky.

December 7, 1886

Appeal from circuit court, Bourbon county.

J. Q Ward, B. F. Buckner, and G. C. Lockhart, for appellant.

J. W Lucas, for appellees.

BENNETT J.

On the second day of March, 1866, Ossian Edwards, of Bourbon county Kentucky, deeded to I. N. Fry all of his personal estate, consisting of the proceeds of a tract of land, amounting to $28,909.15, and household and kitchen furniture, and choses in action of every description, to be held in trust by I. N. Fry for the exclusive use and benefit of Patsy K. Edwards, wife of Ossian Edwards, as separate estate during her life, with remainder to such of her children by Ossian Edwards as might be living at her death, and to the living descendants of such as might have died before her death, with power in said trustee to invest said estate, by the consent of Patsy K. Edwards, in writing, in any real or personal estate for said trust purposes; also to sell, reinvest, and to resell and reinvest said estate, from time to time, as the interest of said wife and children, in his and her judgment, might require. I. N. Fry accepted said trust, and proceeded to administer it until the nineteenth day of April, 1867. On that day there was a paper filed in the Bourbon circuit court, styled as follows: "Bourbon Circuit Court. Patsy Edwards' Trustee. On Petition." Then follows what purports to be the statement of I. N. Fry, trustee for Patsy Edwards, and Patsy Edwards herself, setting forth the conveyance of said estate to I. N. Fry in trust "for the separate use of said Patsy for life, with remainder to his [Ossian Edwards'] children by her," etc., and that said Fry had accepted said trust, and that it had become inconvenient for him to act, and asking to be released as trustee, and that some one be substituted in his stead. Then follows the statement of Patsy Edwards, expressing her willingness to the release of Fry as trustee, and asking the appointment of S. H. Clay in his stead. This paper was not sworn to, nor signed by any one. On the same day that said paper or petition was filed, an order was made displacing said Fry as trustee, and appointing S. H. Clay trustee in his place, and "the parties hence dismissed;" and on the same day S. H. Clay executed bond as trustee, with I. N. Fry as his surety.

At the October term, 1868, of the Bourbon circuit court, an order was made redocketing the case, and discharging I. N. Fry from any liability as surety for S. H. Clay on said bond, and directing that said Clay do execute another bond as trustee, with W. H. Pierce as surety, payable to Patsy Edwards; and thereupon Clay executed another bond, with W. H. Pierce as surety; and the papers were ordered filed away. On whose motion the case was redocketed, and the orders taken, does not appear. At the April term, 1872, of said court, it was entered upon the record that, "by consent of parties, it is ordered that this action be redocketed, and is referred to the master, who is directed to audit," etc. On the next day the master filed a long report, showing that there had come to the hands of S. H. Clay, as trustee, including interest, over $20,000, all of which he had expended, and more, too, by over $2,500. The report of the master was confirmed in haste, and the papers again filed away.

It does not appear at whose instance said order redocketing the case was made or the orders taken. The order simply recites, "by consent of parties." S. H. Clay died in 1873, and H. C. Clay was appointed his administrator. H. T. Paton, who had been appointed trustee in place of S. H. Clay, and Patsy K. Edwards and her children, brought suit against H. C. Clay as the administrator of S. H. Clay and I. N. Fry as surety on the bond of S. H. Clay. They, H. T. Paton, etc., set out in their petition and amended petition the deed of trust of Ossian Edwards to I. N. Fry; that Fry accepted the trust, and received the trust-estate, amounting to over $28,000; that Fry afterwards turned over to S. H. Clay the amount of the trust-estate remaining in his hands, who had been appointed trustee in place of Fry by the Bourbon circuit court, and who had executed bond as such trustee, with Fry as his surety. And the report of the master showed that there had come to the hands of S. H. Clay, including interest thereon, over $20,000, and in violation of his duty as trustee, and in violation of the rights of the plaintiffs, he had paid out to numerous persons not entitled thereto large parts of said estate.

The administrator and Fry filed separate answers. The answers traverse the charge of improper use of the trust-estate; that it had been paid out to persons not entitled to it, etc. They also plead the settlement of S. H. Clay's accounts, made in 1872 by the master commissioner of the Bourbon circuit court, and its approval by the court, in bar of the action. Fry also pleaded his release as surety on S. H. Clay's bond by the Bourbon circuit court in bar of the action as to him.

The plaintiffs in their reply attacked the proceedings of the Bourbon circuit court, by which Fry was released as surety on S. H. Clay's bond as trustee, and by which the settlement was made, upon the ground that they were void, etc. The court below not only adjudged that these proceedings were void, but adjudged that the judgment of the court releasing Fry as trustee, and appointing S. H. Clay trustee in his stead, was void also. The...