Consolidated Realty Co. v. Richmond Hotel & Bldg. Co.

• Decision Date: 20 March 1934
• Citation: 253 Ky. 463,69 S.W.2d 985
• Parties: CONSOLIDATED REALTY CO. et al. v. RICHMOND HOTEL & BUILDING CO. et al.
• Court: Kentucky Court of Appeals

69 S.W.2d 985

253 Ky. 463

CONSOLIDATED REALTY CO. et al. v. RICHMOND HOTEL & BUILDING CO. et al.

Court of Appeals of Kentucky

March 20, 1934

Appeal from Circuit Court, Madison County.

Action by the Consolidated Realty Company, as trustee for certain beneficiaries, against the Richmond Hotel & Building Company and others. From a judgment sustaining a demurrer to the petition, the Consolidated Realty Company and the beneficiaries appeal. A motion to dismiss the appeal was acquiesced in by the Consolidated Realty Company and by John S. Akers, its trustee in bankruptcy, and the appeal was dismissed as to them.

Motion to dismiss the appeal as to the beneficiaries denied, and judgment reversed.

E. C O'Rear and Allen Prewitt, both of Frankfort, and Ross &amp Ross, of Richmond, for appellants.

Burnam & Greenleaf and G. Murray Smith, all of Richmond, for appellees.

RICHARDSON Justice.

We are confronted with a motion to dismiss this appeal. A motion to dismiss the appeal as to the Consolidated Realty Company and John S. Akers, trustee in bankruptcy of the Consolidated Realty Company, has been heretofore acquiesced in and the appeal dismissed as to them. The cause of action involves a contract and bond, executed and delivered by the Consolidated Realty Company, as trustee of, and for, Mrs. Lillian W. Foos (formerly Mrs. Lillian W. Theophanis), George Theophanis Belle Walker, and Jennie Walker Held, to which we shall hereafter give more particular attention. Since their execution and delivery, and the trial of this action in the circuit court, the Consolidated Realty Company was adjudged a bankrupt and John S. Akers appointed its trustee. In the statement filed herein, in accordance with section 740, Civil Code of Practice, the names of Lillian W. Foos (formerly Lillian W. Theophanis), Belle Walker, and Jennie Walker Held were named appellants. Neither of them was a plaintiff or defendant, in the caption of the petition. However, it discloses that, in agreeing on the terms and provisions of the contract and bond which are the basis of the cause of action set forth therein and in the execution and delivery of same, the Consolidated Realty Company was the trustee of Lillian W. Foos (formerly Lillian W. Theophanis), George Theophanis, Belle Walker, and Jennie Walker Held. They are the real parties in interest or the cestuis que trust, for whom the Consolidated Realty Company was acting as trustee in the execution and delivery of the contract, and the acceptance of the bond, and in the filing of this action in the circuit court. The rule that a party for whose benefit a contract is made may sue thereon, in his own name, although the undertaking is not directly to or with him or in his own name, is too well recognized to need authority or reason to sustain it. However, see Allen v. Thomas, 3 Metc. 198, 77 Am. Dec. 169; Smith v. Smith, 5 Bush, 625; Bryant v. Jones, 183 Ky. 298, 209 S.W. 30; Hendrix Mill & Lbr. Co. v. Meador, 228 Ky. 844, 16 S.W.2d 482; Torrent Lodge, No. 711, F. & A. M. v. National Surety Co., 231 Ky. 302, 21 S.W.2d 439; J. T. Jackson Lbr. Co. v. Union Transfer & Storage Co., 246 Ky. 653, 55 S.W.2d 670; N.W. Mut. Life Ins. Co. v. Eddleman, 247 Ky. 116, 56 S.W.2d 561, 87 A. L. R. 276. Section 21 of the Civil Code of Practice expressly authorizes a "trustee of an express trust, a person with whom or in whose name a contract is made for the benefit of another *** may bring an action without joining with him or it the person or persons for whose benefit it is prosecuted. Provided, however, that nothing herein contained shall abrogate or take away the individual's right to sue." This language of the Code authorized the Consolidated Realty Company to institute and prosecute the action in its name as trustee, and if, upon it becoming a bankrupt, or for any other reason, its right to prosecute the action in the circuit court or in this court terminated, the right of Lillian W. Foos (formerly Lillian W. Theophanis), Belle Walker, and Jennie Walker Held existed under the proviso of section 21 of the Civil Code of Practice. The petition names the Consolidated Realty Company as trustee, designates the trust, and names the cestuis que trust for whom recovery was sought. This was permissible under section 21. Oman v. Southern Const. & Quarry Co., 213 Ky. 818, 281 S.W. 1002; Kenton Water Co. v. Glenn, 141 Ky. 529, 133 S.W. 573; Gaines v. Hume, 215 Ky. 27, 284 S.W. 119.

Considering, without determining, that the bankruptcy of the Consolidated Realty Company terminated its right to prosecute the appeal, the right of the beneficiaries of the trust to do so is conferred by section 21 of the Civil Code of Practice. Gregory v. Harlan H. C. Co., 182 Ky. 524, 206 S.W. 765; Bryant v. Jones, 183 Ky. 298, 209 S.W. 30. Therefore the motion to dismiss is overruled.

The Consolidated Realty Company, as trustee of the parties hereinbefore named, and the Richmond Hotel & Building Company, a corporation, T. H. Collins, and Burton Roberts, S. J. McGaughey, and J. S. Sewell and Dan Walker, copartners, on January 23, 1930, executed and delivered a contract, the one to the other, containing reciprocal agreements, whereby the Consolidated Realty Company, as trustee, agreed to dedicate to the city of Richmond, a municipal corporation of the fourth class, for street purposes, 50 feet in width of certain described land, and the other parties to the agreement agreed to dedicate to the city, for the same purpose, a strip 50 feet in width over and on certain other land. T. H. Collins, the Richmond Hotel & Building Company, Burton Roberts, S. J. McGaughey, J. S. Sewell, and Dan Walker, by a provision in the writing, agreed, on the conditions recited therein, to pay to the Consolidated Realty Company, as trustee, the "sum per foot equal to the average price realized at an auction sale to be held September 18th, 1928, per front foot of the lots fronting on the south side of South Lawn of Wellington Sub-division, plus 20% of the price of the number of feet to be paid for." It was further stipulated that the latter parties were to execute and deliver a bond to the Consolidated Realty Company, as trustee, its successors and assigns, to "secure the faithful performance of this contract" and to guarantee the extension of Third street, over, through, and across the Collins and Irvine property. It was also stipulated the sum they agreed to pay in the event Third street was not dedicated over and through the Collins and Irvine property, or extended to College street, as provided in the contract, should be considered as liquidated damages, and that this stipulation was the essence of the contract. The bond which they agreed to execute and deliver was executed and delivered by them to the Consolidated Realty Company, as trustee, in accordance with the terms and provisions of the contract. By a provision of the bond they "promise and agreed to pay the trustee a sum per foot equal in the average price realized at the auction sale to be held September 18th, 1928, per foot of the lots fronting on the south side of South Lawn of Wellington Subdivision plus 20% of said price per foot, if their contract was not carried out"; but if they shall faithfully perform the contract by the dedicating and opening, or having dedicated and opened, a strip of land 50 feet in width, to the city of Richmond, over, through, and across the Collins property and Irvine property to College street, for street purposes, within 12 months from the date of execution of the contract and bond, the obligations thereunder shall be null and void, "otherwise to remain in full force and effect."

It is set forth in the petition that the Consolidated Realty Company, as trustee, held its auction sale of the property on the south side of South Lawn, and that lots thereon, 257 7/10 feet in width, sold for $3,125, or an average price of $12.12 6/10 per foot, and, when the 20 per cent. was added thereto, amounted to $14.55 per foot for the 50 feet, or $727.50, and the terms of the contract and bond had been carried out by it, but that the 50 feet over the Collins property and the Irvine property to College street had not been dedicated nor extended by the defendants; thus the contract and bond had been breached, entitling it, as trustee, to recover the $727.50 in accordance with the terms of the contract and the bond. To the petition the circuit court sustained a demurrer.

The Richmond Hotel & Building Company, T. H....