Dahlgren v. Pierce

• Decision Date: 06 January 1920
• Docket Number: 3291.
• Citation: 263 F. 841
• Parties: DAHLGREN v. PIERCE et al.
• Court: U.S. Court of Appeals — Sixth Circuit

263 F. 841

DAHLGREN v. PIERCE et al.

No. 3291.

United States Court of Appeals, Sixth Circuit.

January 6, 1920

Samuel F. Vinton died in 1862, a resident of Washington, D.C., but leaving an estate consisting largely of real estate in Ohio. From this he constituted a trust, which was to continue until a time which has not yet arrived. Provisions were made for the annual distribution of the income, and eventual distribution of the principal, among the beneficiaries respectively named. The trustee named in the will died, and thereby that clause of the will became active which provided that, in such event, a successor trustee should be appointed by the proper court. Accordingly, a bill was filed in the court below, showing jurisdiction by reason of diverse citizenship, and praying that the court appoint a successor trustee, and for such other relief as might be appropriate. Thereupon, and in 1864, the court took jurisdiction of the cause and appointed a trustee. Upon death or resignation successor trustees have been from time to time appointed ever since. Reports and accountings were filed by the trustee annually, or at frequent intervals, until about 1910, and upon the filing of each report an order of confirmation was entered. In 1910 a question arose as to whether certain coal royalties should be credited to income or principal. This question was presented to the court below by petition of the trustee, all the parties interested were heard, and the court determined it to be income and directed distribution accordingly.

One of the beneficiaries entitled to income, John V. Dahlgren, died in 1899, leaving one child, John V. Dahlgren, Jr., then about 7 years old. The share of income to which John V. Dahlgren Sr., had been entitled was continuously thereafter paid by the trustees to the guardian for the child, and, upon the distribution of the coal royalties, in 1910, it was expressly directed that the father's share should be paid to the son. Thereafter further annual reports were filed and confirmed, showing all disbursements, including these payments to the son, as they continued from year to year. In 1913 it seems to have been first suggested that the terms of the will were such that, upon the death of John V. Dahlgren Sr., his son did not succeed to his interest in the income, but that this share of the income became payable to the surviving members of the class; and accordingly the claim was made that all the payments of income to the guardian had been unauthorized by the will and should be refunded to the trustee.

Pursuant to this theory, the then trustee, Ulrica D. Pierce, in 1913, filed in the court below what she called a supplementary and ancillary bill. In this she set out all the proceedings which had been had in the original case during the nearly 50 years throughout which the court had been exercising jurisdiction over the trust, and alleged that the question of construction of the will, above stated, had arisen. She made parties defendant to this supplemental bill all living persons interested in the estate, and, among others, John V. Dahlgren, Jr., and his guardian, who was his uncle, Eric B. Dahlgren, and who was also interested, personally, as one of the beneficiaries, whose income would be increased if the objection to the payments to Dahlgren, Jr., were sustained. She prayed a construction of the will to determine especially whether Dahlgren, Jr., had been entitled and was now entitled to the income payments, and whether his guardian had received, on that account, payments which were not rightful, and she prayed a decree that, if such payments were found to have been wrongfully made, the guardian be ordered to repay the same to the trust estate. She also prayed, generally, for direction to her, as trustee, in the premises, and for general relief. The bill stated facts from which it appeared that Dahlgren, Jr., had become 21 years old shortly before the bill was filed; but it did not otherwise notice the existence if his majority.

All the parties named as defendants, except Dahlgren, Jr., entered their formal appearance to the suit, waived subpoena, and consented that the court exercise full jurisdiction for the purposes named in the supplemental bill. An order was also made, on January 30, 1914, by consent of the guardian, but without notice to Dahlgren, Jr., that the fund belonging to the ward and in possession of the guardian, and which had accumulated from these payments, and which was in the immediate control of a Surrogate's Court in New York, be, by the guardian, paid into court in this cause.

Thereupon, Dahlgren, Jr., entered a motion to set aside this order. The motion is quoted at length in the margin. ^[1] Pending hearing of this motion, complainant filed an affidavit or petition showing that Dahlgren, Jr., 'is not an inhabitant of the state of Ohio, and cannot be found within this district, and does not voluntarily appear herein,' and procured an order, pursuant to section 57 of the Judicial Code (Comp. St. Sec. 1039), directing that he should appear within the time fixed and that a copy of the order should be served upon him within the state of New York. This proceeding came to nothing, because the copy of the order was not served within the time fixed, and, upon a later and separate motion by Dahlgren, Jr., this order for appearance was vacated.

It sufficiently appears that the argument before the District Judge of Dahlgren, Jr's., motion to vacate the order of January 30, 1914, was continued from time to time, and that the questions involved were presented to him several times; that, in the course of these discussions, it was suggested (by whom it does not appear) that the motion ought to be granted, not only for the reasons therein stated, but because, upon the face of the papers, it appeared, first, that the bill was not a supplemental bill, but rather an original bill, and did not disclose the diverse citizenship necessary to support jurisdiction; and, second, that the meritorious question had become res judicata by the previous proceedings in the cause. Thereupon counsel for Dahlgren, Jr., filed a written brief and argument directed to these two suggested questions.

Eventually, and by an opinion filed January 3, 1916, and adhered to in a later opinion and order, the District Judge held that neither the grounds set out in the original motion nor these additional grounds were sufficient to justify vacating the order; that certain subsequent events made the order ineffective, for which reason it should be and was vacated; but that, by presenting to the court the motion and relying upon the first and second additional grounds above stated, Dahlgren, Jr., had entered his general appearance.

Thereupon he filed a motion to dismiss the bill upon various grounds, some of which go to the jurisdiction of the court, and some to the merits of the controversy, and the first of which is 'because the court never lawfully acquired jurisdiction over him. ' The introductory paragraph of this motion is quoted in the margin. ^[2] Upon this motion, the case was considered as if upon final hearing. Dahlgren's motion to dismiss was overruled and a decree was entered determining that the payments to the guardian had been wrongfully made, and directing that he repay the same to the trustee for a new distribution, to the exclusion of Dahlgren, Jr., and continuing, for later hearing, all questions as to the final distribution of the body of the trust estate. Dahlgren, Jr., appealed to this court. His assignments of error allege lack of any sufficient jurisdiction over him by the court below, and then, upon condition that this court decides to overrule such assignments, he further assigns error upon meritorious questions.

Lawrence Maxwell, of Cincinnati, Ohio, for appellant.

J. Warren Keifer, of Springfield, Ohio, for appellees.

Before WARRINGTON and DENISON, Circuit Judges, and WESTENHAVER, District Judge.

PER CURIAM.

1. The bill filed by the trustee was properly enough denominated 'supplemental and ancillary,' and the trustee thereby rightfully called upon the court below to give instructions to her as to her current duties and to construe the will as far as necessary for that purpose. The estate and the trust were rightfully brought into that court in the first instance, ^[3] and it had never lost jurisdiction for the due administration of the trust. The right to give instructions to the trustee is inherent in such situation and power to construe the will must underlie the right to give instructions. We do not understand these propositions to be seriously questioned, except that it is insisted that in so far as the bill sought a decree for the return of what had been paid to Dahlgren, Jr., it went beyond a truly ancillary character and became original. This insistence is not now important.

2. Cases may be conceived where the will might be construed and a decree made which would be effective to protect the trustees, and yet where it would not be necessary to make defendant every person claiming to be a beneficiary. Here Dahlgren, Jr., has been, for 15 years and by all parties concerned, recognized as a beneficiary. The doubtful question of construction affects him, and him alone, upon one side of...