Earle v. Detroit & Security Trust Co.

• Decision Date: 20 November 1931
• Parties: EARLE et al. v. DETROIT & SECURITY TRUST CO. et al. DETROIT & SECURITY TRUST CO. et al. v. EARLE et al.
• Court: Florida Supreme Court

138 So. 65

103 Fla. 618

EARLE et al. v. DETROIT & SECURITY TRUST CO. et al.

DETROIT & SECURITY TRUST CO. et al. v. EARLE et al.

Florida Supreme Court, Division B.

November 20, 1931

Suit by the Detroit & Security Trust Company and others against Herbert R. Earle and another. From certain interlocutory orders made in the circuit court, defendants appeal, and complainants cross-appeal.

Affirmed in part, and reversed in part, and cause remanded in accordance with opinion. Appeal from Circuit Court, Brevard County; W W. Wright, judge.

COUNSEL

Smith Crofton & Wilson, of Titusville, and David Peel, of Melbourne, for appellants.

Kay Adams, Ragland & Kurz, of Jacksonville, for appellees.

OPINION

DAVIS J.

The appeal and cross-appeal in this case raise but one proposition which is necessary to be discussed in this opinion. That is the authority of a chancellor to make an order before the pleadings are settled requiring and directing a defendant in a pending chancery cause to appear before the chancellor to answer oral interrogatories and submit to an examination concerning the allegations of a bill of complaint upon which extraordinary relief pendente lite and final is being sought with reference to a trust estate being handled by him.

After filing their amended bill of complaint seeking to have the appellant Earle deposed as trustee of an alleged 'pure' trust and another trustee substituted, the complainants propounded certain written interrogatories to the defendant Earle to which interrogatories the complainants required said Earle to file his answers under oath within ten days, presumably as required by sections 2734, 2735, R. G. S., sections 4406, 4407, C. G. L.

Thereafter the defendant Earle and his wife filed a motion to strike the interrogatories and interposed exceptions thereto. The complainants made it appear that the interrogatories were propounded in an effort to invoke the procedure provided by sections 4406 and 4407, C. G. L.

The court was of the opinion that those sections were not applicable in chancery cases and struck the interrogatories, but the complainants were allowed to propound other interrogatories to the defendant Earle under other laws of Florida or under Federal Equity Rule 58 (28 USCA § 723), as complainants might be advised. This order forms and basis of the cross-appeal.

Thereafter on December 10, 1929, counsel for complainant requested the court to make an order directing the defendant Herbert C. Earle to appear before the court at Sanford, Fla., at such time and date as might be agreeable to the court to answer such interrogatories as should be propounded to him by the court or by counsel of record for either of the parties material to or concerning the matters alleged in complainants' amended bill. Upon this application the court made an order requiring the defendant Earle to be and appear before the court at chambers in Sanford, Fla., December 23, 1929, at 10 a. m., there to answer such interrogatories as might be put to him by the court by counsel for the complainant or defendants touching the matters raised by the bill of complaint. Ten days' service of this order was required to be made prior to the date set for the hearing. This order forms the basis for the direct appeal here involved.

The defendant Earle, upon learning of the order for oral interrogation, made a motion to suppress, vacate, and set aside such order. This the court refused to do, and such refusal is also made a basis of appeal by Earle.

The amended bill of complaint set up the making of what is commonly known to the bench and bar as a 'Massachusetts' trust for the development and exploitation of certain land known as 'India-Atlantic By-The Sea.' In this bill it was charged that Earle, the trustee, had made withdrawals from the trust assets in his charge of considerable sums of money and thereby breached the terms of the trust and forfeited his right to remain any longer as trustee thereof. The instrument of writing by which the trust was evidenced contained a provision that a certain deed executed by Earle and wife to the Security Trust Company, dated May 25, 1923, should become effective upon the death or legal disability of said Herbert R. Earle before full execution of the trust, thereby vesting the further execution of the trust in said Security Trust Company as successor trustee by agreement of the parties in interest.

The prayer of the bill was that the defendant Earle be deposed as trustee; that the custodian of the properties who had been appointed by the court be deposed; that a new trustee be placed in charge of the property as contemplated by the agreement of the parties upon the disability of Earle; that an accounting be had by Earle concerning the affairs of the trust estate, and for other and further appropriate relief.

Complainants made application to the court in the nature of a motion for extraordinary relief pendente lite for leave of the complainant trust company to record the deed transferring the functions of trustee from Earle to the trust company which was to take effect upon Earle's disability, it being alleged that the misconduct of Earle, coupled with his insolvency as alleged in the bill, constituted such disability as warranted the granting of this application. The chancellor, however, ruled that the application for such relief was in the nature of an application for a decree which could only be made at final hearing and refused to pass upon the application because it was premature. This action of the court is also embraced in the cross-appeal brought here by the complainant.

The present suit related to a trust, and the object of it was to compel the defendant named therein to give an account of the performance of his trust functions, and also to surrender up any part of the trust estate which might be in his hands should be court deem it proper to appoint a new trustee.

Section 4919, C. G. L., section 3132, R. G. S., prescribes the practice which shall prevail in courts of chancery in this state in the absence of 'provisions of law' or 'rules of practice.' The statute thus appears to make a distinction between 'practice' and 'rules of practice.' See Delbeck Investment Co. v. Raff (Fla.) 136 So. 683, decided at this term, opinion filed September 19, 1931.

Under the ancient practice of courts of chancery in England it appears that the complainant in chancery cases originally did not pray any relief or any process, but merely left the chancellor to send for the defendant or to examine the defendant, thus bringing the defendant before the court in order that whatever relief was awarded should operate against the defendant in personam. See Story's Equity Plead. (10th Ed.) par. 12 et seq.; Henderson's Chancery Practice, par. 72.

Thus it will be seen that under the practice of courts of chancery in England which would be applicable to courts of chancery in Florida, in the absence of a rule of practice in this state or a statute of this state or a rule of practice prescribed by the federal courts, it is permissible for the chancellor to require a defendant to personally appear before him, there to be examined concerning any matter relating to the subject matter of the suit.

This 'practice' of the English chancery courts operates by analogy only in our courts under section 4919, C. G. L., supra, and does not operate at all where there exists, either in the federal courts or in our own courts, a 'rule' or statute which covers the same subject and prescribes a different course of procedure.

All the proceedings in this case which are before the court on this appeal appear to have transpired subsequent to the enactment and taking effect of chapter 13660, Acts of 1929, which amends section 4910, C. G. L., section 3124, R. G. S., so that the same reads as follows:

'If an answer shall be considered insufficient, in whole or in part, the complainant's solicitor may demur thereto or any part thereof, at any time before the next rule day or at such time as the judge may allow; and the defendant may be examined on interrogatories and be committed until he sufficiently answers them; or the plaintiff may move the court to take so much of the bill as is not answered as confessed, and may file his replication, obtain testimony and proceed to hearing in the usual manner.'

As will be noted, the 1929 act provides that if an answer filed by the defendant is insufficient, in whole or in part, the defendant may be examined on interrogatories and may be committed until he sufficiently answers such interrogatories. This statute seems to change the pre-existing practice to the extent of making an examination on interrogatories a step which is only permitted to be taken in the event the answer filed by the defendant is considered insufficient. To this extent the 1929 statute appears to conflict with Federal Equity ...