In re Associated Cemetery Management, Inc., etc., 23092.
Decision Date | 16 June 1958 |
Docket Number | No. 23092.,23092. |
Parties | In re ASSOCIATED CEMETERY MANAGEMENT, INC., EMPLOYEES PROFIT SHARING TRUST, an Express Trust. |
Court | U.S. District Court — Western District of Missouri |
Robert L. Jackson, Kansas City, Mo., for bankrupt.
Oscar S. Brewer, William Coleman Branton, Kansas City, Mo., for interveners.
Wilbur L. Pollard, Kansas City, Mo., for intervening participants and beneficiaries of the trust.
On June 3, 1958, six (6) of the eleven (11) present Trustees of Associated Cemetery Management, Inc. Employees Profit Sharing Trust (hereinafter called "Trust") filed a voluntary petition in bankruptcy in this Court, praying that the above entity be declared a bankrupt. There then appearing to be no opposing interest to the granting of the prayer of that petition, an order was entered adjudicating the above entity a bankrupt and referring the proceedings to the Referee in Bankruptcy. Now, four (4) Trustees not joining in the above-mentioned petition have, by leave of Court, filed an intervening petition praying that the order of adjudication be set aside, and that the voluntary petition for adjudication of the above entity as a bankrupt be dismissed. Thirty-eight (38) other persons asserting rights as "participants" in the Trust Estate involved have, by leave of Court, jointly filed a similar intervening petition.
Tersely stated, the chief attacks directed by interveners at the voluntary petition and order of adjudication made thereon, are premised in the proposition that the "Trust" is not a "corporation", "person", or "moneyed business" subject to adjudication as a voluntary bankrupt within either the ambit of Section 1(8) or 4 subs. a, b of the Bankruptcy Act (11 U.S.C.A. §§ 1(8), 22, subs. a, b). That if the above entity is held to be such, the Trustees filing the voluntary petition had no power, right or authority under the Trust Agreement to petition this Court that the "Trust" be declared a bankrupt. Other grounds assigned in the intervening petitions need not be considered in light of the conclusions hereinafter reached.
The historical background of Associated Cemetery Management, Inc. Employee Profit Sharing Trust is intricate and involved, hard to state in any reasonable space and difficult to understand, because of the many perplexing and entangling arrangements affecting the trust estate and the relationship of the Trustees to some seventeen (17) corporations operating cemeteries in a number of states. Because of an apparent urgency for an early disposition of the interventions here allowed, and to keep this memorandum within reasonable bounds, we do not undertake to make any extended statement on that subject. However, to the end that a reviewing court may have a modicum of light regarding that matter, leave will be granted to the parties to make any memorandum filed in support and opposition to the intervening petitions a part of the record on appeal, so that the record may "truly disclose what occurred in the district court." Rule 75(h), F.R. Civ.P., 28 U.S.C.A.
The "Trust" in question was created by written agreement between Associated Cemetery Management, Inc. (hereinafter called "ACMI") and fifteen (15) individuals named as "Parties of the Second Part" who by that instrument are designated "Trustees." The expressed purpose of the Trust is stated to be the "establishment of a profit sharing trust for the employees" of ACMI. It would appear, however, from the record made in certain state court litigation that the "Trust" as administered by the Trustees has deviated from its expressed purpose, to say the least. As a consequence, a state court Receiver is now in charge of the assets of the Trust. Be that as it may, we find our jurisdiction over the "person" of "the legal entity resulting from the trust" (Art. I, 10) to be measured by the instrument creating that entity and the purpose avowed for the Trust therein. When so considered, we find that we are here concerned with a simple, private trust established for certain designated individuals, or class of persons, known, or capable of identification, by the terms of the instrument creating the Trust. (Art. II.) According to the trust instrument, ACMI was, from time to time, to make certain contributions to the trust fund. (Art. III.) All funds received by the Trustees, together with all income, profits, or increments thereon are required to be registered in the name of the Trust, but ownership thereof is vested in the Trustees. (Art. VII(a)). Those who may participate in the trust fund are identified in Art. IV of the Trust Agreement; and the manner and mode the benefits are to be distributed to them is set forth in Art. V. Suffice to say that notwithstanding the provisions of Art. IV(8) to the effect that the Trustees "shall distribute to each Participant—Current Participation Certificates" if any is allocable to a "Participant", by Art. X it is specifically provided:
The trust instrument provides that fifteen (15) Trustees elected in accordance with the provisions of Art. VIII are to administer the Trust. "Nevertheless, in the event of and during any vacancy the remaining Trustees shall have and shall be entitled to exercise all powers of the Trustees discretionary or otherwise." (Art. VIII (4)). By subsection 7 of Art. VII, it is provided:
Finally, by Art. XIV(3) it is provided that the trust "agreement shall be construed with and under the laws of the State of Missouri, and all rights of Participants shall vest in accordance with the laws of such state."
In light of the foregoing, we shall first consider the point raised by interveners as to the power of the six (6) Trustees to join in the voluntary petition for adjudication to act on behalf of the Trust. That seems to be a "horse that is easily curried" if the entity here adjudicated a bankrupt is a "person" within the meaning of the Bankruptcy Act. "The general rule is that when the administration of a trust is vested in co-trustees, they all form but one collective trustee, and ...
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