Martin & Earle v. Maxwell

• Decision Date: 29 April 1910
• Parties: MARTIN & EARLE v. MAXWELL et al.
• Court: South Carolina Supreme Court

67 S.E. 962

86 S.C. 1

MARTIN & EARLE v. MAXWELL et al.

Supreme Court of South Carolina

April 29, 1910

Appeal from Common Pleas Circuit Court of Anderson County; C. C Featherstone, Special Judge.

Suit by Martin & Earle, trustee for the estate of F. B. Maxwell bankrupt, against Mrs. Alice Maxwell and others. Decree for plaintiff, and defendants appeal. Affirmed.

Hood & Sullivan, for appellants. B. F. Martin, for respondent.

WOODS J.

This appeal is from a decree overruling a demurrer to a complaint the material allegations of which may be thus stated: On the 24th of February, 1908, the defendant F. B. Maxwell made an assignment of all his property for the benefit of his creditors to J. M. Paget. Thereafter, on the 18th day of March, 1903, Maxwell was adjudged a bankrupt by the District Court of the United States, and Martin & Earle, a partnership composed of B. F. Martin and C. B. Earle, became trustee for the bankrupt estate. This action was originally brought in the name of the partnership as trustee, but afterwards the referee in bankruptcy, with the consent of a majority of the creditors in numbers and amount, substituted C. B. Earle as trustee, and the complaint was amended to conform to the change. F. B. Maxwell, the bankrupt, is the grandson of F. C. Borstell and the son of Mrs. Alice Maxwell. By his will, Borstell made the following devise: "I will and bequeath to my daughter, Alice Maxwell, my lot on Brick Range with the storeroom, offices and all buildings connected therewith, and in view of the misfortunes of life which are incident to all persons however prudent and cautious they may be, and not from any distrust of my said daughter or her husband, I have concluded to make this a trust property, and therefore vest the fee simple of said lot and buildings in D. S. Maxwell, as trustee for her, to have and to hold all and singular the said premises to him and his heirs and assigns. In trust nevertheless for the following uses and purposes: That my said daughter shall have the right to use, occupy and possess the said property, to receive the issues, rents and profits of the same, for and during the term of her natural life, and at her death, the same to be sold and the proceeds to be divided among her children, share and share alike, the share of any deceased child, or more remote descendant to take the share to which the parent would be entitled if living as under the statute of distributions. And should the said trustee die or by any means a change should be necessary, my said daughter shall have the right to appoint a new trustee in writing without application to any court, who shall have all the rights conferred on the said D. S. Maxwell, and so continue to appoint new trustees as often as a contingency may arise." Mrs. Maxwell, the life beneficiary of the trust, is still living, and it is therefore uncertain whether at her death the bankrupt will take, or his children, or their children or descendants. Some years before Maxwell was adjudged a bankrupt, he undertook to assign his interest under the will to his aunt, Miss Von Borstell, now Mrs. Coleman; but this assignment is alleged to be invalid for lack of record or other notice to subsequent creditors. The trustee, believing Maxwell's interest in the trust estate to be salable, advertised it for sale, and thereupon received notice from the bankrupt that his contingent interest was not the subject of sale, and that "said sale would be contested." The allegation is made: "That by reason of such notification and claim and on the part of F. B. Maxwell and on the part of others on his behalf, a cloud has been and is now being cast upon the title of the interests of the plaintiff as trustee, and that on account of the resultant probability of the bidding for the said interest being chilled by virtue of such claim and cloud upon the title as aforesaid, the plaintiff withdrew said interest from sale and now desires the question of title and salability of the said interest to be determined and declared by the court, and the cloud from said title removed." The relief asked is that the cloud on the title be removed, that the court determine and declare the salability of the interest of the bankrupt, and order the plaintiff as trustee to sell and convey it.

In the decree of the circuit court this statement appears: "By consent of counsel, the demurrer to the original complaint is to be considered as made to the amended complaint." The first ground of demurrer to the original complaint was: "Because it appears from the face of the complaint that the plaintiffs have not legal capacity to sue for the following reason, to wit: Sections 44 and 45 of the act of Congress entitled 'An act to establish a uniform system of bankruptcy throughout the United States' provide that the creditors of a bankrupt estate shall appoint one or three trustees of the estate, who shall be individuals or corporations; whereas, it appears from the complaint that Martin & Earle, a partnership composed of B. F. Martin and C. B. Earle, and engaged in the practice of law, was appointed trustee of said estate by the creditors of the bankrupt estate." Act July 1, 1898, c. 541, 30 Stat. 557 (U. S. Comp. St. 1901, p. 3438). This was the only objection made to the capacity of the plaintiff to sue, and it was removed by the amendment alleging C. B. Earle to be the sole trustee and substituting his name as plaintiff for the firm name of Martin & Earle. Therefore the point made in argument that C. B. Earle was not properly appointed trustee of the bankrupt estate was not before the circuit court and cannot be considered by this court.

By the demurrer the bankrupt, Maxwell, submits that the complaint does not state a cause of action: First, because his interest under the will is contingent, and is therefore not the subject of sale; and, second, because the will provides that the land shall be sold on the death of his mother and the proceeds divided, and therefore his interest is personalty with respect to which an action to remove a cloud on title cannot be maintained. ...