Miller v. Butler
| Decision Date | 28 January 1905 |
| Citation | 49 S.E. 754,121 Ga. 758 |
| Parties | MILLER et al. v. BUTLER. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. It being the duty and within the power of the trustee to defend the estate committed to his care, he may institute or defend actions relating thereto without joining the cestuis que trust as parties, and in the absence of fraud they are bound by the judgment rendered therein.
2. If the cestuis que trust suffer loss by reason of the conduct of the trustee, the remedy is not to undo what has lawfully been done, but to proceed against the trustee, whose solvency and capacity was passed upon by the settlor in appointing him to represent the estate when it became necessary to deal with third persons.
3. While a demurrer admits facts properly pleaded, it does not admit a fraud charged, except as the facts establish or constitute fraud.
4. The petition in the present case stated no facts constituting fraud, nor did the subsequent breach of the contract under which the decree was taken amount to fraud which would relate back and vitiate a decree which was otherwise free therefrom.
5. The right of the plaintiffs to unite in a suit grew out of the unity of their interest under the trust deed.
6. The trustee and beneficiaries thereunder were not the promisees in the express contract sued on, and therefore had no right to maintain an action thereon in their own names.
7. The parties sued in one capacity under the trust deed. But the right to recover for the breach of the express contract was only in two of the parties, and in a capacity different from that in which they sued.
8. The causes of action and prayers for relief were dissimilar and antagonistic.
9. If by virtue of the interest created by the trust deed, the beneficiaries have any cause of action against the defendant alone, or against the defendant and the trustee, or the right to recover from the defendant an amount equal to the consideration alleged to have been given for the consent verdict, the same must be asserted in a separate and distinct suit.
Error from Superior Court, Troup County; R. W. Freeman, Judge.
Suit by Willis Miller and H. W. Miller against H. C. Butler. Judgment for defendant, and plaintiffs bring error. Affirmed.
D. J Gaffney and W. C. Wright, for plaintiffs in error.
F. M Longley, for defendant in error.
LAMAR, J. (after stating the foregoing facts).
Where the title to property is put in one person for the benefit of others, the latter take cum onere. The skill, ability, and solvency of the trustee operate to their advantage. But as to acts within the scope of his express or implied powers, they must suffer the consequences when they ultimately prove detrimental to the beneficiaries. The remedy in such a case is not to undo what has lawfully been done, but to proceed against the trustee (Clark v. Flannery, 99 Ga. 239, 25 S.E. 312), whose personal and financial fitness were passed upon by the grantor when giving the land. The very instrument which created the estate put forward the trustee as the person who was to represent those interested therein when it became necessary to deal with third persons. On this principle, cestuis que trust are bound by his nonaction for a time long enough for him to be barred by the statute (Civ. Code 1895, § 3773); they are bound by his loss of a loan made in good faith to a person then solvent (Walker v. Walker, 42 Ga. 135); by his receipt of funds which other prudent men then took as currency (Campbell v. Miller, 38 Ga. 304, 95 Am.Dec. 389); by a compromise honestly and in good faith made by him (Maynard v. Cleveland, 76 Ga. 53 [6]). They are likewise bound by the results of suits instituted or defended by him for the benefit of the estate. Gunn v. James, 120 Ga. 482, 48 S.E. 148. And this is so even if the judgment is rendered by default. Sanders v. Houston, 107 Ga. 59, 32 S.E. 610 (4). See Ferris v. Van Ingen, 110 Ga. 102, 35 S.E. 347 (6, 7), where the minor was held bound by the conduct of the mother, to whom a year's support for herself and child had been set apart.
In proceedings by a trustee to get a benefit personal to himself, or to secure the right to exercise a power not granted by the trust deed or not implied by law, the cestuis que trust must be made parties. Meyer v. Butt, 44 Ga. 468; Snelling v. American Freehold Co., 107 Ga. 854, 33 S.E. 634, 73 Am.St.Rep. 160. But it required neither express power in the deed, nor an order from the chancellor, to authorize or require the trustee to defend and preserve the estate committed to his care. That was a prime duty imposed by his appointment. Schley v. Lyon, 6 Ga. 535; Bourquin v. Bourquin, 120 Ga. 115, 47 S.E. 639. The beneficiaries under this deed were therefore not necessary parties to the suit brought by the trustee to preserve the corpus as against the claim asserted by Butler. In the absence of fraud or collusion, they were bound by the decree that the title of Butler was superior to that created for them by the deed of settlement. Sanders v. Houston Co., 107 Ga. 55, 56, 32 S.E. 610; Snelling v. American Freehold Co., 107 Ga. 854, 33 S.E. 634, 73 Am.St.Rep. 160; Knorr v. Raymond, 73 Ga. 750 (10a); Smith v. Cook, 71 Ga. 705.
But the plaintiff in error contends that, even if the decree in the former suit would ordinarily have bound them, it has no such effect here, because of the allegation in the bill that it was the result of fraud on the part of Butler. Where litigation is pending, and by the fraud of one party the other is prevented from making his defense, or induced to withdraw his plea, appeal, or motion for a new trial, or where by reason of fraud a judgment apparently conclusive is rendered, relief therefrom may be had by appropriate proceedings. Everett v. Tabor, 119 Ga. 130...
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