R. W. Owen, J. G. Owen, Frank G. Owen, A. R. Owen, Rust-Owen Lumber Company
| Decision Date | 16 June 1924 |
| Docket Number | 24744 |
| Citation | 263 S.W. 423,304 Mo. 330 |
| Parties | R. W. OWEN, J. G. OWEN, FRANK G. OWEN, A. R. OWEN, RUST-OWEN LUMBER COMPANY, PAUL D. RUST, DORA D. RUST, LOUISE RUST RUSSELL, ETHEL H. BEEBE, FLORA SMITH GILCHRIST, as Sole Executrix and Heir of Estate of F. R. GILCHRIST, GRACE GILCHRIST FLETCHER, RALPH E. GILCHRIST and GILCHRIST, THREE STATES LUMBER COMPANY, CORA S. SMITH, Residuary Legatee Under Last Will of HERBERT SMITH, CORA S. SMITH, Guardian of CATHERINE M. SMITH and ADELAIDE H. SMITH; W. A. GILCHRIST, Appellant |
| Court | Missouri Supreme Court |
Motion for Rehearing Denied June 16, 1924.
Appeal from Mississippi Circuit Court; Hon. Frank Kelly Judge.
Reversed and remanded (with directions).
Herbert Pope, Edgar R. Rombauer, James A. Finch and W. H Fitzhugh for appellant.
(1) If the trust of 1902 is valid, as the circuit court finds, and the trustee has power to carry out the trust by selling the trust property, as the court also finds, then the court has no power to terminate the trust before its purpose is accomplished or to set aside to the defendant, as a beneficiary under the trust, a separate tract of land as a substitute for his share of the proceeds to be realized from a sale of all the land, as provided in the trust instrument. (a) The finding that the trust is valid and that the trustee has power to sell the trust properly removed the only difficulty theretofore existing in the carrying out of the trust and also removed all ground for the termination of the trust by the court. (b) A court of equity has no power to terminate an active trust which can be carried out in accordance with its terms where all parties in interest have not consented to such termination. Shelton v. King, 229 U.S. 90; Gibson v. Gibson, 280 Mo. 519, 533; Stevens v. De La Vaulx, 166 Mo. 20; Easton v Demuth, 179 Mo.App. 722; Smith v. Smith, 70 Mo.App. 448, 451; Ewing v. Shannahan, 113 Mo. 188, 196; Newton v. Rebenack, 90 Mo.App. 650, 657; Cuthbert v. Chauvet, 136 N.Y. 326. (c) A court of equity will not undertake to grant relief to parties who are able to secure the relief to which they are entitled without the aid of a court, particularly where they have made no attempt to secure relief for themselves and, as in the case at bar, have prevented the trustee from securing it for them. (d) There is no finding of any ground for the removal of the trustee and the appointment of a successor, and there is therefore no ground for accomplishing this result indirectly by terminating the trust and so preventing the trustee from fulfilling his active duties. (e) A court of equity cannot arbitrarily deprive a beneficiary of a trust of property rights to which he is entitled by terminating an active trust and setting off for him, without his consent, a separate tract of land in place of his share of the proceeds derived from a sale of all trust property, and such action is invalid because it deprives the beneficiary of his property rights without due process of law. Myles Salt Co. v. Iberia Drainage District, 239 U.S. 478; Twining v. New Jersey, 211 U.S. 78; C. B. & Q. Railroad Co. v. Chicago, 166 U.S. 226; Hubbard v. Hubbard, 77 Vt. 73. (2) Even if this court, of its own motion, raises the question of the validity of the trust of 1902 and determines that it is invalid, nevertheless the plaintiffs are not entitled to have the deed to the defendant in 1902 set aside. The court will leave the parties where they have placed themselves and the defendant will be able, as in the past, to sell and convey a good title to the property. (a) This court held in the quo warranto case that legal title was vested in W. A. Gilchrist, and it could not legally have held otherwise. Hart v. Sansom, 110 U.S. 151; Arndt v. Griggs, 134 U.S. 316; Roller v. Holly, 176 U.S. 398; Grannis v. Ordean, 234 U.S. 385; State v. Holtcamp, 245 Mo. 655. (b) Plaintiffs are not now entitled to ask the court to set aside the conveyance of 1902 from the Three States Lumber Company to W. A. Gilchrist. Harriman v. Northern Securities Co., 197 U.S. 244; St. Louis, Vandalia & Terre Haute Railroad Co. v. Railroad Co., 145 U.S. 393; Dent v. Ferguson, 132 U.S. 50; Traders' National Bank v. Steere, 165 Mass. 389; Duane v. Merchants Legal Stamp Co., 231 Mass. 113; Miller v. Larson, 19 Wis. 463; Sauerherring v. Rueping, 137 Wis. 407; Continental Securities Co. v. Northern Securities Co., 66 N.J.Eq. 274; Levy v. Davis, 115 Va. 814; Edwards v. Boyle, 133 P. 233; Ward v. Hartley, 178 Mo. 135; Zeidler v. Schneider, 181 Mo.App. 277; Ullman v. St. Louis Fair Association, 167 Mo. 273; Ober v. Howard, 11 Mo. 425; George v. Williamson, 26 Mo. 190; Sell v. West, 125 Mo. 621; Creamer v. Bivert, 214 Mo. 473; Scudder v. Atwood, 55 Mo.App. 512; Hall v. Edwards, 222 S.W. 167.
Bundy, Beach & Holland, Fordyce, Holliday & White and J. M. Haw for respondents.
(1) The judgment in the quo warranto action adjudging this trust conveyance to be void and the ownership of these lands notwithstanding such conveyance, to be still in the corporation, became binding not only on the corporation itself, which was the nominal party in that action, but also upon the trustee and his beneficiaries. In consequence thereof it became not only the right but the duty of the corporation to divest itself of the title to these lands, in compliance with the laws and Constitution and the express mandate of this court. The corporation's conveyance, therefore, to its stockholders, on January 20, 1921, was a lawful conveyance and the grantees therein, by virtue thereof, became the owners of the legal title to these lands. The court, therefore, in this action, upon the application of plaintiffs, properly adjudged this trust to be terminated and properly directed a partition of the lands. (a) The trustee was not a stranger to the title involved in the quo warranto action, but sustained privity of estate with the defendant corporation, and was therefore in a position, though not nominally a party to that action, to make himself bound by the judgment therein by participating in the defense thereof as trustee. Henry v. Woods, 77 Mo. 271, 281; Sherin v. Brackett, 30 N.W. 551; Boughton v. Harder, 61 N.Y.S. 574; Patton v. Pitts, 80 Ala. 373, 376; Hartford Fire Ins. Co. v. King, 73 S.W. 71. (b) The trustee, had he so desired, might have intervened in the quo warranto action, on behalf of himself and his beneficiaries, and therefore was in a position, though not nominally a party to that action, to make himself bound by the judgment therein, by participating in the defense thereof as trustee. 21 C. J. 856, sec. 17; Commonwealth ex rel. v. Railroad Co., 114 Pa. St. 340. (c) The undisputed testimony shows that the trustee, though not nominally a party to the quo warranto action, did in fact defend that action, not only as an officer of the corporation, but as trustee, and he thereby made himself a party to the action and became concluded by the judgment therein. Riescheck v. Klingenhoefer, 91 Mo.App. 430; Landis v. Hamilton, 77 Mo. 554; Mooneyham v. Wynatt, 222 S.W. 451; Wood v. Ensel, 63 Mo. 193; State ex rel. v. Barker, 26 Mo.App. 487; Titus v. Development Co., 264 Mo. 229; State ex rel. v. Stone, 269 Mo. 344; State ex rel. v. Homer, 249 Mo. 58; Locke v. Commonwealth, 113 Ky. 864; Hines v. Hines, 147 S.W. 774; Bruebaker v. Bidstrup, 163 Mo.App. 646; Davidson v. Real Estate & Inv. Co., 249 Mo. 474, 503; First National Bank v. Anna Burns, 199 S.W. 282; Balke v. Swift, 53 Mo. 85; Bank v. Varnum, 176 Mo.App. 78; Todd v. Ferguson, 161 Mo.App. 624; Leahy v. Merc. Trust Co., 247 S.W. 397; McMillan v. Barber Asphalt P. Co., 151 Wis. 50; Connell v. Kaukauna, 164 Wis. 471, 491; Sturdivant Bank v. Huters, 87 Mo.App. 534. (d) The trustee had sole and complete management and control of the defense in the quo warranto action. He stood at that time in a three-fold relation toward the property involved in that litigation. First, he was a stockholder, officer and manager of the defendant corporation, which was the grantor of the property and the creator of the trust; second, he was the grantee and trustee of this property; and, third, he was also one of the beneficiaries of the trust. (e) As an officer and stockholder of the corporation he became concluded by the judgment against the corporation in the quo warranto action. Todd v. Ferguson, 161 Mo.App. 624; Davison v. Real Estate & Inv. Co., 249 Mo. 474, 503; 2 Black on Judgments (2 Ed.) sec. 583. (f) His rights in some of his aforesaid three-fold capacities having been involved in the decision in the quo warranto action, the judgment therein bound him in all of his said capacities. 23 Cyc. 1245. (g) Having by his own act made himself a party as trustee, in the quo warranto action, the judgment in that action not only bound the trustee, but also his beneficiaries. Raphael v. Railroad Co., 201 F. 854; Cooley v. Kelley, 96 N. E. (Ind.) 838; Kerrison v. Steward, 93 U.S. 155; Miller v. Butler, 121 Ga. 758; Connell v. Kaukauna, 164 Wis. 471. (h) The fact that he, as trustee, and the corporation were not adversary parties of record in the quo warranto action, does not prevent his being bound by the judgment therein. Comstock v. Keating, 115 Mo.App. 372; Fiene v. Kirchoff, 176 Mo. 516; Wiggin v. St. Louis, 135 Mo. 558. (i) Holding the trustee and his beneficiaries concluded by the judgment in the quo warranto action would not result in invalidating the deeds which the trustee had theretofore made to various small purchasers. Louisville School Board v. King, 107 S.W. 247, 15 L. R. A. (N. S.) 379. (j) The estoppel of this judgment was in issue, but, if not, it is now too late for the trustee to object on that score, because all the testimony upon which the estoppel is founded was offered and received without objection and was in fact, in a large part at least,...
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