State ex rel. Carmichael v. Bibb

• Court: Alabama Supreme Court
• Writing for the Court: KNIGHT, Justice.
• Citation: State ex rel. Carmichael v. Bibb, 234 Ala. 46, 173 So. 74 (Ala. 1937)
• Decision Date: 04 March 1937
• Docket Number: 7 Div. 429
• Parties: STATE ex rel. CARMICHAEL, Atty. Gen., v. BIBB et al.

173 So. 74

234 Ala. 46

STATE ex rel. CARMICHAEL, Atty. Gen., v. BIBB et al.

7 Div. 429

Supreme Court of Alabama

March 4, 1937

Rehearing Denied March 25, 1937

Appeal from Circuit Court, Calhoun County; R.B. Carr, Judge.

Bill in equity by the State of Alabama, on the relation of A.A Carmichael, as Attorney General, against John D. Bibb individually and as trustee under the will of L.H. Kaplan deceased, and others. From a decree sustaining a demurrer to the bill, complainant appeals.

Reversed rendered, and remanded.

Ross Blackmon, of Anniston, and Mulkey & Mulkey, of Geneva, for appellant.

Roy M. Woolf, of Anniston, for appellees.

KNIGHT Justice.

This appeal is prosecuted from an interlocutory decree sustaining a demurrer interposed by certain of the respondents to a bill filed by the State, on relation of the Attorney General, against John D. Bibb, individually, and as trustee under the will of L.H. Kaplan, deceased, and others.

In a former decision of this court, on appeal by the original trustee seeking a construction of the will of said Kaplan, this court held the bequests made to the Jewish Hospital for Consumptives at Denver, Colo., and to the Jewish Hospital at Jerusalem were charitable bequests, and sustained the validity of the same. No question was raised in that case as to the validity of the charitable devise for the purpose of establishing the hospital at Anniston. National Jewish Hospital for Consumptives v. Coleman, 191 Ala. 150, 67 So. 699, decided November 7, 1914.

Let it be understood in the outset that, in the consideration of this case, on this appeal, we have treated all averments of the bill, which are well pleaded, as true, as we must do on demurrer. Whether the evidence on a hearing of the cause supports these averments is a matter of future determination.

The bill seeks the establishment and enforcement of a public charity, the removal of said Bibb as such trustee, an accounting by him, the appointment of a trustee by the court to execute the trust in place of said Bibb, and for the sale for partition of certain real estate for division among the alleged joint owners.

The respondent Bibb, in his individual capacity and as trustee, filed his separate demurrer to the bill, but this demurrer was overruled by the court, and no appeal was taken from this decree, and hence the propriety of the court's ruling in this respect is not now before us.

There was a joint demurrer by the respondents A.P. Agee, Ellen Agee Foster, Caroline Agee Rowan, Mary Blackwell Wells, J.V. Blackwell, H.B. Blackwell, Louise Blackwell, and Julia Blackwell Patton, to the bill as a whole, which was sustained by the court, and it is from this ruling that the present appeal is prosecuted.

It appears from the bill that one L.H. Kaplan, for many years a resident of the city of Anniston, in the State of Alabama, died seized and possessed of a considerable estate, and leaving a last will and testament, which was admitted to probate and record, in common form, in the probate court of Calhoun county; the exact date of its probate is not shown, but it was upward of twenty years ago.

By the ninth paragraph of the will, the testator made the following testamentary provision:

"I devise to said trustees, the block on Noble Street, between Eighth and Ninth Streets, being block number one hundred and thirty, according to Anniston City Land Company map of the city of Anniston, in trust for the following purpose:

"The said block is devised to said trustees in trust for the following uses: a one-half interest therein to the Jewish Hospital for Consumptives at Denver, Colorado; a one-fourth interest therein to the Jewish Hospital at Jerusalem; and a one-fourth interest therein to be used for the purpose of establishing a free non-sectarian public hospital in the city of Anniston, Alabama, to be known as the Kaplan Hospital."

By the will Thomas W. Coleman, A.H. Sheppard, and M.B. Wellborn, all of Anniston, were appointed trustees to carry out and execute the trusts created by it.

By the eleventh paragraph of his will the testator devised and bequeathed to the named trustees all of his property, to be held by them for the uses above set forth, except that he gave the property which he owned in Asia, just outside of the city of Jerusalem, direct, free of any trust, to his brother-in-law Mordecai Max Ben Sin.

By the same clause, he made the following consecutive provisions:

"The annuities above bequeathed are not to be charged on any specific portion of my estate, but on the whole thereof, except the said block one hundred and thirty (the property devised in trust for the hospitals mentioned in item nine of the will) the income from which is to be used for the three charities aforementioned.

"In case of my (any) failure of any legacy, I devise the remainder is to go as above directed to said three charities in the propositions (proportions) shown, as residuary legatees and deviatees (devisees). In case of the failure of any bequest devised to any of said charities, so that the same cannot share, in the residuum of my estate, then the remaining charity or charities, which shall be competent to take said estate, shall be the residuary legatee in the proportion above shown, that is to say, if there is a failure as to the Denver Hospital, then my residuary legatees shall be the Anniston Hospital and the Jerusalem Hospital in equal shares; if failure as to the Denver Hospital and the Jerusalem Hospital, then my residuary legatee shall be the Anniston Hospital, above described to be established; if failure as to the Jerusalem Hospital then the residuary to the Denver Hospital and the Anniston Hospital, to be known as the Kaplan Hospital, in the proportion, two-thirds to the Denver Hospital and one-third to the Anniston Hospital." (Italics supplied.)

It is to be here noted, from the averments of the bill, that during the time that A.P. Agee was trustee, under appointment of the court, in executing the trust created by the said will, he and his wife, Mrs. Ellen S. Agee, and his law partner, D.C. Blackwell, "acquired by purchase the devise to the Bicur-Cholim Hospital at Jerusalem, and A.P. Agee and John D. Bibb purchased the one-half interest in said block one hundred and thirty devised by said Kaplan to the Jewish Hospital for Consumptives at Denver, Colorado." We shall have occasion to refer hereinafter to these alleged purchases.

It appears that the trustees named in the will, viz., Thomas W. Coleman, A.H. Sheppard, and M.B. Wellborn, after entering upon the discharge of their trust duties, resigned their office as trustees on or about October 17, 1917, and A.P. Agee was duly appointed as sole trustee in their stead. That said Agee duly qualified as such trustee, and continued to act in that capacity "down to and including 28th day of May, 1920, at which time he resigned." That said Agee made final settlement of his trusteeship in the circuit court of Calhoun county, in equity, at which time it was ascertained that said Agee, as such trustee, "held funds in trust for the Kaplan Hospital as designated by said will amounting to $6,037.00 in cash and 'gilt-edge' securities."

It is alleged that upon the resignation of said Agee, as such trustee, on May 28, 1920, the court appointed, as his successor in said office of trustee, the respondent John D. Bibb, who duly qualified as such trustee, and entered upon the duties of said office, and that said Agee thereupon turned over the property, funds, and securities to said Bibb. That Bibb, upon his qualification as such succeeding trustee, collected the rents issuing from the entire trust property, to wit, block 130 in the city of Anniston, from June 5, 1920, to February 1, 1928, at which time it is averred "the other owners of the property assumed the management and control of said block and the collection of the rents issuing therefrom, from which time the said Bibb has not had further control of said block."

It is charged that said Bibb, during the time he collected the rents, had collected rents in the aggregate amount of $65,049.84, one-fourth of which inured to the Anniston, or Kaplan Hospital fund. This one-fourth, therefore, amounted to $16,262.46, less commissions and expenses.

It is further charged that said Bibb, as such trustee, has charged for commissions and expenses against the rental fund, during the period from June 5, 1920, to February 1, 1928, the aggregate sum of $35,252.43. It is further charged that said Bibb as such trustee has received for the Anniston or Kaplan Hospital the following amounts: Cash from his predecessor, $6,037; collected by himself as rent due the Kaplan Hospital, $16,262.45; and rentals turned over to him by A.P. Agee and Louise Blackwell from February 1, 1928, $10,233.09--making the total amount collected by said Bibb for and on account of the bequest to the Anniston or Kaplan Hospital $32,532.54, without taking into account any interest that may have been collected by said trustee on any loans made by him of said funds.

With reference to the handling of said funds, it is averred "Whereas, owing to the incompetency and lack of business ability and knowledge of the correct usages of business and adequate knowledge of real estate values in Anniston, Alabama, and vicinity, the said trustee has dissipated, misloaned and misspent said trust fund until he has on hand as securities representing the assets of this trust estate at the present time as above itemized, fifty-eight mortgages aggregating a total value of $33,905.46, which are probably not worth more than forty per cent. of their face value, many of the mortgagors being dead, and others utterly and hopelessly insolvent, and the mortgage security of little or no...