State v. Thresher

• Decision Date: 01 July 1904
• Citation: 58 A. 460,77 Conn. 70
• Court: Connecticut Supreme Court
• Parties: STATE v. THRESHER et al.

58 A. 460

77 Conn. 70

STATE

v. THRESHER et al.

Supreme Court of Errors of Connecticut.

July 1, 1904.

Appeal from Superior Court, New London County; Alberto T. Roraback, Judge.

Action by the state of Connecticut against Seneca H. Thresher and others on a probate bond. Prom a judgment for plaintiff for less than its demand, it appeals. Reversed.

Wallace S. Allis, for the State.

Seneca S. Thresher and Charles F. Thayer, for appellees.

PRENTICE, J. The complaint alleges, in substance, that the defendants Thresher, as principal, and Potter, as surety, in December, 1802, gave a probate bond in the penal sum of $1,200 for the faithful performance by Thresher of his duties as trustee under the provisions of the will of John Butler, deceased, to which position Thresher had been duly appointed. By the will, which is annexed to the complaint, the testator gave all his estate in trust, the trustee to pay over all the income thereof as it should accrue to the testator's widow, Mary Butler, and their son, John, Jr., during their lives, and upon their death to transfer, convey, and pay over the principal of said trust estate to John, Jr.'s, children, if any should be then living, the same to be theirs absolutely; but, if no children of John be then living, then, after the payment of $50 for masses and $20 to a friend, two-thirds of the fund is given absolutely to the testator's brother Edward, of Ireland, and one-third to the children of a deceased sister, Mary Connor, late of Massachusetts. The will does not provide that its provisions in favor of his wife should not be in lieu of her statutory right, contains no authority to the trustee to sell real estate, and has no residuary clause. The complaint further alleges that Thresher, as trustee, received $2,257.74 in cash of the principal of said trust fund; that, after having been trustee from December 21, 1892, to July 2, 1898, Thresher was succeeded by Edwin W. Higgins, who has since been, and now is, the trustee; that Thresher has paid over to Higgins $1,054.63 of the principal of said fund, and no more; that Mary Butler and John Butler, Jr., are both dead, the latter having died pending the action, and leaving no living issue; and that the suit was brought for the special benefit of said trustee, Higgins, said Edward Butler, and the children of said Mary Connor.

The answer contains three special defenses. The second and third are sufficiently noticed later. The fourth alleges that all of the testator's estate, save only such as was required to pay debts, funeral expenses, and expenses of settlement, and such as would be necessarily consumed in the using, consisted of real estate; that Thresher had accounted to the court of probate—and to its acceptance and approval—for all of this estate; that the expenditures thereof made by Thresher and so approved were chiefly for necessaries for the support of the widow, Mary Butler, until her death in June, 1894, and the support of the son, John, Jr., and his wife and child, and all with the knowledge and consent of said John, Jr.; that Edward Butler is a "foreigner," and has never been in the United States; that the present trustee, after the payment of all debts and charges, now has in his hands more than one-third in value of the principal of said estate, the personalty which would be necessarily consumed in the using not being included. The four statements of account alleged to have been presented to and approved by the court of probate are made a part of the special defenses, and annexed thereto, and all save the second purport to bear thereon the indorsement of approval by said John, Jr.

The plaintiff demurred to each of the special defenses. That to the fourth was sustained; the others overruled. The plaintiff thereupon filed replies to the second and third defenses, in which issues of fact were raised, and the allegation made that the residuary legatees under the will were not present, and had no notice to be present, at any of the proceedings in the court of probate in relation to the allowance of accounts of the trustee. To this allegation of new matter no rejoinder was made, and the case was heard to a jury upon the issues made.

Upon the trial the plaintiff claimed and offered evidence to prove, among other things, that the principal of said trust fund at the time of Thresher's appointment and qualification consisted of $1,136.03 in cash and a farm appraised at $1,400; that he received said principal in that form; that he afterwards sold the farm for $1,000.23, after deducting the expenses of sale; that Thresher, as trustee, charged himself with said two sums of $1,136.03 and $1,000.23, as appears by his accounts filed in the court of probate, making a total of $2,136.20; that Thresher had paid over to his successor, Higgins, only $1,054.63 of said principal; that he had refused to pay over the balance, to wit, $1,081.63, although demanded; that Thresher had appropriated said balance as shown in said probate accounts. No evidence was offered to prove that any proceedings had been taken in or by the court of probate with respect to the sale by Thresher of said real estate.

That the farm in question formed a part of the estate which went into Thresher's bands was conceded by both parties. In view of this fact the court instructed the jury that "the liability and undertaking of the surety, Mr. Potter, in this case, upon the bond declared upon, is not broad enough to make Mr. Potter liable for money received by this trustee from the sale of real estate of the deceased. The money derived from the sale of real estate cannot, under those circumstances, be made a part of the principal fund of this trust estate, so as to make the surety in this case liable therefor upon the bond now relied and counted upon." These instructions furnish the ground for the plaintiff's principal assignment of error. The claim of error is well founded. The bond in suit was conditioned upon the faithful discharge by the trustee of the duties of his appointment according to law. One of these duties clearly was to so manage the trust estate in his hands that it should not be misapplied or misappropriated. The title to the property which comprised the estate was in him. This was as true of the realty as of the personalty. The proceeds of the sale of realty would be held by him in no other right, in no other manner, and for no other purpose, than would the other personal estate in his hands. There would be no occasion for their separation, nothing to prevent their commingling. The language of the condition of the bond which the trustee as principal and the defendant Potter as surety gave contains no limitation of the liability imposed to the conduct of the trustee with respect to personalty or its proceeds. It contains nothing from which such limitation can be derived by construction. The argument attempted to be drawn from an assumed analogy between executors and administrators and trustees fails, because, if for no other reason, the analogy fails. The relation of an executor or administrator to the real estate of the deceased is quite different from that of a trustee to real estate in the trust fund. The former have no title to the property. It forms no part of the estate proper. They may have possession during the settlement of the estate. The property may, upon their initiative, be made subject by the court to demands arising out of the estate; but the legal title is elsewhere, and, until the court intervenes for some of the few reasons permitted by statute, there can be nothing in the executor or administrator beyond the mere right of possession. If real estate is sold, its proceeds form a special fund, which must not be mingled with the corpus of the estate, and must be accounted for separately. Gen. St. §§ 300, 353. The case is quite different with a trustee, and no reason can be suggested for the restriction of an obligation unlimited in its terms, guarantying the faithful discharge according to law of his duties, to duties as respects some portion only of the estate which is in his hands to hold, manage, and control for the purposes of the trust. The General Assembly doubtless had this distinction in mind when, in section 353 of the General Statutes, it provided for a bond when a sale of real estate by an executor or administrator was authorized, and provided for none upon a sale by a trustee. The omission from section 253 of a requirement for a bond was not, therefore, one of inadvertence. It was one justified in reason, and serves to indicate the interpretation which the Legislature placed upon the scope of the obligation of a trustee's bond. That interpretation was fully justified by the terms of the bond. It is doubtless true that the fact that a portion of the trust estate was in realty, which the trustee might not convey away without authority from the court of probate, influenced it in determining the amount of the bond to be required in this case, and that such considerations might fairly be taken into account in similar cases; but that proves nothing as to the range of liability under the bond. It only demonstrates that when authority to sell trust real estate is given to a trustee the court ought to inquire whether, under the new conditions, the amount of his bond is sufficient or ought to be increased. Gen. St. § 211. There is no reason, legal or practical, why a trustee who sells real estate should give bonds of two kinds, both intended to protect the same estate from his acts. On the contrary, practical considerations dictate that the simpler method of a single comprehensive obligation or uniform coextensive obligations only should be used.

The second and only remaining error assigned by the appellant arises out of the overruling of the plaintiff's demurrer to the second and third defenses. The error here claimed to have been committed, in view of the instructions given to the jury, is more technical than substantial,...