Tait v. Anderson Banking Company

• Court: U.S. District Court — Southern District of Indiana
• Writing for the Court: Carl F. Morrow, Anderson, Ind., for defendant Anderson Banking Co
• Citation: Tait v. Anderson Banking Company, 171 F.Supp. 3 (S.D. Ind. 1959)
• Decision Date: 05 March 1959
• Docket Number: No. IP 58-C-304.,IP 58-C-304.
• Parties: Glen M. TAIT, Trustee, Plaintiff, v. ANDERSON BANKING COMPANY, Sofia Paul, Bulah Hoover and JoAnne Collins, Defendants.

171 F. Supp. 3

Glen M. TAIT, Trustee, Plaintiff, v. ANDERSON BANKING COMPANY, Sofia Paul, Bulah Hoover and JoAnne Collins, Defendants.

No. IP 58-C-304.

United States District Court S. D. Indiana, Indianapolis Division.

March 5, 1959.

Fred Albert, Minneapolis, Minn., for plaintiff.

Carl F. Morrow, Anderson, Ind., for defendant Anderson Banking Co.

Walter F. Jones, Jr., Indianapolis, Ind., for defendants Sofia Paul, Bulah Hoover and JoAnne Collins.

STECKLER, Chief Judge.

This cause came before the court upon the motion to dismiss filed by the defendants, Sofia Paul, Bulah Hoover and JoAnne Collins, and upon the "Answer in Interpleader," filed by the defendant, Anderson Banking Company. In its Answer in Interpleader, the defendant, Anderson Banking Company, seeks to add as an additional party defendant, one Clarence D. Rotruck, as Trustee, so as to have him "answer as to his interest."¹

That it would be better for the court and the parties presently before the court to have the additional party joined can hardly be questioned, but since the defendant, Anderson Banking Company, has not met the requirements of the federal interpleader statute, 28 U.S.C.A. § 1335, in that it has not deposited or paid into the registry of the court the sum here in controversy, or given bond payable to the clerk conditioned as required by the statute, the proposed interpleader cannot be acted upon by the court, particularly if it is to be treated strictly as an action for interpleader. Whether the proposed additional party is an indispensable party is another question. Since that question is not now before the court, suffice it to say that should the question be raised, it will be met and disposed of at the proper time. In view of what has here been said, the request of the defendant, Anderson Banking Company, to add Clarence D. Rotruck, as Trustee, is, for the present, denied.

Turning now to the motion to dismiss, it will be noted that it is premised upon the ground "that the court lacks jurisdiction of the subject matter and of the parties in that the plaintiff lacks capacity to sue."

The plaintiff, a nonresident of the State of Indiana, brings this action as the trustee of a testamentary trust under the last will and testament of Earl S. Collins. In his complaint the plaintiff alleges that John L. Collins, the cestui que trust, is an incompetent and an inmate of the Minnesota State Hospital at Hastings, Minnesota; that plaintiff has been duly appointed trustee by the District Court of Washington County, State of Minnesota, and has qualified and is now acting as said trustee of the testamentary trust created by the deceased, John (sic) S. Collins. He further alleges that he is entitled to possession and custody of the assets (remaining) of the estate of John (sic) S. Collins, subject to the jurisdiction of the District Court of the State of Minnesota; that though due demand has been made therefor, the defendant, Anderson Banking Company, has failed and refuses to deliver the assets of the decedent's estate to be used for the benefit of John L. Collins.

The decedent, Earl S. Collins, died testate June 25, 1956, while domiciled and residing in the State of Indiana. The complaint alleges that the plaintiff, Glen M. Tait, Trustee, and the cestui que trust, John L. Collins, in whose behalf the action is brought, are citizens of the State of Minnesota; that each of the defendants is a citizen of the State of Indiana, and that the matter in controversy exceeds, exclusive of interest and costs, the sum of $10,000. The action, therefore, is here by reason of diversity of citizenship and the amount in controversy pursuant to Title 28 U.S.C.A. § 1332. Thus the court has jurisdiction of the parties and the subject matter and must exercise that jurisdiction unless it is otherwise by law precluded from doing so. It could only be precluded from acting if this action and the proceedings in the state court are both actions in rem or quasi in rem and jurisdiction over the res has previously settled in the state tribunal, and if the action in this court would interfere with the orderly administration of the res in the state tribunal. Markham v. Allen, 1945, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256.

The pleadings before this court establish beyond question the following: The decedent, Earl S. Collins, while a resident of Madison County, Indiana, made his last will and testament, by which he provided that after the payment of his just debts, should his son, John Lewis Collins, survive him, then in that event, all of the remainder and balance of his estate of every kind and character and wheresoever situated, whether real estate, personal property or mixed, be given, devised and bequeathed to Glen M. Tate (sic) of St. Paul Park, Minnesota, as trustee, to be held by him in trust for and during the life of the decedent's said son, John Lewis Collins, for the use and purposes set out in the will. In his will the decedent directed that the trustee of the testamentary trust is to have the full and complete authority to take possession, custody and control of all of the property and assets of his estate which remains after the payment of the debts and obligations thereof and the costs of administration; that the trustee is to have the possession, custody and control of such property during the life of the decedent's son, John Lewis Collins, should said son survive the decedent, the testator. The trustee by the will is directed to use said estate in caring and providing for the decedent's son, and the trustee is authorized and empowered by the will to sell and dispose of said assets, to reinvest the proceeds of such sales in securities as may be approved by the court. No reference is made to the court that is to have the judicial control over the administration of the trust res. The will goes on to provide that the trustee is authorized and empowered to do any and all things necessary to provide the son with a home, medical care, food, clothing and any and all things necessary to provide the son the comforts of life, including such services as may be necessary for hospital, medical and nursing care. This particular item of the decedent's will concludes by saying,

"It is my intention by this Item of my Will to provide for the comfortable and reasonable maintenance and support of my said son during his life time even though it is necessary to use all the balance and remainder of my property and estate for such purposes, and to provide for my son a decent and respectable burial in the event of his death."

By Item III of his will, the decedent provided that any balance and remainder of the trust res not used for the care and benefit of the decedent's son as set out in the will, is to go to the decedent's nieces, the individual defendants named in this lawsuit, share and share alike, or in the event one of them should predecease the testator's son, then the share of such predeceased niece is to go to her children, but if such niece dies leaving no children, her share is to go to the decedent's surviving nieces or their children.

By Item IV of his will, the testator provided that in the event his son be not living at the time of his death, then the balance and remainder of the entire estate, after payment of debts, is to go to the named individual defendants herein, share and share alike, or to the surviving children of a predeceased niece, but if a predeceased niece leaves no children, then her share is to go to the surviving nieces or to their children.

The testator nominated and appointed Carl F. Morrow of Anderson, Indiana, as the executor of the will, but later by codicil he appointed the defendant, Anderson Banking Company, as the executor and requested that Mr. Morrow be engaged as attorney for the executor in the administration of the estate. The same attorney now represents the defendant banking company in this proceeding.

The pleadings further disclose that the decedent's estate in the state court has been fully administered and the executor is ready to file his final report. It is, however, also disclosed that the executor petitioned the state court to appoint a trustee "as provided by the will" in order to enable the executor to make distribution of the net estate. See Footnote 1 supra. From an entry of the state court dated September 16, 1958, attached to the Answer in Interpleader, it is shown that the state court, finding the testamentary trustee, Glen M. Tate, not to be a resident of the State of Indiana, but a resident of the State of Minnesota, further found "that it would be to the best interest of the trust herein, and all parties interested in said trust, that there be appointed, with the said Glen M. Tate, a co-trustee, and that said co-trustee be a resident of Madison County, Indiana." After finding that all of the assets of the estate were situated in Madison County, Indiana, the court proceeded to appoint Clarence D. Rotruck, a resident of that county, and Glen M. Tate, "as co-trustees to carry out the terms of said will, in the manner therein set forth." Bond was fixed in the amount of $32,000.00 and the co-trustees ordered to qualify in ten days by giving bond in that amount to be approved by the court. The court then appointed Carl F. Morrow as attorney in the administration of the trust.

By an order of September 26, 1958, the state court appointed Clarence D. Rotruck as sole trustee under the will of the decedent. This apparently was done, as the order discloses, by reason of the failure and refusal of the designated testamentary trustee to qualify as a co-trustee as previously ordered by the court and by notice from his attorney, Fred Albert, of Minneapolis, Minnesota, that he, Tate, declined to serve as a co-trustee.

It is evident from the pleadings that the defendant, Anderson Banking Company, as executor, has never paid over to Clarence D. Rotruck, the court appointed sole trustee, the balance of the estate...