Roane v. Brodie, 7 Ark. 264 (1847)

Jan. 1847 · Arkansas Supreme Court

7 Ark. 264

Roane et al. Trustees R. E. Bank vs. Brodie et al.

Debt by fourteen original Trustees of the Real Estate Bank: plea, puis darrein continuance, that the plaintiffs had, since the commencement of the suit, ceased to be trustees, by limitation of the deed of assignment, and that five residuary trustees had been elected from their number, under the provisions of the deed, to whom the assets of the bank, including the notes sued on in this case, passed : demurrer to the plea — Held that the suit had abated : that on the election of the five residuary trustees, the legal interest in the causes of action vested exclusively in them, and the fact should have been suggested upon record, the suit abated as to the others, and progressed in the names of the residuary trustees.

Writ of Error to the Circuit Court of Washington County.

Debt, brought by Roane, Conway, Biscoe, Moore, Preston, Davis, Faulkner, Craig, Hill, Witter, Smith, Clark, Drennen and Gibson, as Trustees of the Real Estate Bank, against Brodie, Anthony and Leeper,and determined in the Washington circuit court, at the May term 1845, before Sneed, judge. The action was brought to the May term 1844.

The plaintiffs declared upon two promissory notes: the first, they alleged, was executed to the Real Estate Bank by the defendants on the 3d March 1842, due at six months, for $3330; and assigned by the Bank, on the 2d April 1842, to plaintiffs “and one Carey A. Harris, since deceased, as Trustees of said Bank, .and to their successors and survivors. The allegations as to the second note were similar, differing only as to the amount. Anthony was not served with process. At the return term Brodie and Leeper filed two pleas, the first usury, the second questioning the legality of the assignment of the notes to plaintiffs; and the cause was continued. At the May term 1845, they filed a plea puis darrein continuance in substance as follows:

“ Defendants come &c. &c. and say, &c. because they say that heretofore, to-wit: on the 2d April 1844, at &c. and since the commencement of this suit, and before this day, the said plaintiffs, pui’suant to a provision of the Deed of assignment executed by the said Bank to said plaintiffs, met at Little Rock and a majority of them did then and there elect, of their own number, five residuary trustees, to-wit: Henry L. Biscoe, Sandford C-. Faulkner, George Hill, John Drennen and Ebenezer Walters, who then and there became and are sole residuary trustees of the said Bank; and the defendants aver that all the books, records, property, choses in action, including the notes in the declaration mentioned, and all assets of the said bank, and of said plaintiffs, did then and there pass to and vest absolutely and unconditionally in the said residuary trustees, who did then and there acquire, by means thereof, and still have the legal and vested right to sue and implead the defendants of the said promissory notes in said declaration specified, and whatever of debt, interest and costs that may have accrued thereon, absque hoc that plaintiffs have any present legal or vested right or title in or to the said notes or either of them: and this defendants are ready to verify, &c.”

Plaintiffs demurred to the plea, the court overruled- the demurrer, they declined to answer over, and brought error.

3?ike & Baldwin, for the plaintiffs.

We once sued on certain notes, in the names of the successors of the original trustees, supposing the law to be as is avered by the plea jnw's dar. con. This court corrected our error, and in Roane et al. vs. Lafferty, 5 Ark. R. 465, made a decision under which we brought this action. We regret that the court below sends us here again, in consequence of its entertaining an opinion of the law on this point differing froi® the judgment of this court.

D1. Walkek, contra.

The only question, presented for the consideration of the court, is, whether the right of action existed in the plaintiffs after the election of residuary trustees: for if the legal interest had passed from them to the residuary trustees by the deed of assignment then it is a question not open for controversy that they can have no judgment. 5 Ark. R. 385: id. 98.

In this case the note upon which suit was brought was executed to the bank; who by deed assigned it to the plaintiffs to be and remain in them for two years; after which time it was to vest and be absolutely the property of the residuary trustees. The plea sets out these facts and the election of the five trustees, and the title which they acquired since the commencement of this suit. The demurrer admits the facts to be true as pleaded, and raises but one point — is the legal title in the notes in the 15 or in the 5 trustees? This court, in the case of Gray et al. vs. R. E. Bank, 5 Ark. Rep. 93, say that a plea of assignment after the commencement of the suit was properly interposed.

The same deed which gives to the plaintiffs their sole right to sue, qualifies and limits that right to two years. Such has been decided by this court to be the legal effect of the deed. In the case of Conway Ex-partc, 4 Ark. R. 361, this court said: “ The deed is valid and must stand together. The trustees take under the deed, and their title is limited in time, and made then to determine. After two years, the whole trusts vest absolutely in five residuary trustees.” And at page 347, the court say that “after the election of residuary trustees the whole trust estate shall vest 'absolutely and unconditionally in them.”

Upon examination of the case of Roane et al. vs. Lafferty, 5 Ark. Rep. 465, which is referred to by plaintiffs, it will be found in no wise to affect the question now before the court. Then no residuary trustees had been elected. The question was whether the surviving assignees and the successors of deceased assignees could maintain an action. The court decided that the right of action was in the surviving assignees alone. In this case the whole title of the fifteen ceased at the election of the residuary trustees, and that by the very deed which conferred title in them. To deny this is to deny the validity of the deed. The deed invalid, and the bank, not the plaintiffs, has the legal right of action.

Johnson, C. J.

The only point raised for the adjudication of this court is presented by the plea puis darrein continuance. The -disposition of this question must necessarily depend upon the construction which may be given to certain provisions of the deed of assignment. The Real Estate Bank, on the 2nd day of April A. D. 1842, made and executed a deed whereby the said bank assigned and set over all her property and assets to the plaintiffs and one Carey A. Harris, as trustees for the uses and purposes therein specified. The deed provided that, at the expiration of two years from its date, the said trustees or a majority of them should meet at Little Rock and there elect five of their number, who should thereafter be the sole trustees. And that all the grants thereby made to, the powers vested in, and privileges conferred upon said trustees, should, at the expiration of two years from the date of the deed, enure and pass to, and vest absolutely, fully and completely in said residuary trustees alone. And.it was further declared and agreed by and between the parties thereto, that all and singular the grants made to, and the powers and privileges vested in, and conferred upon said original fifteen, should be vested in, and conferred upon said residuary five, their successors and survivors to be exercised as thereinafter defined. These are the only provisions of the deed that bear directly upon the question before the court.

It is contended by the defendants that if the legal interest in the instrument sued upon passed to, and vested in the residuary trustees at the expiration of two years from the execution of the deed then the plaintiffs have no interest in the subject matter of the suit. It is a general rule of law that the legal interest in the subject matter of the suit shall be in the plaintiff at the commencement and there remain throughout the entire prosecution of it. If there has been a change of interest, since the institution of the action, the case then falls within the rule, and as a necessary consequence the de-fence set up ought to prevail. The trustees take under the deed and by its authority. When that authority is limited to a particular period of time and made then to terminate, of course the estate vests according to the condition of the grant. That condition is, that at the expiration of two years from the execution of the deed, the whole trust estate shall vest, solely and absolutely in five residuary trustees. Until the contingency happens upon which the estate vested, the whole trustees are seized with the legal fee subject to the condition of the deed. Whenever the condition takes effect their right to continue trustees depends upon their election to fill the office. The defendants assume that at the expiration of two years from the execution of the deed the interest of the original trustees ceased to exist. We do not conceive that the language of the deed will warrant such a conclusion. Let it be admitted, for the sake of the argument, that the deed had provided that in case ten of the trustees should resign, their places should not be filled, but that the other five should administer the whole fund. Would any one insist that, upon the happening of that contingency, there would be any change of interest? We apprehend not. The two cases are precisely similar. The five who were elected did not derive their rights and powers as trustees solely and exclusively from that election, but were thereby simply permitted to continue in the exercise of those conferred upon them by the deed at the time of its execution. The election was not designed to abolish, or in any wise impair the original trusteeship, but only to reduce the number of the trustees, and then to concentrate and consolidate the rights and powers of all into the hands of the lesser number thus elected. The election by which the number of original trustees was reduced from fifteen to five did not occasion such a change of interest as would operate to defeat the suit in the names of the latter in case they had taken the requisite steps to continue its further prosecution. It left it precisely upon the same ground as if the ten, who passed out, had resigned or experienced a natural death. In either case it would have devolved upon the plaintiffs to suggest the fact upon the record, and then to have proceeded in the names of the residue. The attempt to prosecute this suit in the names of the entire fifteen after ten of the number had ceased to exist as such, was clearly illegal; and consequently the circuit court decided correctly in overruling the demurrer to the plea and abating the suit. Judgment affirmed.