Town of Carbon Hill v. Marks
Town of Carbon Hill v. Marks
Opinion of the Court
Complainant’s right, if it existed at all, rested on the mortgage of the town of Carbon Hill to Jefferson County Savings Bank, recorded in volume 100 of Mortgages, at page 479, in the probate office of Walker county, on January 13, 1906. The same is shown to have been released by the mortgagee of date January 21, 1910, and recorded in volume B, page 100, of the appropriate record in the probate office of said county.
The Jefferson County Savings Bank, failing in business, went into the hands of the superintendent of banks January 28, 1915, and all of its assets were transferred to the Jefferson County Bank, a corporation, on August 1, 1915. The latter bank on January 28,1916, was placed in the hands of A. E. Walker, as superintendent of banks, who was engaged in the liquidation of its affairs at the time the bill was filed. Said Walker as superintendent of banks, the Jefferson County Bank, the town of Carbon Hill, and the American Trust & Savings Bank (the trustee in last ■ mortgage by said municipality) are made respondents.
It is averred that—
The Amei-ican Trust & Savings Bank, as trustee for certain persons, firms, or corporations whose names and places of residence are unknown to complainant, “claims to own some right to, interest in, or lien or incumbrance upon, the pi'operty” iA question “by reason of a purported mortgage or deed of trust recently executed (the bill being filed December 29, 1916) to said American Trust & Savings Bank as trustee by said town of Carbon Hill; * *' * that any right, interest, or incumbrance which the said American Trust & Savings Bank, either for itself or for the benefit of any and all of its alleged cestuis que trustent, may have ox-claim in and to said property, or any 'part of it, was acquired subsequent to and with knowledge or notice of the lien, right, and incumbrance” of complainant “by reason of the execution of said wai-rants and said deed of trust securing the same”; and charges that complainant has a “right, title, interest, lien, or incumbrance upon and to all of said property so described ih said deed of trust * * * superior and paramount to that of said American Trust & Savings Bank and any and all of its cestuis que trustent, which should be declared and enforced in this cause.”
*624
The bill alleges an interest in the properties under the mortgage of the town of Carbon Hill to American Trust & Savings Bank, and that the owners of the debt secured by said mortgage are unknown to complainant. No required affidavit was made showing their names or residences, or that they were unknown; nor was diligence shown on confplainant’s part to ascertain the names and residences of the cestuis que trustent under said mortgage. They were not parties to the suit. It was not sought to make them respondents.'- No publication or notice was given to them, or such as bound them as owners. No' property of such parties was seized by attachment, nor statutory requirement complied with to perfect service on them as unknown or as nonresident defendants. There was no appearance in this suit by such real parties in interest. The decree, attempting to'injuriously affect their interest or property rights, is not binding on them, and presents reversible error on its face. Such is the result whether they are residents or nonresidents of the -state. The making of American Trust - & Savings Bank (the trustee in said mortgage) a defendant was an attempt on the part of complainant to effectuate service upon the real parties in interest, and to bind them (by the decree)-as Cestuis que trustent by .the appearance of the trustee. This the decree erroneously undertook to do. It did not contain a provision that the relief granted was without prejudice to the rights of such cestuis que trustent or owners of the evidences of debt by the town of Carbon Hill to American Trust & Savings Bank as trustee, and secured by the mortgage of tha(t municipality to said bank. In equity, such cestuis que ‘trustent are the real owners of the debt and mortgage securing the same, and as such parties in interest were indispensable parties to the suit.
In Lebeck v. Ft. Payne Bank et al., 115 Ala. 447, 453, 22 South. 75, 77 (67 Am. St. Rep. 51), the court observed-that in a court of law a trustee is regarded as the owner of the property, and his representation is for the cestui que trust; that if there is dereliction on his part- injuriously affecting the interest of the cestui que trust, or if he is incompetent to properly assert and defend his legal rights in legal forms, or is unfaithful therein, the cestui que trust may apply to equity to control his conduct and restrain the jurisdiction of the legal tribunals, to the end of the full and complete protection of the cestui que trust.
“Hence, an action at law which proceeds to judgment against the trustee, unaffected by fraud, accident, or mistake, binds the cestui que trust. Frank v. Myers, 97 Ala. 437. But in a court of equity an entirely different doctrine obtains. There the cestui que trust is regarded as the owner of the property, and his own representative in reference thereto. He is, there, separate and distinct from the trustee, and, in a sense, the adversary of the latter. He prosecutes and defends his own interests, and shapes, through the decrees of the court, the conduct of the trustee. Hence, unless there be something special in the terms of the trust, which confers upon the trustee the power and duty to represent, in courts of equity, the beneficial interests; unless a power of attorney, so to speak, is conferred upon him to represent those interests, in those forums, a decree in equity, affecting the trust estate, rendered against the trustee, in the absence of the cestui que trust, is not binding upon the latter. The cestui que trust is an indispensable party to such proceedings, and he cannot be ■concluded unless he is made a party. Collins v. Lofftus (10 Leigh, 5), 34 Am. Dec. 719, and extended note at page 722, citing many authorities.” Stone v. Hale, 17 Ala. 557, 52 Am. Dec. 185; Walker v. Miller, 11 Ala. 1067, 1086; Sprague v. Tyson, 44 Ala. 338; Story’s Eq. Pl. (9th and 10th Ed.) §§ 207, 210, 211; Nunnelly v. Barnes, 139 Ala. 667, 36 South. 763; 1 Daniell, Ch. Pr. 267; 1 Barton, Ch. Pr. §§ 35, 74; Sims, Ch. Pr. § 142.
For analogous authorities see Langley v. Andrews, 132 Ala. 147, 31 South. 469; Hambrick v. Russell, 86 Ala. 199, 5 South. 298; Prout v. Hoge, 57 Ala. 28; Heirs and Adm’r of Hitchcock v. U. S. Bank of Pa., 7 Ala. 386; Clark v. Reyburn, 8 Wall. 318, 19 L. Ed. 354; Richardson v. Davis, 21 Grat. (Va.) 706, 710, 711; Simon v. Ellison, 90 Va. 157, 17 S. E. 836; Lyman v. Petitioner, 11 R. I. 157; 23 Cyc. 1246.
An examination of the cases impresses one that the rule announced by our court is rested upon reason and authority. The fact that the cestui cannot take the initiative in a -suit without alleging that he has requested the trustee to bring the same, and that the trustee has refused (Bailey v. Selden, 112 Ala. 593, 605. 20 South. 854; Blackburn v. Fitzgerald, 130 Ala. 524, 588, 30 South. 568; Arnett v. Bailey, 60 Ala. 435, 438), does not militate against the view that in equity not only the trustee but the cestuis que trustent are necessary parties that the decree may bind each. ■
The decree of the circuit court is reversed, and the cause is remanded, that testimony be taken when all necessary parties are before the court.
Reversed and remanded.
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