Summary
In Matter of Livingston (34 N.Y. 555, 569) the general rule was stated: "As a general rule, petitions can only be presented in an action already commenced, or in a matter over which the court has jurisdiction by some act of the Legislature or other special authority."
Summary of this case from In re CossOpinion
March Term, 1866
William F. Allen and Alexander S. Johnson, for the appellants.
John W. Edmonds, for the respondent, Livingston.
John H. Reynolds, for Haskins.
It is important, to a proper consideration of the several questions presented by these appeals, to understand the position which the respective parties occupy toward each other, and the equity of each to invoke the aid of the courts under the trust deed, for the protection of their respective rights.
This trust deed was voluntary on the part of William Winter, securing to himself the rents, issues and profits of a real estate, confessedly worth $100,000, during his life, with remainder over to his heirs; and on default of heirs, to his nephews Mortimer and Henry W. Livingston. As he has no children, it may perhaps be assumed that the nephews in question take a vested remainder under our statute; which doubtless gives them a standing in court, to invoke its aid to protect the corpus of the estate from destruction by the unlawful acts of the tenant for life.
So far as the deed creates a trust in Birdsall to receive the rents and profits, and apply them to the use of William Winter during his life, it is expressly authorized by statute. (1 R.S., 728, § 55.) So far as it requires the trustee to assign or convey the legal estate to those who shall be entitled in remainder under the trust deed, his services will be useless; as the transfer will be made, if at all, by operation of the statute of uses and his office as trustee will then terminate. (1 R.S., 730, § 67.)
As against William Winter, the creator of the trust and the beneficial owner of the rents, issues and profits of the legal estate during his life, the court will not, I think, interfere in behalf of the nephews to give them more than is secured to them by the very terms of the settlement. (Hill on T., 83; Hayes v. Kershaw, 1 Sandf. Ch., 258.) Although the deed of settlement is silent on the subject, doubtless those claiming in remainder under it are interested in the management of the estate; and the tenant for life owes them certain duties which a court of equity may enforce. A tenant for life, in respect to these duties, stands in the nature of a trustee to the remainderman; but this is an implied and not an express trust. ( Joyce v. Gunnels, 2 Rich. Eq., 260.)
If the tenant for life is guilty of any species of waste, calculated materially to injure or destroy the value of the estate in remainder, it is perfectly competent, and, in truth, is the constant practice in this country, as well as England, for the remainderman to resort to the prompt and efficacious remedy by an injunction bill. (4 Kent, 77.) Upon such a bill a court of equity might require security of the trustee for the due performance of those duties which the law casts upon him in respect to the preservation of the corpus of the trust estate.
Since it has become impossible, under our statutes (1 R.S., 730, § 65), for the trustee in such a case to alien or dispose of the real estate to the injury of the remainderman, there are but few occasions when it can be necessary or proper for the court to interfere with the management of the trust, except on behalf of the beneficial owner for life.
In this case, William Winter, the creator of the trust deed, is the only person who is legally interested in the execution of the express trusts therein mentioned. There are no express trusts in favor of the petitioners. The obligation on the part of the trustee to preserve the corpus of the estate for the benefit of those entitled in remainder, does not rest upon any express trusts, but is to be implied, if it exists at all.
Keeping in view the relations which these several persons sustain toward each other, I will now proceed to notice the several questions presented by the appeals.
I. It will be seen that William Winter, the equitable owner of the estate for life, and who alone is interested in the execution of the trusts mentioned in the deed of trust, is a party defendant in these proceedings. I am not aware of any case where the court has entertained a petition for the removal of a trustee under our statutes at the instance of those entitled in remainder and against the wishes of the cestui que trust for life. Nor do I think the statute intended to authorize such a proceeding. Section 55 (1 R.S., 728) authorizes the creation of an express trust "to receive the rents and profits of lands, and apply them to the use of any persons during the life of such person." This is such a trust. Section 70, taken in connection with section 72, provides that upon the bill or petition of any person interested in the execution of an express trust theretofore authorized, the Court of Chancery may remove any trustee who shall have violated or threatened to violate his trust, or who shall be insolvent, or who shall, for any cause, be deemed an unsuitable person to execute the trust.
It was said by the chancellor, in the matter of Van Wyck (1 Barb. Ch., 565), that, independently of these statutory provisions, the court had no power upon a mere petition to discharge a trustee, and that the usual course of proceedings was by bill. (Hill on T., 194.)
As a general rule, petitions can only be presented in an action already commenced, or in a matter over which the court has jurisdiction by some act of the legislature or other special authority. Under the English statutes sundry cases of trust were provided for, in which a remedy might be had by petition; but the courts uniformly held that the remedy could not be extended by construction to include other cases. In ex parte Brown (Cooper, 295), Lord ELDON discharged an order that had been made upon petition, stating that, in his opinion, constructive trusts were not within the meaning of the statute. And in ex parte Skinner (2 Mer., 453), it was held that the statute was meant to extend only to cases of plain breach of trust, committed in their character as trustees. (And see Hill on T., 193, 3 Dan. Ch. Pl. Pr., 2099.)
It is quite certain that our statutes, authorizing persons interested in the execution of express trusts to apply for the removal of the trustee on petition, were only intended to embrace that class of persons who were immediately interested and who might be injured by a violation of the trust, or by the insolvency or other incompetency of the trustee.
In this case I think William Winter was the only person interested in the execution of the trust, within the meaning of the statute, and that it was erroneous for the court below to entertain a petition for the removal of Birdsall from the trust, except upon the application of Winter.
It does not, however, appear that the appellants took any objection of this character. Perhaps they should have moved to dismiss the petition in order to avail themselves of the objection; and it may be too late, after litigating the petition upon the merits, to raise such a question. If, however, the court below was without jurisdiction in the first instance, as I am inclined to believe, I think it is not too late to raise the objection, although it is well settled that a stranger could not avail himself of it. ( People v. Norton, 9 N.Y., 176.)
II. If it should be conceded that the proceedings by petition were regular, or that jurisdiction was acquired in consequence of the appellants neglecting to take the objection in time, then it will be necessary to examine into the matter of the petition before we are prepared to pass upon the other questions raised by the appeal. It contains a great many things which are quite foreign to the matter in hand, and many of its most important statements rest upon information and suspicion. It contains, however, one statement, which, if sustained by the evidence (and I am not prepared to say that it is not), would induce the court to refuse at once to entertain any proceedings to give effect to the trust deed in favor of these respondents, or any other of the parties claiming under it.
It is said in the petition that William Winter was incompetent to devise real estate. This is stated by Mr. Livingston in his letter to Judge EDMONDS but a few days before the execution of the trust deed. The petitioners also say, "that said William Winter being a person of very weak understanding, incapable of transacting business or managing his own affairs, so credulous as to believe the most improbable and absurd statements, and so timid as to be easily frightened into almost any course of action that might be suggested to him, easily alarmed and imposed upon by any designing person, said Birdsall has taken advantage of William's weakness of mind and character, and of his (Birdsall's) own relations as such attorney and trustee toward him, for the purpose of defrauding, deceiving and misleading him; that, at the time the execution of said trust deed of December 23, 1863, was obtained by Birdsall, * * * and for more than a month prior thereto, he had been acting not only as the agent, attorney and counsel of William, but as his guardian and custodian; that said Birdsall has abused the confidence reposed in him by William solely for his own gain and advantage; that by falsehood, trickery and deceit he has induced and compelled William to avoid all communication with and keep away from his own relatives, acquaintances and other advisers, whilst by like fabrications and false statements, he has prevented such relatives from calling upon William, he (Birdsall) keeping himself in communication with and deceiving both parties; * * * that the execution of said trust deed was procured by Birdsall through fraud and deceit practiced by him upon said William, and upon said Livingston and his counsel.
Gilead P. Nash (Livingston's partner), on his affidavit annexed to the petition, says, that he "never had any doubt of the fact that said William is a person of unsound mind."
It appears that Livingston himself proposed that Winter should execute a deed of trust, although he preferred somebody besides Birdsall for trustee. He finally consented to have Birdsall's name put in. This, however, says Mr. Nash, was "a matter of necessity; for Mr. Birdsall repeatedly stated, both to me and Livingston, that he would not allow William to execute the deed unless it should be made to him."
William Winter, however, in his affidavit, states that he executed the trust deed without any compulsion, fraud, duress, threats or misrepresentations of any kind upon the part of Birdsall or any other person, and that he is still satisfied with it and with Birdsall as his trustee; that he selected Birdsall by his own choice, although Birdsall at the time informed him that he was, comparatively speaking, a poor man; that he made inquiries as to Birdsall's character and integrity, and became satisfied, and is still satisfied, that Birdsall will carry out the said trust deed with faithfulness and honesty. He further states that he executed the said trust deed "believing it to be the best thing he could do to get away and be relieved from the annoyances and harassings of said Livingston, and believing thereby he could have the quiet and rest from vexation he so much desired to have and desires."
Mr. Birdsall, in his affidavit, states that Livingston urged him to advise William Winter to make a trust deed; that Livingston offered him $2,000 for his trouble if he would get him to execute such an instrument as he (Livingston) had prepared for him; that Livingston said he did not offer it as a bribe, but that William Winter was very close, and would not pay him (Birdsall) for his services. Birdsall says he declined this proposition. He says that Livingston told him frequently that he (Birdsall) ought to make from $2,000 to $3,000 a year out of the trust, and that he (Livingston) would not take charge of it for less than that sum; that in the month of May, 1864, Livingston stated to him that it would be impossible for Birdsall and Livingston to get along together, and it would be better for all parties for Birdsall to resign his trust; that Livingston offered him $5,000 if he would resign, and $5,000 more if he (Birdsall) would get him (Livingston), or some person he (Livingston) would select, appointed trustee, the moment the order for such appointment was entered. Birdsall says he declined, whereupon Livingston got angry and swore he would have him removed whatever it might cost. Mr. Livingston, in a subsequent affidavit, denies that he ever made any offers of the kind.
The case tends very strongly to show that the deed of trust was obtained by fraud and undue influence, both Livingston and Birdsall cooperating together to induce William Winter to execute it; and as it is expressly charged in the petition that Winter was of unsound mind when it was executed, and that the deed was obtained from him by fraud and undue influence, it was clearly the duty of the court below to dismiss the petition, unless the judge was fully satisfied that the trust deed was the voluntary act of a sane man, competent to make it. A court of equity will never interfere in favor of a party who takes under an instrument executed by a person who is non compos, or when executed under duress, or under terror or apprehension, nor suffer them to take effect if they are accompanied by any circumstances of imposition or apprehension. (See Hill on Trustees, 156, et seq.)
In order, therefore, to sustain the orders made for the removal of Birdsall as trustee, and the appointment of Haskins to carry out the trusts, the petitioners must, of necessity, concede that William Winter was not only competent to make the deed of trust, but that it was fairly and voluntarily made, when he was neither under duress or restraint. Otherwise, the court would doubtless set it aside on complaint of William Winter, or of his committee.
III. Assuming, however, that William Winter was competent to create the trust, and that the deed is valid, there is but little left in the case, as made out by the petitioners, upon which to found an order for the removal of Birdsall as trustee. In my opinion, the court ought not to remove him against the wishes of William Winter, who has an undoubted right to give away the rents and profits of the trust estate to whom he pleases, without interference from the petitioners. He may, if he pleases, pay Birdsall's debts out of these same rents and profits; and it is not for Livingston to prevent him from doing so. But it is claimed that William Winter is liable to be imposed upon; that he is an imbecile, and incompetent to manage for himself. Without undertaking to deny that this may be, in a measure, true, what is the result? It does not advance the case of the petitioners, or aid in sustaining the proceedings in the court below. If the court erred in affirming the verdict of the jury, upon the commission de lunatico inquirendo, that error cannot be corrected in these proceedings. From the nature of the evidence tending to establish the lunacy of William Winter, there is no doubt that, if he is now incompetent to manage his own affairs, he was equally so when he made the deed of trust; and this would lead to a result quite foreign to the expectations of the petitioners, who claim under it, as we have already had occasion to notice.
Now, whether Birdsall is insolvent or not, whether he is using a portion of the rents and profits for his own benefit, and to pay his debts, in order to relieve himself from insolvency, is a question between him and William Winter, and the creditors of William Winter. When the petitioners state that William Winter's debts are accumulating upon him by the negligence and dishonesty of the trustee, they are interfering with a matter over which they have no control whatever. It will be time enough for Livingston to make such complaint when he is constituted one of the committee of the person and estate of William Winter; and, until that time arrives, he has no claim upon the court to interfere with William Winter or his trustee. As yet, William Winter has not been pronounced a lunatic or a person of unsound mind, by the judgment of a competent court, and we must, therefore, concede to him the same right we concede to others who are the owners of a large estate — the right to dispose of it by gift, grant or devise, to whomsoever he pleases, without being called to account for it in a court of equity by those who have no legal control over him or his estate.
In my opinion, therefore, the order or decree of Justice LEONARD of July 1st, 1864, denying the application of the petitioners, was right; first, upon the ground that the petitioners had no right to apply by petition for Birdsall's removal as trustee; and, secondly, upon the merits.
As the rehearing, before Justice JOSEPH F. BARNARD, was substantially upon the same state of facts, it may not be necessary to proceed any further in the discussion of these appeals, as we must necessarily come to the conclusion that the subsequent decree, removing Birdsall as trustee and the appointment of Haskins in his place, cannot be sustained upon any theory of the case.
IV. As this is, however, a very extraordinary case, I will proceed to notice the proceedings subsequent to the decree of Justice LEONARD dismissing the petition. The very statement of the case, with the various orders made by the various judges during its progress to this court, is sufficient to attract our attention and create some suspicions, at least, that the forms of law have been strangely perverted to accomplish objects which could not have been attained by the regular and orderly administration of justice.
(1.) I will first notice the order for a rehearing granted by Justice GEORGE G. BARNARD at Special Term. It is called an order granting leave to the petitioners to renew their application; but it is doubtless an order for a rehearing of the petition upon the merits. With respect to applications made in an action, they may doubtless be made by petition as well as by motion; and the practice is the same, whichever form the application takes. (1 Barb. Ch. Pr., 578.)
In relation to special proceedings authorized by the Code, when the remedy may be had by petition under section 1, the rules governing ordinary motions do not apply; but instead of obtaining leave to renew the application, the defeated party was required, by the former practice of the court, to apply for a rehearing in the same manner as upon a decree or decretal order. (1 Barb. Ch. Pr., 353.) An order, made upon motion, was not a proper subject for rehearing, but might be discharged by application by motion to the court. But if the order of Justice G.G. BARNARD is treated as an order made on motion, I think it was made in violation of the practice of the court; and certainly in violation of rule 23 of the Supreme Court, which prohibits a second application upon the same state of facts to be made to any other judge than the one who decided the original application.
2. It is, at least, questionable whether a rehearing upon the merits can be granted, since the Code of Procedure, except upon an appeal to the General Term. Doubtless the court at Special Term may, at any time within a year, relieve the party from a judgment, order, or other proceedings taken against him through his mistake, inadvertence, surprise or excusable neglect, upon terms, or grant a new trial in the cases provided for in civil actions, according to the rules and practice of the court. But there is no provision in the Code, that I am aware of, where the trial is by the court, which authorizes an application to the court at Special Term for a new trial upon the merits. It may be said, however, that, by another provision of the Code, in cases left unprovided for, the former practice may be resorted to. (§ 468.) Certainly the Code has not attempted to regulate the practice in special proceedings, except upon appeals. By the Laws of 1854, p. 592, certain provisions of the Code are made applicable to special proceedings. That act provides that an appeal may be taken to the General Term from the final order of the Special Term in special proceedings, and that the practice on such appeals shall be conformed to §§ 327, 329, 330 and 332 of the Code. By reference to these sections, it will be seen that the appellate court may, upon such appeal, reverse, affirm or modify the order appealed from, and may order a new trial. It is doubtful, I think, whether the court at Special Term can entertain an application for a new trial upon the merits, as that power seems to be vested in the court at General Term.
V. But, if the former practice is still in force in respect to rehearings in equity in this State, I am of the opinion that the court below erred in granting a rehearing in this case. 1. It was not a case for a rehearing. A rehearing will not be granted on account of the discovery of new evidence or new matter, nor because the importance of the testimony has only been ascertained since the decision, nor to obtain cumulative testimony, nor for the purpose of contradicting the adverse party's witnesses. (1 Barb. Ch. Pr., 354, 355, and cases cited.) Certainly the power to grant a rehearing cannot be arbitrarily exercised; and, if the judge grants it upon insufficient grounds, it is an error which should be and will be corrected by the appellate court whenever the question is properly brought before it for review.
2. But, in my opinion, there is another grave objection to the order of Justice BARNARD, granting a rehearing of the petition, except before the same judge who denied the original application. Chancellor WALWORTH, in Winship v. Pitts (3 Paige, 260), says that, after an application has been made to the vice-chancellor in open court, and been denied by him, it is irregular to bring the same question before the chancellor, except by way of appeal; and, after a decree had been made by the chancellor, it is not competent for any vice-chancellor to make an order or decree which would, directly or indirectly, discharge, alter or modify the same. ( Greenwich Bank v. Loomis, 2 Sandf. Ch., 70.) Nor will one vice-chancellor modify or interfere with a decree made before another vice-chancellor. ( Astor v. Ward, 3 Ed. Ch., 371.)
So in England; a cause heard before the chancellor may be reheard before the chancellor or his successor in office. If it has been heard before any of the other judges, it may be reheard before the judge who heard it before, or before the lord chancellor, in which case it is generally termed an appeal, although, in fact, it is only a rehearing. When the statute (5 Vic., ch. 5) created two additional vice-chancellors, it was made one of the provisions of the act, that one vice-chancellor could not rehear any matter in which an order or decree had been made by another vice-chancellor. (3 Dan. Ch. Pl. Pr., 1617, 1618.)
Although we have no statute which expressly prohibits one judge from rehearing a matter decided by another judge, the rule is so well established and is so important for the protection of parties from unjust vexation, that if it has not already been, it is full time it should be incorporated into the equity law of this State.
3. But there is another ground upon which it cannot be permitted; and that is the doctrine of res adjudicata. We have tribunals to whom parties may appeal from an erroneous decision made by a judge at Special Term; and if parties conceive themselves aggrieved by the decree of one judge, they must take their remedy by appeal, instead of applying to another judge to rehear their complaints.
VI. I will now examine into the validity of the orders made by Justice J.F. BARNARD upon the rehearing by which Haskins was substituted trustee in the place of Birdsall, as well as the subsequent orders made to carry that order into effect. If, as I have already attempted to show, the order of Justice LEONARD was right, it follows that the subsequent order of Justice BARNARD cannot be sustained; for it was made upon substantially the same state of facts. But it is unnecessary to rest the case here; for pending these proceedings before Justice J.F. BARNARD upon the rehearing, the parties entered into a valid and binding agreement by which the controversy was settled; a settlement which was clearly just and advantageous to all the parties. This settlement, if the trust is valid, ought to receive the sanction of a court of equity, and should be enforced against all the parties.
It was suggested on the argument, that the settlement was not binding upon the petitioners because they are infants; but a court of equity will enforce it if it is made for their benefit, as this clearly was. ( Rogers v. Cruger, 7 Johns., 557; Savil's Case, Moseley, 224.) It was, therefore, right and proper that the proceedings should be discontinued, as they were, by an order of the Supreme Court at Special Term upon the stipulation of all the parties. This order was made before Justice LEONARD upon the basis of the settlement, and it in terms vacated all the orders which had been theretofore entered in the proceedings.
Notwithstanding the settlement and a formal discontinuance of the proceedings, Justice JOSEPH F. BARNARD, subsequent thereto and on the 12th of April, 1865, made an order on the rehearing, removing Birdsall as trustee and appointing John B. Haskins in his place. On application of Mr. Haskins, he afterward made another order, at Poughkeepsie, directing his order of the 12th of April, 1865, to be entered as of the 31st of August, 1864. It is not to be disguised that the object of this last order was to overreach the settlement. It was founded upon the affidavits of Mr. Haskins and the clerk of the court. Mr. Haskins swore that he had the original memorandum order of Justice BARNARD, as follows: "The ____ day of ____, 1864," and that "the erasure of figure four in the year, and the insertion of April 12th, 1865, was an error of the clerk, and such order should be corrected and entered as of August or September, 1864." The clerk swore that about a week or two after the rehearing, in August, the papers came to him from Justice BARNARD by express; and that subsequently he received the decision written on some of the affidavits and on the motion, which was found in the judge's private room. He also swore that the papers were received and said order made as early as August, 1864. That all this was substantially false in every important particular, plainly appears by the affidavits of the clerk and others, subsequently made and used upon the motion of Birdsall to set aside the order. The clerk then swore that the order of the 12th of April, 1865, was on that day given to him by Justice George G. Barnard; on which day he filed all of the papers in this matter, together with said order, and marked the whole of them; and that he received the memorandum of the decision before referred to, subsequent thereto and several days thereafter; that he did not find it in the judge's private room, but the same was handed to him in the latter part of April. He further says that his former affidavit was made under a misapprehension. But this is not all. Birdsall states in his affidavit, and in this he is corroborated by Herman Fox, that on the 18th of April, 1865, he examined the papers on file, and the memorandum in question was not then on the paper on which it was subsequently found to be indorsed. These facts were not contradicted before Justice SUTHERLAND on the part of Haskins or Livingston. I think, therefore, it is quite apparent that the order of Justice JOSEPH F. BARNARD, antedating his order of removal to August 31st, 1864, was made under an entire misapprehension of the facts.
But whether the order was fraudulently obtained or not, the fact is put beyond doubt by the affidavit of the clerk, that no order was published by Justice JOSEPH F. BARNARD removing Birdsall as trustee, until the 12th of April, 1865. It could not take effect prior to that time by force of another order made afterward.
There is another order which claims our attention, granted upon the motion of Mr. Haskins by Justice SUTHERLAND at Special Term, setting aside the order of Justice LEONARD already referred to, discontinuing the proceedings. This order was made at the same time that the judge denied the motion to set aside the order of April 12, for the reason, doubtless, that it was regarded as an obstacle in the way of Haskins getting possession of the trust property under the order of April 12th. The reasons of Justice SUTHERLAND for setting aside the settlement of October 3, 1864, are not given in the case; but the grounds upon which the application was made deserve attention. Mr. Haskins states in his affidavit that Birdsall pretended that the proceedings in the matter of the petition were discontinued, but that "as he is informed by Livingston and verily believes to be true, the said Birdsall obtained his signature to the said stipulation and agreement of the 3d of October, by falsely and fraudulently pretending and representing to said Livingston that the motion argued herein for said Birdsall's removal on the 23d 24th and 25th days of August, before the Hon. J.F. BARNARD had been denied, and by other false representations and pretenses." Birdsall, however, in his affidavit denies this, and states further that "on the 30th day of May he called on Livingston and showed him Haskins' affidavit, and that Livingston then told him that all of said affidavit in relation to what Haskins alleges was said to him by Livingston as herein referred to is false and untrue." Mr. Livingston did not make an affidavit in the matter, but it appeared by the affidavits of Mr. Courtney, as well as that of Mr. Birdsall, that the settlement was fairly made by the mutual consent of all the parties interested. Surely the court would not set aside the settlement and stipulation for fraud, when the party who is alleged to have been defrauded does not complain of it.
There are many other things, which might be noticed, tending to reflect upon the character of the proceedings under review, but the facts already referred to are sufficient, I think, to enable the court to dispose of these appeals.
VII. It is claimed, however, that no appeal will lie in this case, or that, at least, this court will not review the order removing Birdsall as trustee, as it rests in the discretion of the Supreme Court, and is not subject to review in this court.
As I have already stated, an appeal is given by the Laws of 1854, p. 592, § 1. By section 330 of the Code, which is made applicable to such appeals, this court may reverse, affirm or modify the order appealed from, and may order a new trial. The orders appealed from also affect a substantial right made in a special proceeding under section 1 of the Code, and for that reason are appealable as such to this court. ( Hyatt v. Seely, 11 N.Y., 52.)
No provision having been made by the Code for a finding of facts in such a case, this court is necessarily required to examine the affidavits and evidence upon which the case was decided. An unrestricted appeal takes along with it the whole merits of the determination appealed from. ( Bates v. Voorhees, 20 N.Y., 528.)
It may be true, as was said in Rogers v. Hosack, ex'r (18 Wend., 329, 330), that the Court of Appeals will not interfere to regulate the discretion of a court of equity, when the statute has vested that court with power to remove a trustee for a particular cause; but I think such a principle is not applicable to this case.
Upon the application of William Winter to remove Birdsall for insolvency, the evidence in this case is such that this court would not feel authorized to interfere with the decision of the court, whatever its determination might be; but when the court undertakes to act upon the application of third persons claiming in remainder, who have no immediate interest in Birdsall's insolvency, the question assumes another aspect. And when one judge overrules the decision of another judge, under pretext of a rehearing, upon substantially the same state of facts, it involves a principle which affects the administration of justice in this State, and presents a question eminently proper to come before this court for review.
And so in reference to the orders made subsequent thereto by which a valid settlement and final discontinuance of the proceedings were avoided upon grounds which were not only false in fact, but insufficient in substance.
Although no appeal was taken from the order of Justice G.G. BARNARD ordering a rehearing of the petition, it is necessarily connected with the final order of Justice J.F. BARNARD upon such rehearing, which in effect reversed the previous order of Justice LEONARD; and its validity is doubtless involved in the principal appeal from the final order of Justice J.F. BARNARD, removing Birdsall as trustee and appointing Haskins in his place.
I have no doubt as to our power to examine the whole case upon the merits, and to make such order in the premises as we shall deem suitable and proper in view of all the circumstances. This being a proceeding in equity, we may not only reverse, but, if necessary, make such final order or decree in the premises as justice may require. (2 R.S., 167, § 27; Laws of 1847, ch. 280, § 8; Le Guer v. Gouverneur, 1 Johns. Ca., 436, 499; Forest v. Forest, 25 N.Y., 501.)
I have already said enough as to the character of these proceedings to justify us in reversing the orders appealed from, on account of their departure from the rules and practice of the court. These rules of practice have been established to protect the rights of parties and constitute a part of the equitable jurisprudence of this as well as every other civilized country.
But if we look only at the merits of the case, it is impossible to sustain the proceedings. No reason can be assigned for superseding the deed of settlement of October 3, 1864. If the trust deed is to stand, there could be no more proper arrangement made for securing the rights of all the parties and the preservation of the trust estate. If we lay out of view the insufficiency of the evidence upon which the deed of settlement was overreached by the order of Justice SUTHERLAND, there is no ground upon which the court could properly make such an order upon the motion of Mr. Haskins. He had no interest whatever in the original controversy; and his subsequent appointment as trustee did not give him any standing in court to interfere with the prior proceedings. He was merely a volunteer, and yet we find that the court acted solely upon his motion in granting the application, which in effect overreached a settlement of the entire controversy mutually beneficial and satisfactory to all the parties.
I would, therefore, advise that all the orders appealed from be reversed, and that the order of Justice LEONARD, made at Special Term, October 4th, 1864, by which the proceedings were discontinued without costs to either party, be affirmed. This will leave the parties to go on under the deed of settlement made and signed by all the parties October 3d 1864.
Although the case furnishes strong grounds for setting aside the trust deed, that question is not properly before us. As to the costs, we may award them at our own discretion. (Laws of 1854, p. 592, § 3.) I think the respondents should be charged with the costs of all the proceedings taken by them after the settlement of October 3d 1864, together with the costs of the appeals in this court.
All concur in the disposition to be made of this case as recommended by MORGAN, J.