IRVING W. CHILDS, Respondent,
EVERSLEY CHILDS, Individually and as Sole Trustee under the Last Will and Testament of WILLIAM H. H. CHILDS, Deceased, Appellant.
APPEAL by the defendant, Eversley Childs, individually and as sole trustee, etc., from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 7th day of February, 1912, denying the defendant's motion for judgment on the pleadings.
John M. Bowers, for the appellant.
Frederick H. Clarke, for the respondent.
Action to construe a will, to compel a retransfer to a trust estate of certain property alleged to have been wrongfully disposed of, to compel the trustee to account and to have him removed and another person appointed in his place.
After the service of a reply to new matter set up in the answer a motion was made by the defendant for judgment on the pleadings. The motion was denied and the appeal is from that order.
The reply admits that since the commencement of the action the trust created by the will of the testator has terminated and that the trustees have settled and by surrogates' decrees have been discharged. The only question, therefore, necessary to be considered is whether the plaintiff, notwithstanding such decrees, upon the facts alleged is entitled to any relief.
The amended complaint alleges that the plaintiff's father died on the 25th of April, 1898, leaving a will by which the plaintiff was bequeathed $35,000, a one-fourth interest in the business of the Mica Roofing Company--a firm composed of the testator and the defendant--and a one-half interest in the residuary estate after the death of the plaintiff's mother; that the $35,000, the one-fourth interest in the Mica Roofing Company, and the entire residuary estate under the terms of the will were directed to be held by the trustees therein named in trust until the plaintiff became twenty-five years of age, subject, however, to a power of sale by the executors and trustees and in their discretion to pay him a portion of the proceeds before that time; that provision was made for the payment of certain
income to the plaintiff before his mother's death and to the payment to him of the principal, including his portion of the residuum, when he reached twenty-five years of age, if his mother was then dead; that his mother, one William H. Childs, and the defendant, Eversley Childs, who was a brother of the plaintiff, were appointed executors and trustees and the defendant was also appointed testamentary guardian of the plaintiff; that the will was admitted to probate in May, 1908, and letters testamentary were issued to the plaintiff's mother and the defendant, both of whom qualified; that they acted as such until March 21, 1904, when the mother died; that the third executor and trustee named in the will was thereupon substituted in her place and he served with the defendant as executor until July 15, 1907, when an accounting was had and a decree entered directing the executors to turn over the assets of the estate to themselves as trustees; that William H. Childs served as such trustee until August 6, 1908, when he, upon his own application, accounted and was discharged, and that thereafter the defendant continued to act as sole trustee until June 13, 1911, when, as appears by the answer and admitted by the reply, he accounted and was discharged. The complaint further alleges that in December, 1898, the executors unlawfully sold all of the testator's interest in the Mica Roofing Company in violation of an express provision contained in the will, which directed that the plaintiff's interest therein should be held and managed by the executors and trustees until the plaintiff arrived at the age of twenty-five years, when the same was to be turned over to him. There is no allegation in the complaint that the price at which this interest was sold, $157,764.26 in cash, and $311,000 par value of the capital stock of a corporation which purchased it, was inadequate or that the sale was fraudulent. It is, however, alleged that the power of sale contained in the will did not authorize the sale and that the purchaser took title to the property with notice of that fact and for that reason the sale should be set aside and, if necessary for that purpose, that the party who made the purchase be made a party defendant. It is further alleged that a part of the residuary estate of the testator consisted of 475 shares of the capital stock of the Bon Ami Company, of which the executors sold
50 shares in 1899 and the balance at some time prior to 1903; that the price at which this stock was sold was grossly inadequate and that the purchase money was furnished by the defendant, he being the real purchaser; that he still owns such stock, though the same was transferred to and stands in the name of another representing him, and for that reason that the sale should be set aside and defendant be compelled to account therefor and for the dividends received thereon.
It is further alleged that in April, 1907, the executors held, as part of the residuary estate, 2,770 shares of the capital stock of the American Coal Products Company, which then or at some time thereafter they sold for $208,365, notwithstanding the fact that it was worth $277,000, and, by such sale through their fraud or negligence, a ...