Manson v. Duncanson/Opinion of the Court

The only matter for our consideration relates to the validity of the decree of the supreme court of the District of Columbia of May 18, 1875, ratifying and confirming the sale of the property in dispute; and that depends upon the solution of the question whether that court had jurisdiction of the person of Frederick L. Manson, and of the subject-matter of the suit in which the decree was entered.

There was no service of a subpoena upon Frederick L. Manson, but there was an appointment of a guardian ad litem by commissioners appointed by the court, and an answer was taken and filed by such guardian. guardian ad litem is spoken of in Bank v. guardian ad litem is spoken of in Bnak v. Ritchie, 8 Pet. 128, as according to the most approved usage. A full discussion of this subject, and of the law as it existed in Maryland prior to the erection of the District of Columbia, will be found in the case of Snowden v. Snowden, 1 Bland, 550, and the case of Hammond v. Hammond, 2 Bland, 306, 350; and therein the practice of bringing in a nonresident minor by the appointment of a guardian ad litem, and thus subjecting him to a decree for the partition of land, and for the sale of lands to pay the debts of a decedent, is recognized as usual and proper.

In the case of Insurance Co. v. Bangs, 103 U.S. 435, this court held that it was not competent for the federal courts to appoint a guardian ad litem for a nonresident or absent infant, so as to subject him to a purely personal claim. But it was distinctly admitted that, where the infant had an interest in real estate within the state or district, the rule was otherwise, and that the power to appoint a guardian ad litem in such of case was founded in the general powers of courts of equity. In this case it was said: 'Our attention has been called to several cases in the state courts in which it has been held that a decree or judgment could not be collaterally attacked, though rendered in a case where a guardian ad litem had been appointed without service of process on the infant. Such are the cases of Preston v. Dunn, 25 Ala. 507; Robb v. Irwin, 15 Ohio, 689; and Gronfier v. Puymirol, 19 Cal. 629. All of them are illustrative of the position we have stated. They all relate to the interest of the infant in real property in the state.'

In the answer, which was sworn to by the guardian, Frederick L. Manson said that he was an infant under 21 years of age; that he claimed such interest in the premises as he was entitled to, and submitted such interest to the protection of the court. This answer was subscribed and sworn to on the 1st day of December, 1874. In his testimony; taken in the present case, Manson claims to have been past 21 years of age when that answer was made. If so, as the evidence is clear that he was present when the appointment of the guardian was made, he must be deemed to have regarded the answer as his own, and cannot be heard to repudiate it in a collateral proceeding.

Moreover, it may be claimed with some show of reason that if the trust deeds of 1862 and 1865 really vested the legal title to the land in question in Erastus Poulson, subject to the trusts set forth in those instrument,-and such is the theory of the complainant's bill in the present suit,-he, as trustee, represented all the parties beneficially interested, and they, even if not parties, are bound by the decree, unless it is impeached for fraud or collusion between him and the adverse parties.

In Shaw v. Railroad Co., 5 Gray, 162, it was said:

'The rule of equity pleading that all persons interested in the subject-matter of the suit, and whose rights may be affected by a final decree, must be made parties to the bill, is subject to several exceptions, which are as well established as the rule itself. * *  * It has been held that, where persons are made trustees for the payment of debts and legacies, a suit may be sustained in which the trustees only are either plaintiffs or defendants, without joining the creditors or legatees for whom they are trustees and whose rights and interests are directly involved in the case. Feur v. Craig, 3 Younge & C. 216.

'Upon this principle, it has been decided by this court that, in a bill concerning the title to the assets of an insolvent debtor, it is sufficient, without joining the creditors, to make the assignees parties, who alone have the right to claim the property, the legal title being in them, and who are authorized and empowered, and whose duty it is, to represent the interests of, and to act for, all the creditors interested in the trust. Stevenson v. Austin, 3 Metc. (Mass.) 474. In like manner it has been determined that a trustee, holding a mortgage in trust for several creditors, may maintain a bill to foreclose without joining his cestuis que trust as parties.

'The principle seems to be well settled that in an action by a creditor to reach trust property in the hands of administrators or trustees who have the control of, and whose duty it is to protect, the property, the cestuis que trustent need not be joined as parties. The defense of the trustees is their defense, and their presence in court is not necessary to the protection of their interests.' Winslow v. Railroad Co., 4 Minn. 317 (Gil. 234).

In the case of Kerrison v. Stewart, 93 U.S. 155, the question was whether the creditors of an insolvent firm, in whose favor a deed of trust had been executed by the firm, were bound by a decree against the trustee; and this court held that, 'where a trustee is invested with such powers that his beneficiaries are bound by what is done against him or by him, they are not necessary parties to a suit against him by a stranger to defeat the trust in whole or in part. In such case he is in curt on their behalf, and they, though not parties, are concluded by the decree, unless it is impeached for fraud or collusion between him and the adverse party.'

With the proper parties before the court, the next question is whether the court had such jurisdiction over the subject-matter of the suit as to protect its decree from attack in a collateral proceeding.

That the bill in this case is collateral in its nature is obvious. It does not seek the correction or errors in the proceedings or decree in the former case. Its avowed object is to have the former proceedings declared null and void because taken in a court without jurisdiction of either person or subjectmatter.

That the court had jurisdiction to decree the sale of real estate to pay the debts of a deceased debtor and owner is undeniable. The bill contained averments that the complainant was a creditor of the estate of Sarah J. Manson; that the decedent had died intestate as to her real estate situated in the city of Washington and District of Columbia; that the personal estate was inadequate to pay the debts of the decedent; that the decedent, at the time of her decease, was seised of described real estate. These are the usual and necessary allegations of a bill in such a case, and, if found to be true, plainly warranted a decree of sale.

It is true that Erastus Poulson, trustee, was made a party defendant, and that the several deeds of 1862 and 1865, creating and defining the trust, were referred to, and, in effect, made part of the bill, and also copies of the will of the decedent and of letters of administration thereon.

It is claimed on behalf of the appellant that the bill did not sufficiently allege the existence of unpaid debts. The allegation in question was as follows:

'Your complainant settled the estate of Sarah J. Manson, deceased, by virtue of certain letters of administration c. t. a. issued from the office of the register for the probate of wills and granting letters of administration, in and for the city of Philadelphia, a certified copy of which is hereto annexed, and marked 'Complainant, Exhibit A,' as part of this bill; and the personal estate of the said decedent has been fully and finally administered, and the same would have proved insufficient and inadequate to pay the debts of the estate, but your complainant made advances out of his own fund to pay the indebtedness of said estate in full, and said advances, together with assets of the estate, paid in full all the just claims filed and proven against said decedent; and your complainant has paid out of his own funds, on said account, over and above assets coming into his hands, the sum of two thousand and fifty-one dollars, which amount is justly due him, and there remains no fund from which to reimburse him, unless the real estate hereinbefore described be sold, and so much of the proceeds as may be necessary be applied to the payment of your complainant's claim.'

We are unable to accept the appellant's contention that these allegations, taken to be true, do not disclose the existence of debts collectible by proceedings in the District court, and that an administrator with the will annexed cannot be reimbursed for advances made by him in the process of settling the estate.

At all events, even if the District court erred in holding that the allegations and proof were sufficient to establish the existence of a collectible debt, such an error did not invalidate the decree so as to subject it to attack by a collateral proceeding.

The next contention, and one that has been ably argued, is that the bill for a sale showed that the court had no jurisdiction of the subject-matter, because it showed that Sarah J. Manson, the decedent, had no interest in the realty at the time the bill was filed; that she had had a life estate only.

It must be conceded that if the property sold was not owned by the decedent, and was not subject to her debts, the decree of sale was void; and it must also be conceded that, by the allegations of the bill, the court was obliged to take notice of the contents and legal import of the deed creating and defining Poulson's estate as trustee.

It is admitted that the real estate in question was paid for by moneys belonging to Mrs. Manson; that, under the terms of the trust deeds, she had the right to occupy the premises, and to receive the rents and profits thereof for her sole and separate use, her receipt alone being a valid descharge for such rents and profits; that it should be lawful for her, at any time, and from time to time during her life, to dispose of said premises, either by absolute sale or mortgage thereof, as she might think proper; that in default of any such sald of mortgage, or so far as the same shall not extend, upon further trust for such person or persons and for such estate, and in such parts, shares, and proportions, as she, the said Sarah J. Manson, should or might from time to time, by any deed or instrument of writing, or by her last will and testament, under her hand and seal (which will she was authorized to make), limit, direct or appoint, give or devise, the same, and in default of any such limitation, direction and appointment, gift or devise, in trust for such child or children as she should leave surviving her, and the issue of any deceased child,-such issue taking his, her, or their parents's or parents' share,-and, for default of all such children or issue, then in trust for the right heirs of the said Sarah J. Manson forever; and that all money which should or might be raised by sale or mortgage of the said premises, or any part thereof, should be paid to the said Sarah J. Manson, and be disposed of as she should or might think best,-her receipt being a valid discharge therefor, the party paying the same not being bound to see to the application or disposition thereof.

The record does not inform us upon what view of the legal import of these provisions the District court proceeded in awarding the decree of sale. It may have been thought that such a trust did not protect the real estate described from the creditors of Sarah J. Manson, either during her life or at her death. Nichols v. Eaton, 91 U.S. 716. Or the court may have regarded the will of Sarah J. Manson, though not so executed as to permit it to be proven in the District of Columbia, as a sufficient exercise of the power of appointment, in which case, according to a rule well established in England and in this country, where a person has a general power of appointment, either by deed or will, and executes this power, the property appointed is deemed, in equity, the part of his assests, and subject to the demands of his creditors, in preference to the claims of his voluntary appointees or legatees. Clapp v. Ingraham, 126 Mass. 200; Brandies v. Cochran, 112 U.S. 334, 5 Sup. Ct. 194.

We do not wish to be understood as intimating that either of such views would have been a sound construction of the trust deed; but we do say that these were questions before the District court for decision, and, if any error was committed by that court, the remedy was by appeal or by a bill of review, if duly filed.

We adopt the language and reasoning of the court of appears in this case:

'It is certainly the policy of the law to maintain judicial sales, and every reasonable inducement should be indulged to uphold them; otherwise the public would become distrustful, and fair prices for property sold under judicial authority would seldom be obtained. Purchasers, while they are required to take notice of the existence and terms of the decrees or judgments under which they purchase, and as to the parties bound thereby, they cannot be required to become judicial critics, and to pass in review, at their peril, upon the correctness of the proceedings upon which the judgments or decrees may be founded. As was pertinently said by the supreme court of the United States in the case of Thompson v. Tolmie, 2 Pet. 168; 'After of a lapse of years, presumptions must be made in favor of what does not appear. If the purchaser was responsible for the mistakes of the court, in point of fact, after they had adjudicated upon the facts, and acted upon them, these sales would be snares for honest men. The purchaser is not bound to see whether the court was mistaken in the facts of debts and children. The decree of the orphans' court in a case within its jurisdiction is reversible only on appeal, and not collaterally in another suit. When a court has jurisdiction, it has a right to decide every question that may arise in the cause; and, whether its decisions be correct or not, its judgment, until reversed, is regarded as binding in every other court.'

'These principles apply in all respects, and with special force, in this case. It was for the court whose decree is attempted to be impeached, not only to decide on the facts before it, but upon the construction and legal effect of all deeds and muniments of title upon which the proceeding was based. The court having general jurisdiction over the subject-matter of decreeing the sale of real estate of a deceased debtor for the payment of debts, it had the right and was required to determine the question as to the liability of the property for the debts, and whether the case was within its jurisdiction; and, though its decision may have been erroneous, it could only be reversed upon a direct appeal.' 'It is of no avail,' said this court in Cooper v. Reynolds, 10 Wall. 308, 'to show that there are errors in the record, unless they be such as prove that the court had no jurisdiction of the case, or that the judgment rendered was beyond its power. This principle has been often held by this court and by all courts, and it takes rank as an axiom of the law.'

And in Cornett v. Williams, 20 Wall. 226, it was declared that 'the settled rule of law is that, jurisdiction having attached in the original case, everything done within the power of that jurisdiction, when collaterally questioned, is to be held conclusive of the rights of the parties, unless impeached for fraud.'

Having concluded that the District court had jurisdiction over the parties and the subject-matter, and that its decree cannot be successfully impeached in this collateral proceeding, it is unnecessary to consider other questions suggested in the record and discussed in the briefs of the counsel.

The decree of the court of appeals is affirmed.