Opinion
8 Div. 983.
April 5, 1917. Rehearing Denied May 17, 1917.
Appeal from Chancery Court, Marshall County; James E. Horton, Jr., Chancellor.
Street Bradford, of Guntersville, for appellants. McCord Orr, of Albertville, for appellee.
This is a bill filed by a trustee to protect the rights of the beneficiaries of the trust.
In its simplest elements a trust is a confidence reposed in one person, by and for the benefit of another, with respect to property held by the former, for that other's benefit. The person in whom this confidence is reposed and who holds the title to the property in question is the trustee; and the person for whose benefit the property is so held by the trustee is the cestui que trust, or, as formerly referred to in the Roman law, the fidei-commissarius. Brown v. Brown, 83 Hun, 160, 164, 31 N.Y. Supp. 650; Carter v. Gibson, 29 Neb. 324, 332, 45 N.W. 634, 26 Am. St. Rep. 381; 3 Pom. Eq. Jur. § 1055; Deming v. Lee, 174 Ala. 410, 56 So. 921; Butts v. Cooper, 152 Ala. 375, 44 So. 616; Coleman v. Coleman, 173 Ala. 282, 55 So. 827; Hughes v. Letcher, 168 Ala. 316, 52 So. 914.
No express words are necessary to the creation of a trust if that intention appears. Gifford v. Rising, 51 Hun, 1, 3 N.Y. Supp. 392. It may be inferred from the facts and circumstances of the case. Coleman v. Coleman, supra; Butts v. Cooper, supra; O'Neal v. Greenwood, 106 Mich. 572, 582, 64 N.W. 511; Hedges v. Keller, 104 Ind. 479, 3 N.E. 832.
To hold stock in a warehouse corporation for the benefit of the contributing purchaser and collect and disburse the dividends accruing therefrom among those who contributed to the purchase of the trust property is the creation of an active trust in the trustee (Green v. McCord, 30 Ind. App. 470, 66 N.E. 494; Repp v. Lesher, 27 Ind. App. 360, 61 N.E. 609), who should protect the property for the benefit or use declared.
It is therefore the duty of such trustee, not only to hold the property for the beneficiary, but to disburse the proceeds to such beneficiary according to the terms or circumstances of the creation of the trust in and out of the estate. Gindrat v. Montgomery Gaslight Co., 82 Ala. 596, 2 So. 327, 60 Am. Rep. 769; Perry's Trusts (6th Ed.) § 2; 2 Story's Eq. Jur. (13th Ed.) § 965; 4 Kent's Com. 289. That is to say, to hold the property and to prevent the diversion thereof, or of the title thereto, to other use or parties not so declared or interested, and disburse it for the specific purposes of the trust. Black, Law Dict. If, therefore, a conveyance of all or any part of the trust property has been made under a mistake of fact by the trustee, and to the prejudice of the beneficiary of the trust fund, it is, of course, subject to the equitable rights of such beneficiary. Lewin on Trusts, page 572; Robinson v. Pierce, 118 Ala. 273, 24 So. 984, 45 L.R.A. 66, 72 Am. St. Rep. 160; Brooks v. Greil Bros. Co., 192 Ala. 235, 244, 68 So. 874. And such property so impressed with a trust, or the proceeds thereof or of its sale, may be followed so long as it can be identified in the hands of subsequent holders who are not bona fide purchasers for value without notice. Brooks v. Greil Bros. Co., supra, and authorities there collected.
A careful consideration of the evidence convinces us that the correct conclusion was reached by the chancellor. The trustee was a proper party complainant to the suit, having for its purpose the reinvestment in such trustee of the two shares of stock. Any one or all of the beneficiaries may join with the trustee in a bill for such purpose. They are, however, not necessary parties to such a bill.
If, however, members of the Union were joined who had no interest in the subject-matter of the suit or in the maintenance of the same, the chancellor may, on distribution, render decree granting such relief as the justice and equity of the case may require, in favor of any one or more of the complainants, and denying relief to any one or more of the complainants, and against any one or more of the defendants, as they may be entitled, under the facts. Code, § 3212; Zadek v. Burnett, 176 Ala. 80, 57 So. 447; Stewart v. Snider, 72 So. 409. There is, then, no question of misjoinder to be considered, under the averred and proven facts.
197 Ala. 129.
Of nonjoinder of parties complainant, it is sufficient to say that respondents Teal knew, or had knowledge of facts that warranted the inference that they knew, the conditions on which the stock was purchased and held by the union, and that it was acting as trustee for certain of its members or stockholders. They cannot be heard to question the right or capacity of the union, either as a corporation or as a charitable organization or association, to act as such trustee. Ex parte Hill, 165 Ala. 369, 51 So. 786; Harris v. Gateway Land Co., 128 Ala. 658, 29 So. 611; McDonnell v. Ala. Gold Life Ins. Co., 85 Ala. 401, 5 So. 120; Nat. Com. Bank v. McDonnell, 92 Ala. 387, 9 So. 149. Neither can said respondents question the right to maintain this bill to compel the cancellation of the reissue of stock by the Farmers' Union Warehouse Company to respondents Teal, and require the warehouse company to thereupon reissue this stock to the Pleasant Grove Local Union No. 204, and to further require the respondents Teal to account to the said trustee for the several sums paid the respondents by the warehouse company, as dividends on said stock, with interest thereon. The parties thus affected by the decree were properly before the court as complainants and respondents, and there was no nonjoinder of parties or of causes to the extent of the relief decreed by the chancellor.
The matter of an accounting for the stock and the accrued dividends thereon, on the party of the complainants, to the several beneficiaries, is not a proper question to be adjudicated in this suit. Webb v. Butler, 192 Ala. 287, 68 So. 369, Ann. Cas. 1916D, 815.
The chancellor's decree was confined to the proper relief to be granted under the pleading; and it is in all things affirmed.
Affirmed.
ANDERSON, C. J., and MAYFIELD and SOMERVILLE, JJ., concur.