v. BOWE et al. (Court of Chancery of Delaware. Feb. 8, 1912.) TINGENT. management of its affairs is a right of the corporation; if money be recovered it be- EQUITABLE GUARANTEE & TRUST CO. longs to the corporation; and if the corporation becomes insolvent and a receiver of all its estate and effects is appointed, the receiver is the proper person to bring the 1. WILLS (§ 630*)—LEGACY-VESTED OR CONsuit, for by the appointment of the receiver the court assumes jurisdiction of all the estate and affairs of the corporation, through its receiver, for the benefit of all those whom the court shall ultimately adjudge to be entitled to such estate. 4 Thomp. on Corp. § 4635; Porter v. Sabin, 149 U. S. 473, 13 Sup. Ct. 1008, 37 L. Ed. 815. [2] What reasons are assigned why the petitioners, rather than the present or substituted receiver, should bring the suit for the alleged mismanagement by the officers of the company? Beyond asserting that the petitioners would be primarily liable for the expense of the litigation, and so relieve the estate in the hands of the receiver therefrom, and that delay and loss of evidence would be avoided, no reasons are set out in the petition. These reasons do not strongly appeal to the court. There will be no serious delay. As to the expense, if a new receiver should be appointed in the place of the present receiver, the substituted receiver will have from the estate ample funds to carry on the litigation in question. If in his judgment the proposed litigation is without rea sonable basis and likely to be unprofitable, indemnity to the estate against costs of the litigation may be required of those stockholders who desire the litigation. In this way the court will have, as it should have, control over the litigation; if it be fruitful, its benefits belong to all creditors and stockholders and not to those petitioning stockholders only. The probability, if any there be, of loss of evidence is a reason why the books and papers of the company should be retained by a receiver of the court for the purpose of the suit, and so be under the control of the court through its receiver. It is urged for the petitioners that from correspondence there appear reasons why the present receiver should not bring the suit, but assuming this to be true, it is not sufficient reason why the petitioning stockholders should have leave to bring the suit. The affairs of the receivership are practically settled, and very speedily the duties of the present receiver will be so concluded as that the receiver will be allowed, according to its commendable offer, to resign and another receiver be appointed, and the person so chosen will be a person free from even a lack of sympathy with the object sought by the petitioners. In this way it seems that all the rights of persons interested will be conserved. As at present advised, then, the court will deny the prayer of the petition for leave to bring the suit referred to therein. Let an order be entered accordingly. Where the time for, or condition to, the payment of a legacy is annexed to the substance of a gift, and not merely to the payment, the legacy is contingent; but where interest, either by way of maintenance or otherwise, is given to the legatee in the interim, the legacy will, notwithstanding the postponement, vest immediately on the death of the testator. [Ed. Note. For other cases, see Wills, Cent. Dig. §§ 1464-1480, 1486, 1487; Dec. Dig. § 630.*] 2. WILLS (§ 630*)—LEGACY-VESTED OR CON TINGENT. A will bequeathed a sum of money to a trustee for each of certain grandchildren of the testator, "to provide for some of my sons who have a greater number of children than the others," the money to be invested and the income to be expended for the maintenance and education of the grandchildren and the principal to be paid to them as they arrived at the age the grandchildren at testator's death. of 30 years. Held, that the legacies vested in [Ed. Note. For other cases, see Wills, Cent. Dig. 88 1464-1480, 1486, 1487; Dec. Dig. § 630.*] Bill by the Equitable Guarantee & Trust Company, trustee under the will of William Bowe, against Mary Josephine Bowe and Will others, for the construction of a will. construed. Saulsbury, Ponder & Morris, for next of kin of William Bowe. Charles F. Curley, for administrator of Margaret Bowe. THE CHANCELLOR. The bill is filed by the Equitable Guarantee & Trust Company, trustee under the will of William Bowe, deceased, for construction of item 13 of his will, and all the parties in interest that could be affected by the interpretation of the clause have been made parties and are represented by counsel. The item under consideration is as follows: "Thirteenth. To provide for some of my sons who have a greater number of children than the others, I give and bequeath to the Equitable Guarantee & Trust Company, the sum of dollars, being ten thousand dollars for each of my grandchildren, the children of James H. Bowe, Joseph A. Bowe and William S. Bowe, to hold and invest the same in good incomeproducing securities, with full power to call in and reinvest, to collect the income arising therefrom, and, after deducting a reasonable sum for its care and trouble, to pay over the net income for the maintenance and education of said grandchildren until they arrive at the age of thirty years, and as they respectively arrive at the age of thirty years to pay over to them the share of the principal sum to which they are entitled, free and discharged from all trusts." At the time of the death of William Bowe there were six children of William S. Bowe entitled to shares under the above item, including Margaret Bowe, one of the children of William S. Bowe. In March, 1911, Margaret Bowe died at the age of 14 years and letters of administration were granted upon her estate to her father, William S. Bowe. The executor of the estate of William Bowe, the Equitable Guarantee & Trust Company, paid over to the trustee in the lifetime of Margaret Bowe the sum of $90,000 under item 13, there being nine grandchildren of the testator, children of his three sons, James H. Bowe, Joseph A. Bowe and William S. Bowe. The question is whether Margaret Bowe had a vested or contingent legacy. If vested, it is now payable to her administrator, and if contingent it is payable to the executor of William Bowe for distribution among his next of kin as intestate property, the residuary clause of the will of William Bowe having heretofore been declared to be invalid. It was urged on behalf of the next of kin of William Bowe, the testator, that Margaret Bowe did not at any time have a vested interest in the gift, because there was in the will no gift to her, directly, either of principal or of income for maintenance, other than in the direction given to the trustee to pay the grandchildren as they should respectively arrive at the age of 30 years, and because there was no antecedent estate or interest given to another person, thereby postponing the enjoyment of the fund for the benefit of the estate, or to let in a prior estate. In support of this contention there was cited Leake v. Robinson, 3 Meriv. 363; Batsford v. Kebbell, 3 Ves. 363; Bevan's Trusts, 34 Ch. Div. 716, 719; 2 Jarman, Wills (5th Ed.) 457; Newman v. Newman, 10 Sim. 51; Ford v. Rawlins, 1 Sim. & St. 328; Frost v. McCaulley, 7 Del. Ch. 162, 44 Atl. 779; Billingsley v. Wills, 3 Atk. 219; Seibert's Appeal, 13 Pa. 501; King, Adm'r, v. Crawford, 17 Serg. & R. (Pa.) 118; Moore v. Smith, 9 Watts (Pa.) 403; Walker v. Mower, 16 Beav. 365; Pleasonton's Appeal, 99 Pa. 362; Dougherty v. Thompson, 167 N. Y. 472, 60 N. E. 760. [1] In Conwell's Adm'r v. Heavilo, 5 Har. 296, Booth, C. J., laid down a rule which is well settled elsewhere, as well as here: "When a legacy is directed to be paid at a future time, or on a future event, it is vested or contingent, according to the intent or meaning of the testator, as expressed in his will. If the time or event is annexed if to the substance or gift of legacy, it is contingent, because such appears to be the intention of the testator." But there is in this case an additional feature, not included in the above rule, and everywhere considered an important and determining one. Here is the case of a present gift in trust, with a postponement of payment until the beneficiary attains the age of 30 years, and with a gift of the whole income in the meantime for the maintenance and education of the beneficiary. True the income is not by express words made payable to the beneficiary, and the will does not specifically declare to whom the payment of income is to be made, but it does distinctly appear that the whole of it is to be so applied and the intention to benefit the grandchild prior to the time she arrives at 30 years is surely indicated thereby. Indeed, no reason appears why the whole of the net income is not payable to the grandchild, or, during her minority, to her guardian. There is no discretion in the trustee to apply all or part only of the income towards the maintenance and education of the grandchild, nor is the trustee limited in so applying a designated portion or share of the income, or a certain sum as part of it. It is the whole of the net income which is to be so paid and applied. The amount to be so applied is not so large as to indicate an intention of the testator to restrict the trustee in paying over all of it for the grandchild. The evident and expressed intention of the testator is to aid certain named sons, including William S. Bowe, by giving a certain sum of money for each of his children, to be held by a trustee, the income received from the investment thereof to be used for the maintenance and education of each grandchild until they severally attained 30 years of age and the principal to be then paid to the several grandchildren. It is not a gift of $90,000, a sum of money arrived at by multiplying the sum of $10,000 by nine, the aggregate number of the children of the three sons of the testator, named in the will, to be held in trust for a class, viz., grandchildren of the testator, children of his said three sons. It is a gift of $10,000 to each such grandchild to be held in trust for it. With respect to Margaret Bowe, the child of William S. Bowe, the gift is in effect this: "I give to the Equitable Guarantee & Trust Company the sum of $10,000 to hold and invest the same and pay over the net income thereof for the maintenance and education of my grandchild, Margaret Bowe, daughter of William S. Bowe, until she arrives at the age of thirty years, and then to pay over the principal sum to her free and discharg ed from all trusts." The principles of law applicable to such a gift are clear and well settled. In bequests if the only gift be in the direction to pay terim interest to or for the benefit of the legatee, prima facie vests the principal, though if such words had not been used the legacy would not have been treated as vested. Thus a bequest to A., when he attains a given age, the interest to be paid to him in the meantime, is vested, and if A. dies under that age, his representative will be entitled. The rule is the same where the interest is given to other persons to be applied for the benefit of the legatee. Hawkins on Wills, *227; 2 Wms. on Ex'rs, *1097 et seq.; Hanson v. Graham, 6 Ves. 239; Hammond v. Maule, 1 Coll. 281; Re Hart's Trusts, 3 De G. & J. 202; Frost v. McCaulley, 7 Del. Ch. 162, 44 Atl. 779; Provenchere's Appeal, 1. COURTS (§ 18*)-INQUISITION OF LUNACY-. 67 Pa. 463. In Frost v. McCaulley, supra, the gift was to trustees of a share of an estate in trust, in substance: "The income I give to A. [a granddaughter], payable one-half yearly for ten years, after which I give the same to her." It was held that the words "the same" meant the principal, and that she took a vested interest from the testator's death. "The gift to her of the principal, without the gift of the income, during the interval between the death of the testator and the expiration of 10 years thereafter, would have made her share a contingent legacy, but the appropriation of the accruing interest during the interval for her benefit makes the gift, in substance, an absolute vested legacy, divided into two distinct portions or interests, for the purpose of postponing not the vesting but the possession only." Judge Sharswood, in Provenchere's Appeal, supra, thus states the rule: "Thus it is true, as a general rule, that where the time or other condition is annexed to the substance of the gift and not merely to the payment, the legacy is contingent; but a well-recognized exception to this rule is that where interest, whether by way of maintenance or otherwise, is given to the legatee in the meantime, the legacy shall, notwithstanding the gift itself appears to be postponed, vest immediately on the death of the testator." [2] These settled general principles are said to be inapplicable here because the income is payable to the father of Margaret Bowe and not to her, the gift having been made "to provide for some of my sons," naming them. But this is not a reasonable view. The gift is to the grandchildren primarily and the reason for the gift is that so the testator's sons would be helped, for they would otherwise be obliged to maintain and educate their children. This indirect way the testator adopted in order "to provide for" his three sons. It is clear then that the gift in trust for Margaret Bowe was a direct gift of the principal, the payment thereof being postponed until her arrival at 30 years of age, and so it was a vested legacy in trust. But even In re WILSON. (Court of Chancery of Delaware. Feb. 5, 1912.) JURISDICTION. Chancery has jurisdiction to issue a commission de lunatico inquirendo respecting a person who has real estate within the jurisdiction, though he be a nonresident. Cent. Dig. §§ 50-68; Dec. Dig. § 18.*] -- Where there was no chancery rule for the giving of notice to an alleged lunatic upon the quirendo, it may be given in such a way that filing of a petition for a writ of de lunatico inthe chancellor will be sure that the supposed lunatic, if in such condition that a notice will be proper and useful, has knowledge of the proceeding, though living in another jurisdiction. [Ed. Note.-For other cases, see Insane Persons, Cent. Dig. § 21; Dec. Dig. § 13.*] Petition by Florence A. Horne for a writ to inquire into the lunacy of William F. Wil son. Granted. John Biggs, for petitioner. THE CHANCELLOR. A petition has been filed by the sister of William F. Wilson stating that he was formerly domiciled in Delaware, and afterwards in Pennsylvania, and that he is now at a sanatarium in Maryland, at which last place he has been under treatment for 71⁄2 years last past. It is further alleged that he is a lunatic; that he is seised and entitled to real and personal estate in the state of Delaware; and that there has not been a committee, guardian, or trustee appointed for the care of him or his estate in any other one of the United States, and the petition asks that a writ may be issued to inquire as to his sanity. There being no reported decision respecting the power of the Chancellor to order an inquisition under such circumstances, I have given careful consideration to the matter. The general provision conferring jurisdiction upon the Court of Chancery respecting lunatics is, as follows: "The Court of Chancery shall have care of the insane persons above the age of twenty-one years so far as to appoint trustees for such persons, to take charge of them and manage their estates. But before such appointment the Chancellor shall issue a writ to inquire by a jury and determine whether or trustee of the person of the lunatic (as the person named is insane." The Chancellor is also empowered to sell real estate of the lunatic, invest the proceeds and direct expenditures of principal, as well as of income. In the same chapter it is provided that a trustee appointed in any other one of the United States for a person in such foreign state, having property in the state of Delaware, may upon producing here a certain certificate have the rights and powers of trustees appointed by the court here. This court is asked in this present petition to issue a commission to inquire into the lunacy of a person resident in Maryland who owns real and personal property in Delaware, and for whom no committee, guardian, or trustee has been appointed elsewhere. [1] It is clearly settled that a Court of Chancery has, independent of statute, jurisdiction to issue a commission de lunatico inquirendo respecting a person who has real estate within the jurisdiction of the court, though he be a nonresident. Lord Hardwicke so held in the case of Ex parte Southcote, 1 Amb. 109, where he granted a commission concerning a person resident abroad but having an estate in England. This was followed in the case of In re Perkins, 2 Johns. Ch. (N. Y.) 124, by Chancellor Kent, who appointed a commission to inquire into the lunacy of a resident of Massachusetts who owned property in New York, the Chancellor saying: "There is no doubt, from the case of Ex parte Southcote, 1 Amb. 109, that a commission of lunacy may issue against a person resident abroad." See, also, the similar decision of Chancellor Walworth in the case of In re Petit, 2 Paige (N. Y.) 174; In re Gause, 9 Paige (N. Y.) 416; In re Fowler, 2 Barb. Ch. (N. Y.) 305. And see, also, In re Child, 16 N. J. Eq. 498; In re Devausney, 52 N. J. Eq. 502, 28 Atl. 459, in which last case the above and other authorities are fully referred to in an illuminating opinion. distinguished from a committee or trustee of his property) cannot be appointed by a court in a jurisdiction other than that in which the lunatic is domiciled. There are no formulated rules of this court respecting the procedure by the Chancellor; but appended to the rules of practice in the Court of Chancery, revised and established in 1868 by Chancellor Bates, there are certain forms for a petition for a writ de lunatico inquirendo, for the writ, for the notice to be served upon the alleged lunatic, and for the inquisition to be returned by the jurors summoned by the sheriff. The form of the writ which has been uniformly used since that time, if not longer, in addition to inquiring as to sanity of the person alleged to be a lunatic and as to what property is owned by him, commands the sheriff, if so required by the jurors, to cause the alleged lunatic to be produced before the jurors at the execution of the writ, to be there examined; and also requires the sheriff to give at least ten days' notice to the alleged lunatic, if his condition render such notice proper or useful, but if it is not, then to such person as may have custody of him, Where the alleged lunatic is a nonresident it may be difficult to have him produced in person before the jurors, but this is not an insuperable obstacle to the exercise of the clearly established jurisdiction of this court, because, as pointed out by Lord Hardwicke: "No mischief can follow by the granting of the commission, for if the jury are satisfied without inspection, they will find so; if not, they will not make a return, or will return that it does not appear to them that he is an idiot or lunatic." [2] So also as to the matter of notice to the alleged lunatic, which, of course, is very important. Inasmuch as there is no rule or statute prescribing the form or method of giving notice it can be given in such way that the Chancellor will be sure that the supposed lunatic, if in such condition that a notice will be proper and useful, has knowl edge of the proceeding, though living in another jurisdiction. In Beall v. Stokes, 95 Ga. 357, 22 S. E. 637, it was held that the superior court in the exercise of its chancery jurisdiction had It should be noted, however, that the juauthority by a receiver to administer such risdiction of the Court of Chancery should of the estate of a lunatic resident in another not be exercised over the person of the lunastate as was situated in Georgia, the adjudi- tic, but only over such property as may be cation of lunacy having been theretofore within this state. Therefore, as the authormade elsewhere. The question as to the is-ity of the court is clearly established, as suance of a commission was not under con- hereinabove set forth, and there are no feasideration in the case cited, but only the gen- tures of practice or procedure which intereral powers of a Court of Chancery over the fere with the exercise of the jurisdiction, an property in Georgia belonging to a nonresi- order will be made issuing a commission in dent lunatic, so that this is not authority this case, for the purpose of administering against the foregoing conclusion. Nor are the estate of the person alleged to be a lunathe authorities which hold that a committee tic situated or being in this state. The plaintiff in each case filed a statement alleging that C. C. Benson, named as trustee, purchased of the Rangeley Light & Power Company, the defendant corporation, bonds issued by that company of the par value of $30,000, agreeing to pay therefor the sum of $27,000, being at the rate of 90 cents on the dollar; that in pursuance of such purchase Benson took delivery of the bonds, and paid the sum of $10,000 on account thereof; that there is still due from Benson to the defendant company on account of the purchase of these bonds the sum of $17,000; that Benson agreed with the defendant company 2. GARNISHMENT (§ 164*)-TRUSTEE PROCESS to purchase on the same terms the remainder - INDEBTEDNESS OF TRUSTEE-EVIDENCE of the bonds issued by the defendant comSUFFICIENCY. On trustee process, evidence held insuffi-pany of the par value of $5,000 in the event cient to show that the alleged trustee was indebted to the principal defendant. [Ed. Note. For other cases, see Garnishment, Cent. Dig. § 302; Dec. Dig. § 164.*] that the sum of $27,000 did not prove sufficient in amount to install and finish the defendant's plant then in process of construction; and "that the said Benson, the alleged or any of them hereinbefore recited." 3. GARNISHMENT (§ 24*)-TRUSTEE PROCESS-trustee, has not carried out the agreements PERSONS SUBJECT TO-CORPORATE OFFICERS. The treasurer of a corporation cannot be charged under trustee process for its property in his official custody. The Rangeley Light & Power Company, the defendant corporation, was organized under the general law in 1908 for the purpose of furnishing electricity for light and power in [Ed. Note. For other cases, see Garnishment, Cent. Dig. § 31; Dec. Dig. § 24.*] Report from Supreme Judicial Court, An- the town of Rangeley and its immediate droscoggin County. Actions by Pettengill, Andrews & Co. and by James H. Kerr against the Rangeley Light & Power Company, with trustee process against Charles C. Benson. The principal defendant defaulted. On report. Trustee discharged. Argued before WHITEHOUSE, C. J., and CORNISH, KING, BIRD, HALEY, and HANSON, JJ. Geo. C. & H. L. Webber, for Pettengill, Andrews & Co. Bisbee & Parker and Harrie L. Webber, for James H. Kerr. McGillicuddy & Morey and White & Carter, for trustee. WHITEHOUSE, C. J. The former of the above-named cases is an action to recover for the price of material furnished to the defendant corporation. The defendant has been defaulted for $865.82 and interest. The latter is an action brought to recover the contract price for extra labor and materials, and for excavating a pipe trench and building a dam for the defendant's power station. The defendant has been defaulted for $6,926.61. The cases are reported to the law court upon the same evidence to determine the liability of the trustee upon the disclosure of the trustee, the allegations of the respective plaintiffs, and the evidence. The alleged trustee, Charles C. Benson, filed a disclosure in each case, alleging that at the time of the service of the writ upon him in that case he had not in his hands and possession any goods, effects, or credits of the defendant corporation, and thereupon submitted himself to examination on oath. vicinity. This organization was confirmed and additional powers conferred upon the company by chapter 330 of the Special Laws of 1909. In the summer of that year, Dwight D. Elliott of Rangeley, who was an electrician, having some knowledge of the establishment of electrical plants, became presi dent and general manager of the company, and arranged with Charles C. Benson, a banker and broker in Lewiston, the alleged trustee in these cases, to accept the position of treasurer. Extensive improvements were in contemplation at that time, and it was understood that the treasurer would take a prominent part in the management of the financial affairs of the new enterprise. It is not in controversy that Benson had some negotiations with the president of the company with reference to the methods of providing the funds required to make the improvements that had been projected. It appears to have been estimated by the president that this expense would not exceed $22,000; but, as the bills then outstanding amounted to $5,000, it was deemed necessary to make provision for a total indebtedness of $27,000. It was accordingly arranged to issue bonds to the extent of $35,000 secured by a trust mortgage, in order to procure the required sum of $27,000, if practicable, from the sale of bonds of the par value of $30,000, and to hold the remaining $5,000 of the bonds in the treasury for further improvements in the future. In pursuance of this plan the bonds were duly prepared, the mortgage executed and recorded, and the treasurer authorized by vote of the directors to dispose of the bonds. It does not appear that the price at which they were to be sold was |