In Re the Estate of Campbell

MIZUHA, J.,

WITH WHOM HAWKINS, CIRCUIT JUDGE CONCURS, WHILE JOINING THE OPINION OF THE COURT, DISSENTS FROM THE HOLDING THAT THE SUCCESSOR TRUSTEES HAVE A RIGHT TO APPEAL.

Although the trial judge found that “no evidence has been adduced that the present successor trustees (A. S. Davis, M. L. Randolph and George M. Collins, Findings of Fact No. 2) permitted any breach of trust by their predecessors to continue, neglected to compel their predecessors to turn over trust property, or neglected to take proper steps to redress any breach of trust,” there is no specification of error on the part of the income beneficiaries or the contingent beneficiaries and remaindermen *574 relative to this finding. Hence, it may be assumed that to the date of judgment, June 29, 1959, the present successor trustees were not liable either in their personal or representative capacities.

As I see it, any possibility of personal liability on the part of the successor trustees in the future depends on their conduct after the disposition of this case by this court. A partial reversal which leaves a deficiency in the corpus of the trust must be made up from either the estates of the former trustees or from their bondsmen, if such were possible. There may be neglect for failure to act or act promptly after this court has spoken.

R.L.H. 1955, § 208-3 provides in part as follows:

“Appeals shall be allowed from all decisions, judgments, orders or decrees of circuit judges in chambers, to the supreme court, except in cases in which the appellant is entitled to appeal to a jury, whenever * *

In construing this section this court stated in In re Victoria, K. Ward, 42 Haw. 60 , 64-5:

“* * * From a casual reading of the wording of the statute it might appear that any party to a proceeding would have the right of appeal where the decision is adverse to the contentions of such party. However, our court, as well as the great majority of appellate courts, has added the requirement that the appellant must be an ‘aggrieved party.’ The words ‘aggrieved party’ mean that the appellant’s property rights must be affected thereby, that mere emotional feelings of dissatisfaction at the decision of the trial judge are not sufficient. (Hawaiian Trust Co. v. Holt, 24 Haw. 212 ; Castle v. Irwin, 25 Haw. 807 ; Pires v. Pires, 29 Haw. 849 .)”

This requirement that an appellant’s property rights must be affected in order to be an aggrieved party is now abandoned by the main opinion which holds that trustees *575 in their representative capacities have a right to appeal when they could “anticipate that, should there be a reversal of the portion of the judgment directing the trustees to withhold part of the deficiency from these income beneficiaries but not a reversal of the determination itself,” they would “be faced with the possibility of further litigation to obtain other redress for the deficiency by seeking payment from the estates or bondsmen of predecessor trustees.”

I agree with the majority that a trustee may appeal if he has a potential liability. Estate of Holt, 42 Haw. 129 ; Hawaiian Trust Co. v. Galbraith, 22 Haw. 78 . But that is not this case where the successor trustees have been absolved of all personal liability. There is a distinction between “bill of instructions” and “accounting of trustees,” but this distinction has no bearing on the trustees’ right of appeal. In the Galbraith case, supra, which the main opinion cites in support of this contention, this court said at page 82 that the trastee had a right to appeal, not because the lower court was passing “upon what had already been done” but because “* * * The enforcement of the decree would oblige the trustee to make good to those children their portion of the annuity for the years 1908 to 1910 which had been divided among the other claimants. We think that because the amount involved is small and may be recouped by the trustee from those to whom it was paid does not affect the result. Under the circumstances we hold that the trustee has an appealable interest.” (Emphasis added.)

The judgment below involves property rights of the income beneficiaries and contingent beneficiaries and remaindermen. The successor trustees in their representative capacities who contend that the accounts are correct after the lower court found a deficiency in the corpus and charged it to the income beneficiaries, are now clearly *576 favoring the income beneficiaries as against contingent beneficiaries and remaindermen, who have an interest in the corpus of the trust. This court stated in Castle v. Irwin, 25 Haw. 807 , 811-12 that “* * * The trustees should occupy a neutral and indifferent attitude in any controversy between the real parties in interest and clearly they ought not to be allowed to litigate the claim of one such interested party as against another such party. * * * With controversies which affect the individual interests alone of those who may be interested in their trust they have nothing to do and consequently cannot be aggrieved by a decree which affects those individual interests. See Coldtree v. Thompson, 83 Cal. 420 .” See also In re Estate of Ena, 30 Haw. 41 .

After the judgment of the court below, the successor trustees were not affected one way or the other. It should be no concern of theirs that the deficiency in the corpus is now charged to the income beneficiaries. It is a controversy which affects the individual interests of the income beneficiaries and the contingent beneficiaries and remaindermen. By sustaining the successor trustees right to appeal, the main opinion now overrules Castle v. Irwin, 25 Haw. 807 .

In determining the successor trustees’ right to appeal, mere anticipation as to the holding of this court which may necessitate future litigation to recover in a different suit or suits is insufficient to extend to them the right to appeal. The analogy in the main opinion with reference to judgment n.o.v. is inapplicable here. The successor trustees will not be aggrieved by a partial reversal or complete reversal of the judgment below. Any further litigation that may result as a result of partial reversal will not be on the accounts that are being settled, but against former trustees or their bondsmen to recover deficiencies in the corpus which arose during their ad *577 ministration of the trust. This court further stated in the. Oastle case, 25 Haw. 786 at page 792:

“* * * Only persons who have substantial grievances, that is to say, who are affected or prejudiced by the judgment or decree, ought to be heard in the appellate court. Judicial tribunals sit only for the determination of real controversies between parties who have a legal interest of at least technical sufficiency in the subject-matters embraced in the records of causes pending in courts. Merely abstract or moot questions will not be determined on appeal and feigned or fictitious appeals ought not to be tolerated. * * *”

The holding in the main opinion that the successor trustees’ have a right to appeal assumes that there will be a partial reversal of the judgment below. This court found that the lower court erred in charging all of the deficiency to income beneficiaries, leaving a portion of the deficiency unaccounted for, but declined “to rule on the liability of the predecessor trustees, when under the judgment of the court below, that question was not reached,” and concludes that “this question may be clarified on the remand of the case.” As a result the successor trustees now have a duty to recover this partial deficiency from others. Consequently, if at the outset the successor trustees, in their judgment felt that further litigation was unnecessary and that they should rest their case on the correctness of the predecessors’ accounts they are aggrieved parties and entitled to appeal from the judgment below. This deduction leaves unanswered, the position of this court as to the successor trustees’ right to appeal in the event this court affirmed the judgment below and terminated litigation on all of the issues raised by the income beneficiaries on this appeal, the same judgment which the successor trustees now seek to reverse by their appeal.

I cannot agree with a decision that permits successor *578 trustees who disagree with the judgment of the court below as to the correctness of their predecessors’ accounts, and who merely anticipate the necessity of further litigation, (although it is their duty to litigate with others to recover any deficiency in corpus after this court has spoken) to fall into the category of aggrieved parties with the right to appeal despite the absence of any personal liability, and ignores the rule that successor trustees must remain neutral in any controversy between real parties in interest. Castle v. Irwin, 25 Haw. 807 .