
    Vetterlein et al. v. Barker.
    
      (Circuit Court, S. D. New York,
    
    March 21, 1891.)
    1. Vacating Decree — Evidence—Res Adjüjhcata.
    A bill of review to annul a decree cannot be maintained on tho ground that a decree in a collateral suit between the parties, which was introduced as res ad/judir cata upon some of the issues in the cause, has, since the decree, been set aside by the court which rendered it, where it appears that tho collateral decree was void for want of jurisdiction of the court, and was vacated for that reason. The vacating of the decree did not detract from its original inoperativeness as res adjudícala, and therefore is not new matter arising since the decree now sought to he annulled, within the rules that apply to hills of review.
    2. Same — Neglect or Trustee.
    A bill to annul a decree for fraud cannot be maintained upon the theory that the defendants, who were trustees, were derelict in their duty to their cestuis que trustent in not availing themselves of defenses which they might have presented, whore it does not appear that the complainant in the suit was cognizant of any misconduct on the part of the trustees, and where they were the proper parties to represent the beneficiaries and litigate the cause for them. Under such circumstances the adverse party cannot be deprived of the benefit of tho adjudication which he has obtained.
    Ill Equity.
    
      Roger M. Shernum, for plaintiffs.
    
      ■John Proctor Clarke, for defendant.
   Wallace, J.

This is a bill to reverse and set aside a decree of”ibis court, (16 Fed. Rep. 759,) in affirmance of a decree of the district court (Id. 218) adjudging that certain insurance policies, the property of the bankrupt firm composed of Theodore H. Vetterloin aiid Bernhard E. Yettcrlein, and assigned to trustees for the benefit of the wife and children of Theodore H. Votterlein, were so assigned in fraud of the rights of the assignee in bankruptcy of the Vetterloins. The present complainants are the wife and children of Theodore 11. Vetterlein, the beneficiaries named in the assignment of the policies. The defendants are the assignors in bankruptcy, who are the successors of tho complainant in the former suit, and the defendants in that suit. The hill proceeds upon three grounds: (1) That a decree in a collateral suit between tho parties to the original suit, which was put in evidence as res adjudícala upon the issue of fraud, has since been annulled by the court, which rendered it as void for want of jurisdiction; (2) that the use of the collateral decree as evidence in the original suit was in fraud of an agreement made between the parties to that suit; and (8) that tho defendants in the original suit, who were trustees for the present complainants, violated their duty to their cestuis que trustent by omitting to avail themselves of defenses which existed, and setting up defenses in hostility to their trust, — of all -which the complainant in the original suit was aware at the time. The bill has been discussed by counsel as though it were a bill of review. So far as it proceeds upon the theory that the vacating of the collateral decree is new matter, which has arisen since tho original decree, it would state facts appropriate for such a bill, if it did not appear that the collateral decree was void for want of jurisdiction of the court, — a fact. which is not new matter, which presumably was known when the decree was offered in evidence, and which, if it had been urged at the time, would have destroyed the effect of the decree as evidence. So far as the bill proceeds upon the theory that .the former defendants, trustees of the present complainants, were derelict in their duty in the conduct of the suit, to the knowledge of the former complainaut, it is essentially one to impeach a decree for fraud, and not a bill of review. As the bill has not been demurred to the cause will be disposed of on the proofs as though the averments, if established by the proofs, would entitle the complainant to relief in any aspect of the facts.

The bill cannot be maintained on the first two grounds, because the proofs do not show that the reception of the collateral decree in evidence had any material influence upon the result. The record of the proofs in the original suit has not been introduced, consequently it cannot be ascertained upon what evidence the court decreed. It would seem, however, from the opinion of the judge that there was evidence, irrespective of the collateral decree, to establish all the material facts in controversy upon which the decree proceeded, and that the collateral decree was not regarded at all in reaching the decision.

The bill cannot be maintained upon the third ground, because, irrespective of other considerations, it does not appear that the complainant in the original suit was cognizant of any misconduct of the trustee^ in the defense of the suit. He made the trustees adverse parties, because they were the proper persons to represent the beneficiaries. He is entitled to the benefit of the adjudication he has obtained by his diligence, and cannot Be deprived of it because those who were duly authorized to represent the beneficiaries were negligent or faithless. If the trustees were derelict, the cestuis que trustent must look to them for their remedy. It appears, however, that the trustees insisted that the beneficiaries were necessary parties to the suit, and that they should be brought in. This contention was overruled, and the supreme court held that it was properly overruled. Vetterlein v. Barnes, 124 U. S. 169, 8 Sup. Ct. Rep. 441. The circumstance that the trustees endeavored to have the beneficiaries brought in as parties is quite cogent to show that they intended to protect the rights of the beneficiaries. From all that now appears, there is little room to doubt that the trustees defended the suit to the best of their ability.

The bill is dismissed, with costs.  