Brothers v. Tiffany

| N.Y. App. Div. | Mar 8, 1907

Lead Opinion

Lambert, J.:

The complaint in this action alleges the recovery of a judgment by plaintiff against Burnett,Y. Tiffany for necessaries furnished by it with ’the consent of defendant trustees and the return of execution unsatisfied; the bankruptcy of Burnett Y. Tiffany, and the appointment of the defendant Hosmer as. trustee; the death of Charles L- Tiffany, .the probating of his will and the. appointment and qualification of defendants as trustees thereunder ; .the giving by said will to said trustees of certain property, the income from which was tó be applied in their discretion to the use of Burnett Y. Tiffany, and that fhey have been and now are paying the latter $.18,000 annually, the amount fixed by them in'their discretion as proper for his support ; that such sum exceeds the amount necessary-for Burnett Y. Tiffany’s proper support, and that the sum of $3,000-is sufficient therefor, “ and the remainder of the said annual income of $18,00p is surplus income, properly applicable to the payment of the debts of the defendant Burnett Y. Tiffany'; * * *-that there has already accrued of said surplus-income ” a large amount of money remaining in the trustees’ hands and not paid over to Burnett Y. Tiffany; and that the trustees have received and now retain moneys in trust for the use of Burnett Y. Tiffany applicable to the.payment ’ of his debts. The relief asked is (1) for an accounting by the trustees of moneys received in which Burnett Y. Tiffany has an interest; (2) that.such portion of "the $18,000 in excess of the amount determined by the court to be necessary -for his support be applied to the paymént of plaintiff’s judgment; (3) that the. trustees be enjoined from paying over such excess; (4) that a receiver be appointed, and (5) for further relief.

The “ first and separate defense ” of the answer here demurred tp sets forth the death of Charles L. Tiffany leaving a will, which is annexed to and madp a part of the allegation ; the probate of the same and the appointment and qualification of defendants as trustees ; that pursuant, to said will and codicil, in the exercise of their discretion, the trustees fixed upon the sum of $18,000 as the proper amount to be paid Burnett Y. Tiffany annually, and the payment of the balance of the income of the trust property to certain other persons according to the directions of the will and codicil. The will and codicil referred to gives the trustees discretion to pay to Burnett Y. Tiffany such portion of the income as they deem necessary for his proper support.

' The judgment creditor seeks to reach a surplus income in excess ' of the amount necessary for the support of Burnett Y. Tiffany. If the latter, under the will and codicil, was to receive the whole income of the trust estate, there is no question but that plaintiff’s judgment could be satisfied out of such surplus, were any shown to exist. ( Williams v. Thorny 70 H. Y. 270; Tolies v. Wood, 99 id. 616.) Following the reasoning adopted in Matter of Hoyt (116 A.D. 217" court="N.Y. App. Div." date_filed="1906-12-07" href="https://app.midpage.ai/document/in-re-the-final-judicial-settlement-of-the-accounts-of-hoyt-5201090?utm_source=webapp" opinion_id="5201090">116 App. Div. 217), it is evident that the income from the trust estate came into the hands of the trustees for the benefit of Burnett Y. Tiffany primarily, and could be transferred to him, if in the opinion of the trustees the entire income was necessary for. liis proper maintenance. If, however, they deemed that a portion only should be used for this purpose, his right to the excess over such portion was liable to be divested, and the amount remaining to be paid to certain other persons. Here we have an allegation that there are certain moneys in the trustees’ hands belonging to Burnett Y. Tiffany, and not necessary for his support, out of which a judgment for necessaries, furnished him with the knowledge and consent of the trustees, should be satisfied. The facts alleged state, in my opinion, a good cause of action.

The defense demurred to, that the trustees have fixed upon a certain sum as the proper amount to be paid Tiffany, and have turned over the balance to the persons entitled thereto, appears to me to constitute no defense to such a'cause of action. The defense'■ does not allege that the whole $18,000 has been paid Tiffany as fast as it accumulated1, and that no part thereof remains in their possession which would disclose a complete disposition of the trust income ; nor can such' an allegation be read into'the portion of the complaint which shows that the' trustees have been and 'noware paying Tiffany this amount. On the contrary, the latter allegation implies that the income is gradually accumulated, and affirmatively shows its disposition at intervals. A portion of whatever income, if any, shown to be held by the trustees, may or may not be' surplus, and is a matter to be determined upon the trial of the action.

Bor these reasons the interlocutory judgment sustaining the demurrer should be affirmed, with costs, with; leave to the defendants to amend their answer within twenty days.

Patterson, P. J., Laughlin and Houghton, JJ., concurred; IngraHam, J., dissented.

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Dissenting Opinion

Ingraham, J. (dissenting):

1 think this judgment'should be reversed. ■ The complaint alleges that on or about February 18, 1902, one Charles L.' Tiffany, died, leaving a last will and testament which was duly admitted to probate by the surrogate of JSTew York county; that, in and by said will the defendants were appointed executors of and trustees under . the said will and letters testamentary were issued to them; that in and by said will a large amount of property -was given to said executors and trustees in trust to invest the same and to collect the income thereof, and to apply such part of the same as in their discretion they should from time to time deem proper, to the use of the defendant Burnett Y. Tiffany for and during his natural life; that pursuant to said provisions of said will, the said executors arid trustees have heretofore fixed the sum of $18,000 a year, or $1,500 a month, as the proper amount to be paid to the defendant Burnett Y. Tiffany, and for a long time they have been paying him and are now paying him the sum of $1,500 a month in equal quarterly payments, every month. '■

The defense demurred to alleges, the death of Charles L. Tiffany, the making of his will and codicil thereto, copies of which are annexed to the answer as a part of the defense.. It is then alleged that the defendants, in the exercise of their discretioh, fixed upon the-sum of $18,000 per annum, payable in equal monthly installments of $1,500, as a proper .amount at that time to pay to the said Burnett Y. Tiffany; that pursuant to the directions of the testator in said will and codicil contained, these defendants have from time to time .paid the balance of the income from the property held in trust, as directed by said will and codicil, to Annie O. Mitchell and Louis 0. Tiffany, the persons named therein.

It appears from the codicil to the will that the testator gave to his executors in trust certain property to invest the same and to collect the net income thereof, and to apply such part of the same as in their discretion “ they shall from time to time deem fit and proper, which discretion shall not be in any manner interfered with by any court, to the use of my. son Burnett for and during his natural life and to apply the balance of said net incoin e during the life of my son Burnett to the use of my son Louis C. Tiffany and my daughter Annie O. Mitchell,” with a bequest over, and with the following clause : “ And in my opinion which, however, is not to control the discretion- of my executors unless a radical change shall take place in his life and habits the sum of Three thousand (3,000) dollars per annum payable in monthly installments will be an ample amount for his proper support and maintenance.” The complaint did not set out a copy of the will, but only an abstract of its contents. The defendants, by this separate defense, set forth the will and codicil in full, and if, from the provisions of the will and codicil, it appears that this action cannot be sustained, then the defense is good. The will do'es not authorize the trustees to determine that a specific amount of income should be payable to Burnett Y. Tiffany, which amount would thou become payable to him, but directs them to apply such part of the income as in their discretion they shall, from time to time, deem fit and proper, which discretion shall not in any manner he interfered with by any court, with a provision that the balance of the income from the trust fund which should not be applied by the trustees to the use of his son Burnett should be paid to another son and a daughter. It seems to me that the effect of this provision is that all the income from the trust estate, not actually applied by the trustees to the use of Burnett, becomes at once the property of his other son and daughter, and that the trustees are bound to pay to them such unapplied income. The testator considered that the sum of $3,000 per annum would be- sufficient .for the proper support and maintenance of his son, but this was advisory' merely, and this provision was not to control the discretion of the-trustees; but it seems to me that there could be no accumulation of income to which either the son Burnett or his creditors would be entitled under this clause of the will. If the trustees failed to apply any portion of the income, whether they had determined that a certain amount of income should be paid to Bui-nett, or not, the amount that they failed to apply for his support and maintenance became at once the property of his brother and sister, and neither Burnett nor his creditors could compel the trustees to pay it to him or them. This trust property ánd the income is not, and never was, the'property of Burnett Y. Tiffany, and neither to the principal nor the income has he acquired any right or title. There was nothing, therefore, that his .creditors could reach by a creditor’s bill. The testator had a right to do what he pleased with liis own property. He had a right to limit the interest of a, legatee or beneficiary in the property, and, having such absolute power of disposition, he left property in trust, with a discretion to his trustees to apply a portion of the inpome to the . support of his son, and that the balance of the income of • the trust property not so applied should be paid to the others named. The persóns who were entitled to the balance of the income acquired a vested right in the income ' not used for the support and maintenance of the son, and the court cannot, as I view it, interfere with their vested right to such income in favor of either the son or his creditors.

I think, therefore, that this was a good defense to the action,, and that the demurrer to it should be overruled.

Judgment affirmed, with costs, with leave to defendants to amend on payment of costs in this court and in the court below.