239 Mass. 138 | Mass. | 1921
This bill in equity, by the trustee in bankruptcy of Benjamin P. Cheney, against said Cheney and the trustees under the will of Benjamin P. Cheney, senior, is brought mainly for the purpose of obtaining possession of the interest of the bankrupt in the trust estate, for the payment of his debts. All other beneficiaries and parties interested in the trust and all prior assignees and attaching creditors of the bankrupt are joined as defendants. The single justice overruled the demurrer of the defendant Cheney and reported to the full court the questions raised by the demurrer.
In 1895 Benjamin P. Cheney, father of the bankrupt, died testate. While an appeal was pending from the .decree of the Probate Court allowing the will, a compromise agreement was executed. A single justice of this court on March 27, 1896, found the agreement to be “ just and reasonable ” and ordered a decree confirming it. That decree has not been reversed. The ninth paragraph of the agreement of compromise provided that the net income of the residue of the estate should be divided equally among the children of the testator, payment to be made semiannually dining the life of each, and “ in the event that any child shall die at a time intermediate between said payments, said trustees shall pay to the legal representatives of such child a proportionate part of said income.” It further provided for the payment of a proportional share of the principal, upon the death of any child, “to the executor or executors of such deceased child
It is alleged in the bill that prior to his bankruptcy the defendant Cheney made certain assignments of his right to receive income; that the annual net income accruing from the interest of said bankrupt at present amounts to about $32,000; and that there are also outstanding attachments of his interest in the trust estate, made more than four months previous to the filing of the petition in bankruptcy. In the case of Woodard v. Snow, 233 Mass. 267, where the validity of one of these assignments was in question, it was held that Cheney had “ a vested assignable expectant interest in the income,” and that “ The right of Cheney and the right of the assignee to receive the income of the trust fund was a present, equitable right of ownership which ripened into an ordinary property right when the income, accumulated in the hands of the trustee, became payable under the terms of the trust.” It follows that the income, held and to be received by the trustees of the trusts created under said will and agreement of compromise for the benefit of the defendant Cheney, — subject to the rights of said assignees and attaching creditors, — can be reached in equity and applied to the payment of his debts.
Under the agreement of compromise the defendant has an absolute right to dispose by will of the trust estate held for his benefit during life. If he should die intestate, this fund will go to his “ legal representatives.” From similar language used elsewhere in the will and agreement, and from the expressed intention of the testator that “ each of said children, his or her executors or legal representatives, may eventually receive an equal share of my estate not given or devised to others than said children,” presumably this fund will be treated as general assets of Jiis estate if he should fail to make a will. See Sargent v. Sargent, 168 Mass. 420. In any event, he has the right to receive the whole income, and has also the absolute jus disponendi of the principal. The vested equitable remainder, as well as the equitable life estate, can be reached in equity under R. L. c. 159, § 3, cl. 7 (see now G. L. c. 214, § 3, cl. 7), and applied to the payment of his debts. Sparhawk v. Cloon, 125 Mass. 263. Daniels v. Eldredge, 125 Mass.
Considering now the specific grounds of the defendant Cheney’s demurrer: The first and fifth are disposed of by what has been said. As to the second and tenth: the question whether the plaintiff can call for a termination of the trust, especially without the consent of the defendant, is not before us at this time. See Young v. Snow, 167 Mass. 287, 289; Sears v. Choate, 146 Mass. 395. The right of the trustee in bankruptcy to sell all the property of the bankrupt does not preclude him from coming into this court to obtain possession of the bankrupt’s interests now in the possession of the defendant trustees. This is sufficient answer to the third and fourth. The sixth, seventh and eighth are answered by the fact that these are necessary parties, as their rights are involved in the suit. The ninth is directed to the administration of the bankrupt’s estate, a subject not raised by the plaintiff’s bill. The accounting referred to in the twelfth ground is merely incidental to the relief prayed for. The eleventh raises issues that need not now be determined in considering whether the bill is demurrable. Irrespective of the exercise of the power of appointment the plaintiff can reach and apply certain interests of the bankrupt in the trust fund. We may add that the effect of the defendant’s covenant in his agreement of April 10, 1914, with Woodard and others, to execute a will by which his interest should be “devised and bequeathed ... to the protection of all his creditors,” is not now before us.
The decree overruling the demurrer of the defendant Cheney is to be affirmed.
Ordered accordingly.
