Harrison v. Mc. Mennomy

| New York Court of Chancery | Feb 12, 1834

The Vice-Chancellor:

This cause has been reheard ; and the defendants have insisted that the complainants can have no right to any share of the mortgage money and, therefore, the bill must be dismissed or if not so, still there must be other persons who have a right to a portion of the mortgage money made parties, before a proper decree can be had.

There might be no difficulty in deciding this cause, provided the court was bound to look no further than to the bond and mortgage. By these instruments, a debt was secured to the several persons therein named payable with interest at such time as the youngest of them had attained the age of twenty-one years. Thus, there were'immediate vested interests in equal portions from the time the bond and mortgage were made ; and although payment was postponed and in the event of the death of one or more of them, the right of action at law devolved upon the survivors, yet the respective shares were transmissible and assignable before the time of payment arrived. Upon these principles and viewing the bond and mortgage aside from other matters, there would now be all proper parties before the court to authorize an ordinary decree for foreclosure and sale.

But a very different construction and effect are sought to2 be given to the bond and mortgage, by the answer of the défen(jant Mennomy; and if the facts bear out this construction, then an end is undoubtedly put to the present MIL The hearsay testimony offered by this defendant is incompetent to alter or affect, in the smallest degree, the import of the written instruments; and the evidence of Hannah Harrison, as to the precise extent of the trust in relation to the money placed in the defendant’s hands by her mother, still leaves' the point in doubt. Indeed, it is apparent, throughout her testimony (and it could hardly be otherwise) that instead of clear and distinct facts resting on her mind, she has only given the vague impressions and opinions entertained by her; and she admits she has been much perplexed with the opinions of others in regard to the question whether the defendant is pursuing the intention of her mother in saying the money should be divided between the witness and Ann' Evelina, the only two who were living when the latter arrived at age. Upon testimony so vague and uncertain, it is' unsafe -to decree a trust of the particular description set up in the answer. Parol evidence is admissible to prove a trust in opposition to an absolute deed or written instrument: but it must be evidence of so positive a character as to leave no doubt of the fact and, at the same time, so clearly define the trust as that the court may see what is requisite for its due execution. There can be no doubt a trust was created for the benefit of the children upon placing the money in the hands of the defendant: for it was not a loan of money to-be repaid by him as borrower, but the same was a special deposit for the purposes of investment and accumulation— the fund not being distributable until thé youngest attained the age of twenty-one years. The number of parts into which the fund was then to be divided is left uncertain by the parol evidence.

The trust restricting the distribution of the fund to the survivors is not made out ;• and the act of the defendant, Me. Mennomy, in executing a bond and mortgage payable in the manner already mentioned, is evidence to the contrary. In order more clearly to show the trust was not as is asserted by the defendant, the complainants have produced in evidence the will of Margaret Harrison ; and it has been made one of the points on the part of the complainants, that even ad-nutting the money to have been confided to him by the testatrix, with the instructions which he alleges, still her subsequent will must alter and control the disposition of it. I think this correct. The money in the hands of the defendant was still the money of the testatrix and subject to her disposition by will. It was competent for her to declare the trusts# fix the time when the distribution should be made, and designate the persons or classes of persons to take. And all this she has done by her will. The money secured by the bond and mortgage is the same which she disposes of and gives over by her will; and although this bond and mortgage purport to secure the payment of the principal and interest to the five children absolutely as a debt owing to them, yet the security must be held to enure for the benefit of those entitled under the will. Robert having died before the time appointed for the division of the fund, his interest therein ceased and the right to his share devolved upon his children and did not go to his personal representative. So, upon the death of Charles, his interest ceased and was not transmissible to his personal representative and, leaving no issue, it merged in the shares of the survivors. Again, with respect to the interest of Mrs. Littlejohn. This vested in her child at her death and not in her husband; and, consequently, his personal representative is not entitled to receive it.

The objection arising from the production of the will in evidence to the right of the administrators of Robert, Charles and the husband of Mrs. Littlejohn to file this bill was not taken upon the original hearing of the cause, but is now—upon the rehearing—urged: and it appears to be insurmountable. If we take the bond and mortgage in connection with the will, (and which is produced by the complainants for the purpose of controuling the disposition of the money) it will at once be seen that the present complainants can have no interest in the money and no right, in their representative capacities, to file the bill. In case any portion of the money, to arise from the sale of the mortgaged premises, should be permitted to go into their hands, they would receive it as assets to be applied in a due course of administration. The court cannot make a decree for a sale of the mortgaged premises and, ai the same time, stop the money from going into the hands of the complainants. This would amount to an acknowledgment of their right to sue and yet be a withholding of all benefit by it.

Nor do I see how the present complainants can be regarded in the light of trustees suing for the benefit of the parties entitled under the will. The defendant, Robert Me. Mennomy, is the trustee of the fund; and the bond and mortgage may be considered a security for the performance of the trust. No doubt the persons actually entitled, as cestuis que trust, may come into this court and call him to an account and claim the benefit of the security. They may have rights to an account beyond what may be secured by the terms of the bond and mortgage. And hence the propriety of their being before the court as parties complainants, instead of the persons who have filed the bill.

I feel constrained to say the complainants have, by the production of the will, debarred themselves from a standing in this court.

It has been urged that this objection comes too late—that it should have been taken at an earlier stage of the suit. Not so. The defendant was at liberty to take the objection at any time after the foundation for it was laid; and, indeed, it could only openly appear upon the hearing. Besides, it is not a mere formal objection which could be obviated by an amendment, but one of substance, going against the entire right of the complainants to sue, from their having no interest in the matters in controversy.

The decree heretofore made must be reversed and the bill dismissed.

As there were prima facie claims of right in the persons represented by the present complainants and on account of their having prosecuted the suit in good faith, I shall leave the respective parties to bear their own costs.