2 Barb. Ch. 506 | New York Court of Chancery | 1848
The vice chancellor, from what is stated in his opinion, appears to have overlooked the fact that
I have not been furnished with the reasons of the complainants’ counsel for supposing that the devise and bequest of one-fourth of the residuary estate of the testator, for the support of the family of Barney Corse during his life, with remainder in fee to his children or issue, is void. And I have looked in vain for any thing to satisfy me that it is so in fact. It does not appear whether Barney Corse had a wife living, but the testa? tor undoubtedly contemplated that he might have one; for he speaks of his son’s children, born and to be born. The support of the wife, as well as the children of the son, was therefore probably intended to be covered by the word family in the original will; although in the codicil the testator speaks of this one-fourth of his residuary estate which he had by his will directed to be invested and placed at interest during the life of Barney Corse, and the interest or income, to be applied by the executors, in their discretion, to the support of his children. It is perfectly clear that he did not intend to provide for the support of Barney Corse himself out of that share of the prop*
A trust in the executors, as to this part of the residuary estate, is not created in terms. But, taking the whole will together it is very evident that he intended his executors should invest one-fourth of the residuary personal estate, and one-fourth of the proceeds of the real estate which they were to sell for the purposes of the will, and hold the same as executors during the life of Barney Corse; and should accumulate the interest or income which they should not think it necessary to expend for the support of the family in the meantime. And the testator intended that after the death of Barney Corse, the principal of that fourth of the estate, together with the accumulations thereon, should'go to his children then living, and to the issue of those who had died, per stirpes. So far as regards the trust to invest the capital of this fourth of the residuary estate, and to apply the income, or so much as may be necessary, to the support of Barney Corse’s family and the education of his children, it appears to be such a trust as is authorized by the 3d subdivision of the 55th section of the article of the revised statutes relative to uses and trusts. (1 R. S. 728.) For it is a trust to receive the income of the property, and to apply so much of it as is necessary to the support of such of the members of Barney Corse’s family as were in existence at the death of the testator, for life, or for a shorter period if Barney Corse should die before them; and subject to open and let others into the class, from time to time. It is true, such an interest, in the income of the estate, may suspend the absolute ownership of the property, during its continuance. But as that absolute ownership is in no event to be suspended beyond the life of Barney Corse, which is only during the continuance of one life in being at the death of the testator, this portion of the will does not contravene the provisions of the revised statutes in that respect. And, for the same reason, the contingent limitations over of the capital of this fourth part of the testator’s estate, in fee, upon the death of Barney Corse, are valid.
-1 am inclined to think, however, that for the present, the whole of this surplus income is validly and effectually disposed of by the will; although in the event of some contingencies, which may happen, certain future interests in the income of this share of,the testator’s estate, which are attempted to be created by the will, during the life of Barney Corse, may not be valid under other provisions of the statutes, The 40th section of, the article of the revised statutes relative to the creation and division of estates, (1 R. S. 726,) provides that when, in consequence, of a valid limitation of an expectant estate, there shall be a suspense of the power of alienation, or of the ownership, during the continuance of such suspense the rents and profits of the property are undisposed of, and no valid direction for their accumulation is given, such rents and profits shall belong to the, persons presumptively entitled to the next eventual estate. And this rule also applies to a future interest in personal estate, by another section of the revised statutes. (1 R. S. 773, § 2.) In the case under consideration, the five children of Barney Corse who were in esse at the death of the testator, are presumptively entitled to the next eventual estate in this fourth part of his property. And I see nothing to prevent them from taking the «'hole of the income thereof, which is not effectually disposed of by the will, during the time they continue to be thus presumptively entitled. Nor do I see any difficulty in permitting-after-born children to come in and share in the income which
If the authority given to the executors, to lease the real estate until it can be sold, has the .effect to suspend the absolute power of alienation, in that part of the testator’s property, beyond the time allowed by law, it is void... But the power in trust to sell would still be valid; and the real property must, in equity, be considered as converted immediately into personalty, where it is necessary to carry into effect the will of the testator, and to prevent injustice to any of the objects of his intended bounty. (Van Vechten v. Van Vechten, 8 Paige's Rep. 104.) For, where a will contains different trusts, some of which are valid and others void, or unauthorized by law, or where there are distinct and independent provisions as to different portions of the testator’s property, or where different estates or interests in the same portions of the property are created, some of which provisions, estates or interests, are valid, and others invalid, the valid trusts, provisions, estates or interests, created by the will of the testator will be preserved; unless the valid and. the invalid are so dependent upon each other that they cannot be separated without defeating the general intent of the testator. (Darling v. Rogers & Sagory, 22 Wend. Rep. 483. Parks v. Parks, 9 Paige's Rep. 117.)
There is also a void trust, for the accumulation of so much of the income of §20,000 of Israel Corse junior’s fourth of the residuary estate as the executors in their discretion shall- not think proper to pay over to him, or apply to.his support or that of his family, if he should have one. That portion of the income, however, is not undisposed of by the will; although •Israel junior had no children at the death of the testator. For by the provisions of the will and codicil, his two sisters, and the children of his brother Barney who were then in esse, were presumptively entitled to the next eventual estate in that part of the testator’s property •; and they are en titled to so much of th e income as is not validly and effectually disposed of in some other way. But if Israel should marry and have issue, such issue would then
The income of $20,000 of Mrs. Thome’s fourth of the residuary estate for life, and the capital of the residue of that fourth, is given to her immediately, upon the death of the testator, through the medium of the executors; and the trust to receive the income of the $20,000 and pay it over to her, from time to time, is a valid trust. And the limitations over of the capital of the $20,000, of that fourth of the-estate of the testator, in the different contingencies contemplated by him in his will and codicil, are all valid. The dispositions made by the will, of the principal and income of the $20,000 of Mary Corse’s one-fourth of the testator’s residuary estate, are valid, for the same reason.
The surplus of the shares of Mary Corse and Israel Corse junior, beyond the $20,000 carved out of each share, is to be paid and delivered to them respectively when they shall arrive at the age of twenty-one. These are immediate gifts of the property. And there is an implied trust, for the executors and guardians to accumulate the income, during the minorities of the legatees respectively, for their use and benefit; beyond the portion of such income which the executors and testamentary guardians shall think proper to apply for the support and education of these minors, in the meantime. And as these accumulations. are for the benefit, of infants who were in esse when such accumulations were directed to commence, and must terminate with the minorities of the respective legatees, they are valid, All the testator’s interest in those portions of the property are effectually disposed of by his will, whether the minors do or do not, attain the age of twenty-one.
The only interest, therefore, which Barney Corse: had in the estate of his father, at the time of the filing of the bill in this cause, must depend upon a remote contingency; and can only vest in him or his assigns, as an interest in possession, by the death of all his children during his life. For the contingent interest which was given to him by the original will, as one of
It is true, as I have before observed, the testator by the codicil declares that it is his will and intention that his son Barney shall not, in any event, become entitled to any part of his estate; and he therefore revokes the contingent limitation over to those who should then be his heirs, so far as Barney is concerned. But the original will directed the capital of the §20,000, in the event contemplated, to be divided among those who should be the testator’s heirs at the happening of the contingency ; and in the proportions in which they would take his real estate if he had died seised thereof at that time. And the share which Barney Corse would have been entitled to under the original will, is only disposed of by the codicil in case he has children living at the time of the death of the brother or sister without issue. Barney, therefore, in the events I am now contemplating, would still be entitled to an interest in the portion of the capital of the §2.0,000, not effectually disposed of by the will. And he would take his interest in that portion of the capital, not under the will of the testator, but as one of his original heirs at law and next of kin of the testator at the ime of his death. For it is not sufficient, to deprive an heir at law or distributee of what comes to him by operation of law, as property not effectually disposed of by will, that the testator should have signified hi» intention, by his will, that his heir or distributee should not in
In relation to the fourth of the estate which is given to the executors, for the use of Barney Corse’s family during his life, and to his children and issue after his death, it is effectually disposed of by the will after his-death, even if he should die without issue. For in that • event it is to go to the then heirs of the- testator," under the provision of the original will on that subject; and-in the proportions which they would take in the testator’s r.eal estate if he had died at that time. So that if- all the descendants of the testator should be dead, his collateral heirs then in existence would take the property, under the will. And those who were presumptively entitled to this ultimate remainder in fee, would, under the provisions of the revised statutes, have a right to the income of that fourth of the estate, if the issue, of Barney Corse should become extinct before the time appointed, by the will for the ultimate remainder in fee to vest in possession. But there may be some contingent interests in the income of the other shares, in the event of the death of all the issue of Barney Corse in his lifetime, in which he will be entitled to share; as interests in the testator’s property not effectually disposed of by the will.
It is evident, however, that these interests of Barney Corse, in the estate of his father,.and to which he may be entitled .upon the happening of the contemplated event, are so very remote-as not to be worth the extra costs and expenses of a chancery suit to reach them by a creditor’s bill. But as they are probably, worth something, the demurrer of the executors cannot be allowed upon the ground that the judgment debtor had no interest whatever, in the estate of their testator, at the time of the filing of the original or the supplemental bill in this cause. I sliall therefore proceed to consider the question whether the complainants have deprived themselves of the right to further prdsecute their creditor’s bill against Barney Corse, and against
Under the English bankrupt laws, the assignment gives to the assignees not'only the property which the bankrupt has at the time of the assignment, but also all that he shall afterwards acquire or become possessed of, by devise, descent, bequest, or otherwise, before he shall have obtained his certificate. (Stat. 6 Geo. 4, ch. 16, §§ 63, 64.) An uncertificated bankrupt, under the English law, is therefore incapable of trading or contracting for his own benefit; and all the property which he at any time acquires belongs to the assignee, for the benefit of the creditors who come in and prove their debts under the proceedings in bankruptcy. (Martin v. O’Hara, Cowp. Rep. 824. Evans v. Mann, Idem, 569. Ex parte Proudfoot, 1 Atk. 252.) It is therefore of very little use for a creditor, in England, to proceed .against the uncertificated bankrupt, in an ordinary suit, where he has a right to come in and prove his debt under the commission. Previous to the statute 49 Geo. 3, ch. 121, § 14, there-was no positive rule of law prohibiting a creditor of the bankrupt, who had proved his debt for a special purpose, and without intending, to claim a dividend of the estate, from proceeding by suit against the bankrupt to compel payment of the debt which had thus been proved. Thus, in Ex parte Salkeld, (1 P. Wms. Rep. 561,) which came before Lord Mansfield in 1719, a creditor who had come in and proved his debt to prevent the bankrupt’s discharge, where he thought it necessary to do so for that purpose, was permitted to imprison the fraudulent bankrupt, upon waiving all claim to his estate under the commission. And in Ex parte Capot, (West's Ch. Rep. 633,) which was before Lord Hardwick about twenty years afterwards, his lordship allowed a creditor, who had not only proved his debt but had received two dividends thereon, to proceed against the bankrupt at law; upon restoring the dividends, and electing to relinquish all claim to his estate under the commission. He also allowed the creditor, who elected to relinquish all claim to the bankrupt’s estate, to Drove his debt for the purpose of assenting to or dissent
This principle , of holding the creditor, who had come in. and obtained a dividend under the commission, to his election, protected the bankrupt from proceedings at law against -him, even if he had not obtained his certificate. For all his future acquisitions being liable to be seized by his assignees, the-lord chancellor held that the two remedies of the creditor were inconsistent with each other; and that the creditor could not claim under the commission, and at the same time resort to a difieren! remedy for the recovery of his debt. The great seal therefore, in the exersise of its jurisdiction, in bankruptcy, compelled the creditor to abide by his election in such a case; although the proof of the debt under the commission was not a bar at law.. But the statute 5 Geo. 2, ch. 30, § 9, declared that, if a second. commission issued against a bankrupt, who had previously been, discharged, the certificate under the second commission, should exempt his person from arrest and imprisonment, but that his
Such was the state of the law in England whpn the statute, 49 Geo. 3, c. 121, was passed. The 14th section of that statute declared that the proving of a debt under a commission against the bankrupt, should be deemed an election by the creditor to take the benefit of such commission with respect to the debt so proved. But the statute made no provision for vesting in the assignees, under a second commission, the estate which the bankrupt might acquire subsequent to the allowance of his second certificate. The question then arose, whether the act was a bar to an action by the creditor who had come in and proved his debt, under a second commission which had not produced 15 s. in the pound. This question first came before the court of king’s bench, about five years after the passage of that act, in the case of Read v. Sowerby, (3 Maule & Selw. Rep. 78.) And that court decided that the 14th section of the statute referred to was a bar to an action for the debt;
The question thus in conflict between the two courts was obviated by the statute, 6 Geo. 4, c. 16; which repealed all the previous laws on the subject of bankruptcies; and consolidated most of their provisions in a new act. That act, in addition to the provisions giving to the assignees of ah Uncertificated bankrupt dll his future acquisitions, until his creditors ivho came id and proved their debts udder the commission were fully satisfied, gives to the assignees under a second commission, which does not produce 15 s. in the pound, the future acquisitions of the bankrupt, for the benefit of the creditors who have proved their.debts. And it gives td the bankrupt the right to plead his certificate in bar; without reference to the question
The fifth section of our bankrupt act of 1841, appears to have been framed with a view to obviate some of the difficulties which had arisen under the English bankrupt laws. For, ’instead of prohibiting a creditor from coming in and proving a debt, under the proceedings in bankruptcy, until he should have relinquished any suit which he had previously instituted for the recovery of that debt, as he is bound to do in England, this section of our act, of 1841, declares that the mere act of proving a debt under the proceedings in bankruptcy, shall of itself be deemed a surrender of all proceedings a.ready commenced, and of all unsatisfied judgments already obtained on such debt. And, instead of declaring the pi oof of the debt to be an election by the creditor to take the benefit of the pro
This construction of the bankrupt act, would of course protect the bankrupt from any proceedings against him, at law or in equity, until it should be finally settled that he was not entitled to a discharge. In case a discharge was granted, it would likewise protect him against the claims of fiduciary creditors, who had come in and proved their debts under the decree in bankruptcy; as the supreme court of the United States decided in the case of Chapman v. Forsyth, (2 How. U. S. Rep. 202.) And it would probably prevent foreign creditors, who had come in and proved their debts under the proceedings in bankruptcy, from instituting suits in another country, against a discharged bankrupt, if his discharge was not fraudulently obtained. For even foreign tribunals might consider such a waiver of all right of action and suit, either at law or in equity, by the creditors who had come in and taken their chances for a dividend of the estate of the discharged bankrupt, to be binding upon such creditors there, as well as here ; although the •discharge, itself, without such a waiver, might have no binding force beyond the limits of the United States. This rational
I am not aware that this question has before arisen and been directly decided in this country; though several judges, when speaking in reference to suits by creditors, while the proceedings in bankruptcy were pending, and before a final decision of the court denying the bankrupt’s application for a discharge, have said that a creditor who had come in and proved his debt could not sue the bankrupt. And the conclusion to which I have arrived has not been "come to without considerable hesitation. But my opinion is founded upon the fact, that to give the construction to the general language of the fifth section of the bankrupt act which is contended for by the counsel for the respondents, would be to make that provision of the statute wholly inconsistent with the evident intention of the lawmakers; as evinced by several other provisions of the same act.
This, however, does not dispose of the case now before me, in favor of the appellants. For, upon another ground, I think the supplemental bill cannot be sustained. The original bill of the complainants was founded upon a judgment recovered "previous to the decree in bankruptcy; and it was filed before they
In this case, the suit upon the original bill of the complainants, by the proof of their debts under the decree in bankruptcy, had been surrendered and discontinued, at the time the plea of the defendant Barney Corse Avas put in. Instead of pleading the proof of the debts in bar, therefore, he should have applied to the vice chancellor to dissolve the injunction and to stay all further proceedings in the suit; upon the ground that such suit was discontinued, as to him, by operation of law. And the complainants should not have taken issue upon a plea which was undoubtedly true, at the time it Avas pleaded, and when the replication thereto was filed; but they should have applied to have the plea taken off the files, and to have the suit dismissed upon the records of the court, without costs as to the oankrupt. And as they had, by their oAvn act, rendered it im
The decree of the vice chancellor allowing the demurrers, and dismissing the supplemental bill as to the respondents, must therefore be affirmed with costs.