133 F. 799 | S.D.N.Y. | 1904
This is a motion by W. & J. Sloane to vacate as to them an injunction restraining creditors from interfering with the property of the bankrupt. By the will of the bankrupt’s father a trust fund was created for the benefit of the bankrupt, out of
The beneficiary of this trust fund has no estate in the income which can be seized upon execution. The trust vests the whole estate in law and in equity in the trustee, subject only to the execution of the trust. By the statutes of New York it is provided that in the case of certain trusts the surplus of the income beyond the sum which may be necessary for the education and support of the beneficiary shall be liable in equity to the claims of his creditors in the same manner as other personal property which cannot be reached by an execution at law. A trustee in bankruptcy may bring a suit to enforce such liability. In Re Baudouine, 3 Am. Bankr. Rep. 651, 656, 101 Fed. 574, 41 C. C. A. 318.
If an adjudication shall be had and a trustee in bankruptcy appointed, the trustee can bring such a suit. If such a suit should result successfully, I think that no one creditor should be permitted to obtain a preference by obtaining a lien on the fund within four months before the bankruptcy. It is claimed that this lien is analogous to a mechanic’s lien, which has been held not to be a lien obtained through legal proceedings, within the meaning of section 67f of the bankrupt act of July 1, 1898, c. 541, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3450]. But I think that this lien is one obtained through legal proceedings, namely, by issuing the execution pursuant to the special order obtained.
My conclusion is that this motion should be denied, with leave to renew it if the trustee does not institute any proceedings to reach the trust fund for the benefit of creditors within 30 days after his appointment and qualification, or if he brings such proceedings and it is held in them that he is not entitled to recover.