108 F. 520 | 3rd Cir. | 1901
William B. Wetmore was on bis own petition adjudged a bankrupt January 13, 181)9, by the United States district court for the Eastern district of Pennsylvania. GL Plantou Middleton was appointed trustee March 14,1899, and filed in the court below February 23, 1900, the following petition:
In tiie United States District Court for tlie Eastern District of Pennsylvania.
No. 27.
In Bankruptcy.
In the Matter of William B. Wetmore, Bankrupt.
To the Honorable ,Tolm B. McPherson, Judge of the Said Court:
The petition of G. Plantou Middleton respectfully represents:
That on the thirteenth day of January, 1899. William B. Wetmore filed a petition in bankruptcy in your Honorable Court and was upon the same day duly adjudicated a bankrupt and Ids case referred to George E. Darlington, Esq., Referee in Bankruptcy.
That on the fourteenth day of March, 1899, your petitioner was appointed by the said Referee, trustee of the estate of the said bankrupt.
That the said bankrupt appeared before the Referee at divers times for examination, and upon ids examination held on tice twenty-fifth day of Novem-. her, 1899. the following facts were in evidence, as appear set forth at largo in stenographic copy of the notes of testimony taken before the said lief croc», duly filed by him with his report in the above entitled cause.
That one Samuel Wetmore, the father of the said bankrupt, died in the City of New York on the 6th day of March, 1886, having first made his last will and testament, dated the eleventh day of October, 1882, duly proven and registered in the Surrogate’s office for the City and County of New» York and Slate of New York, on the sixth day of April, 1885, wherein and whereby, inter alia, he provided as follows:
“Fourth. I give and bequeath to my executors hereinafter named other than my wife the sum of one hundred thousand dollars (in cash or in securities or stock valued by my executors at that sum) upon trust to keep the same in-veslod and to receive the income thereof and after deducting reasonable charges for the management of the said trust, to apply the net amount of such income from time to time as it shall accrue, to the use of my wife, Sarah Taylor Wetmore, so long as she shall live; and I empower my said wife to dispose of the principal sum so held in trust and any accumulations thereof by last will and testament duly executed by her, and in such manner as she shah think proper, and in default of such disposition by will I give the said trust fund upon her decease to my own then surviving next of kin in like manner and shares as if the same were to be then distributed as my own proper estate dying at time intestate.”
That the said bankrupt, William B. Wetmore, was the only child and issue of his parents, and was one of the executors mentioned in the said will of his said fa i her.
That as such executor the said William B. Wetmore had charge of the investment and management of the said trust fund of one hundred thousand dollars therein mentioned.
That Sarah Taylor Wetmore, the mother of the said bankrupt, the beneficiary under the said trust, died on the seventeenth day of March, 1899, shortly after the adjudication of bankruptcy, having first made and published her last will and testament, bearing date the thirteenth day of January, 1898, which has been duly probated in the office of the Register of Wills of Chester County, wherein and whereby she appointed her son, William B. Wetmore, the above named bankrupt, her executor, and provided in the exercise of the power of appointment in reference to the trust fund of one hundred thousand dollars, as contained in the will of Samuel Wetmore, her husband, as hereinabove set forth, as follows:
“Item. In accordance with, and in exercise of the power of disposition and appointment conferred upon me by the Fourth Item of the last will and testament of my deceased husband, Samuel Wetmore, dated the eleventh day of*522 October, 1882, duly proven and registered in the Surrogate’s office in and for the City and County of New York and State of New York on the sixth day of April, A. D. 1885, I do will, order and direct and do give, devise and bequeath unto my said son, William Boerurn Wetmore, his heirs and assigns in fee simple, the said principal sum of one hundred thousand dollars ($100,000), so devised ‘In Trust’ for my benefit during my life, as by the said Fourth Item of my husband’s will is directed, and so that my said son shall have and hold the same free and discharged from all trusts.”
It further appeared from the testimony of the said bankrupt that at the time of his adjudication in bankruptcy, as sole surviving' trustee of the aforesaid fund of one hundred thousand dollars, he had in his possession the sum of about fifty-five thousand dollars, the balance of the said fund having been lost through re-investment and by reason of encroachments upon the princi-pahin the lifetime of the said Sarah Taylor Wetmore.
That by virtue of the premises, as aforesaid, the said fund of fifty-five thousand dollars in the hands of the said bankrupt, as trustee for his mother, became the'individual property of the said bankrupt and was then in his possession in cash or in securities.
Your petitioner further avers that in the schedules annexed to his petition in bankruptcy, the said bankrupt has made no mention of his interest in the aforesaid fund. That the said fund or the securities in which the same was invested is within the knowledge of the said bankrupt, and that he has failed to disclose the same to your petitioner, as trustee in bankruptcy. That the said fund and the securities in which the same are invested properly belongs to your petitioner as such trustee, being “property which prior to the filing ■of the petition, he could by any means have transferred or which might have been levied upon and sold under judicial process against bim,” within the meaning of section 70 of the National Bankrupt Act, and the same lawfully belongs in the custody of the said trustee and is applicable to the payment ■of the debts of the said bankrupt duly proved against him. .
. Wherefore your petitioner prays your Honorable Court to make an order requiring the said William B. Wetmore to pay over to the petitioner, as trustee in bankruptcy, the sum of fifty-five thousand dollars or deliver the same to him in securities therefor as above set forth.
And your petitioner will ever pray. G. Plantou Middleton.
To this petition the bankrupt interposed a general demurrer which was sustained and the petition dismissed by the court below June 12, 1900. The revision oí this proceeding is the object oí the petition now before us. It is not disputed that the trustee upon or shortly after his appointment became duly qualified to act as such, nor that Samuel Wetmore, the father of the bankrupt, had at the time of his death his domicile in üew York. The sole question for our determination is whether on the facts disclosed William B. Wetmore, not as testamentary trustee, but in his individual capacity, had at the time of his adjudication as a bankrupt any “property” in the unex-pended balance of the fund mentioned in the fourth item of his father’s will and in his mother’s will, “which prior to the filing of the petition he could by any means have transferred or which might have been levied upon- and sold under judicial process against him.” The fact that Sarah T. Wetmore limited or appointed the fund or what was left of it to the bankrupt is unimportant. Property acquired by a bankrupt only after the filing of a petition in bankruptcy does not pass to the trustee. While the interest or estate which one takes by virtue of the execution of a power of appointment is acquired under the authority of the power and is referable to the title of the donor, and not to that of the donee of the power, such interest or estate cannot vest before such execution. Mrs. Wetmore did not
“In default of such disposition by will I give the said trust fund upon her decease to my own then surviving next of kin in like manner and shares as if the same were to be then distributed as my own proper estate dying at time intestate.”
The fourth item contains prior to the above quoted provision no reference either to children or tb next of kin. The natural import of the language is that on the death of his wife his next of kin were to take only in the event and to the extent of her failing to execute the power of appointment, and that in such case the next of kin who should take were to be his “then surviving next of kin” and should take the trust fund only in like manner and proportions as if the saíne were “then distributed” as his own estate, he dying at that time intestate. The next of kin who were to take in default of appointment might or might not include a child or children of the tesla tor, or might or might not include his more remote issue. Within his contemplation either collateral kindred or direct descendants might constitute the ulterior beneficiaries of the fund. His intent was clear that only such of his next of kin as should be living
“Section 13. Future estates are either vested or contingent. They are vested when there is a person in being who would have an immediate right to the possession of the lands upon the ceasing of the intermediate or precedent estate. They are contingent whilst the person to whom, or the event upon which they are limited to take effect, remains uncertain.”
If this statute furnishes the rule applicable to personalty, it fails to support the contention of the petitioner. The bankrupt, would not under his father’s will have had an immediate right to the fund if his mother had died prior to the filing of the petition in bankruptcy. Whether he would have become entitled at that time under the fourth item would have depended upon an event wholly beyond his control, namely, the execution or non-execution by his mother of the power of appointment. Reference is" also made to section 35 of the same title and chapter. It is as follows:
“Section 35. Expectant estates are descendible, devisable, an'd alienable in the same manner as estates in possession.”
This section has been held to apply to personalty. The difficulty encountered in the practical application of this provision is found in the determination of what constitutes “expectant estates.” If the bankrupt had an expectant estate it undoubtedly passed to the trustee. But if he had no claim or title, absolute or defeasible, vested or contingent, but merely an expectation of an estate or interest in the future, then there was nothing in him to pass to the trustee. It is contended on the part of the petitioner that the limitation to the testator’s next of kin vested on his death in the bankrupt a present right to the fund, subject to' divestiture by the death of the latter during his mother’s life time or by her execution of the power of appointment, and that this right had a marketable value and was properly within the meaning of the bankruptcy act. But it was not necessary to the accomplishment of the plain purpose of the testator that the bankrupt should during the life time of his mother have either a vested or a contingent right to the enjoyment of the fund on and after her death. Enjoyment of the fund by him tinder his father’s will was absolutely dependent upon his survival of his mother and her failure to appoint the fund exclusively to oth
The order of the court below dismissing the petition of the trustee is affirmed.