61 F. Supp. 651 | D. Del. | 1945
This proceeding is instituted under the provisions of the federal Declaratory Judgment Act, 28 U.S.C.A. § 400, by plaintiff who is a receiver appointed by the courts of New Jersey. Plaintiff prays for a declaratory judgment that he is vested with title to all property rights and interests of one Ferdinand R. Patzowsky under the will of his father, Richard Patzowsky, deceased, and further that the court declare that the interest is such that it be payable to plaintiff upon the occurrence of certain contingencies. A motion to dismiss was argued on the grounds (1) there is no controversy between the parties within the meaning of the Declaratory Judgment Act; (2) the complaint here is in the nature of a creditor’s bill and therefore cannot be maintained in this district; and (3) the litigation does not involve the jurisdictional amount.
It appears from the complaint that Richard Patzowsky died in Wilmington in 1916. Under the terms of his will, Wilmington Trust Company duly qualified as trustee under three trusts which provide
On August 16, 1938, the Equitable Life Assurance Society of the United States recovered a judgment at law in the New Jersey Supreme Court against Ferd R, Patzowsky, a resident of the State of New Jersey (the same being the Ferdinand discussed supra), in the sum of approximately $133,000.
On June 29, 1942, the Supreme Court of New Jersey, pursuant to Secs. 2:26-157 to 2 ¡26-159 of the Revised Statutes
Plaintiff duly qualified as receiver. On March 15, 1945, plaintiff, through the local firm of Southerland, Berl & Potter, Esqs.,
Plaintiff contends that the refusal of defendant to acknowledge and recognize his title as receiver subjects him to great uncertainty and insecurity with respect to his rights as receiver for the reason that defendant, Wilmington Trust Company, as trustee, upon the death of one of the life tenants, may distribute the corpus of the trust to said Ferd R. Patzowsky and further, the reason that equities of third persons may intervene before the death of the life tenants to the irreparable loss of the receiver and for the further reason, that the trustee, by such refusal, may at some future date attempt to avail itself of the defense of laches as against the plaintiff. Defendant’s main contention, on the other hand, is that the complaint sets forth no controversy between the parties within the meaning of the Declaratory Judgment Act.
Since the complaint fails to make a case under the Declaratory Judgment Act, it shall be assumed, without deciding, that plaintiff is vested with the same rights as Patzowsky had under his father’s will, that this interest is property in New Jersey, and that the order giving him such rights is entitled to full faith and credit.
That the orders of the New Jersey Courts were effective to transfer any interest under the will to the receiver is subject to much doubt. These queries suggest themselves: (1) Was Patzowsky domiciled in New Jersey so as to make the doctrine of mobilia sequuntur personam applicable; (2) if yes, is an expectancy in an estate such a movable as follows a person; (3) what law governs whether an expectancy is a movable; (4) if an expectancy is not a movable, is the order appointing the receiver a nullity; (5) is the order appointing plaintiff “Receiver of the property and things in action belonging or due to or held in trust for said Ferd R. Patzowsky” in any event sufficient to include an expectancy ; and (6) if yes, can it have any effect if the expectancy is not a movable and mobilia sequuntur personam is, therefore, inapplicable ?
Plaintiff is compelled to concede that if Patzowsky’s expectancy is not regarded as property in New Jersey the complaint must fail. But plaintiff contends and it will be assumed without so deciding that Patzow-sky’s “interest” is analogous to the interest of a creditor who has an unmatured debt owing to him.
The nature of the “interest” of Patzow-sky under Items 4, 5 and 6 of his father’s will raises an interesting academic speculation. I am of opinion that the interest was contingent.
The complaint does not make a case under the Act. This conclusion is not reached by ignoring the well established rule that the primary object of the Declaratory Judgment Act is to afford a speedy and
Plaintiff relies on Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826, and Dewey & Almy Chemical Co. v. American Anode, 3 Cir., 137 F.2d 68, certiorari denied, 320 U.S. 761, 64 S.Ct. 70, 88 L.Ed. 454 which, it is argued, impel the conclusion that the complaint in the instant case supports the ground for declaratory judgment relief. These cases are distinguishable. In the Maryland Casualty Co. case, claimant brought an action of tort against the insured for injuries arising out of an accident. Under the state law, claimant, if successful, could enforce his judgment by a supplementary proceeding against the insurer. After the action that preceded the judgment, the insurance company brought a complaint against claimant and insured seeking a declaration of non-coverage. The claimant had not made any claim against the insurance company under the policies but the Supreme Court held that an actual controversy existed between claimant and the insurance company. In that case the ultimate liability rested on the insurance company, if the claim was within the policy, since the original tort action had been reduced to judgment. Moreover, the legal interests of the parties were obviously adverse, and adverseness of interest would arise merely by the filing of the tort action by the claimant. In this case, however, there is no showing that the legal interests of the parties are adverse. Plaintiff simply
The motion to dismiss should be granted.
The trust created by Item 4 of the will is typical and is as follows:
“Item 4. — I give and bequeath unto my Executors, hereinafter named, the sum of Seventy-five Thousand Dollars (§75,000.00) in trust, for the following intents and purposes, to-wit:
“To invest and keep invested the whole of the said trust estate, or trust fund, in some good and productive security or*652 securities and to collect and receive the income therefrom, and, after the payment of the costs and expenses attending the care and management of said trust estate, to pay the said income unto my daughter, Antoinette Fleisch, of the City of New York and State of New York, for and during the term of her natural life, and, at the death of my said daughter, my said Executors shall pay over the principal, or corpus, of said last mentioned trust fund, or trust estate, in equal shares, unto such issue of my said daughter as shall survive her, per stirpes and not per capita, upon the arrival of such issue, respectively, at the age of twenty-one years, and if any such issue, so surviving my said daughter, as aforesaid, should not have attained the age of twenty-one years at the time of my said daughter’s death, my said Executors shall pay unto each of such issue during his or her minority the net income of his or her respective share of said trust estate until his or her arrival at the said age of twenty-one years; in case my said daughter should die without leaving issue, her surviving, or in case such issue should all die before arriving at the age of twenty-one years, my said Executors shall pay over unto my son, Ferdinand R. Patzowsky, the whole of the principal, or corpus of sai'd trust estate, or trust fund, to be his, absolutely.”
See 122 N.J.L. 482, 6 A.2d 390.
See 128 N.J.Eq. 579,17 A.2d 794; 131 N.J.Eq. 49, 23 A.2d 561.
The pertinent sections of the statute are as follows;
“2:26-158. Receiver; appointment
“The judge making the order for discovery may, after considering the evidence taken at the examination, either before himself or a supreme court commissioner or master in chancery, make order appointing a receiver of the property and things in action belonging or due to or held in trust for the judgment debtor as aforesaid, at the time of the recovery of the judgment or at any time thereafter.1 '
“2:26-159. Powers and duties of receiver
“A receiver appointed under authority of section 2:26-158 of this title shall have authority to receive, take into possession, and, if need be, sue in his own name as such receiver for the property and things-in action specified in section 2:26-149 of this title; and the receiver shall apply the same in payment of the judgment against the judgment debtor, the costs of the proceedings thereon and his reasonable compensation, to be taxed by the judge, and pay the residue into the court in which the judgment was recovered or docketed, for disposal according to law; and the judge shall order the judgment debtor to convey and deliver to such receiver all the property and rights in action and the evidence thereof.”
The letter reads, in part, as follows: “We feel that the demand made by you that we, as trustee, under the Will of Richard Patzowsky, acknowledge and recognize the title of Elwood F. Kirkman as Receiver is entirely premature. Since Ferd R. Patzowsky has no immediate rights or interest in possession under his father’s Will, we see no reason why we should either acknowledge or refuse to acknowledge the title of said Receiver at the present time.”
The New Jersey Courts also held that the interest is contingent. See note 3 supra.
WUat will undoubtedly happen is this. Upon the termination of the life estate— the death of the daughters — and in default of issue, the defendant, here, as testamentary trustee, having been advised of the claim of the plaintiff-receiver, by the institution of these proceedings, will file a bill for instructions in tbe Court of Chancery of the State of Delaware and seek to be advised as to whether the residuary estate should be paid to Patzowsky or his receiver. This is traditional practice in Delaware.