35 N.J. Eq. 553 | N.J. | 1882
The opinion of the court was delivered by
This is an effort to reach equitable property and apply it in satisfaction of a judgment. That this property exists in the shape of a trust, in which the defendant in execution is the beneficiary, is apparent. If this trust is the creation of the debtor herself, the property is amenable to the action of this court of chancery.
If it be a trust created by some one other than herself, then, by force of the statute, it is relieved of any liability to- an application in liquidation of the debts of the cestui que trust. Hardenburgh v. Blair, 3 Stew. Eq. 645.
It appears in the cause that the father of the defendant, by will, left the sum of $6,000 to his executors in trust to invest, and to collect and pay the income to Keturah M. Evens, and,
It is perceived that the cestui que trust, under this instrument, had the power of complete control over the fund whenever she should choose» to exercise it. Upon her demand, the trustee was to pay it over to her.
Yet, until she should choose to exercise this power, and it wás executed, the trust existed; and it was not a ground for contention upon the hearing that the property, under such a trust, was within the excepted class of trusts mentioned in the statute.
The contention was that this trust became executed and that a new trust arose, the creator of' which was the defendant herself, and so subjected the present property to a liability for her debts. This is claimed to result from the act of the defendant in requesting the trustee to invest the money in the property which is sought to be reached in the present suit.
He made such investment, taking a deed of the property to himself in trust to suffer her to occupy the same and receive the income, and in trust to sell to such person as she should appoint, and should she die without appointing, then to sell and pay the proceeds to such person as she, by will, should designate.
Now, had the trustee, without the request of his cestui que trust, made this investment, it is clear that the original trust was still an existing trust.
It is not a question now whether the change of the trust estate from money into land was beyond the power of the trustee to accomplish. The breach of his duties, as trustee, involved no determination of his fiduciary character, nor does it relieve the property into which the money can be traced from the impress of the original trust.
Nor is it a question whether the trustee can be held responsible by the cestui que trust for his acts in making this transmutation of property. There is more than one instance in the books where a. cestui que trust has been held estopped by his assent to the acts of his trustee from thereafter claiming that the covenant was in breach of his duty. Indeed, this is the equitable
Now it seems to me that it is apparent that so far as the intention of the parties to the transaction which changed this money into land is involved, it was their desire that the trust relationship should continue to exist. I think that it did continue to exist without a break in its continuity, and that instead of there being two trusts, it was a single continuing trust arising from the will of the father of Keturah M. Evens.
The original trust could have been extinguished by the calling in of all the money, as she did call in the $1,500. Had she reduced it to her possession actually or constructively, any subsequent investment or transmutation upon mortgage or deed to another with whatever trust clause in her favor, would have been a creation of her own. Until she did this, I think the trust still exists. She has never had the legal title to any of the money, or to that which now represents money. Her power over the land is not greater than the power she had over the money. The trusts upon which the trustee now holds the legal title do not substantially differ from those under which he held the money. No release or receipt or acknowledgment on the part of the defendant, by which she discharges her trustee from the old trust or admits the reception of the amount held for her under the will, or its equivalent, appears in the case.
The result is, that, inasmuch as the trust still remains one not created by the defendant, the decree below must be affirmed.
Decree unanimously affirmed.
