217 Wis. 11 | Wis. | 1935
The complaint alleges the recovery of a judgment in favor of the plaintiff for $4,750 against the defendant Miles Reif and a return of execution unsatisfied. It further alleges that a trust was created by the will of his grandmother for the benefit of the defendant Miles Reif, pursuant to which the county court by final decree assigned to Norma Reif and another, as trustees, a fund of $9,216.79, the income of which was to be devoted to the education and support of the defendant Miles until he should arrive at the age of twenty-five years, if he lived so long, and then the fund'with any accumulations of income not expended for his support and education was to be turned over to him; and if he did not reach the age of twenty-five years, the fund was to go to his mother, Norma, if she were living at his death; and if Norma were not then living, it was to go to the heirs of the testatrix, whoever they might be at that time. The complaint prays for several specific kinds of relief, or such other relief as may be equitable to prevent the fund from being so disposed of by the defendants that it cannot be devoted to plaintiff’s judgment in case the defendant Miles shall reach the age of twenty-five years.
The defendant Norma Reif is the sole surviving trustee of the fund. She and Miles answered the complaint admitting all the allegations of fact stated therein. Among the allegations of the complaint was one to the effect that Miles is the equitable owner of the fund and will become the absolute owner thereof upon arriving at the age of twenty-five years. The answer of Miles denies that he is the equitable owner of the fund, or interest therein, except as beneficiary of the income thereof for his support and education, and
A demurrer to an answer for insufficiency of facts to constitute a defense “searches the record,” and brings up the question whether the complaint states a cause of action. The allegation of the complaint next above stated is a mere conclusion of law from the facts stated. The allegations of the answer stated are mere denials of this conclusion of law. As no facts are denied in the answer, the effect of the order overruling the demurrer to it is that of an ordér sustaining a demurrer to the complaint for insufficiency of fact, and amounts to a holding that the complaint does not state a cause of action. So the real question at issue is whether the plaintiff is entitled to any relief upon the facts stated in his complaint, which was the issue in Arzbacher v. Mayer, 53 Wis. 380, 10 N. W. 440.
The plaintiff’s right to recover is grounded on the general principles of equity applicable to creditors’ bills and the Arzbacher Case, which construes sec. 3029, R. S. 1878, now sec. 273.02, Stats. This statute provides that whenever an execution is returned unsatisfied against a judgment debtor action lies to compel discovery of property belonging to the debtor or held in trust for him, and to prevent the transfer of any such property “except where. such trust has been created by or the fund so held in trust has proceeded from some person other than the defendant [debtor] himself.” The respondents claim that by reason of the exception above quoted, the plaintiff is not entitled to seize the fund or prevent its transfer. They contend that the defendant Miles has no vested interest in the fund and that it is therefore not subject to transfer or assignment.
In the Arzbacher Case corporate stock was by will bequeathed to trustees to pay the income to the widow of the testator during her life, and to turn the stock over to a son
The holding of the Arzbacher Case is to the effect that trust property held for the benefit of a debtor may-be applied to satisfaction of a judgment against him whenever his interest in the property is assignable. From this it follows that if the defendant Miles has an assignable interest in the fund in suit the plaintiff is entitled to such relief as will prevent its assignment, just as the plaintiff in the Arzbacher Case was entitled to such relief. The situation, if the defendant may by assignment transfer to another right to the fund when he becomes twenty-five years of age, if he reaches that age, is precisely the same as in the Arsbacher Case, and the plaintiff is entitled to whatever preventive relief the plaintiff in that case was entitled.
That the defendant has an assignable interest in the fund held for his benefit would seem to follow from sec. 231.19, Stats., which declares that “the rights and interests of every person for whose benefit a trust for the payment of a sum in gross is created are assignable.” Here a sum in gross is held in trust for Miles. If more than this is needed to support the assignability of the interest of Miles in the fund, the following supplies it:
The opinion in the Arzbacher Case bases the right of the plaintiff therein, in part at least, as do the New York cases which it follows, upon the analogous proposition that as in
Much of the briefs herein is devoted to the question whether the interest of the defendant Miles in the principal of the fund is vested or contingent. The appellant contends that the interest is vested, and therefore assignable; the respondents contend that the interest is contingent; that as it is contingent, it cannot be assigned, and that as only assignable, interests can be reached under the statute cited, under the rule of the Arzbacher Case, the interest of Miles cannot be reached. But whether the interest of Miles is vested or contingent is beside the case, for contingent interests may be conveyed as well as vested interests. As above stated, ex
It is stated in 3 Pomeroy, Equity Jurisprudence, § 1285, after saying that “modern English statutes have so far changed the common law as to permit the assignment at law of contingent and future interests, expectancies, and possibilities coupled with an interest in real estate,” that “the American legislation has generally been broader, and authorizes the assignment at law of such future expectancies and possibilities, when coupled with an interest, whether connected with real or with personal estate.” The future expectancy of Miles, even if considered as a possibility, is certainly coupled with an interest.- The case óf Lawrence v. Bayard, 7 Paige (N. Y.), 70, is referred to in the text of Pomeroy as illustrating the type of statutes supporting the statement last above quoted. This case gives the statutes referred to as supporting the latter proposition. They are the same as our statutes above stated. It is, moreover, to the precise point that such an interest in personalty as is here involved is assignable. In that case shares of stock were by will bequeathed to- trustees, to pay the income therefrom to L. during her life, and upon her death to turn it over to the then surviving eldest son of the testator. The eldest son of the testator was William. His receipt of the stock was contingent upon his surviving his brothers, just as the receipt of the trust fund by Miles is contingent on his becoming twenty-five years of age. William was living at the death of L. He had previously assigned his interest in the stock to H. H. brought a bill in equity to restrain William from transferring the stock and to restrain the trustees from turning it over to
“The revised statutes [the same as our statutes above stated], which were in operation when this sale was made, have declared in express terms, that expectant estates are descendible, devisable and alienable, in the same manner as estates in possession. (1 R. S. 725, § 35.) And by an examination of the several provisions of the revised statutes it will be seen that by the term ‘expectant estates’ the legislature intended to include every present right or interest, either vested or contingent, which may by possibility vest in possession at a future day. The mooted question, whether a mere possibility coupled with an interest is capable of being conveyed or assigned at law, is therefore forever put at rest in this state.”
And it is further there pointed out that “there never was a doubt that any interest whatever in personal property, or a mere possibility coupled with an interest in real estate, was assignable in equity.”
The proposition that the interest of Miles is transferable is supported by Restatement, Property (Tent. Draft No. 4), § 204: “The owner of any future interest in a thing other than land has the power, by an otherwise effective conveyance inter vivos, to transfer his interest or any part thereof.”
So also as to land, Ibid. § 203, p. 32: “(1) The owner of any remainder or executory interest in land has the power, by an otherwise effective conveyance inter vivos, to transfer his interest or any part thereof.” Executory interests in the above rule include contingent interests. Ibid. I to III, p. 33. The fact that the future interest may terminate before becoming possessory does not affect its transferability. Ibid. p. 34 c. The power of transfer exists, where it is possible that the interest will become possessory, although that it will become so is “most improbable.” Ibid. p. 40 e.
That future interests in land though contingent are subject to^seizure by creditor’s bill, is declared in sec. 207 of the
“. . . Though no precedent may be at hand in a given situation, since principles of equity are so broad that the wrong involved [or the right to be enforced] need not go without a remedy, its doors will swing open for the asking, and a new precedent be made.”
To grant the relief above suggested would protect the plaintiff and be fairer to the cestui que trust than to sell his interest in the fund. A sale as ordinarily made on execution or pursuant to judgment would carry the interest in the fund and thus carry the whole fund when the cestui que trust arrived at the age of twenty-five, if he reached that age. The uncertainty of his arriving at that age would prevent
By the Court. — The order of the circuit court is reversed, and the cause is remanded with directions to enter an order sustaining the demurrers to the answers and for further proceedings.