6 N.Y. 567 | NY | 1852
Lead Opinion
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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *577 I have sought in vain to find some ground on which to sustain the whole claim of the plaintiff in this case, regarding the defense, as most inequitable and unjust. The plaintiff's services were rendered, and disbursements were paid by him, in good faith, for the protection and preservation of what was deemed Mrs. Blakeman's separate estate, upon her promise and that of her husband of remuneration out of that estate. After she has availed herself of the benefit of those services, she has found reasons, satisfactory to herself it seems, to repudiate her promises, and for setting the plaintiff at defiance. She now interposes, as a shield against his just and equitable claim, certain *578 provisions of the statute concerning uses and trusts; and for aught I can perceive, must prevail, as far as respects his demand for costs and counsel fees in the suits with Mrs. Bogardus, which arose without the retainer, express or implied, of her trustee.
The deed of Mrs. Blakeman and her husband to Belden of her separate estate, bears date October 7, 1842, and is in trust, to pay out of the rents, income and profits, first, the interest upon certain incumbrances on the trust property; second, the taxes and assessments on the same; third, all necessary expenses incurred in needful repairs on the premises, andfourth, to pay the remainder of such rents, income and profits to Mrs. Blakeman, upon her own separate receipt, notwithstanding her coverture, to the intent and purpose, that the same or any part thereof might not be at the disposal of, or subject to the debts, liabilities or engagements of her husband, or of any future husband she might have, but at her own sole and separate use and disposal, c.; with power to Mrs. B. to dispose of the premises by last will and testament, and in default of such appointment, giving further directions in relation to the disposition of such income after her death. There are other provisions in the deed, not material to the questions in controversy.
The revised statutes concerning uses and trusts provide that "every express trust, valid as such, in its creation, except as "herein otherwise provided, shall vest the whole estate in the "trustees, in law and in equity, subject only to the execution of "the trust. The persons for whose benefit the trust is created, "shall take no estate or interest in the lands, but may enforce "the performance of the trust in equity." (1 R.S. 729, § 60.)
Section 63 of the same statute declares, that "no person beneficially "interested in a trust for the receipt of the rents and "profits of land, can assign, or in any manner dispose of such "interest."
The deed of trust in this case by force of the 60th section, above cited, vested the whole equitable as well as the legal estate in the trustee; and all that Mrs. Blakeman the beneficiary had *579 left, was an equitable right, which she could enforce against the trustee, but which, by the 63d section, she is declared incapable of assigning or otherwise disposing of. It is an error therefore, it seems to me, to call this right a separate estate. It is no estate whatever. Certain duties are devolved upon the trustee which the court would require him to discharge, among which is that of paying the remainder of the income, after discharging the prior obligations, to Mrs. Blakeman. Before she receives them, she has no power of disposition of them. She could not create a lien upon them for any purpose whatever, without the co-operation of her trustee. The plaintiff cannot in any event reach them under the 57th section of the statute, for the reason that he does not stand in the relation of creditor of thecestuis que trust. He was not a creditor in the sense of that section, because Mrs. Blakeman was a feme covert, at the time of the retainers and the rendition of the plaintiff's services, and incompetent to contract a debt.
But with respect to so much of the plaintiff's claim as relates to his costs and counsel fees in the two suits last mentioned in the bill of complaint, I think it may be sustained. In those suits, Belden, the trustee, was made a party defendant. The object of them was to set aside the deed and subject the trust property to debts owing by Blakeman, the husband, and thus defeat the principal, if not the only object of the trust. Belden was unwilling to incur any personal liability in their defense, and in my judgment it was competent for him to give the plaintiff a lien upon the future receipts of income, for the purpose of defending the trust estate against the creditors of Blakeman. He was not bound to pay out his own money, or to incur personal responsibility, and it does not appear that he had any funds in his hands applicable to such purposes. That it was his duty as trustee to resist the assaults that were making, so far as he was able, without advancing his own funds, or involving himself in personal responsibility, there cannot be a shadow of doubt; and if competent counsel could be found who would undertake the defenses, relying upon future receipts of income for his compensation, *580 it seems clear to me, it was his duty to pledge the income for that purpose. If he had advanced his own means, or given his personal liability, he would clearly have had a lien upon the incoming rents and profits for the purpose of reimbursing or indemnifying himself; (Hide v. Haywood, 2 Atk. 126; Balch v. Halsham, 1 P. Wms. 455; Caffrey v. Darby, 6 Ves. 497; Warral v. Hartford, 8 Id. 8; Dawson v. Clark, 18.Id. 254; Wilkinson v. Wilkinson, 2 Sim. Stu. 237;) and there is no rule of law or equity within my knowledge which would prevent his assigning that lien, if necessary for the protection of his cestuis que trust. The deed, it is true, does not, in terms, contemplate any other appropriation of the rents and profits, than for the objects specified. But what then? Shall the trustee stand by quietly and see the objects of the trust utterly frustrated? It would be a reproach with which the law is not to be made chargeable. Rather than suffer it, the law will infuse into the trust deed a provision to enable the trustee to exercise the necessary power, if possible, to prevent it.
It is undoubtedly true as a general rule, that where a trustee employs agents in the execution of his trust, they are to look to him individually, and have no lien upon the trust fund for their compensation. If he is in funds he is bound to protect the estate, in which case he has no lien, and consequently cannot assign any, having none to assign. But being without funds, and a necessity arising for expenditures in order to protect the estate from spoliation, he may either make them himself, and be allowed for them in the passing of his accounts, or may engage others to do it upon the credit of the fund, reserving to himself the same management and direction as in any other case, and thus avoid the objection that he had delegated his trust. The latter, I think, is substantially this case.
If I am correct, the judgment of the superior court should be affirmed in toto. No costs of these appeals to be allowed to either party as against the other. *581
Concurrence Opinion
I entirely concur in the opinion of the justices delivered at the general term, when this case was decided. By the terms of the trust deed the trustee was to receive the rents and profits of the lands, and to pay them over to Mrs. Blakeman, to her separate use during her life. This was a valid trust under the 3dsubdivision of section 55, 1 R.S. 728, and was so held by this court in Leggett v. Perkins. (2 Comst. 397.) The whole estate, both in law and equity, was vested in the trustee. (1R.S. 729, § 60.) By the same section it is declared that thecestui que trust could not take any estate or interest in the lands, but could only enforce the performance of the trust. The bill filed by the plaintiff alleges, that a creditor of her husband had filed a bill against her husband and herself, and sought to set aside the trust deed, so as to make the property liable for her husband's debts, and that he rendered services as solicitor and counsel, in defence of that suit and others of a like nature. He was aware, when he rendered those services, that all the estate or interest which Mrs. Blakeman had in those lands was by virtue of this trust deed, which the law declared to be no estate or interest whatever, either legal or equitable, but that the whole estate was in her trustee, whose duty it was to protect it, if attacked. Nothing short of a retainer by the trustee could entitle the plaintiff to recover for services rendered in the defense of such an estate. The plaintiff can recover, if at all, solely on the ground that Mrs. Blakeman has a separate estate in those lands, by virtue of the trust deed. Now, to call this a separate estate, where the law declares that it is neither an estate or interest, in law or in equity, seems to me to be a contradiction in terms. In England where the rule was first laid down by Lord Hardwicke, in Peacock v. Monk, (2 Ves. sen. 190,) it was upon the ground that the wife had a separate estate, which could not be charged with her husband's debts, and which she was free to alienate and dispose of, without any control or interference on the part of her husband. By an examination of the English cases which followed and adopted this decision, I find they were all cases where the wife's estate was *582 such that she had power to sell and convey it as her separate property, which necessarily included the power to charge it with the payment of debts. (Hume v. Tenant, 1 Bro. Chan. Cas. 16; S.C. 2 Dickens, 560; Fettiplace v. Gorges, 1 Ves.jr. 46; S.C. 3 Bro. Chan. Cas. 8; Essex v. Atkins, 14Ves. 542; Heatley v. Thomas, 15 Ves. 596.) The courts have never shown any disposition to extend this rule to a case where there was the least doubt as to the existence of the wife's separate estate, but rather to limit or qualify it. Our own courts in adopting the rule have evidently made this the foundation of it, and have never extended it to any case where the wife had not the complete power of alienating the estate. (Jaques v. Meth. Episc. Church, 17 John. 548; North Amer.Coal Co. v. Dyett, 7 Paige, 9; S.C. 20 Wend. 570;Gardner v. Gardner, 7 Paige 112; Cumming v. Williamson, 1 Sand. Ch. Rep. 17; Curtiss v. Engel, 2 Id. 287.) The plaintiff on the argument cited the case of the Firemen'sInsurance Company of Albany v. Bay, (4 Barb. 407,) as authority to show that Mrs. Blakeman by the trust deed had a separate estate in these lands. The ruling in that case, although there are some unguarded expressions in defining what is a separate estate, and which were not necessary to the decision, is nevertheless in unison with the other cases to which I have referred. In that case the father devised lands to trustees for the benefit of his daughter, and they were authorized and empowered by the will, "from time to "time, to sell and dispose of such parts of his real estate, in "fee simple or otherwise, as his daughter, by writing under her "hand, should from time to time request or desire, and pay the "proceeds over to her, for her separate use, notwithstanding "her corverture." The only question before the court, was, whether she could mortgage those lands without her husband joining in the mortgage. That trust was created prior to the adoption of the revised statutes, when such a trust was valid; and as the law then stood, the cestui quetrust, by force of the terms of the devise possessed the whole equitable interest in the estate. It will be seen here that she virtually had the *583 power of disposing of it at her pleasure, as she had but torequest her trustees in writing to sell any part of it, and they were bound to do so, and to pay the proceeds over to her for her separate use. (Hill on Trustees, 421; Story's Eq. Jur. § 1, 388; 17 John. 548.) The court, therefore, might well decide, that she so far had a separate estate in those lands, that she could encumber them by mortgage, without the formality of her husband's joining in the mortgage, as he had no estate or interest in the lands to be encumbered. This is no authority for the plaintiff, for the facts show that it had the essential elements to constitute it a separate estate in the wife, to wit, the power to dispose of or sell it, through the medium of trustees, and to take the whole proceeds to her separate use. I have been unable to find any adjudged case, where the property of a married woman has been held liable for her debts not contracted before marriage, unless she had a separate estate with the power of disposing of it as if she were a feme sole, and I am not disposed, even if the question was now open, to extend the rule. The next question is as to the income, rents and profits of the lands. Has the wife such a separate estate in them that she can charge them with the payment of her debts? By § 63, 1 R.S. 730, it is enacted, that, "no person beneficially interested "in a trust for the receipt of the rents and profits of lands, can "assign or in any manner dispose of such interest." Looking at the reason, and the ground upon which the rule was first established by the courts, and which has since been steadily adhered to, it seems to me that the bare reading of this section would be sufficient to satisfy any one, that a person possessed of such an estate, could not charge it with the payment of his debts. But without enlarging upon this point, it is sufficient that it has been decided in the court of chancery in the case ofL'Amoreux v. Van Rensselaer, (1 Barb. Ch. Rep. 34.) That was a case, where the trust was in terms similar to the present. The chancellor in his opinion says, "the cestui que trust could "not assign, dispose of, or in any manner mortgage or pledge "her interest in the trust property, or in the future income *584 "thereof; nor could she contract any debt, which could create "a lien upon such future income, so as to authorize the creditor "to reach such income, either at law or equity." Without going through with the reasoning of the chancellor upon this point, which to me is perfectly conclusive, I am satisfied that this decision carries out the true spirit and intent of the statute, and that it ought to be adopted as the rule in this case. Assuming then that the plaintiff proved a retainer in the two first suits from Mrs. Blakeman, as there is no evidence of any employment or assent on the part of the trustee, the plaintiff cannot recover the costs in those suits, and the judgment of the general term in regard to them must be affirmed. In the other suits he was employed by the trustee, as well as by Blakeman and wife. As I have before said, it was the duty of the trustee to defend any suits by which the trust estate was attacked, and the employment of counsel for this purpose was in the line of his duty and eminently proper for the protection of the estate. The law allows him to reimburse himself out of the rents and profits of the estate. (Hyde v. Haywood, 2 Atk. 126; Balsh v.Hyam, 1 P. Will. 455; Worrall v. Harford, 8 Ves. 8;Dawson v. Clarke. 18 Ves. 254.) The judgment of the superior court allowing the plaintiff to recover his costs and counsel fees in the two last suits, must be affirmed, without costs.
RUGGLES, Ch. J. and JOHNSON, J. concurred in the conclusions arrived at in the foregoing opinions.
EDMONDS, J. declared his opinion in favor of reversing the judgment of the superior court, so far as it modified the judgment of the supreme court, and of affirming the judgment of the supreme court.
GARDINER and JEWETT, Js. were for reversing the judgments, both of the supreme and superior courts, and dismissing the bill of complaint, on the ground that the trustee could not avoid personal responsibility, and create a lien on the trust estate for the expenses attending its preservation.
Judgment affirmed. *585