4 Abb. Ct. App. 83 | NY | 1864
The general exception in the case, if it raises any legal question to be reviewed here, is the single one, whether the plaintiff’s judgment against Mrs. Eames is a debt, within the provisions of the trust deed, which the defendant Kirkland is bound to pay in the execution of the trust. Points, it is true, are now made that the deed is fraudulent and void as to the plaintiffs, creditors of Mrs. Eames, and that in any view it was error" to dismiss the complaint, as she had "a valuable equitable interest in what remained of the trust property, which the plaintiffs were entitled to; but in the eomplaint there was no allegation or pretense that the trust deed was for any reason fraudulent or invalid, or that Mrs. Eames had any interest in the trust property applicable to the payment of the plaintiffs’ debt, nor were there any facts found, or legal conclusions of the court, to which exception was taken, bringing up either point for review. The plaintiffs treat the trust deed as valid in their complaint, not seeking to impeach it, but claiming the benefit of it as creditors of Mrs. Eames, within the scope of the trust; and the judgment demanded is, that the trustee pay the plaintiffs’ debt out of any trust funds in his hands, or transfer sufficient of the property to pay it. Instead of alleging in the complaint that the trust deed was void as to them, or intended to defraud creditors, the plaintiffs claimed a beneficial interest under it, and the pleading was not framed to reach any equitable interest of Mrs. Eames, if she had any, but to obtain payment of their debt from the funds or estate remaining in the hands of the trustee, on the ground that it was provided for in the deed. It is a rule in chancery, not affected by the Code of Procedure, that a party must recover according to the case made by his com-, plaint, or not at all; “ secundum allegata,” as well as “probata.” Ho decree can be made in favor of a plaintiff on grounds not stated in his complaint, nor relief granted for matters not
In Bailey v. Ryder, a judgment creditor sought to have certain lands applied in payment of his demand, on the ground that the purchase of them was in trust for the benefit of Ryder, the judgment creditor. The answer asserted, and the evidence showed, that the purchase and investment made were not for the benefit of Ryder, but for his children. The complaint had gone solely upon the ground that the judgment debtor was the equitable owner of the lands, they having been purchased by his direction and with his money, and the title taken and held for his use and benefit by two other defendants. This being disproved, and.the trust shown being not for the judgment, debtor but for his children, the plaintiff attempted to shift his claim for relief, contending that the investment of the sum of fifteen hundred dollars by the judgment debtor, although in trust for his children, was intended to defraud his creditors then existing, or that should thereafter exist; that it was in the nature of a voluntary conveyance to defraud creditors, and Was, therefore, void as to such creditors. But this court said
“ If the complainant’s rights depended upon showing that the creation and execution of the trust for the use and benefit of the children of Ryder was voluntary and fraudulent as against him, his course was plain. He should have amended his bill and stated the facts on which he meant to impeach it. The defendants would have been required to answer such facts, and, if denied, it would then have been competent to have supported the allegations by proof. The rule is explicit and absolute that a party must recover in chancery according to the case made by his bill, or not at all.”
The doctrine of this case is in harmony with the law as it now exists, the Code providing that “ the relief granted to the
Looking, therefore, at the matters charged, the issues raised and tried, the facts found, the legal conclusions of the judge, and the exceptions to such conclusions, as has been stated, the only point for our consideration is whether the debt of the plaintiff was within the provisions of the deed, of trust, which, in the performance of his duty, the defendant Kirkland was bound to pay. If it was not, the complaint was properly dismissed. On the contrary, if it was, as the trustee had sufficient of the trust property in his hands to pay it, the plaintiffs were entitled to judgment. The dismissal of the complaint, it is true, was not excepted to; but, as the judge evidently based his decision on the ground that the debt for which the action was brought did not come within the purpose of any of the trusts contained, in the trust deed, if he was wrong in this, the error should lead to a reversal of the judgment.
Kow, was the debt in suit embraced within the trust? The deed was executed and took effect on September 5, 1853. It conveyed all the property, real and personal, of Mrs. Eames to the defendant Kirkland and Walter S. Eames (since dead), subject to certain trusts. Amongst these, and primarily, was to pay her just debts of every description, including those specified in the schedule annexed to the conveyance, and any others due from her not thus specified. This was undoubtedly a trust for the payment of all debts of the grantor contracted at
If, then, at the time she executed the trust deed she was in no sense liable for or owed the plaintiffs the debt in question, there is no ground for claiming that it was a debt provided for in such conveyance. It is absurd to assume that the trust embraced the payment of a demand or liability that had no existence at its creation, and when it depended altogether on a contingency in the future whether the grantor would ever become bound, and that contingency entirely under her control.
If it were conceded that liabilities, contingent or otherwise, are provided for by the deed, it must be liabilities existing when the conveyance was executed, and for some existing thing, and to some one who could be secured. It should be at least such a demand as would entitle a party, under the provisions of the English bankrupt act, or our insolvent laws, to1 a share in the insolvent or bankrupt estate. There was no demand or liability in this case which could be proved under the bankrupt or insolvent laws, or on which any portion of the bankrupt- or insolvent estate could be paid, when the deed was executed, or for more than twenty years afterward. Young v. Winter, 16 C. B. 401; Boorman v. Nash, 9 Barn. & C. 145; Yallop v. Ebers, 1 Barn. & Ad. 698; Ford v. Andrews, 9 Wend. 312; Mechanics’ & Farmers’ Bank v. Capron, 17 Johns. 467; Doolittle v. Southworth, 3 Barb. 79; Hill on Trustees, 357.
Our statute provided that a discharge under the insolvent laws should be a bar to all debts of the insolvent, whether due or to become due, which existed at the time of the insolvent’s assignment; yet in Ford v. Andrews, supra, it was held that the demand of the accommodation indorser of the insolvent’s note, due before the assignment, for money paid on the note
It cannot, therefore, be insisted, upon any reasonable construction of the deed of September, 1833, that the plaintiff’s judgment is a debt within its provisions which the trustee is bound to pay out of the trust property. That deed only provided for the payment of existing liabilities. The debts are to be paid pro rata, and it manifestly was not intended that the trustee should wait twenty years before he paid them, to see if some debts should not be contracted by theJ manufacturing company which it would be unable to pay. Had there not been sufficient assets to pay conceded debts, the trustee would not have been justified iu retaining any funds to pay debts like the plaintiff’s that might possibly accrue on the dissolution of the corporation in an insolvent state. That is not the meaning of the deeds nor is the trust so expressed. It is expressed in these words: “ To, pay all my just debts of every description.” “The intent and object of this clause being
This disposes of the appeal upon the ground on which the action was presented by the pleadings, and tried in the court below, viz: assuming the trust deed to be valid, and claiming that the plaintiff’s judgment against Mrs. Eames was a liability provided for by it. As the debt in suit was not a debt within the provisions of the deed, no case was made entitling the plaintiffs to a judgment in their favor. Were the question, however, presented by the case, whether the plaintiffs were entitled to have the deed set aside and the property subjected to the payment of their judgment, on the ground of fraud, or because it was a conveyance of personal estate reserving a use or benefit to the grantor, I should entertain an opinion adverse to the plaintiffs. Instead of being made with intent to defraud the creditors of Mrs. Eames, a primary object of the conveyance was to provide for the payment in full of all her debts. The plaintiffs were not her creditors at the time of the assignment, and there could have been no fraudulent intent respecting them. The statute condemns alienations of property made with intent to defraud creditors. As against them only it is declared the conveyance or assignment shall be void. 2 R. S. 137, § 1. The plaintiffs, therefore, not being the creditors of Mrs. Eames when the conveyance or transfer was made, were not in a position to assail its validity on the ground of fraud. But it is claimed that the deed is void as against the plaintiffs, by another statute. This statute declares that “ all deeds of gift,
The judgment of the supreme court should be affirmed.
The justice before whom this case was tried found that the debt due to the plaintiffs, for which this action was brought, did not exist at the time of the execution of the trust deed in 1833, but accrued in 1854. The complaint does
There can be no difficulty in disposing of the first ground, by the statements that no doubt existed at the time of the trust deed from Mrs. Eames to the plaintiffs. It is trae she owned the stock then; and if the debt had been due then from the company to the plaintiffs it would have been provided for under the trust deed, but the debt was not created till nearly twenty years after the assignment was made. There was no liability existing at the time of the execution of the deed, and none for which the trustees could have been called on for payment. The deed was not intended to cover, and did not provide for, any not then existing indebtedness, and not for debts to be incurred twenty years thereafter. It is idle to say that Mrs. Eames was then liable for a debt which was not contracted, and for which the principal debtor, the company, were not liable, and which had no existence till twenty years thereafter.
I think it is clear that the debt is not one contemplated by the trust deed, or one which the trustees could have paid out of the trust funds without violating the terms of the trust; and it is equally clear that there could be no relation back to the original liability of Mrs. Eames as a stockholder, so as to cover debts contracted by the company long after the trust deed was executed. It is, however, urged that the trustees are liable, as the owners of the stock under the trust deed, and as such owners they are indebted to the company.
I do not think the plaintiffs can now claim against the trustees to recover for them, on the ground that they were the owners of the stock, and therefore liable. They have established, by their judgment against Mrs. Eames, that she was the owner. If the trustees were the owners of the stock, their
It is suggested that the debt should be paid out of the income belonging to Mrs. Eames under the trust deed. The complaint does not contain the allegations necessary to make out such a claim, and, even if it did, I think there is no reason for allowing it in this case. The whole title to the property was in the trustees, subject to the trusts. The provision for her support was personal, not assignable, and not subject to debts subsequently incurred, and even that has ceased by her death.
The judgment should be affirmed.
1. A person free from debt may make a settlement of his estate for the benefit of his family, by conveying to them the whole interest, to take effect in possession immediately, or the reversion, to commence in possession at his death. So, if by the same deed he make a provision for the payment of all his debts out of the property settled, so that creditors are not and cannot be hindered and delayed. The beneficiaries named, other than Mrs. Eames, took a vested estate in reversion by this deed. The nominal consideration of one dollar raised a use, and made it a good deed of bargain and sale, and vested the reversion immediately in the beneficiaries.
2. The fact that Mrs. Eames was a stockholder in the Manchester Manufacturing Company did not disable her from making the settlement. It is not possible that she could be considered a debtor until the plaintiffs’ debt was contracted, if she could be at any time before the dissolution of the company ; and there is no pretense that the debt on which the judgment was recovered was contracted prior to the conveyance to Kirkland and Eames. The case is very much like that
3. The plaintiff cannot, therefore, reach the the-interest of the persons ujion whom the reversion was settled. I have said that the estate of the beneficiaries, other than Mrs. Eames, was a vested estate; and I think it was such. If, however, it was contingent, on account of what is said respecting the law of descents and distribution which should be in force at Mrs. Eames’ death, it would make no. difference in my conclusion as to the validity of the deed. A person may create a contingent fpture estate as well as one vested in interest, if there is no illegal suspense of the power of alienation. The fact that there might be changes in the persons of the beneficiaries before. the taking effect- of the reversion in possession, does not prevent the vesting, the rule being that if there be persons in existence in whom the estate would vest in possession if the preceding estate should now terminate, the latent estate is a vested one.
4.. The remaining question is, whether the plaintiff is entitled to sequester the rents and profits payable to Mrs. Eames during her life, to satisfy its judgment. In determining this, we must consider the subject as wholly real estate. It originally consisted of both real and personal, but the latter has been appropriated to the payment of debts provided for in the trust deed. There iá no direction in the deed to convert the real into personal, and the doctrine of equitable conversion has, therefore, no application. The securities now in the hands of the defendants are the proceeds of real estate sold, and are, therefore, so far as this question is concerned, to be considered
5. It has been argued, that inasmuch as this stock in the manufacturing company passed to the defendants, the trustees, by the trust conveyance, the other trust property should be chargeable with this debt. Passing by other objections which might be urged against this view, it is enough to say that the plaintiff has no judgment against the trustees. He has elected to consider Mrs. Eames as the stockholder who is liable for the debt, and is therefore estopped from taking the ground that the trustees were the stockholders.
It follows from what has been said that the judgment of the supreme court is right, and ought to be affirmed.
All the judges concurred.
Judgment affirmed, with costs.
But see reversal, in 14 N. Y. 85.
See Sheridan v. House, in this volume.