137 Misc. 420 | N.Y. Sup. Ct. | 1930
This is an action in equity brought by the plaintiff to declare null and void as a fraudulent conveyance a certain written instrument dated July 1, 1924, and acknowledged July 14, 1924, at Lausanne, Switzerland, alleged to be a release or transfer by the defendant Blanche Morange Rausch of all her interest in her father’s estate and to subject the interest of said defendant Rausch in said estate to the lien and to procure satisfaction of a certain judgment secured against said defendant Rausch by this plaintiff in the Supreme Court, New York county, on February 2, 1925, for the sum of $100,194.50, damages and costs, in an action brought by plaintiff for the alienation by said defendant Rausch of the affections of plaintiff’s husband, together with appropriate incidental relief. The said judgment recovered February 2, 1925, was and is in all respects a good and vahd judgment. There was a substantial compliance with the statutory provisions relating to attachment and to service of process by publication, and the contentions of the defendants that jurisdictional defects exist in respect to the acquirement of jurisdiction over the defendant Rausch and over the trust res within this State are in all respects overruled. The alleged defects complained of by the defendants are not jurisdictional defects, but at most, if defects at all, are mere immaterial irregularities. On October 6,1924, the court duly issued a vahd warrant of attachment in said action for ahenation of affections. On or about October 16, 1924, the sheriff of Westchester county made a vahd levy under said warrant upon the remainder interest of the defendant Rausch in her father’s estate by due service of the necessary papers prescribed by statute upon Mary M. Fisher, individually and as executrix, pursuant to subdivision 3 of section 917 of the Civil Practice Act. The case of Judds v. Martin (218 App. Div. 402), cited by the defendants, in no way concerns an attachment upon a remainder interest, but relates solely to the question whether an attachment could be levied upon an income of a trust fund. The court in Judis v. Martin (supra) in its opinion by Dowling, J., states: “ But it is to be noted that the levy of the attachment [under section 916, Civil Practice Act] is limited to a right or interest of defendant to any of the estate of a deceased person which may belong to him and which could be legally assigned by him as legatee or distributee. [Italics of the court.] The right of a beneficiary to enforce the performance of a trust to receive the income of personal
The present equitable action is not purely in personam, but is substantially in rem or quasi in rem. A court of equity, having once acquired jurisdiction, will retain hold of the subject-matter for all purposes and not lift its hand until plenary and perfect justice is done, as near as may be, under the issues; equity deals with the kernel of things and not the mere shell; form gives way to substance and the matter is adjudicated according to the real nature of the transaction, the relief being adapted and measured by the situation
The interest of the defendant Rausch, who was living at her father’s death, in the trust established by her father’s will, was (1) an inalienable share of the rents and profits arising from real property (See Real Prop. Law, § 103, subd. 1); and (2) a vested remainder subject to be divested in real estate situated in the county of New York (Real Prop. Law, § 40; Schaefer v. Fisher, 221 App. Div. 880, Second Department, October 28, 1927, reargument dénied November 25, 1927, Appellate Division, Second Department, 222 App. Div. 696.) Such real estate is the res of the trust and is property within the jurisdiction of this court, of which the defendant Rausch is a co-owner and, as stated in section 59 of the Real Property Law, “ is descendible, devisable and alienable, in the same manner as an estate in possession.” In an action in equity of this character, such vested remainder interest (Bergmann v. Lord, 51 Mise. 213; affd., 194 N. Y. 70), as well as the excess of income reasonably required for the support and maintenance of the beneficiary of the trust when ascertained (Real Prop. Law, § 98), and also the prescribed statutory percentage of the income of the judgment debtor arising from the trust liable to execution under section 684 of the Civil Practice Act (Brearley School v. Ward, 201 N. Y. 358, 362; Judds v. Martin, 218 Apn. Div. 402), can be reached and applied to the satisfaction of the plaintiff’s judgment claim. The decree of the court can be carried into effect by action of the sheriff operating directly upon the property (See Civ. Prac. Act, § 979; Garfein v. Mclnnis, 248 N. Y. 261 [1928]), and even a contingent remainder in a trust estate may be sold to satisfy a judgment against the remainderman. (Cohalan v. Parker, [1910] 138 App. Div. 849.)
Subdivision 6 of section 232 of the Civil Practice Act is controlling, and a conclusive case in principle is Garfein v. McInnis (248 N. Y. 261, May, 1928). (See, also, Gagnon v. • Roberts, 131 Misc. 126; affd., 224 App. Div. 723.) In Garfein v. Mclnnis (248 N. Y. 261, '263), which was an action against a non-resident for
The defendant bank will be held to have had knowledge of the purpose of the contemplated transfer and responsible for the knowledge of its attorney, Mr. Kellegrew, and I hold that the defendant bank actively and knowingly co-operated with the other defendants in carrying out and consummating such wrongful transfer of the trust res, with the intent to hinder, delay and frustrate the collection and satisfaction of the plaintiff's judgment which, to the bank’s knowledge, had been secured by this plaintiff in the alienation action. I agree with the conclusion stated by the Appellate Division, Second Department, in Schaefer v. Fisher (221 App. Div. 880) and hold “ that the release executed by Blanche Morange Rausch did not terminate the trust (Matter of Wentworth, 230 N. Y. 176; Matter of United States Trust Co. of New York, 175 id. 304), and that Blanche Morange Rausch has a remainder in the estate of her father, subject to being divested.”
In my opinion the plaintiff is entitled to a judgment and decree in her favor for all the relief asked for in the complaint, and judgment is awarded to the plaintiff, with costs, and an extra allowance to attorneys for the plaintiff. The court has taken into consideration the amendments to the pleadings as allowed upon the trial. The findings as submitted by both sides have been passed upon. The plaintiff should present, upon notice to the defendants, a decision containing all the findings as made, together with a final judgment or decree.
Repealed by Laws of 1925, chap. 254. — [Rep.