Stewart v. Foster

| New York Court of Common Pleas | Dec 15, 1857

INGRAHAM, First Judge.

There is nothing, in the evidence in this case, which shows that the trust created in the bauds of Hog^t & Getty, as trustees for the benefit of the defendant, was not created by herself, and that the whole fund was not liable to her debts.

Supposing, however, that the trust was required by the will of the defendant’s father, then, secondly, it appears that the annual income was $2,100, of which the defendant has received only $1,200, and no explanation of the disposition of the residue is shown. It is true the trustee Iloguet says the amount was paid over quarterly, but the defendant states as positively she has not received it.

There is ample room for an order for the appointment of a receive]’, to collect whatever amount remains unpaid of such income, whether in the hands of the trustees or of any other persons.

Thirdly, I am of the opinion that the proceedings, to reach the income to accrue under the trust, cannot be taken under those contemplated by the provisions of the Code supplementary to execution. Those proceedings are, I think, limited to reaching the defendant’s property in his possession, or in the possession of others, but which is conceded to belong to the debtor, and money due to the debtor, when the order is obtained; — by a direct order; and to reach also property of the debtor, or money in the hands of others, to which they make a claim; through a receiver. But when a creditor would compel the application of the accruing income of a debtor from a trust fund to the payment of his debts, then the proper course of proceeding is by an action against the debtor and trustee (Bramhall v. Ferris, 4 Kernan, 41), in which all the rights of the parties can be protected and the amount necessary for the support of the cestui que trust can be properly ascertained. The statute contemplates suits in equity 'for that purpose. The Code has not substituted supplementary proceedings in its place. An action is still necessary, and an injunction in such an action could properly protect the creditor until the facts necessary to a correct adjudication were ascertained.

I think the order at chambers should be modified so as to order the appointment of a receiver, and to restrain the defendant from receiving, and Hoguet from paying, any of theiáfcrcst which accrued from the trust funds prior to the 15th April, 1857; and also restraining the trustees from disposing of the trust fund in any way to the injury of the plaintiffs, for a time sufficient to allow the receiver to commence an action against the trustees, to compel an application of such trust fund to the payment of the plaintiffs’ judgment, and that the residue of the order appealed from should be vacated.

Ordered accordingly.