Dixon v. Bentley

50 N.J. Eq. 87

• Court: New Jersey Court of Chancery
• Decided: May 15, 1892
• Status: Published

Opinion

The Chancellor.

It was objected at the hearing that the cestuis que trust of" the $4,000 should be parties to the suit. I agreed with the objector, and they have since been brought in and are now before the court as complainants.

Mrs. Towar admits, both in her answer and at the hearing, that she holds $2,000 of the $4,000 of trust moneys charged with the trust, and tenders herself willing and ready to pay it as the chancellor may direct. She, however, insists that she will not be charged interest upon it prior to the death of Peter Bentley, junior, contending that, so long as her brother educated and supported his children, the interest upon the trust fund belonged to him; that he had full power to give it to her, and that he did give it to her.

The single question is thus presented, whether the interest upon the $4,000, trust funds, from April, 1876, to April, 1888, belonged to Peter Bentley, junior.

■ None of the cestuis que trust had, within that period, attained the age of twenty-one years. The will expressly provided that the income was to be applied by their father “ towards ” their support and education. The word “ towards,” in the connection in which it is used, assumes that the father would be charged with a burden, and signifies that the income from the trust fund was designed to assist in discharging that burden. It was designed to exonerate the father pro tanto from his duty, and thus was, in fact, a gift for his benefit. Says Mr. Hill, in his work on Trustees, page 621:

“ Where the interest of the children’s fund is expressly given to the father for their maintenance, the application of the general doctrine (that where the father is able to support his infant child, the income held in trust for the child, will not be used in his exoneration) is excluded by the terms of the trust; and in that case the income will be properly paid to the father by the trustees for the purpose expressed; such a gift is, .in fact, one pro tanto for the benefit of the father.”

It is said, in 2 Rop. Leg. 1295:

“ The other exception of not allowing maintenance where the parent is of ability, is where the interest of the legacy is given to the father for the maintenance of the legatee, for, in that case, he will be allowed to apply it for that purpose in exoneration of his natural obligation, for such a gift is, in fact, a legacy to the parent.”

The authorities have quite uniformly held, with reference to such a bequest of income, that the parent will not be compelled to account for the income, if it appears that he or she has adequately supported and educated the children. Berkely v. Swinburne, 6 Sim. 613; Hadow v. Hadow, 9 Sim. 438 ; Leach v. Leach, 13 Sim. 304; Browne v. Paull, 1 Sim. (N. S.) 92; Hora v. Hora, 33 Beav. 88; Hawk. Wills 166; Theob. Wills 385; Wood v. Chelwood, 6 Stew. Eq. 9; Macknett v. Macknett, 11 C. E. Gr. 258, 260. In the latter of these cases upon appeal, Mr. Justice Reed, in pronouncing the opinion of the court of errors and appeals (12 C. E. Gr. 596), explained the effect of this ruling as follows :

“ Whether the doctrine arose from the idea that the legal or moral liability for the infant was upon the parent, and that anything which totally or partially relieved the parent of that liability was a provision for the parent’s benefit, or had its origin in a policy designed to preserve the' family relations and establishment intact, is immaterial. Whatever the origin of the doctrine, it has resulted in placing such dispositions of property among a class of bequests which are considered as gifts to the first taker, >coupled with a duty.”

It appears to be clear that the parent has property in the income so long as he performs the duty with which the income is coupled, and I perceive no sufficient reason why he may not alienate that property, whether by the gift of it to another or otherwise. The alienee will, of course, take the income subject to its liability for the duty.

■ In the present case, it was the unquestioned purpose of. Peter Bentley, junior,, to give his sister not. only his own interest in one-half of the trust funds, but also the interest of his children therein, and to that end he executed- h.is gift by passing to her the principal of that one-half in order that she might fully enjoy it as her own property, unimpressed with the trust. I think that his gift was effectual so far as his property in the trust was concerned and that property certainly included the income of it while he educated and maintained his children. It did not pass the principal of the fund.

The complainants’ recovery from Mrs. Towar, then, will be limited to that which her brother ineffectually attempted to give her—one-half the principal and interest thereon from his death. He will -also., upon the same principles, be accorded similar recovery from the estate of Peter Bentley, junior, to which the-other half of the trust fund went impressed with the trust.

As the trust funds have been traced to Mrs. Towar and the-estate of Peter Bentley, junior, she and the executrix of that estate will be primarily liable therefor, and, as the co-executors-of Peter Bentley, junior, assented to his unlawful distribution of the trust funds, they will be held secondarily liable for the recovery from Mrs. Towar, to which the complainants are entitled.. I perceive no reason why interest upon interest should be allowed.. The recovery, however, must be with costs.