Keeney v. Morse

71 A.D. 104, 75 N.Y.S. 728
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 15, 1902
StatusPublished
Cited by7 cases

This text of 71 A.D. 104 (Keeney v. Morse) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Keeney v. Morse, 71 A.D. 104, 75 N.Y.S. 728 (N.Y. Ct. App. 1902).

Opinion

Ingraham, J.:

The plaintiff, a judgment creditor of the defendant Morse, commenced this action as a judgment creditor’s action to reach the. income of certain trust funds held by the defendant, the United States Trust Company, as trustee under the last will and testament of' Phoebe J. Cross, deceased. The complaint alleges the recovery of judgment against the defendant Morse and the return of an execution unsatisfied; that Phoebe J. Cross, the mother of the defendant, was a resident of the State of Rhode Island at the time of her death; that the defendant Morse is a beneficiary under the last will [106]*106and testament of Phoebe J. Cross, deceased, which will was duly admitted to probate in the State of Rhode Island, a copy of which will is annexed to the complaint; that by said will there was bequeathed to the United States Trust Company, as' trustee, securities of the par value of $250,000, in trust, “ to collect and receive the interest and income thereon, * * * and to pay to my said daughter, Sophia Y. Morse, during her life, the interest or income upon so many of the bonds or securities in this article mentioned as will amount at their par value to Two hundred and twenty-one thousand two hundred and fifty dollars; ” that the income upon such securities held by the trustee amounts annually to the sum of $15,000, less the trustee’s commissions; that by the law of the State of Rhode Island the whole of the income of the trust fund which would otherwise be paid to said beneficiary is subject to the claims of creditors, and that a trustee of such fund can be compelled to pay judgments against the beneficiary; that there had accrued of the income of said trust certain sums of money, the amount of which is unknown to plaintiff, in excess of the. amount necessary to the payment of the trustee’s commissions, and said sums are now in the hands of the defendant the United States Trust Company, as trustee,, and have not been paid over to the defendant Sophia Y. Morse, and the judgment demanded is that the rents, issues and profits of said trust, and of the property held in trust by the defendant the Unite I States Trust Company, as trustee for the defendant Sophia Y. Morse, be charged with and applied to the payment of the plaintiff’s said judgment, and interest due and to grow due thereon, and the costs and disbursements of this action; that the defendant the United States Trust Company be enjoined and restrained from the paying over and the said Sophia Y. Morse from receiving any of the avails of said trust of the rents, issues' and profits thereof accrued or to accrue, and that the defendant the United States Trust Company be directed and required to make a full and fair accounting as such trustee of the said property so in trust to it for the benefit of the said Sophia Y. Morse, and of the avails thereof, and of the rents, issues and profits of the same from the creation of such trust and to apply so much thereof as may be necessary. to the satisfaction of the judgment in favor of the plaintiff.

The plaintiff seeks to maintain this action in two aspects; in the [107]*107one as a creditoi’’s bill filed under sections 1871 to 1879, inclusive, of the Code of Civil Procedure; and if not allowed by these sections, then under the general equity power of the court to reach property under the control of the judgment debtor which should in equity be applied to the payment of his judgment. As, under the law of Rhode Island, the income of a trust which would otherwise be paid to the beneficiary is subjéct to the claims of creditors, and the trustees of such fund could be compelled to apply the interest of such beneficiary to the payment of his indebtedness, it is claimed by the plaintiff that the income realized from the fund held by the defendant, which the instrument creating the trust directed to be paid to the beneficiary, should be applied to the payment of a judgment obtained against the beneficiary in this State.

There was a direct attack upon the validity of this trust by the next of kin of the testatrix which was determined in Cross v. United States Trust Co. (131 N. Y. 330). It was there held that in determining the validity of this trust, as well as the competency of the testatrix to make a will, and also the execution thereof, the law of the State of Rhode Island, the domicile of the testatrix, must control; and that if the law of that .State declared this trust valid, it is binding upon us by comity. The trust having been upheld because it was valid by the laws of the State of Rhode Island, we are now asked to apply the income of this trust fund to the payment of the creditors of the beneficiary, because if this trust fund was in Rhode Island and the plaintiff had obtained a judgment against the beneficiary there, the courts of the State of Rhode Island would so apply it.

The question presented in this action, however, is not as to the validity or enforcement of the trust. By its terms, the income is to be paid to the defendant, and the appropriation of such income to a judgment creditor of the beneficiary would be a violation of the terms of the trust, and not an enforcement of it. Whether or not there shall be such an appropriation must depend upon the laws of the State in which the application to reach the fund, situated as this is, is made; and the question is whether the income of the trust property situated here is applicable to the payment of a judgment against the person to whom the income is payable. The law of this State has provided that under certain conditions the income of a [108]*108trust fund can be reached by a judgment creditor of the beneficiary and applied to the payment of the judgment. Whether or not the courts of Rhode Island would or would not apply the interest of a beneficiary to the payment of a judgment against the beneficiary in the State of Rhode Island has no relation to an action commenced in this State to compel the trustee under a trust administered here to apply it to the payment of a judgment obtained here. In. determining what property is applicable to the payment of a judgment obtained in this State, we must be controlled by the law of this State which determines what interest of the beneficiary in the trust fund is applicable to the payment of such a judgment. That the validity of the will and the bequests contained therein are to be determined by the laws of the State of Rhode Island has no relation to the question as to what interest, if any, of the beneficiary-under such a will can be applied to the payment of a judgment obtained here. If this trustee were a resident of Rhode Island, and the courts of this State obtained jurisdiction by service of process here, the principle would, be the same. The courts of this State would not compel him to appropriate the trust property in his hands to the payment of a judgment obtained in this State against the beneficiary, because the courts of Rhode Island would require him to appropriate the interest or income of the beneficiary in his hands to the payment of a judgment obtained in Rhode Island against a person entitled to such an interest; and it would seem, therefore, that this action can only be maintained upon the allegation of facts which by the .law o"f this State would justify a judgment applying the defendant’s interest in this fund to the payment of the judgment.

Applying the law of this State, it would seem that a creditor’s bill cannot be maintained. Judgment creditors’ actions are regulated by sections 18Y1 to 1819 inclusive of the Code of Civil Procedure.

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Cite This Page — Counsel Stack

Bluebook (online)
71 A.D. 104, 75 N.Y.S. 728, Counsel Stack Legal Research, https://law.counselstack.com/opinion/keeney-v-morse-nyappdiv-1902.