Rogers v. Ludlow

3 Sand. Ch. 104, 1845 N.Y. LEXIS 539, 1845 N.Y. Misc. LEXIS 61

Opinion

The Assistant Yice-Chancellor.

The bill charges that Mrs. Elizabeth Ludlow, the grantee in the deed of trust, by force of that instrument, became and has ever since been, the trustee of all -the property and estate thereby limited to the separate use of Mrs. Edward H. Ludlow; and that the latter has since the date of the deed, been in the full use and enjoyment of such separate estate. It then seeks to recover a debt, which as the bill alleges, Mrs. E. H. Ludlow contracted with the complainants on the credit of that estate.

The two principal points discussed at the hearing, were the existence ef the debt, and the force of the post-nuptial settlement in reference to E. H. Ludlow’s life estate in the lands.

As to these points, my impression was very decided, that the debt was established; but that Ludlow had no estate or interest in the lands when he executed the settlement. There was still a question whether his covenants in the deed could be enforced, either by his wife or her creditors, as an equitable settlement, now that he has by the death of Edward P. Livingston, become entitled as tenant by the curtesy.

Since the argument, the opinion of the Chancellor in L'Amoreux v. Van Rensselaer and wife, and her trustee Mr. Phelps, (Aug. 5, 1845,) has been published,

Footnotes

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(a) and its bearing upon this case was such, that the counsel have been heard anew on the questions presented by the settlement made for Mrs. E. H. Ludlow’s benefit.

It is now contended in behalf of the complainants, that the trusts in this settlement do. not fall within the section of the revised statutes authorizing express trusts; but they are valid as powers in trust, and as such will be maintained in favor of the wife and of her creditors.

Assuming for the sake of the argument, that the settlement is operative upon some estate or property, I will examine the proposition just stated.

The trusts are, to lease, let and improve the property, so as to produce the best income, or as the wife shall direct;'from time to time to pay, apply and dispose of the income as it should be received, unto such persons, for such uses and purposes, and in such parts and manner, as the wife should in writing, appoint; and for want of such direction, then to her proper hands; or otherwise should permit her to receive the same, to and for her sole and separate use and benefit; to the intent that the rents and profits might be to and for her own sole and separate use, benefit and disposal, and not at the disposal, or subject to the debts, of her husband. There was a further trust declared, for the conveyance of the property in pursuance of the wife’s appointment by deed or her last will and testament ;—and in default of her disposal in one or the other of these modes, the estate was to pass to the heirs of the wife.

Without deciding all the questions which have been so well presented in regard to these trusts, it is sufficient to say that several of them, and those which are the most essential to the wife, the party designed to be benefitted, are valid as express trusts. Such is the trust to lease the property, and incidentally to receive the rents. This is a good trust, (in connection with the application of the rents,) under the third clause of section fifty-five of the statute of uses and trusts. The trust to pay the income and to apply it for the use and benefit of the wife, which is the ultimate effect of the limitation as to the disposal of the income, is also a valid trust under the same clause and section.

The Chancellor decided in Gott v. Cook, (7 Paige, 521,) that a trust to receive the rents of real estate and pay over the same to the beneficiary for his use, is a valid express trust. (And see Van Eps v. Van Eps, 9 Paige, 237.)

This is the settled law in the court of chancery, and therefore the trust to pay, is good in this case, as well as that to apply the income.

The valid trusts in the deed of E. H. Ludlow are sufficient to uphold the title of the trustee, although they may be accompanied with trusts which the statute does not authorize. (Darling v. Rogers, 22 Wend. 483 ; Kane v. Gott, 24 ibid. 661, 665-6 ; Irving v. De Kay, 9 Paige, 521.)

It follows that Mrs. Elizabeth Ludlow, the trustee, took and still holds, whatever estate or right, was conveyed by the deed in question.

The recent decision of the Chancellor in L'Amoreux v. Van Rensselaer, before mentioned, is conclusive that the interest of Mrs. E. H. Ludlow under this trust, cannot be subjected to the payment of the complainant’s debt. The trust in that case was of real estate, and the trustee was to pay over the net income to Mrs. Yan Rensselaer, for her sole and separate use. And it was held, that she could not contract any debt which could be made a charge upon the property or its income, because the interest of the beneficiary in these trusts, is inalienable by the 63d section of the statute relative to uses and trusts.

If the complainant’s counsel had succeeded in establishing that the deed was invalid for all the purposes of its express trusts, and that the same might be upheld as powers in trusts; still I do not perceive how the bill could be maintained.

There is no direction or appointment of Mrs. E. H. Ludlow, which can operate upon the trustee, within the terms of the deed. But it is said, the 103d section'of the article of the revised statutes relative to powers, enables the creditors of any person entitled as one of the objects of the trust, to compel an execution of a trust power, for their benefit.

The complainant’s difficulty under this section is, that they are not creditors of Mrs. E. H. Ludlow, in the legal sense of the word, or within its meaning as used in the section.

A married woman cannot incur a debt, and where she has a separate estate, her obligation incurred on the faith of it, or for its benefit, is enforced, (when capable of being enforced,) as a charge, and never as a personal liability. (2 Story’s Eq. Jur. 625, §. 1397 to 1400.) (a)

A similar section in favor of creditors of a beneficiary under an express trust, as to the surplus income, is contained in the Article relative to Uses and Trusts. (1 R. S. 729, §. 57.) And in L'Amoreux v. Van Rensselaer, before cited, the Chancellor said that Mrs. Y. R.’s interest could not be reached under that section, because she could not create a debt which should bind her personally, while she was a married woman.

The complainant’s bill must be dismissed, but without prejudice to any legal remedy which they may have, and without costs.

Now reported; 1 Barbour’s Chy. Rep 34.

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And see Curtis v. Engel, 2 Sand. Ch. R. 287.