Case ID: ala_37/html/0327-01.html
Source: Caselaw Access Project
Author: {"author": "A. J. WALKER, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SMITH vs. MOORE.
    [EQUITABLE ATTACHMENT/}
    1. Beqxfsst-to trustee, for comfort'and sujfporWofi'ieitibifbnt not liable fór his debts, subject to' equitable attachment. — 'Wham a sum of money is bequeathed to a trustee, in trust for a debtor, “ not subject to any debt or debts lie may have contracted, but for his comfort and support,” it may be subjected by equitable attachment (Code, 5 2956) to the payment of Ins existing debts.
    Appeal from the Chancery Court of Macon.
    -Heard before the Hon. James B. Clark.
    ’’The bill in this-case was filed by Amos Moore,'against William Gr. Smith• and Thomas H. Smith; and sought to subject to the payment of a debt, due and owing to the complainant.by said William Gr. Smith, a fund which was in the hands of said Thomas H. Smith, as trustee of said William Gr., under the following clause in the will of their deceased father, Guy Smith, to-wib: “I further give to my son, Thomas B.. Smith, in trust for my son William G. Smith, the further-sura • of thirty-six hundred dollars, not subject to any debt ordebts he may have contracted,'but for his comfort and support; and should he depart this life before receiving the same, then, and in that event, the thirty-six hundred dollars to be equally divided with my other children in life; and if any should- be. dead, their share to their child or children.”' The testator’s will was executed in Georgia, where he resided rand was duly admitted to probate there, after his death, in .July,. 1§57. The -complainant’s debt against William G.'Sinith'was evidenced by-a promissory note, dated the 14th April,-1852, and payable on the 1st November next afterdate... The fund sought to- be reached was paid over to Tilomas H. Smith by the administrator in Georgia, and was in his hands at the commencement of the suit. The prayer of the bill was for-an-equitable-attachment-, an account, and general relief. A decree pro confesso was entered .against William G. Smith, on publication duly perfected.against him as a non-resident, Thomas H., .Smith answered, admitting the material allegations of the bill; .but insisting that neither the principal nor the interest of the fund in his hands was liable to the complainant’s demand, and .demurring to the bill.for want .of. equity. On final hearing? on pleadings and proof, the chancellor held, that the entire fund, both principal and interest, or as much thereof as was necessary, was liable to complainant’s debt. He therefore overruled the demurrer, and rendered a decree for the complainant.;, -.and his, decree is-, now assigned as error. .
    Gídobtos;',& Ligón, for appellant.-
    1. If William G. Smith was entitled to the possession of the money,- and could sue foi~ and recover the same from the trastee, (ds the chancellor held,)'then the complainant had a full, complete, and-adequate remedy-at law, by attachment -andgar-nishment. — Hiatt v..Magee, 27 Ala. 416; Harrell v. Whitman, 19 Ala. 135. Such a construction, however, would render the trustee a mere conduit, through which the money was to pass from the executor to William G-. Smith ; and his appointment would be a useless and nugatory act. On the contrary, the interposition of the trustee was necessary, to receive the fund, to apply the income arising from, it-to the comfort and support of the legatee,, and to preserve the fund for the contingent remainder-men; and his tifié does not cease until these objects are fully accom*-piilhed. — Comby v. McMiehael, 19 Ala. 747.
    
      2. The broad doctrine was at one time maintained in England, that every right to property, both legal and equitable, must be subject to the incidents of property — alienation, and the payment of debts; and this was put/upon the ground, that it was against public policy, and a fraud on creditors, to allow property to be held by a debtor, or iñ-trust for his use and benefit, without being liable to the payment of his debts. But modern decisions in Erigland, and more particularly in America, have greatly restricted and qualified this doctrine ; and the principles upon which these latter cases rest, commend themselves by their correct-reasoning, and by their enlightened views of public policy. No principle of public policy is contravened,'by a father, while living, supporting an indigent or an improvident child ; and it is diffifcult to< see what principle forbids that, alter his death, Ms bounty should be expended in the same way, through the agency - of an executor or trustee. Creditors-have no claim-on the father or testator, and their rights are not prejudiced by his bounty to their debtor : on the contrary, they may bb greatly benefited ’ thereby. These views are elaborated, and maintained by unanswerable arguments, in Hill and Wife' v. McRae, 27 Ala. 182 ; and in Braman v. Stiles, 2 Pick.- .463. An examination of the more modern leading cases, both in England and in America, will show, that wherever a right in the property itself, or its proceeds’, is vested in the debtor, the same is subject to Ms debts;-but that the words, “support and maintenance,” “comfort and support,” &c., do not vest such an interest in him as can be reached by his creditors. Tivopenny v. Payton, 10 Sim. 487 ; Q-odden v. Croivhurst, 
      
      ib. 642 ; Stagg v. Beckman, 2 Edw. Ch. 89 ; Ashurst o. Given, 5 Watts & Serg. 323 ; Vanx v. Bark, 7 Watts & ■*Serg. 19 ; Fisher v. Taylor, 2 Rawle, 33 ; Norris v. John■■■son, 5 Barr, 289 ; Eyrick v. Hetrick, 13 Penn. 491j Fope •v. Elliott, 8 B. Mon. 56 ; 2 Beavan, 63 ; 18 Yesey, 429 ; -5 Paige, 583. In this case, besides violating these general principles, the chancellor’s decree operates to defeat the ’■rights of the contingent remainder-men. — Williamson' v. Mason, 23 Ala. 503 ; Elmore v. Mustin, 28 Ala. 313.
    ■N. S. Graham, contra,
    
    cited Ylugely & Harrison v. Bobinson, 10 Ala. 731 ¿Robertson & Fettibone 'v.Molmstoni •’•'36'Ala. 197, and the authorities therein cited.
   A. J. WALKER, C. J.

It is clearHhat the’Testator inn. tended to make the specified fend freé-from liability to the debts of Wm. G. Smith ; and it is 'almost equally clear, ’"that the law forbids the accomplishment of the purpose. The fund itself, nofe-merely the interest, is 'devoted to the "“comfort and suppoti;” of the cestui -que trust. This is ” not only the necessary effect ©f the terms, in which the gift of-Nhe fund, in trust for his comfoi’t and support, is made ; but it is clearly implied from the making his death, withodt receiving the fund, the contingency upon which the limitation over depends. The feud is not given to the trustees, to enable them to support the cestui que trust: the money itself is given in trust for Wm. G., for his comfort and support; and he has, undoubtedly, the right to receive for his comfort and support the entire fund, with its accumulations, if necessary. Cim it be thát a fund, from which one has thus a right to draw for his comfort and support until it-'-is exhausted, is exempt from all liability to' his-debts ?

We shall not deny, that decisions made ia Pennsylvania go to the extent of holding property thus situated -free from liability to debts. — 7 W. & S. 19; Ashurst v. Given, 5 W. & S. 323 ; Norris v. Johnston, 5 Barr, 287 ; Holdship v. Patterson, 7 Watts, 547 ; Fisher v. Taylor, 2 Rawle, 33 ; Eyrick v. Hetrick, 1 Har. 4S8. And a case in Kentucky, and another in Massachusetts, go very far in the same direction. — Pope v. Elliott, 8 B. Mon. 56 ; Braman v. Styles, 2 Pick. 460. But the Pennsylvania decisions make a pal-' pable innovation-upon the law as long established in the English court of ohancery, and it is so'avowed by the opinion in Norris v. Johnston, supra. — 1 White & Tudor’s Leading Cases in Eq. 544; Notes of Hare and Wallace to Hulme v. Tenant.

'•The English doctrine “forbids the disposition of property, divested of--its legal incidents” of liability to debts, and susceptibility of alienation-. — 1 Jar. on Wills, 816; Hill on Trustees, 395. And under the operation of that -doctrine, a liability to .debts, to the extent -of the debtor’s interest, lias been enforced, in the cases following, to-wit: ''Where the dividends were directed to be paid into the ^proper hands of a man, or on his own proper order or receipt, and not to be assignable by way of anticipation (Brandon v. Robinson, 18 Ves. 429) ; where an annuity.'was given in trust for the maintenance and--support of the cestui que trust,-not to be liable to his debts, and to be paid, from time to dime, into his proper hands*; and not to any other person (Graves v. Dolphin, 1 Sim. 66) ; where an annuity was'bequeathed in trust, with directions for the payment of -dividends for the sole purpose of the maintenance and support of the legatee and his family, and with a prohibition of alienation and liability to debts (Yarnold v. Moorehouse, 1 Russ. & Myl. 364); where property was held in trust, to be applied in such manner, and" to such persons, for the board, lodging, and subsistence of the donee and his family, as the trustees should think proper (Rippon v. Norton, 2 Beav. 64); where there was an assignment to trustees of a fund in trust during the life of H, or such part thereof as they should think proper, and at their will and pleasure, and.at such times and in such sums as they should deem expedient, to pay the interest to him, or, at their discretion, to expend the interest in procuring for him diet, lodging, wearing apparel, and other necessaries, so that the same should not be subject to his debts or disposition (Snowden v. Dales, 6 Sim. 524) ; and, lastly, where property was conveyed, to trustees, to pay and hpplythe rents and profits to the support of J., his-wife and ‘children, with -a prohibition against any charge, or'assignment, or anticipa*tion by J.

It is difficult to reconcile the -two cases of Twopenny v. Peyton, (10 Sim. 487,) and Godden v. Crowhurst, (ib. 642,) with the other English decisions, or with the proposition, that the cestui que trust-'m this case basan interest liable to his debts. We refer to the discussion' of tliose- two cases by Judges Ormond and Groldthwaite, in Rugely & Harrison v. Robinson, (10 Ala. 702,); where an attempt has been made to place them in harmony with the other decisions. See, also, Hill on Trustees, 395, note x. In Younghusband v. Gisborne, (1 Col. 400,) there was a trust for the personal support, clothing, and maintenance, with- a provision that the fund'should not be subject to the debts of- the cestui que trust'.. The fund was held’subject to pass-to the assignees under the insolvent' debtors’’ act; and the -vice-chancellor, in commenting upon the cases of Twopenny v. Peyton and Godden v. Crowhurst, said, that if they were not distinguishable from the case before him, he “must:respectfully dissent from them.”" So, too, we say, .that if they are not distinguishable from this case, they are atwar with all the other English decisions and with a principóle well established in the English law, and we must respectfully dissent from them. The authorities, which we have collated, most conclusively show; that the established doctrine in the English chancery does not permit any-' other conclusion, than that the fund in the hands of Thomas H. Smith is liable to the debts of Wm. G-. Smith.

The decision in Hill and Wife v. McRae, (27 Ala. 175,) when considered in its entirety, and not in reference-to any single sentence, does not support the position, that in this case the trust fund enjoys any immunity from liability to debts. It is in reference to a bequest of propert}' to be held in trust for the support of a man and his wife and. children,; and the decision is placed upon the ground, that the interest of the debtor was so blended witli that of the wife and children, that the former cordd not be separated and subjected: to-debts without detriment to the latter. And the same doctrine seems to have been recognized in the opinions in Rugely & Harrison v. Robinson, 10 Ala. 702. See, also, Fellows, Wadsworth & Co. v. Tann, 9 Ala. 999 ; Spear v. Walkley, 10 Ala. 328.

The precise question of'this case seems to have been involved in the case of Clark v. Windham, (12 Ala. 798,) and it is not a strained inference, that an adjudication of it adversely to the appellants is implied in that decision. In the case of Robertson & Pettibone v. Johnston, (36 Ala. 197,) we endorsed the doctrine declared by Judge Ormond in Rugely & Harrison v. Robinson — “that a beneficial interest cannot be given to one, so that it cannot be reached by Ms creditors, -unless 'sueh interest is conferred, and is to be enjoyed, jointly with-otliers, and is also incapable of severance.” We but carry out that doctrine, and follow the lead of our former decisions, in declaring that the fund held in trust for William G-. Smith is liable to his debts.

We think Wm. Gf. Smith’s right to the fund was equitable, and was -liable to attachment in equity under section .2956 of the Code. — You v. Flinn, 34 Ala. 409.

Affirmed,