Case ID: misc_28/html/0362-01.html
Source: Caselaw Access Project
Author: {"author": "Varnum, S.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Matter of the Judicial Settlement of the Account of George A. Widmayer et al., as Executors, etc., of George Widmayer, Deceased.
    (Surrogate’s Court, New York County,
    July, 1899.)
    .Surrogate’s Court — Cannot apply surplus income of a trust to payment of creditors of the beneficiary.
    While equity may apply the surplus income of a beneficiary to the payment of his creditors the court of the surrogate has no such power. The latter court will not surcharge accounting trustees with sums of trust income, payable to a former cotrustee as beneficiary, which they had paid his wife for the necessary support of the family, at times when they as trustees held an unsatisfied judgment against the beneficiary, recovered for his malfeasance in the administration of the trust and because of which he had been removed therefrom.
    Proceedings upon the judicial settlement of the accounts of executors.
    Jay & Candler, for executors’ accountants.
    T. M. Tyng, for W. F. Widmayer, objector.
   Varnum, S.

The decedent, under his will, gives certain incomes from trust funds to his children. One of these beneficiaries was appointed an executor and trustee. His cotrustees brought an action in the Supreme Court against him for malfeasance, which resulted in a decree removing him from office and in a judgment in about the sum of $5,000 against him and in favor of the plaintiffs, as trustees. The defendant trustee became hopelessly insolvent, and other judgments were entered against him. Hone the less, the acting executors and trustees paid the income under the will which belonged to this beneficiary to his wife, who, in turn, applied it to the support of the family. The sum so paid over during the period covered by this accounting amounts to $2,350. The main objection raised to the account is, that the trustees should have applied this money towards the liquidation of the judgment, and this objection is sustained by the referee. Hone of the income thus used for the maintenance of the removed trustee’s family was surplus, and the entire income was paid over. Indeed, the amount in question was entirely insufficient for the family. Where a gift of income from a trust created by a will is made, and a surplus remains beyond what is necessary for the suitable support of the cestui que trust and those dependent upon him, an action may be maintained by a judgment creditor in a court of equity to reach this surplus and have it applied to his claim. Wetmore v. Wetmore, 149 N. Y. 520, 527; Tolles v. Wood, 99 id. 616. But this court is a court of special jurisdiction, and has no equity powers. Riggs v. Cragg, 89 N. Y. 479. Hence, even though the existence of a surplus could be shown, a Surrogate’s Court would have no power to direct its application to-the payment of debts. "It is not necessary to discuss the question whether or not, under the peculiar circumstances of this case, equity would decree the application of the income, irrespective-of surplus, to the judgment; and it may well be that such an inquiry could have been brought up by the beneficiaries in the Supreme Court action. So far as this court is concerned, it follows that, in the absence of any jurisdiction to have directed the application of any surplus to this judgment, a similar want of power exists to pass on the question whether the income itself was so applicable. The exception to so much of the report as surcharges the account to the extent of the income payments made is sustained. In all other respects the report will be confirmed.

Decreed accordingly.