Case ID: ny_6/html/0524-01.html
Source: Caselaw Access Project
Author: {"author": "\n      *Welles, J. * Watson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Noyes v. Blakeman et al.
    
    
      Trust-estate. — Married woman. — Poioers of trustee.
    
    Under the revised statutes, where lands are conveyed to a trustee, to receive the rents and profits and pay them over to a feme covert, for her separate use, during life, the trustee has the whole legal and equitable estate, sub. ject only to the execution of the trust.
    A married woman cannot incur an obligation, binding her, personally, even for the expense of protecting property held by a trustee for her separate use; nor can she, by her contract, create a charge upon the trust-estate.
    A trustee may retain counsel to defend suits affecting the validity of the trust; and the costs and expenses will be a charge on the trust funds in his hands, and will bind the same in the hands of a new trustee, appointed after his removal.
    
    Noyes v. Blakeman, 3 Sandf. 531, affirmed.
    Appeal from the general term of the Superior Court of the city of New York, where a decree in equity in favor of the plaintiff, had been, in part, reversed, and, as modified, affirmed, without costs to either party. (Reported below, 3 Sandf. 531.)
    This was a suit in equity, commenced in the late court of chancery, to subject a trust-estate to the costs and expenses of certain legal proceedings, for the protection of the interests of the cestui que trust. It was transferred to the supreme court, by virtue of the constitution of 1846, and after a decree at special term, and rehearing granted, was removed to the superior court, under the act of 1849.
    *On the 7th October 1842, the defendants, 568 -* Henry Blakeman and Ann Maria, his wife, united in a conveyance of certain lands, which Mrs. Blakeman had inherited from her father, to Henry R Belden, in trust: 1. Out of the rents and profits, to pay the interest upon the mortgages and other incumbrances; the necessary taxes and assessments; the necessary expenses incurred in the needful repairs and insurance of the buildings on the premises; and the residue thereof to the said Ann Maria, upon her own separate receipt, notwithstanding her coverture, to the intent and purpose that the same, or any part thereof, might not be at the disposal of, or subject to the control, debts, liabilities or engagements of the said Henry Blakeman, or of any future husband she might have, but at her own sole and separate use and disposal. 2. Upon her decease, during coverture, to apply and dispose of the income, as she should by will appoint, and in default of such appointment, to apply said income to the maintenance and education of her children, if any survived her, and if not, to pay the same to Henry Blakeman for life; with power to the said Ann Maria to devise the said lands by will, and to appoint a new trustee or trustees, as often as a vacancy should occur.
    After the execution of the deed of trust, in 1842, two suits were commenced against Blakeman and wife, by the executrix of Robert Bogardus, deceased, to subject the trust-estate to a claim for professional services, said to have been rendered on account of such separate estate. In 1843, a suit was commenced against them and the trustee, by a creditor of the husband, to set aside the trust-deed, and charge the estate of the said Henry Blakeman, as tenant by the curtesy, with his debts. In January 1844, Henry Blakeman obtained a discharge in bankruptcy, and thereafter, the assignee in bankruptcy commenced a suit in equity to set aside the deed of trust, as fraudulent, and to subject the interest of the bankrupt to the payment of his debts. The plaintiff, William Curtis Noyes, was retained as counsel by Mr. and Mrs. Blakeman, in the first two suits, to protect the wife’s interest in the trust-estate, with the understanding that the costs were to be paid out of the income. In the last two suits, he was also retained by Mrs. Blakeman and the trustee, upon a like understanding — the trustee not to be held personally liable.
    * 569 1 *One the Bogardus suits was successfully - defended; the other, after answer, was suspended and remained undetermined. One of the suits against the trustee was voluntarily discontinued, and the other, after the failure of a motion for a receiver, was settled by the parties. In October 1845, the defendant, Elisha Ruckman, was appointed trustee in the place of Henry F. Belden. The plaintiff’s bills of costs were duly taxed on notice to the solicitor of the new trustee and of Mr. and Mrs. Blakeman, but on presentation thereof, payment was refused; whereupon, this suit was commenced to subject the trust-estate to the payment of the plaintiff’s claim, and to compel the trustee to pay the same out of the income thereof, which was alleged to be amply sufficient.
    The bill was taken pro confessa as against Henry Blake-man; Mrs. Blakeman and the trustee put in separate answers; to which replications were filed; and proofs were taken, substantially sustaining the allegations of the bill. The supreme court, at special term (Edmonds, J.) made a decree, in accordance with the prayer of the bill; but on a rehearing before the superior court, to which the cause had been transferred, the decree was reversed as to the costs which had not been incurred on the retainer of Belden, the trustee, and affirmed as to the residue of the claim. From this decree, both parties appealed.
    Tracy, for the plaintiff.
    Sandford, for the defendants.
    
      
       See Fitzgerald v. Topping, 48 N. Y. 438.
    
   *Welles, J.

— I have sought in vain to find some ground on which to sustain the whole claim of the plaintiff in this case, regarding the defence as most inequitable and unjust. The plaintiff’s services were rendered, and disbursements were paid by him, in good faith, for the protection and preservation of what was deemed Mrs. Blakeman’s separate estate, upon her promise, and that of her husband, of remuneration out of that estate. After she has availed herself of the benefit of those services, she has found reasons, satisfactory to herself, it seems, to repudiate her promises, and for setting the plaintiff at defiance. She now interposes, as a shield against his just and equitable claim, certain *p'rovisions of the statute concerning uses and ^ ^ trusts; and for aught I can perceive, must prevail, as far as respects his demand for costs and counsel fees, in the suits with Mrs. Bogardus, which arose without the retainer, express or implied, of her trustee.

The deed of Mrs. Blakeman and her husband, to Belden, of her separate estate, bears date the 7th October 1842, and is in trust, to pay out of the rents, income and profits, 1st, the interest upon certain incumbrances on the trust-property; 2d, the taxes and assessments on the same; 3d, all necessary expenses incurred in needful repairs on the premises; and'4th, to pay the remainder of such rents, income and profits to Mrs. Blakeman, upon her own separate receipt, notwithstanding her coverture, to the intent and purpose, that the same or any part thereof might not be at the disposal of, or subject to the debts, liabilities or engagements of her husband, or of any future husband she might have, but at her own sole and separate use and disposal, &c.; with power to Mrs. Blakeman to dispose of the premises by last will and testament, and in default of such appointment, giving further directions in relation to the disposition of such income, after her death. There are other provisions in the deed, not material to the questions in controversy.

The revised statutes concerning uses and trusts provide, that “every express trust, valid as such, in its creation, except as herein otherwise provided, shall vest the whole estate in the trustees, in law and in equity, subject only to the execution of the trust. The persons for whose benefit the trust is created, shall take no estate or interest in the lands, but may enforce the performance of the trust in equity.” (1 R. S. 729, § 60.) Section 63 of the same statute declares, that no person beneficially interested in a trust for the receipt of the rents and profits of land, can assign, or in any manner dispose of, such interest.”

The deed of trust in this case, by force of the 60th section, above cited, vested the whole equitable as well as the legal estate in the trustee; and all that Mrs. Blake- * 579 1 maib beneficiary, had *left, was an equitable -* right, which she could enforce against the trustee, but which, by the 63d section, she is declared incapable of assigning or otherwise disposing of. It is an error, therefore,it seems to me,to call this right a separate estate; it is no estate whatever. Certain duties are devolved upon the trustee, which the court would require him to' discharge, among which is that of paying the remainder of the income, after discharging the prior obligations, to Mrs. Blakeman. Before she receives them, she has no power of disposition of them; she could not create a lien upon them, for any purpose whatever, without the co-operation of her trustee. The plaintiff cannot, in any event, reach them under the 57th section of the statute, for the reason that he does not stand in the relation of creditor of the cestuis que trust. He was not a creditor, in the sense of that section, because Mrs. Blakeman was a feme covert, at the time of the retainers, and the rendition of the plaintiff’s services, and incompetent to contract a debt.

But with respect to so much of the plaintiff’s claim as relates to his costs and counsel fees in the two suits last mentioned in the bill of complaint, I think, it may be sustained. In those suits, Belden, the trustee, was made a party defendant; the object of them was to set aside the deed, and subject the trust-property to debts owing by Blakeman, the husband, and thus defeat the principal, if not the only object of the trust. Belden was unwilling to incur any personal liability in their defence, and, in my judgment, it was competent for him to give the plaintiff a lien upon the future receipts of income, for the purpose of defending the trust-estate against the creditors of Blakeman. He was not bound to pay out his own money, nor to incur personal responsibility, and it does not appear that he had any funds in his hands applicable to such purposes. That it was his duty, as trustee, to resist the assaults that were making, so far as he was able, without advancing his own funds, or involving himself in personal responsibility, there cannot be a shadow of doubt; and.if competent counsel could be found, who would undertake the defences, relying upon future receipts of income for his compensation, *it seems clear to me, it was his duty to pledge ... the income for that purpose. If he had ad- L vanced his own means, or given his personal liability, he would clearly have had a lien upon the incoming rents and profits, for the purpose of reimbursing or indemnifying himself (Hide v. Haywood, 2 Atk. 126; Batch v. Hyham, 1 P. Wms. 455; Caffrey v. Darby, 6 Ves. 497; Worrall v. Harford, 8 Id. 8; Dawson v. Clarke, 18 Id. 254; Wilkinson v. Wilkinson, 2 Sim. & Stu. 237); and there is no rule of law or equity, within my knowledge, which would prevent his assigning that lien, if necessary for the protection of his cestids que trust. The deed, it is true, does not, in terms, contemplate any other appropriation of the rents and profits, than for the objects specified. But what then? Shall the trustee stand by quietly, and see the objects of the trust utterly frustrated ? It would be a reproach with which the law is not to be made chargeable. Rather than suffer it, the law will infuse into the trust-deed a provision to enable the trustee to exercise the necessary power, if possible, to prevent it.

It is undoubtedly true, as a general rule, that where a trustee employs agents in the execution of his trust, they are to look to him individually, and have no lien upon the trust-fund, for their compensation. If he is in funds, he is bound to protect the estate, in which case, he has no lien, and, consequently, cannot assign any, having none to assign. But, being without funds, and a necessity arising for expenditures, in order to protect the estate from spoliation, he may either make them himself, and be allowed for them in the passing of his accounts, or may engage others to do it, upon the credit of the fund, reserving to himself the same management and direction as in any other case, and thus avoid the objection that he had. delegated his trust. The latter, I think, is substantially this case.

If I am correct, the judgment of the superior court should be affirmed in toto. No costs of these appeals to be allowed to either party as against the other.

* Watson, J.

— I entirely concur in the opinion -* of the justices delivered at the general term, when this case was decided. By the terms of the trust-deed, the trustee was to receive the rents and profits of the lands, and to pay them over to Mrs. Blakeman, to her separate use, during her life. This was a valid trust under the 3d subdivision of § 55, 1 R. S. 728, and was so held by this court, in Leggett v. Perkins (2 N. Y. 397). The whole estate, both in law and equity, was vested in the trustee. (1 R. S. 729, § 60.) By the same section, it is declared, that the cestui que trust could not take any estate or interest in the lands, but could only enforce the performance of the trust. The bill filed by the plaintiff alleges, that a creditor of her husband had filed a bill against her husband and herself, and sought to set aside the trust-deed, so as to make the property liable for her husband’s debts, and that he rendered services, as solicitor and counsel, in defence of that suit and others of a like nature. He was aware, when he rendered those services, that all the estate or interest which Mrs. Blakeman had in those lands was by virtue of this trust-deed, which the law declared to be no estate or interest whatever, either legal or equitable, but that the whole estate was in her trustee, whose duty it was to protect it, if attacked. Nothing short of a retainer by the trustee, could entitle the plaintiff to recover for services rendered in the defence of such an estate. The plaintiff can recover, if at all, solely on the ground that Mrs. Blakeman has a separate estate in those lands, by virtue of the trust-deed. Now, to call this a separate estate, where the law declares that it is neither an estate, or interest, in law or in equity, seems to me, to be a contradiction in terms.

In England, where the rule was first laid down by Lord Hardwicks, in Peacock v. Monk (2 Ves. sen. 190), it was upon the ground, that the wife had a separate estate, which could not be charged with her husband’s debts, and which she was free to alienate and dispose of, without any control or interference on the part of her husband. By an examination of the English cases, which followed and adopted this decision, I find, they * 582 1 were a^ cases w^-ere the wife’s estate was *such ' -* that she had power to sell and convey it as her separate property, which necessarily included the power to charge it with the payment of debts. (Hume v. Tenant, 1 Bro. C. C. 16; s. c. 2 Dickens 560; Fettiplace v. Gorges, 1 Ves. jr. 46; s. c. 3 Bro. C. C. 8; Essex v. Atkins, 14 Ves. 542; Heatly v. Thomas, 15 Id. 596.) The courts have never shown any disposition to extend this rule to a case where there was the least doubt as to the existence of the wife’s separate estate, but rather to limit or qualify it. Our own courts, in adopting the rule, have evidently made this the foundation of it, and have never extended it to any case where the wife had not the complete power of alienating the estate. (Jaques v. Methodist Episcopal Church, 17 Johns. 548; North American Coal Co. v. Dyett, 7 Paige 9; s. c. 20 Wend. 570; Gardner v. Gardner, 7 Paige 112; Camming v. Williamson, 1 Sand. Ch. 17; Curtiss v. Engel, 2 Id. 287.)

The plaintiff, on the argument, cited the case of the Firemen’s Insurance Company of Albany v. Bay (4 Barb. 407), as authority to show that Mrs. Blakeman, by the trust-deed, had a separate estate in these lands. The ruling in that case, although there are some unguarded expressions in defining what is a separate estate, and which were not necessary to the decision, is, nevertheless, in unison with the other cases to which I have referred. In that case, the father devised lands to trustees for the benefit of his daughter, and they were authorized and empowered by the will, from time to time, to sell and dispose of such parts of his 'real estate, in fee-simple or otherwise, as his daughter, by writing under her hand,’ should, from time to time, request or desire, and pay the proceeds over to her, for her separate use, notwithstanding her coverture.” The only question before the court was, whether she could mortgage those lands, without her husband joining in the mortgage. That trust was created prior to the adoption of the revised statutes, when such a trust was valid; and as the la,w then stood, the cestui que trust, by force of the terms of the devise, possessed the whole equitable interest in the estate. It will be seen here, that she virtually had the *power' of dis- „ ^ posing of it at her pleasure, as she had but to L request her trustees, in writing, to sell any part of it, and they were bound to do so, and to pay the proceeds over to her, for her separate use. (Hill on Trustees 421; Story’s Eq. Jur. §§ 1, 888; 17 Johns. 548.) The court, therefore, might well decide, that she. so far had a separate estate in those lands, that she could incumber them by mortgage, without the formality of her husband’s joining in the mortgage, as he had no estate or interest in the lands to be incumbered. This is no authority for the plaintiff, for the facts show that it had the essential elements to constitute it a separate estate in the wife, to wit, the power to dispose of or sell it, through the medium of trustees, and to take the whole proceeds to her separate use. I have been unable to find any adjudged case, where the property of a married woman has been held liable for her debts, not contracted before marriage, unless she had a separate estate, with the power of disposing of it, as if she were a feme sole, and I am not disposed, even if the question was now open, to extend the rule.

The next question is, as to the income, rents and profits of the lands. Has the wife such a separate estate in them, that she can charge them with the payment of her debts? By § 63,1 R S. 730, it is enacted, that, “no person beneficially interested in a trust for the receipt of the rents and profits of lands, can assign, or in any manner dispose of, such interest.” Looking at the reason, and the ground upon which the rule was first established by the courts, and which has since been steadily adhered to, it seems tc me, that the bare reading of this section would be sufficient to satisfy any one, that a person possessed of such an estate, could not charge it with the payment of his debts. But without enlarging upon this point, it is sufficient, that it has been decided in the court of chancery, in the case of L’Amoreux v. Van Rensselaer (1 Barb. Ch. 34). That was a case, where the trust was in terms similar to the present. The chancellor, in his opinion, says, “the cestui que trust could not assign, dispose of, or in any manner mortgage or pledge her interest in the trust-property, or in the future income * 584 1 *^iereof > nor could she contract any debt, which -* could create a lien upon such future income, as to authorize the creditor to reach such income, either at law or equity.” Without going through with the reasoning of the chancellor upon this point, which to me is perfectly conclusive, I am satisfied, that this decision, carries out the true spirit and intent of the statute, and that it ought to be adopted as the rule in this case.

Assuming then, that the plaintiff proved a retainer in the two first suits from Mrs. Blakeman, as there is no evidence of any employment or assent on the part of the trustee, the plaintiff cannot recover the costs in those suits, and the judgment of the general term in regard to them must be affirmed. In the other suits, he was employed by the trustee, as well as by Blakeman and wife. As I have before said, it was the duty of the trustee to defend any suits by which the trust-estate was attacked, and the employment of counsel for this purpose was in the line of his duty, and eminently proper for the protection of the estate. The law allows him to reimburse himself out of the rents and profits of the estate. (Hide v. Haywood, 2 Atk. 126; Balsh v. Hyham, 1 P. Wms. 455; Worrall v. Harford, 8 Ves. 8; Dawson v. Clarke, 18 Id. 254.) The judgment of the superior court allowing the plaintiff to recover his costs and counsel fees in the last two suits, must be affirmed, without costs.

Judgment affirmed.

Gardiner, Jewett and Edmonds, JJ., dissented. 
      
       A married woman has no power to charge her separate estate for past services. Eisenlord v. Snyder, 71 N. Y. 45.
     
      
       This is said to he an exceptional case; if a trustee be in funds, he cannot create a charge upon the trust-estate, for professional services rendered for its protection. Stanton v. King, 8 Hun 4 ; s. c. 69 N. Y. 609. A trustee, without funds, may create a charge upon the estate, for an expenditure which he is authorized to make by the instrument creating the trust; but there must be an express agreement to that eifect; after making the expenditure, on his personal responsibility, he cannot, by a subsequent agreement, give a lien upon the trust property for the same. New v. Nicoll, 73 N. Y. 127 ; s. c. 12 Hun 431. And see Randall v. Dusenbury, 7 J. & Sp. 174 ; s. c. 63 N. Y. 645.