Case ID: nys_5/html/0513-02.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MacArthur v. Gordon et al.
    
    
      (Supreme Court, General Term, Third Department.
    
    May 27, 1889.)
    Trusts—Lien oe Cestui Que Trust.
    Where the declarant of a trust for the life of the cestúi que trust fails to apply rents and profits to the use of the cestui que trust as provided in the declaration, the liability incurred thereby is personal, and is not a lien on the remainder held by the declarant in the property, to take effect on the death of the cestui que trust, though the declaration provides that in case of a sale there shall be an equitable lien on the proceeds.
    On motion to settle and modify decision. For report of case on appeal, see 4 H. Y. Supp. 584.
    
      D. M. Westfall, for appellant. Matthew Hale, for respondent.
   Per Curiam.

We decided that the declaration of trust created a trust-es-tote in Gordon to receive the rents and profits and apply tiiem to the use of Larmouth during the life of the latter. Of course the trust-estate would cease with the life of Larmouth. The remainder, after Larmouth’s life, would belong absolutely to Gordon as his property. If Gordon failed to apply the rents and profits according to the trust, he would be personally liable to Larmouth, and he might also be compelled by a court of equity to perform his duty. But the personal liability which would thus be incurred by him would be no lien on the remainder above mentioned any more than upon any other property of his. That remaindér, after the life of Larmouth, would have no connection with the obligation of the trust. To illustrate: If there were a trust in A. to apply rents apd profits to B. for B.’s life, with remainder to C. in fee, that remainder would not be equitably chargeable with rents which A. had neglected to pay to B., and the same would be true if the remainder in fee were in A., instead of C. This is not changed by the clause in declaration that in ease of a sale there should be an equitable lien on the proceeds. What Gordon meant undoubtedly was that the proceeds should be held on the same trust. But in the present action the cestui que trust does not pursue the proceeds. He pursues the estate which we decided was taken by Davis on the same trust on which Gordon had held it. The liability then of Gordon and of Davis is not an equitable lien on the remainder after Bar-mouth’s death, and their liability is to be enforced by execution; possibly by execution against the person as well as against property.