Case ID: ad_24/html/0551-01.html
Source: Caselaw Access Project
Author: {"author": "Parker, P. J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

First National Bank of Amsterdam, Respondent, v. John C. Miller and Others, Appellants. First National Bank of Amsterdam, Respondent, v. John C. Miller and Esther Miller, Appellants.
    
      Judgment creditor’s action—property given for the support of a brother of the testatrix and his "family,” with, remainder to his children — the corpus of such a trust cannot be reached by his creditors — the bequest is not void for indefiniteness of beneficiaries—“absolute power of disposition” under the Beal Properly Law, % 139.
    A testatrix directed by a codicil to her will that, if her brother survived her, the amount of certain provisions made for him by her will should be paid to, and be received by, him “in trust ouly, to be used by him as lie may deem proper and necessary for the support and maintenance of himself and family during his natural life,” and not be liable for, or be charged with, his debts, and upon his decease the testatrix gave the balance of the money unexpended by him “absolutely to his children or the survivors or survivor of them then living.”
    In an action brought by certain judgment creditors of the brother to set aside, as fraudulent as to them, transfers of this property made by him to his two children, his wife having died,
    
      Held, that the provision of the will, in reference to the “family,” was sufficiently definite in its designation of a beneficiary;
    
      That, the gift over to the children was valid, and that the brother had no interest therein which his creditors could reach ;
    That the brother liad not “an absolute power of disposition” of the property within the meaning of section 129 of the Real. Property Law;
    That the use of a portion of the fund in erecting buildings upon land owned by the brother was not an appropriation of it to his support, but an investment of it.
    Putnam, J., dissented.
    Appeal by tlie defendants, John 0. Miller and others, in the first above-entitled action from a judgment of tlie Supreme Court in favor of the plaintiff, entered in tlie office of the clerk of the county of Montgomery on the 24tli day of March, 1897, upon tlie decision of the court rendered after a trial at the Montgomery Special Term; also an appeal by the defendants, John C. Miller and another, in tlie second above-entitled action from tlie said judgment, with notice of an intention to bring up for review upon such appeal the order granting an extra allowance to tlie plaintiff.
    Oil June 22, 1896, tlie defendant John 0. Miller, being the owner of bank stock of the value of $860, a horse, carriage and other chattels of the value of $700, and real estate of tlie value of $45,000, disposed of the same as follows:
    The stock he transferred to his two daughters, defendants in the first above-entitled action, without any consideration. The other personal jiroperty lie sold to his daughter Esther Miller, the defendant in the second above-entitled action, by a bill of sale, the alleged consideration being a claim against her father for services. The real estate was conveyed to the said Esther Miller for the alleged consideration of $38,017.40. Such sum was made up as follows : Mortgages outstanding against the property, which the grantee assumed to pay, $22,568.33; notes against Miller, which she held or assumed and agreed to pay, $9,465.93; and $5,982.17 thereof was a sum which Miller had received from his sister’s estate, and which he testified lie had put into the property as a permanent investment for the benefit of his daughters.
    The $860 of stock, which is the subject of the first suit, and the $5,982.17, invested as above, were received by Miller from his sister’s estate and were held by him* pursuant to the provisions of her will, which reads as follows:
    “ Row, therefore, I do by this, my writing, which I hereby declare to be a codicil to my said last will and testament and to be taken as a part thereof, order and declare that my will is in case my brother John C. Miller shall survive me, that there shall be paid to him the amount or sum as mentioned and provided for him in the 17th and 20th sections or clauses of my said last will, but that same shall be paid to and received by him in trust only to be used by him as he may deem proper and necessary for the support- and maintenance of himself and family during his natural life, and same I hereby declare and provide not to be liable nor in any way to be charged with any •debt or claim now existing against said John 0. Miller or for any debt that may be created or incurred by him hereafter, and upon the decease of my said brother John C. Miller, the balance of said moneys received by him in trust which may remain unexpended by him I give and bequeath absolutely to his children or the survivors or survivor of them then living.”
    These several transfers were made at the same time, and thereby the defendant Miller divested himself of all his property, being then indebted'to the plaintiff more than $9,000, and also owing other creditors. Upon the execution of such transfers he became insolvent.
    The actions were brought to set aside such transfers as fraudulent and void, and to have the property applied to the satisfaction of the plaintiff’s debt. Both were tried together; and upon the trial the transfers were treated as one transaction, and the trial court adjudged them to be fraudulent and void, and in each action directed the property so transferred to be sold by a receiver and the proceeds applied to the discharge of the plaintiff’s debt. From such judgment the defendants in each case appeal to this court.
    
      George B. White and H. V. Borst, for the appellants.
    
      Nisbet & Hanson, for the respondent.
   Parker, P. J. :

The first question to be determined in this case is whether the legacy given to the defendant Miller by the will of his sister is liable to be appropriated by his creditors to the payment of his debts.

The plaintiff’s counsel claims that the trust which was evidently attempted to be created by such will is void, because no beneficiary is named therein except Miller himself; and that, because such trust is void, Miller took an absolute estate in the whole fund by reason of the provisions of section 129 of the Real Property Law (Laws of 1896, chap. 547) (substituted for 1 R. S. 732, § 81).

The cases have been decided upon this theory, and the judgments appealed from have seized upon the whole of such legacy and applied it to the payment of Miller’s debts.

The plaintiff argues that the word “family” is so indefinite1 that it designates no one, and that hence Miller himself is the trustee and sole beneficiary named. But such word has been frequently used in wills, and the instances are many where gifts by way of bequest or devise to the family ” have been recognized and enforced. Generally it derives its particular signification from the context of the will. In Spencer v. Spencer (11 Paige, 160) the chancellor says : “ The word family may mean children, wife and children, blood relatives or the members of the domestic circle, according to the connection in which the word is used.” In Redfield on the Law of Wills (Vol. 2, p. 394) the rule is given as follows: “6 It should seem that a gift to the family, either of the testator himself or of any other person, will not be held to be void for uncertainty, unless there is something special creating that uncertainty.’ ‘ The subject-matter and the context of the will are to be taken into account,’ and the bequest upheld, if it can fairly be made out what the testator intended by the word family.” It is there further said : “ It has often been held that a bequest to one and his family, he having children at that time, was intended for such person and his children ; and that such children as were living at the decease of the testator were entitled to take.” It has also been held that abequest to one’s wife towards the support of her family, gave the children such an interest in the estate devised as entitled them to maintain a bill in their own names to protect such interest. ( Woods v. Woods, 1 Mylne & C. 401. See, also, Beales v. Crisford, 13 Sim. 592; Schouler Wills, § 537; 2 Williams Exrs. [7th Am. ed.] 404 [9th Eng. ed.] 989; Bates v. Dewson, 128 Mass. 334; 7 Am. & Eng. Ency. of Law, 807.)

In the case before us, at the time of the testatrix’s death, Miller’s wife was dead, and the two defendants, Esther and Louise, were his only children. Within the authorities above cited, there is no difflculty in determining that such children were the persons intended by the word “ family ” in the bequest above quoted. They as well as Miller were beneficiaries in the trust thereby created, and hence the trust does not fail for the reason assigned by plaintiff’s counsel. ( Woodward v. James, 115 N. Y. 346, 357. See, also, Losey v. Stanley, 147 id. 568.)

We must conclude, then, that Miller held all the property he received under the will in trust, to use the same for the support of himself and his two daughters, during his life, and that upon his death whatever there should remain thereof unexpended is given over to the daughters or to the survivor of them. Such a trust, and the bequest over to the daughters, was valid. (Roosevelt v. Roosevelt, 6 Hun, 31; affd., 64 N. Y. 651.) And, inasmuch as Miller had no interest personally in the fund, or in the income therefrom, except for his support, he had no interest which his creditors could reach (Code, § 1879 ; Bramhall v. Ferris, 14 N. Y. 41), and his assignment thereof to his daughters cannot be questioned by them.

But even if Miller did not receive the fund in trust, it is clear that section 129 of the Real Property Law does not apply. Under the provisions of that section, the estate is turned into a fee only “ where an absolute power of disposition ” not accompanied by any trust is given. Even if no trust is created, no “absolute power of disposition ” is given to Miller. He had the right to use it for one purpose. only, viz., the support of himself and family. The case of Rose v. Hatch, (125 N. Y. 427-433) is very similar in its facts, and entirely analogous in principle. Under the authority of that case, Miller’s creditors could not reach any part of the fund bequeathed to him.

Applying this conclusion to the two cases before us, we find the situation to be as follows :

The §860 of bank stock, which is the only subject-matter of the first action,, was received by Miller “ in specie ” under the provisions of such will. He had up to the date of the transfer used only the-income therefrom. The principal he had kept intact, and if he had then died his daughters, and not his creditors, would have been entitled to the whole of it. By such transfer, Miller determines that he will never need any of it for his support and passes the control of' the whole over to his daughters. So far as his right to expend any part of it is concerned, I can see no reason why, as against his creditors, he may not abandon it to those who are ultimately to take such as he does not use. Such right on his part is not a right that his creditors could seize or utilize, and hence they can no more complain if he gives up to his daughters his right to expend it, than they could if he should die without having done so. It is not anything that his creditors can use, and hence they can have no right to claim any part of it. So far then as that action is concerned, the plaintiff had no right to reach the property affected by it, and the judgment should, therefore, be reversed, and the complaint dismissed, with costs.

In the second action it appears that Miller used $5,982.17 of the fund he derived under such bequest in erecting the building upon the premises which he conveyed to his daughter Esther. The judgment in that action sets that conveyance aside as fraudulent, and directs the receiver to sell the property and apply the proceeds to the satisfaction of the plaintiff’s debt, thereby taking such "item of $5,982.17 from the daughters and appropriating it entirely to the benefit of Miller and his creditors. Miller himself could not, by so using the fund, deprive his daughters of their interest in it. It was not an appropriation of the principal to his support, but was rather a method of investing it and keeping it intact; and had it remained in that condition until his death, I see no reason why his daughters would not have had an equity in the premises to. that extent superior to the right of any of his- creditors. For the reasons above stated, it was property to which the creditors could not resort; and hence as against Miller’s children, or either of them, the plaintiff is not entitled to have it sold in this action. For that reason alone the judgment must be reversed and a new trial granted.

These considerations lead to the following conclusions: In action No. 1 the judgment is reversed and the complaint dismissed, with costs. In action No. 2 the judgment is reversed and a new trial granted, costs to abide the event.

All concurred, except Putnam, J., dissenting.

So ordered.