Court Opinion

ID: 3591449
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:40:01.820574+00
Date Added: 2024-06-11T13:50:22.958107
License: Public Domain

I think that this judgment should be affirmed upon the broad ground that the Revised Statutes of this state have only changed the common-law rule, which subjected the interest of the beneficiary of a trust to the claims of his creditors, so far as to protect that interest when under a trust created by another than the beneficiary. The statutory provision, relied upon as affording a general protection to all beneficiaries, irrespective of the manner of the creation of the trust, does *Page 324 
not when fairly read, imply a trust founded by the beneficiary himself. That "no person, beneficially interested in a trust for the receipt of rents and profits of land, can assign, or, in any manner, dispose of, such interest" not only imports, by the language, that the founder of the trust and the beneficiary are two different persons; but such is the meaning required by the policy of the law. The changes, effected by the adoption of our Revised Statutes in the rules of the common law, proceeded upon a sound policy and principle, and not arbitrarily. Both policy and principle were opposed to granting immunity to a beneficiary against the claims of his creditors, if his interest was one reserved in a trust created by himself for his own benefit. The principle, which underlay the statutory provision, making the interest of the beneficiary in a trust created by another inalienable, was that of affording protection to a provision, which, in theory of law, had been made for the helpless, the unfortunate, or the improvident. That is a just principle and one which the policy of the law sanctions. The creditor cannot complain, if he is unable to reach the estate of his debtor, under a trust created in the property of a third person. But neither principle, nor policy, can justify the protection of the debtor's estate against the claims of his creditors, when it is one of his own creation. Although, as in the present case, a person may have placed the legal title to his property in another; nevertheless, if he has in the conveyance reserved to himself a life interest in the enjoyment of the rents and profits, it is clear that he has not divested himself of anything more than the legal title and the power of disposition. He still has that interest which made the legal possession of the property valuable; namely, the enjoyment of the income. In other words, what the appellant sought to do, in this case, was to place his own property in such a legal situation that, while he might enjoy its income, his creditors could have no resort to it in order to satisfy the debts which he might incur. Sound public policy condemns such a proposition. As it is clearly shown, in the opinion of Justice CULLEN, it was never contemplated by the authors of the Revised Statutes *Page 325 
that the section, above quoted and relied upon, was intended to apply to a case where a debtor himself created the trust. I think that we may safely rest the affirmance of this judgment upon that broad ground, and without resort to other provisions of the statutes to make clear the conclusions reached, that one may not secure to himself the enjoyment of a life interest in his own property, which shall be beyond the reach of the just claims of his creditors.