Court Opinion

ID: 8848625
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:05:55.127233+00
Date Added: 2024-06-11T17:05:25.357417
License: Public Domain

On Rehearing.
(February 5, 1894.)
LTJRTON, Circuit Judge.
A petition for rehearing has been presented and fully considered. The points made - are four in number: The first calls attention to section 5464, Rev. St. Ohio, and insists that, under that section, any interest of Cassius Hanna in the trust created by his father’s' will, though such an interest be nothing more than a support and maintenance, is subject to the demands of his creditors. That section is in these words:
“When a judgment debtor has not personal or real property subject to levy on' execution sufficient to satisfy the judgment, any equitable interest which he has in real estate, as mortgagor, mortgagee, or otherwise, or any interest he has in any banking, turnpike, bridge, or other joint stock company, or in any money contract, claim or chose in action, due or to become due to him, or in any judgment or order, or any money, goods or effects which he has in the possession of any person, or body politic or corporate, shall be subject to the payment of the judgment, by action.”
This statute was not deemed to have any application to a trust where the beneficiary had no right to demand any distributive part of the income, and under which the trustee was to apply and personally expend the income in the maintenance and support of the debtor as one of a family collectively to be maintained. The trustee, in his discretion, might pay over the income in whole or in part. That discretion could not be controlled. The trust, as we construed it, gave the trustee the right to refuse to Cassius a separate support, and it gave him the absolute and uncontrolled right to refuse to pay over a dollar of the income in money. If we were right in the construction we placed upon this trust, it is within the principle of Godden v. Crowhurst, 10 Sim. 648; Holmes v. Penney, 3 Kay & J. 90; Hill v. McRae, 27 Ala. 175; Hall v. Williams, 120 Mass. 344; and Nichols v. Eaton, 91 U. S. 716. In Godden v. Crowhurst, supra, *939the vice chancellor said, concerning a trust in this respect like the one under consideration:
"Now, there is nothing, in point of law, to invalidate such a gift, that I am aware of. It does not follow that anything was, of necessity, to be paid; but the property was to be applied, and there might have been a maintenance of the son and of the wife and of the children without their receiving any money at all. For Instance, the trustees might take a house for tlieir lodgings, and they might give directions to tradesmen to supply the son and the wife and the children with all that was necessary for maintenance; and therefore my opinion is that I am not at liberty to take this as a more gift for the benefit of the son simply, but it is a gift for his benefit in the shape of maintenance and support of himself jointly with his wife and children; and, if that is the true construction of the gift in question, the result is that the assignees are not entitled to anything.”
The right to acquire and receive a support in kind, as one of a household or family, is not an interest which is capable of severance or valuation, and is not such an equitable estate or interest in property as can he subjected. In no view of the Ohio statute can a creditor be benefited. But Ibis Ohio statute ought not to be construed as relating to, or dealing with, the substantive laws of property. It is found in the Code of Civil Procedure, and it should he regarded as extending the remedy of creditors to property and property interests not subject to seizure by execution at common law on account, of (lie narrowness of the common-law writ. At, common law, the writ of execution was limited in its operation, and was, in addition, confined to those estates recognized by the law as legal estates. Choses in action and equitable interests were not'subject to common-law writs. On account of this, the jurisdiction of equity to entertain suits in aid of a creditor had its origin. 3 Pom. Eq. Jur. § 1415. Statutes have been enacted in many states extending common-law remedies, and enlarging equitable jurisdiction in creditors’ suits. This Ohio statute is one of this class.
The interest which Cassius has under this trust is .not enlarged or otherwise affected by the Ohio statute. The interest which the debtor, Cassius, has in the trust, is not one which can be reached and subjected by a creditor, either at law or at equity.
Another point made in the application for rehearing deserves consideration. The insistence is that income at the end of .each year remaining unexpended is absolutely required to be invested for the benefit of Cassius, and that surplus is absolutely the property of Cassius, and therefore subject to Ms creditors. The view expressed in the opinion was that the executor had a discretion as to whether he would hold such surplus for the common benefit, or invest the same under the provisions of the eighth item of the will; that, having made no such investment, he could not be coerced. The disobedience of the executor to-a positive direction to invest such surplus would not operate to diminish the rights of Cassius or his creditors in the fund. If there was a surplus, and it was the duty of the executor to invest it, then the share of Cassius in the surplus is just as much subject to the claims of his creditors as if it bad been invested. Thus far we agree with the counsel for petitioner. Did *940the executor have any discretion as to when and how much of such surplus income he would invest?
(1) It is too clear for argument that the executor had the power to have expended the whole of such income as it came to hand, and thus have prevented the accumulation of a surplus.
(2) He might have advanced to Cassius or his family, if he saw fit, such unexpended current income.
(3) Under item 9 the executor was given power to advance, at any time, “any portion of the final share of my estate to either of my grandchildren that would be due to them under the plan of distribution herein provided,” subject only to the provisions made affecting the testator’s wife. “In other words,” quoting brief of counsel for the executor, “the executor may, in his discretion, at any time after the death of the widow, advance the entire estate to the grandchildren, and, at any time prior to her death, advance to them all, except sufficient to raise her annuity.” This provision, whereby the executor, in his discretion, might turn .over to others the whole of the estate out of which the income of Cassius was to arise, was not only inconsistent with the suggestion that the interest of Cassius in the income was a vested one, but serves to establish the proposition that the power to invest' surplus income was a discretionary power. If we confine ourselves to the closing paragraph of item 8 of the will, it might well be contended that the executor had no discretion as to such surplus; but if we look at the will as a whole, and endeavor to ascertain the intent of the testator, we are led to the conclusion that the testator did not arbitrarily require' the unexpended income to be invested for the benefit of Cassius, or Cassius and the members of his family. 2sTo power is anywhere given by the eighth item to trench upon such investments. If, however, we turn to item 2 of the codicil, we see that unexpended income is to be held in trust “until expended or otherwise disposed of, as provided in said item,” “to the end that the same may be applied as my said executor shall deem best, and not otherwise, for the benefit of my son, Cassius, and his family.” Speaking of the investment authorized by item 8, the testator continues by adding:
“Also, any portion of said share of income which may be invested for the benefit' of Cassius shall likewise be held and kept in his own possession in trust by' my said executor, the same to be expended for Cassius’ benefit, or paid to him at such time, and in such amounts, as he (my said executor) may deem best; and not otherwise.”
The interest of Cassius in such investment is that “portion of said share of income which may be invested for the benefit of Cassius.” What is that portion? It is clearly not the whole of the unexpended income of one-half of the estate. The family of Cassius had interests in the income; each member an interest equal to that of Cassius. The testator did not contemplate that the whole of such surplus income should be invested for the exclusive benefit of Cassius. He speaks of the interest of Cassius “as any portion of.said share.”-' The share he refers to is the one-half of the net income set apart as a fund out of which the executor was to expend *941the whole, or as much as he deemed judicious, for the support of Cassius and his family. The interest of Cassius is to he (hat “portion” of the surplus of that share which the executor shall invest for the benefit of Cassius exclusi vely. How is the portion of Cassius to be ascertained and separated from the portion to he held for the benefit of the others who compose his family? Looking to ihe whole scope of the will, we must conclude that this is, as is everything else beyond maintenance, left to the sound and uncontrolled discretion of the executor. He may pay over to Cassius, if he see fit, the whole of the share of income out, of which he and his family are to he supported. This discretion is, as we have already seen, personal, and beyond legal coercion. It is easy, therefore, to gather that the executor has a discretion as to what shall be set off for investment exclusively for the benefit of Cassius. Wliat shall be the fate of the portion invested for Cassius?
(1) It is to be observed that the executor is given the evident. discretion as to the manner in which such fund shail he used.
(a) He may expend it for his benefit.
(b) Or he may pay it over to him in such sums, and at such times, as he may deem best, “but not otherwise.”
(c) If it be neither expended nor paid over, then what? Will it pass to the distributees of Cassius, or under Ms will? Not one word occurs giving Cassius any furi her or other interest than such as the executor chose to give. The fund is to remain in the hands of the executor until he pays it over to Cassius or expends it for his benefit, or until the day of final distribution. It will Hum constitute unexpended income, and, as such, pass' with the corpus of the estate. The beneficiaries, having no other interest in the income than a right to maintenance, have not a vested interest in the income. They are io he supported out of the income. The executor may spend so much as he deems proper. The rest, not being given to the testator, is per necessitate, when the trust ceases, to be held and distributed as part of the corpus. This is what the testator understood when in the ninth item of the will, and the fifth item of the codicil, he directs, upon the termination of the trust, a distribution of the “whole of my estate,” or the “whole of my estate as it may then exist.” The fair and rational interpretation of item 8, so far as it refers to the duty of investment, when construed in the light of the purpose of this testator as manifested by surrounding' circumstances, and in the light of the whole scope of the will, particularly the second item of the codicil, was to make the investment of surplus income a matter of discretion not to he controlled by the court.
The other points suggested in Ihe application for a rehearing have all been heretofore passed upon, and are covered by the opinion. Rule 29 provides that a petition for rehearing shall briefly and distinctly state its grounds, “and will not be granted or permitted unless a judge who concurred in the judgment desires it, and a majority of the court so determines.” It may be added that, when such reargument is desired, it will be ordered without waiting for the application of counsel. Public Schools v. Walker, 9 *942Wall. 603. In the case above cited the chief justice said, as to-such petition, that:
“When the court does not, of its own motion, order a rehearing, it will be proper for counsel to submit, without argument, as has been done in the present instance, a brief written or printed petition or suggestion of the-point or points thought important. If, upon such suggestion, any judge who concurred in the decision thinks proper to move for a rehearing, the motion will be considered. If not so moved, the rehearing will be denied as of course.”
That practice has been followed in the present case. The points upon which counsel have suggested a reargument have been considered. In view of the fact that each point was fully presented, both in oral and printed arguments, we are of opinion that no benefit would result from further argument.
Petition dismissed.