Court Opinion

ID: 8269528
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:22:30.772858+00
Date Added: 2024-06-11T16:43:28.289943
License: Public Domain

Swayze, J.
(dissenting).
The trust in this qase was created by Parker himself. As soon as he attained his majority he assigned securities amounting to more than $150,000 to his mother and she immediately assigned them to the Camden Safe Deposit and Trust Company. The declaration of trust provides that the income shall be'paid to Parker during his life for his sole and separate use so that the same shall not be liable to or for his debts and contracts or for debts or contracts or under the control of ,anjr other person; immediately after his death the property is to be. assigned to such person and for such uses as he shall by will appoint in default of a .will to his mother if living, freed and discharged of the trust; but if she die before Parker, then to such person as she may by will appoint; and in default thereof to such persons as would be entitled under the laws of Pennsylvania to. the estate of Parker. A right is reserved to Parker with the consent of his *599mother, if living', to revoke the trust; and to Parker alone to revoke it after his mother’s death. She died in 1901. The trust was made irrevocable just before her death by consent of her and Parker. The deed of trust is clearly void as to creditors under section 11 of the statute of frauds (Comp. Stat. p. 0617), because made in trust for the use of the person making the same, and also because on its face it shows an intent to defraud future creditors. The case comes also within section 70 of the Chancery act, subjecting to the rights of creditors moneys held intrust where the trust has been created by the judgment debtor himself. It does not come within the rule of Ruckmam, v. Con-over and Winans v. Groves, to which the vice-chancellor appeals. In those cases the rights of third parties were involved. So much the court now concedes. No one is interested -in the fund except Parker himself. No one opposes the complainant’s recovery of its money except the trust company which has no beneficial interest in the fund, except possibly commissions to be earned. Parker has apparently done all he could to secure the complainant its money, except to make a binding agreement to execute his power of appointment in favor of his credit&r which he can do if it be necessary. The question, 'therefore, resolves itself into whether he is .to be prevented, in spite' of himself, from securing payment of his debts by a judgment, 'execution and proceedings in chancery supplementary thereto. Tire case goes further than to protect the corpus of the fund. The bill is dismissed and the complainant is thereby1 deprived of its remedy even against the income of the fund which is clearly Parker’s absolute property, and is probably in excess of the $4,-000 mentioned in the statute. Comp. Stat. p. 2259 § 300; P. L. 1880 p. 274.
We have not heretofore adopted in this state the doctrine of “spendthrift trusts,” and our legislature has evinced hostility-to them by subjecting income in excess of $4,000 to supplementary proceedings at law, even where the trust is created by another. We are now by this decision going far beyond any doctrine .of spendthrift trusts-that has ever come under my notice. 'And "we are doing it without any evidence that Mr. Parker needs the protection of the court as he certainly does not ask for it. *600We do it because, without .proof, we guess that a man who borrows about $10,000 a year and chooses to pay it out of a fund of which 'the equitable and beneficial right is wholly his own, by means of judgment and execution, must be doing wrong and without evidence we attribute moral delinquency to a creditor who loans him the money at the legal rate and in the ordinary course of business. There is no evidence as to Parker’s other means or his fortune aside from the trust fund; there is no evidence as to his need of the money or the use he made of it. It may have been used for a highly profitable investment; it ma3r have been used to discharge debts incurred by him of the highest moral obligation. In effect, we say the bank was right in loaning him $35,000 in four years; the court of chancery enforced its right to recover out of this fund three different times; we now say that for it to loan him $13,000 in the fifth year and to attempt to recover it by the thrice approved method, shows that it is guilty of some moral delinquency; that its hands are unclean because it is assisting him to get control of his own property in which no one else has any beneficial interest and to discharge that property of a trust created by himself and pronounced void by statute. If the court is correct, tradesmen who supply him with the means of living, must be likewise guilty of moral delinquency if they supply him' for a fifth year after having enforced their claim for four years out of this fund. This must be so since, as far as the case shows, the money loaned by the bank ma3r have been loaned for the express purpose of meeting Parker’s legitimate living expenses, which may not have been extravagant for one of his means. I cannot understand on what legal principle the bank can have imposed upon it the duty to explain what becomes of the money it loans. The legislature has recently shown a desire to go to great lengths to assist creditors in recovering their debts; a workingman’s wages “due and owing or thereafter to become due and owing” may be sequestered. P. L. 18-15 pp. 182, 'IflO. We are protecting an income on a trust fund in excess of $100,000 created by the debtor himself and expressly declared by him alone not 'to be “liable to or for his debts and contracts.” The way is made easy for a man of fortune to escape the ordinary obligation to pay bis debts, in *601spite of legislation to compel him- to pay. I confess I cannot follow the court’s reasoning. I pass over the question that might-well be raised as to- the estate in the trust fund of a life tenant with an absolute power of disposition by will.
For affirmance—Garrison, Trenci-iard, Parker, Bergen, Minturn, Kalis ci-i, Black, Heppeni-ieimer, Williams, Taylor, Gardner—11.
For reversal—Swayze—1.