Kelsey v. Webb

Headnote

Trust—the interest of a beneficiary entitled to Ms support from the income, the balance thereof being given to other persons, is not subject to the claims of his creditors — order appointing a receiver in supplementary proceedings set aside.

A testator, by Ms will, gave Ms residuary estate to the children of Luke S. Webb in equal shares. The will further provided: “ Said property, both real and personal, is not to be divided nor distributed so long as Luke S. Webb shall live, but continue and remain intact for that period of time. At his decease the same is to be distributed, share and share alike, among his said children; but should said Luke S. Webb decease before his wife, Mary A., then said Mary A. shall be supported out of my real and personal estate, drawing from

the respective shares of my aforesaid grandchildren, so long as she remains the widow of said Luke S.-Webb. The use and income of Said property subject to the bequests hereinbefore made is to he distributed by my said executors after a reasonable support of said Luke S. Webb and family shall have been had and taken by said Luke S. Webb for services for taking care of and managing said property; shall be distributed by my said executors among said children equally.”

Meld, that Luke S. Webb had no interest in the income from the residuary estate which was subject to the claims of bis creditors.

Ordinarily an order appointing a receiver in supplementary proceedings will not be reversed upon appeal. Such an order will, however, he reversed where there has been an unrestricted examination of the judgment debtor, and it is clear that he has no vested or contingent interest in any property applicable to the payment of his debts, particularly when it appears that the order was made upon a .misapprehension of the creditor’s right to have the income of a trust estate applied in satisfaction of his debt.

Appeal by. the defendant Luke S. Webb and by Luke S. Webb and another, as executors,, etc., of Thomas J. Webb, deceased, from an order of the Supreme Court, made at the Franklin Special Term and entered in the office of the clerk of the county of Franklin on the 7th day of January, 1904, appointing a receiver in supplementary proceedings against the defendant Luke S. Webb in the above-entitled action.'

The plaintiff obtained a judgment against the defendant in 1901, and the same year on the return of an execution unsatisfied commenced a proceeding against said defendant supplementary to said execution. The defendant was examined in said proceeding and an application was then made for the appointment of a receiver which was denied without prejudice to other proceedings. About two years thereafter this proceeding was commenced and the defendant appeared and was examined without objection. At the close of the examination the referee before whom the evidence was taken made his report and a motion was then made at Special Term for the appointment of a receiver, and an order was then made appointing a receiver; and the order also provides; “It is Further Ordered, That Luke S. Webb and Luke S. Webb and Charles F. Elliott, as . executors of the last will and testament of Thomas Webb, late of the town of Fort Covington, Yew York, deceased, nor otherwise, upon being served with a certified copy of this order and of notice of filing of the bond prescribed by this order, deliver to said receiver

all property and money now in his or their possession, or under his control, belonging to the said Luke S. Webb, and not exempt by Sec. 2463 of the Code of Givi! Procedure, or otherwise.”

The defendant’s father died several years ago, leaving a will which has been admitted, to probate, and the defendant and said Charles P. Elliott were duly appointed, executors thereof and letters testamentary were issued to them. By said will he gave his residuary estate to the children of the defendant in equal shares. The will then further provides : “ Said property, both real and personal, is not to be divided nor distributed so long as Luke S. Webb shall live, but continue and remain intact for that period of time. At his decease the'same is to be distributed, share and share alike, among his said children; but should said Luke S. Webb decease before his wife, Mary A., then said Mary A. shall be supported out of my real and personal estate, drawing from the respective shares of my aforesaid grandchildren, so long as she remains the widow of said Luke S. Webb. The use and income of said property subject to the bequests hereinbefore made is to be distributed by my said executors after a reasonable support of said Luke S. Webb and family shall have been had and taken by said Luke S. Webb for services for taking care of and managing said property; shall be distributed by my said executors among said children equally, but before such distribution shall be made my said executors shall use so much. of the. excess of said income as may be deemed proper by them for the education of the said Judson. It is my desire and request that the fences and buildings on my several pieces of land and on my farm shall be kept in good repair and condition, according to the best judgment of my Executors.”

The deceased left certain real property and a small amount of personal property, all of which is held by said executors. In one of the houses so held the defendant, who is now a widower, lives with one or more óf his five children. The balance of the real and personal property is rented and from it there is received by the executors a gross amount of about $400 per annum, the net amount of which has been, and is, being used by said executors, toward the support of the defendant and his children, the residuary legatees. It is not claimed that the defendant has any property, real or personal, other than the interest which he has, as stated, in the estate of

his deceased father. The affidavit upon which the order for a receiver was granted states : “ That said judgment debtor has property applicable to the payment of the judgment herein as deponent verily believes, namely, in that he is entitled to the rents, uses and income of certain real property situate in the town' of Fort Covington, Franklin County, New York, amounting in value to the sum of between five and seven hundred dollars per annum, as appears by the evidencé herein, to which reference is hereby made and as deponent > verily believes.”