Majority
p. 122(76 App. Div. 300.) MCKINSTRY v. ATWOOD. (Supreme Court, Appellate Division, Third Department. November 18, 1902.) Argued before PARKER, P. J'., and KELLOGG, SMITH, and CHASE, JJ.
Headnote
1. Execution—Supplementary Proceedings—Third Persons—Examination— Trust Funds.Where an examination of third" persons in supplementary proceedings showed that the only property they possessed was a trust fund, held by them for the benefit of the debtor and. bis wife under the will of another, an order modifying a, former order which restrained the trustees from paying over any part of the fund, by directing that it should not" restrain them from paying to the judgment debtor or his wife such portion of the income as was necessary for their support, violated Code Oiv. Proc. § 2463, declaring that the statute shall not apply or authorize any interference with any property held in trust for a judgment debtor, where the trust was created by, or has proceeded from, a person other than the judgment debtor.
Appeal from special term, Columbia county.
Action, by John McKinstry against Elbert S. Atwood, in which an order was entered for the examination of William S. J. Seymour and Alexander R. Benson as third persons on plaintiff’s application as a judgment creditor of defendant in proceedings supplementary to execution. From an order modifying an order as to the disposition of funds; Seymour and others appeal. Reversed.
On the 18th day of August, 1902, an order was made by the county judge of the county of Columbia directing the appellants to attend and be examined before a referee concerning the property of the judgment debtor, and said order contained an injunction as follows: “Said William S. J: Seymour and Alexander R. Benson are hereby severally forbidden from making or suffering any transfer or other disposition of or interference with the property of said judgment debtor, or in which he may have any legal or equitable interest.” The appellants, upon tlieir affidavit showing that they were trustees under the will of one Hasbrouck, and that under said will they held in trust certain property which they were authorized “to hold, invest, and keep, invested during the life of my [testatrix’s] son Elbert Atwood [judgment debtor], and,to pay to him or to his wife, in their discretion, the income thereof for his support and the support of his, family; his or. her. receipt therefor to be full.acquittance to such trustees;” and-also showing that the- judgment creditor did not claim that the appellants had. in their possession or subject to their control =any personal property or interest in personal property of. the said debtor other than the income on said trust fund,—obtained an order to show cause, why said order of August 18th should not be vacated, or modified so as not to apply to. or enjoin the. said William S. J. Seymour and Alexander R. Benson as trustees under said will. On the return- of said order to show cause the order appealed' from was- made, which provides “that said order of August 18, 1902. be so modified as not to enjoin said William- S. J. Seymour and Alexander R. Ben-son, as. trustees - under the will of Laura S. Hhsbrouck, deceased, from .paying- to the judgment debtor or his wife, in their discretion, such portion of the' income on the trust" fund in, their hands as necessary for the support, of the - judgment debtor and ¡the support of-liis family.”
Cadman & Peck (Horace Peck, of counsel), for appellants.
Henry Van Hoesen, for respondent.
Section 2463 of the Code of Civil Procedure- provides: “This article does not apply. * * * Nor does it author
p. 123
ize the seizure of or other interference with any property * * * or any money, thing in action, or other property held in trust for a judgment debtor where the trust has been created by or the fund so held in trust has proceeded from a person other than the judgment debtor.” The order appealed from does interfere with property held in trust for the judgment debtor, at least to the extent that the income thereon exceeds the necessities of the judgment debtor and his family. It is also left to the trustees to determine at their peril the extent of such necessities. The interest of a beneficiary in a trust fund created by a person other than the debtor cannot be reached in supplementary proceedings. It must be reached, if at all, in a direct action. Levey v. Bull, 47 Hun, 350 ; Conduit Co. v. Dewsnap, 25 Civ. Proc. R. 380, 41 N. Y. Supp. 224 .
Order reversed, with $10 costs and disbursements, and order of August 18th amended by adding thereto: “This order shall not be construed to apply to or enjoin, the said William S. J. Seymour and Alexander R. Benson, as trustees under the will of Laura S. Hasbrouclc, deceased, nor authorize their examination in relation to the trust fund.” All concur.
Cases cited
- Monolithic Drain & Conduit Co. v. Dewsnap 25 Civ. Proc. R. 380 p. 123