Continental Trust Co. v. Wetmore — 50 N.Y. St. Rep. 491

Majority

p. 491

The Continental Trust Co. of New York City, Resp't, v. Sarah T. Wetmore, Ex'rx, et al., App'lts.

(Supreme Court, General Term, First Department,

Filed January 13, 1893.)

Headnote

1. Divorce—Sequestration proceedings—Receiver—Trust fund.

A receiver of personal property and of the rents and profits of real property of a person, appointed in sequestration proceedings, cannot maintain an action to restrain a trustee of such person from disposing of the income to accrue from the principal of the trust estate.

3. Same.

If there is any obligation arising out of the marital relations which had existed between such person and his wife in her action for divorce, which authorized the court to enforce against him the payment out of future accruing income of the alimony awarded her, such right is a personal one, and the receiver is not her representative in respect to it.

Appeal from an order which, pending this action, restrains defendant from making any disposition of the securities which constitute a trust estate.

S. P. & J. McL. Nash, for app’lts;

Jay & Candler (Flamen B. "Candler, of counsel), for resp’t.

On the 1st day of April, 1892, one Annette B. Wetmore, the wife of William B. Wetmore, obtained a decree -of absolute divorce against her husband, and, in the decree allowing such divorce, the defendant, Wetmore, was directed to pay to her for alimony $3,000 a year, and $1,000 for each of her three children, during their minority, the first payment to be made on the 1st day of July, 1892. The defendant, William B. Wetmore, having failed to comply with the directions contained in the decree of divorce in respect to the payment of alimony, on the 26th of July, 1892, the plaintiff in that action obtained an order, under § 1772 of the Code, by which the personal property and the rents and profits of the real property of said defendant, Wet-more, were sequestrated, and the Continental Trust Company, the plaintiff herein, was appointed receiver of such personal property of said Wetmore, and of the rents and profits of his real property.

This action was subsequently brought against the appellant, Sarah T. Wetmore, as executrix and trustee under her husband’s will, and others, to reach the interest of the said William B. Wet-more in a trust fund of $100,000, provided for by the fifth clause of the will of the appellant’s husband, by which he gave to his executors, other than his son, the said William B. Wetmore, $100,000, upon trust to keep the same invested, and receive the income thereof, and, after deducting reasonable charges for

p. 492

the management of the trust, to apply the net income of the-said trust fund, from time to time, as it should accrue, to the use of his son, William B. Wetmore, s'o long as he should live. By the eighth clause of the will the testator directed that no-person for whose benefit any trust was thereby created should have power to anticipate or dispose of any income directed to-be paid or applied to the use of such person until the same, should have fully accrued and become payable to such use; and the trustees of the respective trusts were empowered and requested to disregard and defeat every assignment or contract-in contravention of this clause of the will. There was no allegation in the complaint that, at the time of the appointment, of the receiver in the sequestration proceedings, any income had accrued or was payable under this trust, nor that there was at that time- in the trustees’ hands anjr income which had not been previously paid over to the beneficiary. Upon the foregoing facts an application was made to the court for an injunction pendente lite, restraining the defendant Sarah T. Wet-more from making any disposition of the stocks or securities constituting the trust estate, and also enjoining and restraining her from collecting and receiving any income accrued, or thereafter to accrue, from the said trust securities and stocks, or any or either of them, and from paying over any of said trust income of said William B. Wetmore to any other person or persons whomsoever. From this injunction order this appeal is taken.

The only question which it is necessary to discuss is, can this-receiver in sequestration proceedings maintain such an action ? Or is it not the rule of law that the relief sought, if obtainable at all, can only be by action brought in the name of the plaintiff in the action for divorce? We think, when we consider the rights- and powers of the plaintiff, and the property of which the plaintiff was appointed receiver, it is apparent that this action cannot be maintained. The receivership did not, and could not, extend to-the principal of the trust fund in the hands of the appellant as trustee. The plaintiff was appointed receiver of the personal property of the defendant, William B. Wetmore, and of the rents, and profits of his' real estate. By no fiction of law can income, which may result from investments held in trust, and which income, when it does result, belongs to a party, be held to be the-personal property of such party until it has accrued. It is a. familiar principle that a receivership in supplementary proceedings does not apply to property subsequently acquired hy the defendant, unless such property issued out of property the possession of which passed to the receiver, as the rents of real estate of which a receiver has been appointed. Dubois v. Cassidy, 75 N. Y., 298 . And the same rule must necessarily apply to a receiver appointed in the sequestration proceedings. In supplemental proceedings the receiver is appointed of the property of the judgment, debtor. In sequestration proceedings, a receiver of his personal property may be appointed, and of the rents and profits of his-real estate; the sequestration receiver taking less than a receiver in supplementary proceedings. Therefore, it seems to follow,, as a

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necessary result, that such receiver acquires no title to personal property acquired subsequent to his appointment.

In the case at bar, at the time of the appointment of this plaintiff as receiver, and of the commencement of this action, there was no property upon which the appointment of the plaintiff as receiver could attach; and it is only sought by this proceeding to reach some income which, perhaps, may in the future accrue to the defendant, William B. Wetmore. We fail to see how the plaintiff makes out title to any such property. If there is any obligation arising out of the marital relation which had existed between the plaintiff and the defendant in the action for divorce, which authorized the ■court to enforce against the husband the payment out of future accruing income of the alimony awarded to the plaintiff in the action for divorce, such right is a personal right, and the receiver in sequestration proceedings is not the representative of the wife in respect to it. Much as we may condemn the wilful defiance by the defendant, William B. Wetmore, of the decrees and orders of this court, yet such a condition of affairs affords no ground for this court to violate the plain principles of law in order to lay our hands upon him. The order should be reversed, with ten dollars ■costs and disbursements.

O’Brien and Follett, JJ.,- concur.