Hopkins v. Gouraud

Headnote

1, Will—Direction as to payment of mortgage.

Testatrix, by her will, directed that any mortgage on her Forty-sixth street premises should be paid out of the proceeds of a mortgage hold by her on East Broadway property. The East Broadway mortgage was paid to testatrix before her death, and with the proceeds she paid'one of the mortgages on the Forty-sixth street property, and a part of the balance was used in buying certain bonds. Held, that the proceeds of such bonds should be applied to the payment of the lemaining mortgage.

8. Same—Trust—Assignment by beneficiary of his interest invalid.

Certain property was, given to the executor in trust during the life of one son, to pay the net income to two sons, Claude and Manfred, with directions as to its ultimate disposal. Held, that the interest of Claude in the rents and profits was unassignable.

Appeal by two of the defendants from a judgment of the special term in an action to construe the will of the testatrix, and for instructions to plaintiff as executor and trustee. _

_ The complaint presented two questions for determination of the court.:

First. In regard to the payment of a mortgage on the property No. 151 East Forty-sixth street, of which testatrix died seized.

Second. As to his duty in regard to paying over the income received under a trust as to the property No. 207 Division street, which testatrix devised to plaintiff upon certain trusts.

The facts, briefly stated, are as follows : At the time of making

the will the testatrix was the owner of the premises Ho. 151 Bast Forty-sixth street, which were subject to two mortgages for $10,000 and $3,500 respectively, which had been a lien on the property when she purchased it, and were then long overdue. She was then also the owner of a mortgage for $14,500 upon premises Ho. 246 Bast Broadway. Her will provided as follows :

“ Sixteenth. I order and direct that any mortgage that may be upon the premises known as number one hundred and fifty-one Bast Forty-sixth street in the city of New York be paid by my said executor out of the proceeds of the mortgage held by me on the premises known as number two hundred and sixty-four Bast Broadway in said city of New York.”

Shortly after the making of the will, and in August, 1889, the owner of the East Broadway property paid off the mortgage of $14,500 and received a satisfaction thereof. Of the money so received the testatrix applied $3,500 to the payment of the second mortgage on the Forty-sixth street house, but did not pay off the first mortgage, although the same was then long overdue. On the contrary, she invested about $9,700 of the moneys received in bonds of the par value of $10,000 of the Louisville Southern Railroad Company, which were subsequently exchanged by her for other similar bonds issued in the process of reorganization of that company, and these latter she continued to own until the time of her death, and they are still in the hands of plaintiff as her executor.

As to the Division street property, the fifteenth'paragraph of the will devised that property to the executor in trust to collect and receive the profits thereof, and after paying expenses, to pay the residue of the rents and profits unto the defendants, Manfred and Claude Gouraud, during their natural lives, with provision for the ultimate disposition of the trust property upon the death of Manfred. The defendant, Manfred, has received from his-brother, Claude, a deed purporting to convey the latter’s interest in that property, and the question presented is whether such conveyance was effectual to pass his interest so that the trustee will be protected in paying to Manfred the one-half of the income devised to Claude, or whether the interest of Claude in the rents and profits was not assignable under the provisions of the Revised Statutes, and his attempted assignment consequently void.

The following is the opinion at special term:

Dugro, J.—The direction in the 16th subdivision of the will is in the nature of a specific legacy, and would come within the rule as to ademption of legacies. If the proceeds of the mortgage exist in any distinct form, so as to have a separate entity, or if a part of the proceeds so exists, the direction does not fail of force, for such proceeds or part must be applied as directed. In the case presented, I think the proceeds of the Louisville Southern R R Co. bonds should be applied to a reduction of the mortgage. The bonds are traceable to the immediate proceeds of the Bast

Broadway mortgage, and are themselves proceeds of the mortgage within the term as used in the will." The interest of Claude L. Grouraud in and to the rents and profits of 207 Division street seem to me unassignable.