United States Trust Co. v. Kiddle

Newburger, J. The complaint alleges- that on the 9th day of April, 1912, Henrietta Chappell executed two deeds of trust whereby she conveyed to the plaintiff all her property, both real and personal, to hold in trust for the .uses and purposes therein specified, among other things, to collect and receive interest, income and profits during the lifetime of the said Henrietta Chappell, and to sell in its discretion the property transferred, and to invest and reinvest the same or the proceeds of the sale or any part thereof in such form as the trustee may deem best and in securities permitted by the laws of the state of New York for the investment of the funds of savings banks, and the trustee shall be reimbursed for all expenses and charges in the execution of the trust, and upon the death of the said Henrietta Chappell the trustee is to deliver to her executor or administrator the said trust estate, less all payments, costs, expenses and charges reasonably incident thereto; that thereafter the said Henrietta Chappell was committed to an institution for the insane, where she died July 20, 1915; that while so confined the defendant Musgrave instituted an action in the Municipal Court, although no committee of her person or' property had been appointed, and that no payment thereunder was- made by the plaintiff on the ground that said execution was invalid, and therefore the plaintiff asks the aid and instruction of the court on the following questions: (1) Whether the remainder of the trust created by said Henrietta Chappell by said deed of trust of personal property dated April 9, 1912, was vested in said Henrietta Chappell and should be turned over to the defendant Alfred W. Kiddle, as administrator of the estate of Henrietta Chappell, deceased, as a part of her estate, or whether said remainder vested in the next of kin of said Henrietta Chappell, deceased, sub [384] ject to the right of distribution of the administrator of her estate, or whether said remainder vested in the next of kin of said Henrietta Chappell, deceased, and should be distributed among them by the plaintiff herein. As to this question, I stated on the trial that the administrator of the estate of Henrietta Chappell was entitled to take the personal property. This view is now confirmed after a careful reading of the deed of trust set out in the complaint. (2) In the event that the assets constituting said remainder should be transferred to the said Alfred W. Kiddle, as administrator of the estate of said Henrietta Chappell, deceased, either as a part of her estate or merely for the purpose of distribution among the remaindermen, whether said transfers should be made to said administrator without the filing by him of a further bond or whether said transfers should be conditioned upon the filing of such additional bond as may be found to be required by law. As to this question, I am of the opinion that before any property be transferred to the administrator he should be required to file a further bond in the sum to be fixed by the decree. (3) Whether any charge arising from or growing out of the said real property and falling, due subsequently to the death of said Henrietta Chappell or some portion thereof should be borne by-said trust fund composed of per- • sonal property. Whether the expenses of closing out said trust estate composed of real property, including the trustee’s commissions on principal or some portion thereof, should be paid from said trust fund composed of personal property. The expenses referred to should be paid out of the proceeds of the sale of the real property. (4) Whether the issue of deceased cousins of said Henrietta Chappell are entitled to share in said remainder as next of kin. This question I do not think this court is called upon to determine, but should [385] be left to the surrogate to decide upon the accounting by the administrator. In the deed of trust the trustee was given a power of the sale which survived the life beneficiary. The language of the deed created an express trust of the power and authority of the trustee so as to constitute an equitable conversion, of the realty into personalty. See Matter of Earnshaw, 196 N. Y. 330; Lawrence v. Littlefield, 215 id. 561. I therefore direct the trustee tó sell the real estate and pay over the proceeds thereof to the administrator. As to the claim of the defendant Musgrave upon the judgment obtained by him in the Municipal Court, it is apparent from an examination of the record upon which the judgment is predicated that the court had absolutely no jurisdiction. Henrietta Chappell at the time of its entry was an incompetent, having been committed by an order of this court to an institution for the insane. No committee of the person and property and no guardian had been appointed: It is true that the Municipal Court justice directed service on a person, but no provision was made to guard the interest of the incompetent. As was said in American Mortgage Co. v. Dewey, 106 App. Div. 389, the Supreme Court has inherent power to protect interests of .incompetents in addition to the power conferred by the Code of Civil Procedure, and where an order permitting service upon a third person is made it should be sufficiently broad to enable him to look after the interests of the incompetent. See, also, Sporza v. German Savings Bank, 192 N. Y. 14. Without attempting to pass upon the merits of Musgrave’s claim, I find that the judgment obtained is void for lack of jurisdiction. Ordered accordingly.