Tallmadge v. Sill

By the Court, Parker, P. J. It is. clear that John L. Sill had no legal estate in the land. That was vested in the trustees. He was not even entitled to receive the rents and profits from the trustees, unless he survived his wife as well as his children; and his wife was living at the time of his death. The contingency, therefore, on which he could derive a benefit as cestui que trust never happened. But under the will of Francis Hie oil, John L. Sill was empowered and authorized to convey and dispose of all the land, or any part thereof, by. his last will and testament under Ms hand, executed in the presence of three witnesses in due form of law, and to limit and appoint the uses thereof in such manner as he might deem proper; and that power was executed by John L. Sill, who by will devised the property in question to Horace L. Sill and William A. Woodward in trust for the benefit of the other defendants. The principal question to be determined in this case is, whether the power thus conferred upon John L. Sill and executed by him, gave to him an interest in the property which can be reached by the creditors as equitable assets. The will of Francis Hicoll was executed and took effect previous to the adoption of the revised statutes, and the question must there — 51 — fore be determined without reference to their provisions on this subject. The elementary writers all agree as to the general rule. It is stated by Chancellor Kent, (4 Kent's Com. 339,) as follows: “ A court of chancery holds that where a person has a general power of appointment over property, and he actually exercises his power, whether by deed or will, the property appointed shall form part of his assets, and be subject to the claims of creditors in preference to the claims of the appointee; and Sugden states the rule in nearly the same language. (2 Sugden on Powers, § 27.) Chance (Chance on Powers, § 1817,) after saying that a power is not property, adds: “If, however, the donee see fit to execute his power, thus assuming a dominion over the property, it may thenceforth be regarded as a part of his estate, and as such be subject at least in equity, to the claims of creditors.” The English cases generally cited in support of the rule thus stated by the elementary writers are, 2 Vernon, 287; Id. 319 ; Id. 465 ; 1 Atk. 465 ; 6 Mad. 264 ; 2 Cramp. Sf Mees. 124. In Grise v. Goodwin, (2 Freeman, 264,) a power given to a testator to dispose of a term of years in land, and which was said to have been exercised by him, was held not to be assets. But that case has not been sustained, and Chance says of it, (Chance on Powers, •§ 1826,) “ even assuming that the will in that case operated as an appointment (which he said was contrary to all the cases, because no reference was made in it to the power,) the fund would now be considered assets.” I shall have occasion to speak further hereafter of the cases from which the general rule above stated has been deduced. But it is claimed in this case on the part of the defense, that Sill’s power of appointment was not general within the meaning of the rule I have referred to, because he was only authorized to convey by will and not by deed. The elementary writers recognize no such distinction. Sugden says, (1 Sugden on Powers, 471,) “ By a general power we understand a right to. appoint to whomsoever the donee pleases. By a particular power it is meant that the donee is restricted to some objects — 52 — designated in the deed creating the power, as to his own children.” The definitions were established and well understood long before they were substantially adopted by our revised statutes. (1 R. S. 732, §§ 77, 78. See note of Powell to Fearne mi Executory Devises, 347 to 388. Humphrey's observations on Real Property, 83. 4 Kent's Com. 318.) I concede that in most of the cases referred to in the elementary books and cited by counsel on the argument, the power was authorized to be executed either by deed or will at the election of the donee of the power, but in none of these cases is the distinction here contended for, recognized, or the decision placed upon any such ground. Whether the power to appoint be by deed or will, in either case the control of the fee is absolute, and may be equally beneficial to the person executing it. His disposition of the fee by will may be final and conclusive, and if he may dispose of it, to whom, and for such uses as he pleases, he may secure to himself the whole beneficial interest, as by devising it to pay his own debts. The only difference between a disposition by deed or by will is that in the latter case his conveyance will not operate till his death. This, in effect, postpones the executing of the power by the donee, but in no respect lessens the extent or absoluteness of his control, or detracts from its beneficial character. If the power be not conferred till the person to whom it is given is about to transact the last business of his life, in the last moments of his existence, it would be entirely immaterial whether he was authorized to execute it by will alone or by either deed or will, at his discretion, as in either case the estate to be created would take effect at his death. A power is certainly none the less general because there is delay in conferring it, or because delay is required in its execution. If the power here conferred were directed to be executed either by deed or will when the appointee should arrive at a given age, and not before, it would hardly be contended that the power was not general because thus postponed. If the power be absolute, and the discretion as to the application of the avails unrestricted, I can see no difference in principle, — 53 — whether it may be executed by deed or by will, or whether it may be executed immediately or only at a future day; or how long time is given to the? donee for its execution, if there is sufficient for that purpose. When executed, the control being absolute the power is general, and not till then could it be deemed to be property, for until executed there would be no evidence of its acceptance. A general power to devise by will gives to the donee of the power the absolute control over a remainder in fee after his death. It places the property, in that respect, upon the same footing as if it had belonged to the donee, independent of the power. When a power is executed by deed, the act of conveyance is conclusive upon the grantee : when by will only, it may be revoked at pleasure during the life of the testator. This distinction is claimed as available to the defense; but surely without good reason, for the absoluteness and extent of the control of the property is even greater in the latter case than in the former, and certainly none the less beneficial to the donee of the power. The principle upon which the right of the creditor rests is, that the absolute power of conveying or disposing of property for one’s own benefit, makes the person to whom it is given the owner. The power of absolute and beneficial control cannot and ought not to be separated from the ownership. (Rev. Notes, 3 R. S. 2d ed. 589.) This precise question was decided, after a very full discussion, in Johnson v. Cushing, (15 N. H. Rep. 313,) and I refer to the opinion of the learned judge in that case for a more full examination of the same objections urged here. In that case the power was given to dispose of property by deed or will, to take effect at the death of the donee of the power. That was conferring no greater authority than if it had been confined to an execution by will alone; for a deed to take effect at his death would have only the same effect. In that case the court held the power to be general, and adjudged the property, over which the power had been executed, to be assets liable for the payment of debts. — 54 — In most of the English cases cited, the power was to be executed over personal property, but Chance says (§ 1836) “no discussion has been founded on thati point, the property appointed appears, according the authorities, to be considered as having, in a sense, become the donee’s.” A fair examination of these cases shows that this was the principle upon which they were all made, whatever peculiar circumstances some of them may have exhibited. Whether the property be real or personal can make no difference in principle. In both cases the same rule will be applicable. The questions raised and decided in the case of Johnson v. Cushing, above cited, cover the whole ground. That was a case of a power over real property, the execution of which was restricted, as to its taking effect, till the death of the donee of the power. If that case was correctly decided, and I see no reason to doubt it, either upon authority or principle, it is conclusive against the defendants in this case. In the very able and ingenious argument for the defense, the fact was adverted to, that in most of the English cases there were other peculiar circumstances, such as, that in some of them the property came originally from the donee of the power, and in others, that the remainder, in default of appointment, went to the executors or heirs of the donee of the power. But I lay these circumstances out of view, as I do the significant fact, that by the will of Hicoll the trustees were authorized at any time during the continuance of the trust, to cut down any timber or wood on the land, sell it and pay the proceeds to John L. for his sole use ' If I am right in holding that the controlling principle is that ownership is inseparable from the absolute beneficial power of disposition, these other circumstances are entitled to no weight, and cannot be taken into consideration. My conclusion in this case is, that the power to dispose of the fee of the land by will was-a general power of which Sill might have the exclusive benefit, and that, having exercised it, his interest will be deemed assets upon which the plaintiff’s demands are equitable liens. I think the evidence of the judgment and of the decree was properly received. The property being adjudged to be Sill’s, — 55 — it is enough to introduce the same evidence of Sill’s indebtedness as if the action were against Sill alone. Such evidence is always introduced as proof of the extent of indebtedness, between a creditor and a third person, where property has been fraudulently transferred. It is never necessary in such a case to prove more than the judgment against the debtor, who is claimed to be the owner of the property seized. The action being to establish a lien on specific property, is of the nature of a proceeding in r&m; and in such case a judgment is conclusive as to all the parties. (4 Selden, 392. 1 Stark. Ev. 228. Phil. Ev. 228, 328.) I do not think it was necessary that this action should be prosecuted for the benefit of all the creditors of John L. Sill. It is brought to enforce an equitable lien on land, and I see no reason why the rule laid down in Corning v. White, (2 Paige. 567,) is not applicable, By that rule the judgment creditor who first files his bill obtains a priority in relation to the property and effects of the defendant which cannot be reached by execution at law. But if the judgments against Sill are to take precedence according to their priority, it would not affect the plaintiff’s claim; for there is no evidence of any older judgment than the plaintiff’s. Nor was it necessary that the plaintiff’s claim should be made against all the land affected by the power. The plaintiff has preferred to seek to enforce his claim against a portion of the premises not conveyed by Sill previous to the making of his will, and he has thus avoided the litigation of other questions that might have been raised. If the lands on which his claim is made are not of sufficient value to pay the plaintiff’s debt, it will be a misfortune to the plaintiff but not a matter of which the defendants can complain. The defendants cannot object that the plaintiff purchased these judgments for less than the whole amount due, or that the plaintiff, if he recovers, will be bound to pay a sum of money to some other person. The measure of the lien to be enforced against property adjudged to be Sill’s is the amount of Sill’s indebtedness ; and — 56 — as that debt belongs to the plaintiff, the defendants can be made responsible to no previous owner of it, and need no protection against any action by any such person. [Albany General Term, September 3, 1855. The plaintiff must therefore have judgment declaring the judgment recovered in favor of Norman Peck, a lien on the 276|- acres of land for the amount due thereon, viz: $2,468.51, with interest from 17th February, 1845, and the decree a lien for the amount unpaid, viz: $6,997.52, and interest thereon from 20th March, 1845, and directing the sheriff to sell the land to satisfy said liens, in the same manner and with the like notice, as on sales under executions. Parker, Wright and Watson, Justices.]