Steib v. Whitehead

Citation1884 WL 9953,111 Ill. 247
PartiesM. STEIB, for use, etc.v.WILLIAM H. WHITEHEAD.
Decision Date27 September 1884
CourtSupreme Court of Illinois

OPINION TEXT STARTS HERE

WRIT OF ERROR to the Appellate Court for the Third District;-- heard in that court on appeal from the Circuit Court of McLean county; the Hon. OWEN T. REEVES, Judge, presiding.

Mr. THOMAS F. TIPTON, for the plaintiff in error:

The fund arising from the rents and profits of the lands and property in question, and sought to be reached in this proceeding, is absolute in the beneficiary, and assignable, and being the property of Mrs. Schonrock, absolutely, is liable to garnishment. Wells v. Ely, 3 Stockt. 175; Lynch v. Utica Ins. Co. 18 Wend. 245; Gleason v. Fayerweather, 4 Gray, 348; Hallett v. Thompson, 5 Paige, 583; Livingston v. Stickles, 8 Id. 398; Van Renssalear v. Hays, 19 N. Y. 68; Newkirk v. Newkirk, 2 Caines, 335; McWilliams v. Risley, 2 S. & R. 507; Walker v. Vincent, 19 Pa. 369; Hanly v. Northampton, 8 Mass. 3; Schermerhorn v. Negus, 1 Den. 448; 2 Redfield on Wills, sec. 288, note 30; Rockford v. Hackman, 9 Hare, 475; Keyser's Appeal,57 Pa. St. 236; Koenig's Appeal, Id. 352; Wilkinson v. Wilkinson, 3 Swanst. 528; Groves v. Dolphin, 1 Sim. 66; 2 Jarman on Wills, (Bigelow's ed.) 24-29, note 2.

That trusts can not be created with a provision that the equitable estate or interest of the cestui que trust can not be alienated, is the well settled law of England and most of the States in this country. Oxley v. Lane, 35 N. Y. 345; Norris v. Beyea, 3 Kern. 273; Reifsnyder v. Hunter,19 Pa. St. 41; Walker v. Vincent, Id. 369; Yard's Appeal, 64 Id. 95; Harken's Appeal, 60 Id. 257; Gleason v. Fayerweather, 4 Gray, 348; Bank v. Davis, 21 Pick. 42; Lane v. Lane, 8 Allen, 350; Jones v. Bacon, 68 Maine, 34; Norris v. Hensley, 27 Cal. 439; Pace v. Pace, 73 N. C. 119; Mandelbaum v. McDonnell, 29 Mich. 78; 2 Perry on Trusts, sec. 386; Story's Eq. Jur. sec. 974 a.

The rule is, that where a grant or devise is made of the rents, issues and profits of an estate, the legal estate being vested in a trustee, with a condition annexed that they shall not be subject to present or future debts, whether the estate granted or devised be an estate for life or in fee, the condition is void, as against public policy. Graves v. Dolphin, 1 Sim. 66; Snowden v. Dales, 6 Id. 524; Mebane v. Mebane, 4 Ired. Eq. 181; Bank v. Forney, 2 Id. 181; Foley v. Bunnell, 1 Brown's Ch. 247; Brandon v. Robinson, 18 Ves. Jr. 429; Piercy v. Roberts, 1 M. & K. 4; Dick v. Pitchford, 1 Dev. & Bat. Eq. 484; 2 Story's Eq. sec. 974 a. The limitation that the trustee is not to pay upon orders or assignment, is void, and the income is subject to the payment of the debts of the cestui que trust. Smith v. Moore, 36 Ala. 327; Mebane v. Mebane, 4 Ired. Eq. 131; Gray v. Obear, 54 Ga. 231; McIlvain v. Smith, 42 Mo. 45.

The rule is, that where the debtor is entitled to the sole enjoyment of the income or profits of a fund during his lifetime, such income is subject to the payment of his debts. Dick v. Pitchford, 1 Dev. & Bat. Eq. 480; Presley v. Rodgers, 24 Miss. 520; Johnson v. Cushing, 15 N. H. 298; Brown v. Cleary, 1 Rich. Eq. 319; McIlvain v. Smith, 42 Mo. 45; Heath v. Bishop, 4 Rich. Eq. 46.

Unless otherwise specified in the trust, the profits or income accumulating on a fund given to the beneficiary for life, belong to her, and are not to be added to the corpus of the fund, ( Astope v. Goodall, 53 Ga. 318, Bazamore v. Davis, 55 Id. 504,) and such surplus is liable for her debts. Bailie v. McPhorter, 56 Ga. 183; Rippon v. Norton, 2 Beav. 63; Page v. Way, 3 Id. 20; Wiles v. White, 10 Rich. Eq. 294; Joor v. Hodges, Speer's Eq. 593.

Mr. JUSTICE MULKEY delivered the opinion of the Court:

Asahel Gridley, by his last will and testament, devised to trustees certain valuable real estate, upon the following trusts, namely: “To keep said lands and tenements well rented; to make reasonable repairs upon the same; to pay promptly all taxes and assessments thereon; to keep the buildings thereon reasonably insured against damages by fire; to pay over all remaining rents and income in cash, into the hands of my said daughter, Juliet, in person, and not upon any written or verbal order, nor upon any assignment or transfer by the said Juliet. At the death of the said Juliet said trust estate shall cease and be determined, and the said lands shall vest in the heirs of the body of the said Juliet, and in default of such heirs, shall descend to the heirs of my body then living, according to the laws of Illinois then in force regulating descents.” After the death of Gridley his will was duly probated, and no question is made as to its form, or the capacity of the testator to make a will. The trustees named in the will having refused to act, by a proper proceeding in chancery William H. Whitehead, the defendant in error, was duly appointed trustee in their stead, and thereupon took possession of the devised premises, and otherwise assumed the duties of the trust. Certain moneys, being a part of the rents and profits of the estate, having come into his hands, as trustee, and which, under the provisions of the will, it was his duty to pay over to Juliet, the daughter, were attached in his hands by one of her creditors. The trustee appeared and filed an answer, as garnishee, setting up the trust and the special provisions of the will above cited, and the question presented for determination is, whether the money thus held by him was subject to garnishment.

The authorities are not in accord on this subject. Under the rule as laid down by the courts of England, and by the courts of final resort in a number of the States of the Union, the fund attached would clearly be subject, in equity, to the payment of the daughter's debts. ( Tillinghast v. Bradford, 5 R. I. 205; Smith v. Moore, 37 Ala. 330; Heath v. Bishop, 4 Rich. Eq. 46; McIlvain v. Smith, 42 Mo. 45.) A contrary rule prevails in Pennsylvania, Massachusetts, and perhaps other States, which seems to be supported by the reasoning of the Supreme Court of the United States in Nichols v. Eaton, 91 U. S. 716. The question, so far as we are advised, is a new one in this court, and in view of the respectable authority to be found on either side of it, we feel at liberty to adopt that view which is nearest in accord with our convictions of right and a sound public policy.

That it was the intention of the testator to place the net income of the property beyond the control of his daughter and her creditors while in the hands of the trustee, is manifest, and we perceive no good reason, nor has any been suggested, why this intention should not be given effect. We fully recognize the general proposition that one can not make an absolute gift or other disposition of property, particularly an estate in fee, and yet at the same time impose such restrictions and limitations upon its use and enjoyment as to defeat the object of the gift itself, for that would be, in effect, to give and not to give, in the same breath. Nor do we at all question the general...

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