Clapp v. Ingraham

• Citation: 126 Mass. 200
• Court: United States State Supreme Judicial Court of Massachusetts
• Decision Date: 29 January 1879
• Parties: Elbridge Clapp, executor, v. Frederick W. Ingraham & others

126 Mass. 200

Elbridge Clapp, executor, v. Frederick W. Ingraham & others

Supreme Court of Massachusetts

January 29, 1879

Argued March 21, 1877

Suffolk. Bill in equity, filed April 21, 1876, by the executor of the will of Caroline A. Ingraham, against the children of the testatrix, and her creditors, for instructions, alleging that on January 1, 1828, the Massachusetts Hospital Life Insurance Company received from Joseph Head, trustee of Caroline A. Ingraham, wife of Daniel G. Ingraham, the sum of $ 3000, and executed to him an instrument in writing, whereby they promised and agreed with him, his executors and administrators, to invest the same and to pay the income thereof quarterly to Mrs. Ingraham "during the natural life of the said Caroline, upon her separate order and receipt, to be dated on or subsequent to the several days on which the said several payments shall fall due; for her separate use, free from the debts, control or interference of any husband she now has, or may hereafter have; which annuity and principal sum are both hereby declared to be inalienable by the respective grantees thereof;" and further agreed with the said trustee, his executors and administrators, "that, in sixty days after proof of the decease of the said Caroline, they will assign, transfer and pay the amount of the aforesaid principal sum (or such part thereof as shall not have been lost by bad debts or otherwise, without the actual fault of said company or their servants), and all interest then due thereon at the time of her death, in real estate, stocks, notes, bonds and mortgages, belonging to said company, all, any or either of them, at the pleasure and discretion of the directors, at the prices at which the same respectively shall stand charged in the books of the company at the decease of said Caroline, in the way and manner provided in said extract from said article, to her executors or administrators in trust, and for the special use and benefit of such person or persons as the said Caroline by her last will and testament, or any revocable appointment in nature thereof, may direct; and if no such will and appointment be made, then to such person or persons as may be her heirs at law."

The bill further alleged, that Caroline A. Ingraham died on January 20, 1876, leaving a will, dated October 16, 1871, which was duly admitted to probate, appointing the plaintiff her executor, and containing the following clause: "I direct my said executor to receive from the Massachusetts Hospital Life Insurance Company the sum of three thousand dollars and all interest and accumulations thereon, or the real estate, stocks, notes, bonds and mortgages in lieu of said sum with interest and accumulations, which by the terms of a contract in writing between said company and Joseph Head, trustee, executed the first day of January, one thousand eight hundred and twenty-eight, the said company agrees to assign, transfer and pay to my executors or administrators in sixty days after proof of my decease; and out of the money or other property received from said company, I direct my said executor to have and keep, for his own use and benefit, the sum of four hundred dollars; and to assign, transfer and pay over all the remainder of the money, or other property received from said company, after deducting said sum for his own use and benefit, to my children and the issue of any deceased child or children by right of representation in equal shares."

The bill further alleged, that the plaintiff had received from said company the sum of $ 3000, and that, after diligent search and inquiry, no other property of the testatrix had come to his possession or knowledge; that the testatrix left two children surviving her, who contended that they were entitled to receive the whole of the sum remaining in the plaintiff's hands after deducting the sum of $ 400; that the testatrix left debts to a large amount, and that the creditors contended that said sum was liable, in the plaintiff's hands, as executor, for the payment of such debts.

The children of the testatrix and certain of the creditors filed answers, admitting the allegations of the bill, and setting up their respective claims; and the case was heard by Morton, J., upon the bill and answers, and reserved for the consideration of the full court.

Decree for the creditors.

T. P. Proctor, for the creditors.

G. M. Hobbs, for the children.

Gray, C. J. Lord & Soule, JJ., absent.

OPINION

Gray, C. J.

It was settled in the English Court of Chancery, before the middle of the last century, that where a person has a general power of appointment, either by deed or by will, and executes this power, the property appointed is deemed in equity part of his assets, and subject to the demands of his creditors in preference to the claims of his voluntary appointees or legatees. The rule perhaps had its origin in a decree of Lord Somers, affirmed by the House of Lords, in a case in which the person executing the power had in effect reserved the power to himself in granting away the estate. Thompson v. Towne, Prec. Ch. 52; S C. 2 Vern. 319. But Lord Hardwicke repeatedly applied it to cases of the execution of a general power of appointment by will of property of which the donee had never had any ownership or control during his life; and, while recognizing the logical difficulty that the power, when executed, took effect as an appointment, not of the testator's own assets, but of the estate of the donor...