Hull v. Farmers Loan Trust Co
| Decision Date | 10 December 1917 |
| Docket Number | No. 66,66 |
| Citation | 245 U.S. 312,38 S.Ct. 103,62 L.Ed. 312 |
| Parties | HULL v. FARMERS' LOAN & TRUST CO |
| Court | U.S. Supreme Court |
Mr. Walter S. Heilburn, of New York City, for plaintiff in error.
Mr. Henry B. Twombly, of New York City, for defendant in error Palmer.
Mr. Frederick Geller, of New York City, for defendant in error Farmers' Loan & Trust Co.
Charles Palmer, of New York City, by will executed shortly before his death, bequeathed to the Farmers' Loan & Trust Company the sum of $50,000, in trust, to pay the income to his son Francis, during his life, with a remainder over to others, subject to the 'wish * * * that my son shall have the principal of said trust fund, whenever he shall become financially solvent and able to pay all his just debts and liabilities from resources other than the principal of the trust fund.'
Promptly after probate of the will, Francis filed a voluntary petition in bankruptcy, and in due time received his discharge. Then the trust company instituted proceedings in the Surrogate Court for a judicial settlement of the estate; and, the court adjudging that Francis had become entitled to the principal of the trust fund (65 Misc. Rep. 418, 121 N. Y. Supp. 1099), it was paid over to him. Later the trustee in bankruptcy who had not been a party to proceedings in the Surrogate Court brought suit in the Supreme Court of New York against the trust company and Francis to recover the principal. He claimed that the right to it had passed to him under section 70a (5) of the Bankruptcy Act of 1898 (chapter 541, 30 Stat. 544), and that the whole fund was required to satisfy the balance due on debts proved against the bankrupt estate and the expenses of administration. No claim was asserted against the income of the trust fund. A complaint setting forth these facts was dismissed on demurrer; and the judgment entered by the trial court was affirmed both by the Appellate Division (Hull v. Palmer, 155 App. Div. 636, 140 N. Y. Supp. 811) and by the Court of Appeals (213 N. Y. 315, 107 N. E. 653). The case comes here on writ of error.
Plaintiff asserts that the case presents this federal question: Does a contingent interest in the principal of personal property assignable by the bankrupt prior to the filing of the petition necessarily pass to his trustee in bankruptcy? And, to sustain his claim to recovery, he contends that under the law of New York (1) the words used by the testator create a trust; (2) vesting in the beneficiary a contingent interest in personal property; (3) which is an expectant estate; (4)...
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