Hutchison v. Ross

Decision Date11 July 1933
PartiesHUTCHISON v. ROSS et al.
CourtNew York Court of Appeals Court of Appeals


Actions by John Kenneth Leveson Ross, for whom James Hutchison, trustee in bankruptcy, was substituted as plaintiff, against Ethel Adine Ross and others. From judgments of the Appellate Division (233 App. Div. 626, 253 N. Y. S. 871; 233 App. Div. 516, 253 N. Y. S. 889) reversing on the law and facts a judgment of the Special Term for plaintiff and dismissing the complaint in one action, and affirming on the law and facts a judgment of the Special Term dismissing the complaint on the merits in the other action, the substituted plaintiff appeals.


KELLOGG and CROUCH, JJ., dissenting.Appeal from Supreme Court, Appellate Division, First Department.

Nathan L. Miller and H. Bartow Farr, both of New York City, and Frank B. Ober, of Baltimore, Md., for appellant.

John W. Davis, George W. Martin, Richard S. Emmet, John E. Lockwood, Edwin F. Blair, Harrison Tweed, Robert L. Finley, Alanson W. Willcox, and Bertram F. Willcox, all of New York City, for respondents.

LEHMAN, Judge.

John Kenneth Ross, a resident of Montreal, married in Toronto in 1902. In anticipation of their marriage, the parties entered into an antenuptial agreement to regulate their property rights in accordance with the law of Quebec, where they intended to reside. They still do reside there. Under the civil law prevailing in that province, there is community of property between spouses, but the parties to a marriage may by antenuptial agreement provide that each shall continue to have separate property. They may also by such antenuptial agreement provide for gifts or trusts in favor of one or the other. After the marriage, such provisions in an antenuptial agreement may not be abrogated, modified, or enlarged. Neither husband nor wife may transfer to the other, directly or in trust, any substantial part of his or her fortune.

The antenuptial agreement made by Ross and his prospective wife provided that the property of each should be separate, and Ross agreed in addition to provide for the support of his wife and to establish either by deed or will a trust fund of $125,000 for the benefit of his wife and children. Since John Kenneth Ross was at that time a young man without personal fortune, though the only son of a very rich man, his father became a party to the antenuptial agreement and guaranteed a ‘donation’ of $125,000 binding upon his estate.

The father of John Kenneth Ross died in 1913, leaving an estate of about $10,000,000 to his son. In 1916, during the World War, John Kenneth Ross, the son, decided that a provision of $125,000 for his family was insufficient, and he told his wife that he desired to provide for her more adequately by creating a trust fund of $1,000,000, the income to be paid to his wife for life, and the principal to go to their two children upon her death. One D. M. C. Hogg, a Scotchman learned in the law of Scotland, but perhaps not in the law of Quebec, had been the secretary and adviser of Ross' father. Ross, the son, had continued to employ him in the same capacity. Ross directed Hogg to prepare or have prepared appropriate instruments to transfer to the Equitable Trust Company in the city of New York a fund of $1,000,000, to be held in trust for his wife. Both father and son had kept bank deposits and had securities valued at more than half a million dollars in New York City, in the New York branch of the Bank of Montreal. Ross desired that such securities, with substitutions and additions sufficient to create a fund of $1,000,000, should constitute the corpus of the trust estate.

Hogg, in accordance with what he deemed his instructions, prepared a trust deed or agreement. The trustee was to pay the income to Mrs. Ross during her life and after her death to divide the principal among the children of the marriage her surviving or their issue per stirpes or to make other disposition thereof in accordance with the provisions of the instrument. The instrument was submitted to the trust company for approval. After the trust company had agreed to act as trustee, the instrument was sent to Montreal, where Ross and his wife executed it before the American Consul General. The Equitable Trust Company had not yet signed the indenture, but did so after the indenture was sent to it. Then the Bank of Montreal in New York City, acting as agent for Ross, delivered the securities to the trustee. The trust deed contains a recital that: ‘Whereas Mr. Ross has become possessed of ample means and is desirous of making suitable provision for Mrs. Ross in lieu of the provisions in her favor contained in said contract of marriage settlement, and Mrs. Ross is willing to renounce and revoke the provisions of said marriage settlement in her favor and to accept in lieu thereof the provisions for her benefit and support hereinafter contained in this agreement.’ Mrs. Ross then expressly revoked all conditions or provisions contained in the contract of marriage and all benefits which might accrue to her under the marriage contract.

For about ten years the trustee carried out the provisions of the trust indenture. During that time no one questioned its validity. In 1926 Ross retained a Montreal barrister to draw up a will. He told the barrister of the provision he had already made for his family. The barrister promptly told Ross that the trust indenture was patently invalid under the law of Quebec, and so notified the trustee. By that time most of the estate which Ross had received from his father had been dissipated. Ross was deeply involved in speculations in oil stocks. He owed large sums to some Baltimore banks. He informed the Baltimore banks that the trust he had created was invalid, and, in consideration of his promise to bring legal proceedings to have the trust set aside and to deliver the trust property to the banks as collateral, they agreed not only to extend the existing loans but to make new loans to Ross. He secured the signatures of his wife and children to written consents to revoke the trust. Ross then began an action to set aside the trust on the ground that it was void at its inception and a second action for the revocation of the trust upon the consent of the interested parties.

After the actions were commenced, a petition in bankruptcy was filed against the plaintiff, and the trustee in bankruptcy was substituted in his place. The defendants in the first action assert that under the law of New York the conveyance is valid and should be enforced here. In the second action they assert that the signatures to the consents to revoke the trust were obtained by misrepresentations and that issue of the settlor's children, born and unborn, have an interest in the trust. Both actions were tried together. They resulted in a judgment in favor of the plaintiff in the first action, and a judgment on the merits in favor of the defendants in the second action. Appropriate findings were made in each action. Upon appeal the Appellate Division reversed the judgment in the first action and upon new findings dismissed the complaint upon the merits. It affirmed the judgment in the second action.

The situs of personal property in a jurisdiction other than that where the owner of the property is domiciled has given rise to many difficulties and perplexities. The maxim ‘mobilia sequuntur personam’ cannot alloways be carried to its logical conclusion. Practical considerations often stand in the way. Physical presence in one jurisdiction is a fact; the maxim is only a juristic formula which cannot destroy the fact. Within territorial limits, the jurisdiction of the courts of each state or nation is limited only by Constitution or treaty. The courts of each jurisdiction determine all judicial questions by the law of that jurisdiction. When the owner of personal property authorizes its removal from his domicile or acquires property elsewhere, he must be deemed to know that his property comes under the protection of, and subject to, the laws of the jurisdiction to which it has been removed, and that appeal may be made to the courts of that jurisdiction for the determination of conflicting rights in such property. The law of his domicile may be different from the law of the state or nation in which the personal property is placed. A conveyance of the property may be valid under the laws of one jurisdiction and void under the laws of the other jurisdiction. If the courts of each jurisdiction determine such questions according to their own law then transfers of property become complicated and restricted in effect. A title, valid here, may be lost when the property is removed to another jurisdiction. Such a situation would obviously be intolerable. Therefore the rule has become ingrafted in the law of every jurisdiction that in some circumstances its courts must determine questions submitted to them by the rules of law applied in some other jurisdiction. To that extent foreign law is applied but as part of our own law. See articles by Professor Beale, 23 Harvard Law Review, 260, and 45 Harvard Law Review, 969. Though public policy and comity may be decisive in the determination of what law shall be applied in given circumstances, ‘it does not belong to the judges to recognize or to deny the rights which individuals may claim under it, at their pleasure or caprice; but, it having obtained the force of law by user and acquiescence, it belongs only to the political government of the State to change it whenever a change becomes desirable.’ Parsons v. Lyman, 20 N. Y. 103, 112. Here, as in other branches of the law, there should be certainty of rule and uniformity of application, and we must look to the judicial decisions and legislative enactment for guidance.

The courts of the various jurisdictions have with substantial unanimity adopted certain rules. ‘Capacity to make a valid conveyance of a chattel is determined by the law of the State where...

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128 cases
  • Curry v. Canless, 339
    • United States
    • United States Supreme Court
    • May 29, 1939
    ...trusts have been and are being executed under, the laws of Alabama unaffected by those of any other State. See Hutchison v. Ross, 262 N.Y. 381, 394, 187 N.E. 65, 89 A.L.R. 1007; Sewall v. Wilmer, 132 Mass. 131, At least since 1917, Mrs. Scales had no power to remove the trust or any of the ......
  • Greenough v. Tax Assessors of City of Newport
    • United States
    • United States Supreme Court
    • June 9, 1947
    ...owner. Wheeler v. Comptroller of State of New York, 233 U.S. 434, 34 S.Ct. 607, 58 L.Ed. 1030. 16 See Hutchison v. Ross, 262 N.Y. 381, 393, 187 N.E. 65, 89 A.L.R. 1007. 17 Brown v. Fletcher, 235 U.S. 589, 598—600, 35 S.Ct. 154, 157, 59 L.Ed. 374; Blair v. Commissioner of Internal Revenue, 3......
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    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • September 20, 2010
    ...626, 253 N.Y.S. 871, 882 (N.Y.App.Div.1931) (“The recitals in a contract form no part thereof ....”), aff'd sub nom., Hutchison v. Ross, 262 N.Y. 381, 187 N.E. 65 (1933). Courts have treated clauses that are analogous to the Description language at issue here as the functional equivalents o......
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    • United States State Supreme Judicial Court of Massachusetts
    • September 20, 1937
    ...Der Disconto-Gesellschaft v. United States Steel Corp., 267 U.S. 22, 28, 29, 45 S.Ct. 207, 208, 69 L.Ed. 495;Hutchison v. Ross, 262 N.Y. 381, 390, 391, 187 N.E. 65; Am.Law Inst.Restatement, Conflict of Laws, § 53. See, also, G.L. (Ter.Ed.) c. 155, § 27; Stuart v. Sargent, 283 Mass. 536, 540......
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1 books & journal articles
  • Self-settled spendthrift trusts: should a few bad apples spoil the bunch?
    • United States
    • Vanderbilt Journal of Transnational Law Vol. 32 No. 3, May 1999
    • May 1, 1999
    ...626, at 419 (4th ed. 1989). (19.) N.Y. ESTATES, POWERS AND TRUSTS LAW [sections] 7-1.10 (McKinney 1992). (20.) Hutchinson v. Ross, 187 N.E. 65, 71 (N.Y. (21.) In re Accounting of New York Trust Co., 87 N.Y.S.2d 78'7, 792 (N.Y. Sup. Ct. 1949). For other laws supporting a settlor's right to d......

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