Posner v. Sheridan
| Decision Date | 19 January 1973 |
| Parties | Mary Janet (Sheridan) POSNER v. Thomas SHERIDAN and Mellon National Bank and Trust Company, Garnishee, Appellant. |
| Court | Pennsylvania Supreme Court |
Decree vacated, and case remanded for further proceedings.
John G. Kish, Brennan & Brennan, Pittsburgh, for appellants.
Henry H. Wallace, Wallace & Lipton, Pittsburgh, for appellee.
Before JONES, C.J., and EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
Presently before us is an appeal from a decree of the Court of Common Pleas, Family Court Division, of Allegheny County, which directed the foreign attachment garnishee, Mellon Bank, to pay appellee the sum of $9165 from the principal and interest of a spendthrift trust. The question which this case presents is not one of jurisdiction but of internal common pleas court administration.
The cause arose in the following manner. In December 1968, Mary Posner, appellee, was granted a final decree of divorce from Thomas Sheridan by the Superior Court of the State of California. This judgment included a direction to Sheridan to pay appellee $235 monthly for the support of their two children. Sheridan failed to make payments and an arrearage allegedly accumulated in the amount of $9165 plus interest. [1]
On January 29, 1970, Mrs. Posner filed a praecipe for a writ of foreign attachment and a complaint in equity against Sheridan and Mellon Bank. The bank was summoned as garnishee, because it is the trustee of a spendthrift trust fund created for Sheridan by the will of his mother, Mary Harris Sheridan, a resident of Allegheny County at her death.
The complaint went unanswered and a default judgment was entered against Sheridan on March 30, 1970.
In accordance with Pa.R.Civ.P. 1274, 12 P.S. Appendix, a rule was served on the bank as garnishee to answer interrogatories. In its answer the bank admitted the existence of a trust and declared that Sheridan's share of the total principal was $10,030.43. The bank also averred that the present interest of Sheridan was limited to income and that if he failed to survive the term of the trust, the principal was to be paid over to his surviving children, or alternately to the other children of the settlor or their heirs. [2]
Under 'New Matter' appellant asserted that the trust was under the jurisdiction of the Orphans' Court Division and that the principal of the trust was immune from attachment.
The lower court entered a decree striking off the averments contained in the 'New Matter' and directed the bank to pay the attaching creditor $9165 from the trust funds and to continue to pay $235 monthly until the principal and income of the trust was exhausted. [3]
We will vacate the decree. The issue was improperly entertained in the Family Court Division, and, more importantly, that court's decree is incorrect as a matter of law.
The instant case, like any foreign attachment proceeding, contemplates two judicial determinations: first, whether Sheridan owes his former wife anything; [4] and second, whether the garnished has anything of Sheridan from which appellee can collect what is due her. See General Maintenance Engineers, Inc. v. Pacific Vegetable Oil Corp., 175 Pa.Super. 350, 104 A.2d 505 (1954). [5] Had the underlying cause of action been one of nonsupport, it would have properly been docketed in the Family Court Division. This is so because Schedule to the Judiciary Article § 17(b)(i) states that '(u)ntil otherwise provided by rule of the court of common pleas, the court of common pleas shall exercise jurisdiction' in non-support cases 'through the family court division.' It is our judgment, however, that the cause of action between Mrs. Posner and her former husband is, at its root, an assumpsit action as her complaint plainly demonstrates. [6]
The fact that Mrs. Posner seeks to reduce the California decree to a Pennsylvania judgment for execution purposes in no way detracts or subtracts from what is in essence an assumpsit action for debt.
While the 1968 Constitution had the felicitous result of abolishing the old system of separate courts and amalgamating them into a unified common pleas system, nothing in these new provisions permits plaintiffs to file complaints, or courts to docket them willy-nilly without regard to the appropriate division. In point of fact the language of the Schedule to the Judiciary Article establishes otherwise. [7]
Is there any question, for example, that even under the new Constitution it would be inappropriate for an estate to be probated in family court division? To ask the question is to answer it. If it makes no difference where a case was docketed, then we are left to wonder to what purpose were such divisions created by the drafters of the 1968 Constitution.
We reject, however, appellant's notion that the mere presence of the testamentary spendthrift trust as the property sought to be attached automatically vests jurisdiction exclusively in the orphans' division. The notion is novel and unsupportable in light of past cases in which common pleas court adjudicated the attempted garnishment of trusts in support of marital obligations without interference by this Court. See e.g., Clark v. Clark, 411 Pa. 251, 191 A.2d 417 (1963); cf. Lippincott v. Lippincott, 349 Pa. 501, 37 A.2d 741 (1944); Sproul-Bolton v. Sproul-Bolton, 383 Pa. 85, 117 A.2d 688 (1955) (). [8] The instant case does not involve the administration of a trust or the distribution of the property which forms the trust res. Neither are we concerned with an interpretation or construction of the trust instrument. What is involved is the liability of a beneficiary to his former wife and children and whether or not the garnishee has property of Sheridan which ought to be paid to the judgment winner.
We now turn to the substantive issue involved.
Originally it was the law of Pennsylvania that claims of a wife and/or child for support were no different from claims of other creditors, and therefore the interest of the beneficiary of a spendthrift trust could not be attached even on a claim of non-support. Board of Charities v. Lockard, 198 Pa. 572, 48 A. 496 (1901). This result was subsequently changed by statute and case law.
Two statutes support Mrs. Posner's attempt to attach her former husband's interest in the spendthrift trust. The Estates Act of 1947 provides:
'Income of a trust subject to spendthrift or similar provisions shall nevertheless be liable for the support of anyone whom the income beneficiary shall be under a legal duty to support.' Act of April 24, 1947, P.L. 100, § 12, 20 P.S. § 301.12. [9] (Emphasis supplied.)
Under this enactment a wife is allowed to reach 100 per cent of her husband's beneficial interest in the trust income but she can recover her claim only in so far as it has accrued.
By the Act of May 10, 1921, P.L. 434, § 1, 48 P.S. § 136, appellee can attach only 50 per cent of the beneficial interest of a spendthrift trust but such attachment remains a lien and continuing levy against the trust until all payments are made. [10]
In addition to these statutory remedies, this Court in Moorehead's Estate, 289 Pa. 542, 137 A. 802 (1927) recognized a common law right in the wife to recover support against a spendthrift trust. The common law right was further delineated in Stewart's Estate, 334 Pa. 356, 5 A.2d 910 (1939) where it was held that a wife could reduce to judgment the accrued payments due her under an order, judgment or decree, execute thereon and recover such accrued payments to the extent of 100 per cent of her husband's beneficial interest in a trust.
By awarding appellee more than nineteenths of the entire trust find, the lower court overlooked the fact that Sheridan's interest was limited to a present right to income and a future right to principal [11] with contingent remaindermen designated by the settlor to take if Sheridan did not survive the term of trust. This manifested plan of disposition was totally frustrated by the lower court's disposition and the rights of the contingent remaindermen were, for all intents and purposes, totally destroyed.
The lower court cited the case of Morton v. Morton, 394 Pa. 402, 147 A.2d 150 (1959) for the general proposition that both principal and income of a trust are susceptible to support claims. The Morton case on its facts is easily distinguishable from the present situation and has no application. There appellant-husband created an inter vivos spendthrift trust reserving to himself the income for life. He also retained command over the corpus by reserving the right to change the interests of the other beneficiaries. The Entire trust fund was properly held reachable by Morton's wife and other creditors since the purpose sought to be achieved by the trust device was one the law would not countenance. It has long been the law of this Commonwealth that a spendthrift clause does not preclude any creditor from reaching the interest of a settlor-beneficiary. Mogridge's Estate, 342 Pa. 308, 20 A.2d 307 (1941). No man can put his own property out of reach of his creditors and at the same time enjoy the benefits of that property. [12]
As can be seen there are several possible approaches by which Mrs. Posner can recover these arrearages including securing a lien on the principal which would bind the trustees to pay the sums to her as they come due.
The decree is therefore vacated and the case remanded for further proceedings consonant with this opinion.
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