Seidenberg v. Seidenberg

• Decision Date: 30 June 1955
• Docket Number: No. 12570.,12570.
• Citation: 96 US App. DC 245,225 F.2d 545
• Parties: Fannie SEIDENBERG et al., Appellants, v. Martha E. SEIDENBERG, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

96 US App. DC 245, 225 F.2d 545 (1955)

Fannie SEIDENBERG et al., Appellants, v. Martha E. SEIDENBERG, Appellee.

No. 12570.

United States Court of Appeals District of Columbia Circuit.

Argued June 8, 1955.

Decided June 30, 1955.

Mr. Charles F. O'Neall, Washington, D. C., with whom Mr. Francis C. Brooke, Washington, D. C., was on the brief, for appellants.

Mr. Allan Fisher, Washington, D. C., for appellee.

Before PRETTYMAN, FAHY and BASTIAN, Circuit Judges.

BASTIAN, Circuit Judge.

This action was brought in the District Court by Martha M. Seidenberg, appellee-plaintiff, against her husband, Elijah M. Seidenberg, for custody and maintenance of their five minor children. After a trial, that court rendered final judgment awarding custody of the children to the plaintiff and directing the defendant to pay to the plaintiff the sum of $20.00 a week as maintenance for the children.¹ Defendant being in arrears in the payment of the award, to the extent of $360.00 plus interest and costs, plaintiff caused a writ of attachment to be issued against the appellants, the executors and trustees under the will of Harry Seidenberg, to condemn certain trust funds held by them for the benefit of Elijah M. Seidenberg. Appellants filed answers to the attachment, stating that under the provisions of the will the sum of $10,000.00 was left to them in trust, for payment to the defendant husband from the principal amount at the rate of $175.00 per month during his lifetime, until the fund had been disbursed. Appellee filed a traverse to the answers, and appellants filed a motion to quash the traverse. On the hearing of the motion, it was stipulated between the respective parties that the will of Harry Seidenberg directed that the said Elijah M. Seidenberg receive from the trust fund the sum of $175.00 per month, up to the amount of $10,000.00, during his lifetime; that, although several payments had already been made to Elijah, there were sufficient trust assets out of which the garnishment could be satisfied. The garnishee trustees contended, however, that since the trust estate was a spendthrift trust "with the usual restrictive provisions incident to that kind of trust, the assets of the trust estate are not amenable to attachment by the plaintiff herein."² On December 7, 1954, the District Court denied the motion to quash the traverse, and condemned the sum of $350.00 in the possession of the garnishee trustees, that being the amount of the payments available under the trust. This appeal followed.

The question thus presented is whether the appellee, in behalf of her minor children, may lawfully subject the trust beneficiary's interest in the trust to an attachment in order to enforce a claim against the trust beneficiary for the support of that beneficiary's minor children. Such a question is a novel one in the District of Columbia, although it would appear that such a trust is valid against the claims of ordinary creditors.³

The pertinent provisions of the will of Harry Seidenberg are as follows:

"Item IV

"I give, devise and bequeath unto my dear wife, Fannie Seidenberg and my children, Jacob Seidenberg, and Doris Louise Seidenberg Pazornick, the sum of Ten Thousand Dollars ($10,000.00) in trust, nevertheless, upon the following trust and uses:

"(a) If my son, Elijah M. Seidenberg, survives me, then and in that event to pay unto him the sum of One Hundred Seventy Five Dollars ($175.00) per month, until the sum of Ten Thousand Dollars ($10,000.00) is exhausted.

"(b) If my son does not survive me, then and in that event this trust shall not come into being and the Ten Thousand Dollars ($10,000.00) shall remain a part of my residuary estate and shall be distributed as hereinafter provided.

"(c) As long as my said son shall occupy apartment 21 in 904 Shepherd St. N.W. or any other apartment belonging to me or my estate, then and in that event there shall be deducted from the aforeprovided payment of $175.00, the regular rental value of the said apartment.

"(d) If my said son shall die before the full sum of Ten Thousand Dollars ($10,000.00) shall have been paid over to him by my trustees, then and in that event I direct my trustees to distribute the remaining unused portion of the Ten Thousand Dollars ($10,000.00) unto my surviving children only, in equal shares and the trust shall terminate.

"(e) Any income that may be derived from the said trust estate shall be retained by my trustees as compensation for their services in the management of the trust.

"(f) No assignment by my said beneficiary, by way of anticipation, shall be valid. The aforesaid payments of $175.00 per month, less any deduction for rents as hereinabove provided, shall be paid by the trustees, directly to my son, irrespective of any assignment or order, nor shall the principal or income of the said trust become attached by process of attachment, garnishment or other legal proceeding, while in the hands of the trustees."

Appellants claim that this language, particularly when considered in connection with other language in the will with regard to other beneficiaries, indicates that it was the intention of the testator not to extend the trust benefits to Elijah's children, and that there was a definite and intentional exclusion of those children. Indeed, such would seem to be the case and we shall so assume. Therefore, the question is squarely presented as to whether the public policy of the District of Columbia allows a spendthrift trust to be invaded for the support of minor children of the trust beneficiary. There are no statutes in the District of Columbia, as there are in several of the states, in regard to the specific question before us.

This case presents a direct clash of interests — the interest of a testator in freedom to dispose of his property on such conditions and limitations as he chooses, provided no principle of public policy be violated, and the interest of minor children seeking support from a father under a duty to furnish it.

An examination of the cases on the subject discloses divergence of opinion.⁴ On the point at issue, the Restatement of the Law of Trusts, Section 157, contains the following provision:

"Although a trust is a spendthrift trust or a trust for support, the interest of the beneficiary can be reached in satisfaction of an enforceable claim against the beneficiary.

"(a) by the wife or child of the beneficiary for support, or by the wife for alimony; * * *."

As early as 1875 the Supreme Court, in Nichols, Assignee, v. Eaton, 91 U.S. 716, 23 L.Ed. 254, indicated that it did not accept the limitations which the English Chancery Court⁵ had placed upon the power of testamentary disposition of property by its owner. The Supreme Court upheld the general proposition of freedom of disposition of one's property,⁶ although in that case there was no problem of a spendthrift trust affecting a child-support situation but merely an attempted enforcement by an assignee-creditor against the trust fund. The Nichols case points out, however, that the freedom to dispose of property is not without limitations but must be limited when it is repugnant to prevailing law or public policy. See also Washington Loan & Trust Co. v. Convention of Protestant Episcopal Church, 1923, 54 App.D.C. 14, 293 F. 833, 34 A.L.R. 913.

The case nearest in point in the District of Columbia is Buchanan v. National Savings & Trust Co., 79 U.S.App.D. C. 278, 146 F.2d 13. There a divorced wife brought suit in the District Court against her husband and trustees, to establish an interest in income payable to her husband, on behalf of herself, the minor child of herself and husband, and certain creditors. Personal service was obtained on the trustees and service by publication was effectuated on her husband. We held that the intent of the testator was to provide for the grandchildren out of the trust income and, in failing to provide for his child, the husband was defeating the purpose of the settlor. The extent of provision for the child was left for determination by the District Court. We approved the holding of the District Court that appellant could not recover funds due as alimony to the former wife or for the benefit of creditors. Citing the general rule of the Restatement of Trusts, supra, we ruled that a spendthrift trust may under some circumstances be subjected to the obligation to support a wife or child, the enforcement of such obligation requiring either personal service or an attachment of the beneficiary's equitable interest in the fund, after execution of bond.

In Safe Deposit & Trust Co. v. Robertson, 192 Md. 653, 65 A.2d 292, the question was similar to that in the instant case. There the question was to what extent, if any, the rule prohibiting attachment in the case of a spendthrift trust is relaxed when a claim is made for alimony. There, as here, no direct reference was made in the instrument to the wife (children in the present case) as a beneficiary or otherwise. The court in the Robertson case, resting its decision upon grounds of public policy and not upon any interpretation of the instrument in question, held that while spendthrift trusts are valid against contract creditors the exemption should not extend to claims...