Smith v. Towers

• Decision Date: 12 June 1888
• Citation: 14 A. 497,69 Md. 77
• Parties: SMITH v. TOWERS.
• Court: Maryland Court of Appeals

14 A. 497

69 Md. 77

SMITH v. TOWERS.

Court of Appeals of Maryland

June 12, 1888

Appeal from circuit court, Carolina county.

ALVEY C.J., and BRYAN, J., dissenting.

Argued before ALVEY, C.J., and MILLER, IRVING, BRYAN, McSHERRY, and ROBINSON, JJ.

Wm. S. Bryan, Jr., George R. Gaither, Jr., and Philip W. Downes, for appellant.

J W. Bryant, Edwin H. Brown, Geo. M. Russum, Henry Lewis, and Robt. J. Jump, for appellee.

ROBINSON J.

The testator devised certain real estate to his friend John R Fountain, in trust to collect the rents and profits, and to pay the same to his son Robert, "into his own hands, and not into another, whether claiming by his authority or in any other capacity," and upon his death to convey said real estate to such children of his son Robert as may be living at the time of his death. Upon the construction of this clause of the testator's will two questions arose: " First, did the testator mean to give the income of the property to his son to the exclusion of his creditors; and, secondly, if so, are the terms and provisions of the will effectual to carry out this intention. There can be no difficulty whatever as to the first point. He not only gives the legal estate to the trustee, but he directs in express terms that he shall pay the income into the hands of his son, and not into the hands of any other person, whether claiming by his authority or in any other capacity. Here, then, is an express provision that the income shall be paid to his son, and an express prohibition against paying it to any other person. If the income in the hands of the trustee is liable to the claims of creditors, the trustee, it is plain, could not carry out the trust. So, construing this will as we do, and it is not, we think, susceptible of any other construction, the testator meant beyond all question that the income should be paid into the hands of his son, to the exclusion of all other persons, whether claiming as alienees or as creditors.

The next point is one of more than ordinary importance, and has not heretofore been decided by this court. A great deal may be said on both sides, and the question is not free of difficulty. In England the discussions are all one way, and it is well settled there that the devise of an equitable estate or interest for life to any person, other than a married woman, carries with it, as a necessary incident to such estate or interest, the right of alienation by the cestui que trust, and is liable for the payment of his debts, and no provision by way of inhibition or otherwise, which does not operate as a cesser or limitation over of the estate, can protect it against the claims of creditors. Brandon v. Robinson, 18 Ves. 429; Rochford v. Hackman, 9 Hare, 480; Graves v. Dolphin, 1 Sim. 66; Green v. Spicer, 1 Russ. & M. 395; Younghusband v. Gisborne, 1 Colly. 400. In this country, however, the discussions are conflicting, and the supreme court of the United States and the supreme courts of other states have, after full consideration of the English cases, held that the power of alienation is not a necessary incident to an equitable estate for life, and that the owner of property may, in the free exercise of his bounty, so dispose of it as to secure its enjoyment to his beneficiary without making it alienable by him, or liable in any manner for his debts, and that such an intention, when clearly expressed by the founder of the trust, must be respected by the courts. The supreme court, after reviewing the highest decisions, in an able opinion by Justice MILLER, say: "But the doctrine that the owner of property, in the free exercise of his will in disposing of it, cannot so dispose of it but that the object of his bounty, who parts with nothing in return, must hold it subject to the debts due his creditors, though that may soon deprive him of all the benefit sought to be conferred by the testator's affection or generosity, is one which we are not prepared to announce as the doctrine of this court. * * * Nor do we see any reason, in the recognized nature and tenure of property and its transfer by will, why a testator who gives, without any pecuniary return, who gets nothing of property value from the donee, may not attach to that gift the incident of continued use, of uninterrupted benefit of the gift, during the life of the donee." Nichols v. Eaton, 91 U.S. 725, 727. And in the still later case of Bank v. Adams, 133

Mass 170, argued in June, 1881, and reargued in March, 1882, the court unanimously held that property may be conveyed in trust, with the provision that the income shall not be alienated by the beneficiary by anticipation, or be subject to be taken by his creditors in advance of its payment to him, although there is no cesser or limitation over of the estate on such an event. MORTON, C.J., says: "We are not able to see that it would violate any principles of sound public policy to permit a testator to give to the object of his bounty such a qualified interest in the income of a trust fund, and thus provide against the improvidence or misfortune of the beneficiary. * * * Under our system, creditors may reach all the property of the debtor not exempt by law, but they cannot enlarge the gift of the founder of a trust, and take more than he has given." And then again in Rife v. Geyer, 59 Pa. St. 393, Judge SHARSWOOD, speaking for the court, says: "That a benefactor has the power of thus restricting the enjoyment of his bounty through the medium of a trust during the life of the beneficiary is now the unquestionable law of the state." In Shankland's Appeal, 47 Pa. St. 113, the point was expressly decided, and it was there held that a trust to collect and receive rents, and pay over the same to a son of the testatrix for and during the term of his natural life, without being subject to his debts and liabilities, was an active one, and that the legal estate was vested in the trustee, and no act of the cestui que trust could deprive him of it, or allow him to interfere with the collection of the income, and no creditor could touch the income or any interest which the cestui que trust had in it. In Vermont, Connecticut, and Kentucky the highest courts have held that the income of property may be devised in trust for the benefit of the cestui que trust for life, to the exclusion of the claims of his creditors. White's Ex'rs v. White, 30 Vt. 338; Leavitt v. Beirne, 21 Conn. 1; Pope's Ex'rs v. Elliott, 8 B. Mon. 56. In other states, however,--it may be said, in the majority of the states where the question has arisen,--the English rule has been adopted without qualification. Tillinghast v. Bradford, 5 R.I. 205; Dick v. Pitchford, ...