Opinion
01-27-1892
PERRINE v. NEWELL et al.
W. T. Hilliard, for complainant. M. P. Grey, for William Newell and Elijah W. Dunn, trustees.
(Syllabus by the Court.)
Bill by Sarah A. Perrine, executrix of John Perrine, deceased, against Charles B. Newell; Charles W. B. Newell, arid Annie, his wife; Eliza A. Brad way and Thomas Bradway, her husband; Deborah Tuft and John V. Tuft, her husband; and William Newell and Elijah W. Dunn, surviving trustees under the will of James Newell, deceased,—to secure the payment of a certain amount out of a farm held in trust by said trustees.
W. T. Hilliard, for complainant.
M. P. Grey, for William Newell and Elijah W. Dunn, trustees.
MCGILL, Ch. The object of the bill is to secure the payment of $1,000, with interest, out of the farm hereinafter mentioned. By his will, dated on the 19th of June, 1859, James Newell devised to William Newell and Elijah W. Dunn his farm, at Lower Penn's Neck, in the county of Salem, containing about 245 acres, whereon his son, Charles B. Newell, then lived, with other lands, in trust, to rent the same from time to time, and, pay to Charles B. Newell, during his life, the rents and profits thereof, and continued in these words: "And, at the death of said Charles B. Newell, I do give and devise all these said lands, houses, and premises to his three children, Eliza Bradway, Charles Newell, Deborah Tuft, his children; to them, their heirs and assigns, forever." On April 29, 1872, after the death of James Newell, and after his will had been duly admitted to probate, the son, Charles B. Newell, and his children, Charles W. B. Newell. Eliza A. Bradway, and Deborah Tuft, who were all then of age in order to enable them to rebuild embankments along the Delaware river, upon which a portion of the farm fronts, to protect the farm from inundation, borrowed $1,000 from John Hershon, executing and delivering to him their bond conditioned for the payment of that sum in 3 years, with interest at 7 per cent. per annum, and on the same day made and delivered to him their mortgage of the farm to secure the payment of that bond. In February, 1875, Hershon assigned the mortgage to John Perrine. Perrine died in April, 1886, leaving a will, afterwards duly admitted to probate, of which the complainant is executrix. At the time of the execution of the mortgage, Charles W. B. Newell was married. His wife still lives, and is a defendant to this suit. Eliza A. Bradway and Deborah Tuft were also, at the time of making the mortgage, married, and their husbands survive, and are parties defendant in this suit. Neither the wife of Charles W. B. Newell nor the husbands of Eliza Bradway and Deborah Tuft joined in the execution of the bond and mortgage. The bill alleges the purpose for which the mortgage was given, and that the embankments were constructed with the moneys had from it, and that such work was necessary for the preservation of the farm, and it asks dual relief: that the mortgage may be foreclosed; also, that the money due upon it may be charged upon the farm, and paid thereout. Only the trustees, William Newell and Elijah W. Dunn, answer; and they claim that the complainant's right is subject to a lien upon the trust property which the law gives them for disbursements they have made in the performance of their trust, and allege that such disbursements amount to a large sum.
The first question to be considered is whether the children of Charles B. Newell, at the time the mortgage was made, had an estate in the farm which they could mortgage. It is observed that the will provides that the trust shall continue during the life of Charles B. Newell, adding, "And, at the death of the said Charles B. Newell, I do give and devise," etc. In Post v. Herbert's Ex'rs, 27 N. J. Eq. 540, John Herbert, by his will, devised lands to his executors to hold in trust for the use of his son-in-law, Abraham Post, in order that Post might enjoy the possession, rents, and profits of the land until the youngest child of his wife should attain the age of 21 years, and "after the said youngest child" should attain the age of 21 years the land was to be sold, and the proceeds of sale divided among the wife's children. Chief Justice Beasley, pronouncing the opinion of the court of errors and appeals, stated the rulp to be that a bequest to A. "at"a given age or marriage, or "when" or "from" and "after" his attaining a given age, is prima facie contingent, but that the rule is subject to exceptions, which, with the rule, are very distinctly stated and explained by Vice-Chancellor Wigram in the case of Packham v. Gregory, 4 Hare. 398, in this language: "If there is a gift to a person at twenty-one, or on the happening of any event, or a direction to pay and divide when a person attains twenty-one, there, the gift being to persons answering a particulardescription, if a party cannot bring himself within it he is not entitled to take the benefit of the gift. There is no gift, in those cases, except in the direction to pay, or in the direction to pay and divide. But if, upon the whole will, it appears that the future gift is only postponed to let in some other interest, or, as the court has commonly expressed it, for the benefit of the estate, the same reasoning has never been applied to the case. The interest is vested, notwithstanding, although the enjoyment is postponed." Applying this rule to the case then considered, the chief justice said: "Now, in the present case, it seems to me that the purpose of the testator in deferring the payment to the children of these legacies until the youngest should become of age is perfectly manifest. It was to keep the family together, and provide a house for ail the children until the period of distribution. I am at a loss to perceive any other motive for this provision. The payment,most evidently, was not postponed on account of anything personal to the legatees. * * * Without looking for the intention in other parts of the will, I think, from this clause alone, the purpose to postpone the payment of these legacies solely for the convenience of the estate, and to let in the interest deposited in the son-in-law, is unmistakably shown." The conclusion drawn was in affirmance of the chancellor's opinion, (reported in 26 N. J. Eq. 278,) that the children of the testator's daughter had taken vested interests at the testator's death. The doctrine thus laid down has been adopted in several other cases in this state. Fairly v. Kline, 3 N. J. Law, 754; Wintermute v. Snyder, 3 N. J. Eq, 489, Howell v. Green, 31 N. J. Law, 570; Van Dyke v. Vanderpool, 14 N. J. Eq. 198; Feit's Ex'r v. Vanatta, 21 N. J. Eq. 64; Beatty's Adm'r v. Montgomery's Ex'r, Id. 324; Van Blarcom v. Uager, 31 N.J. Eq. 783, 786; Ballentine v. Wood, 42 N. J. Eq. 552, 9 Atl. Rep. 582; Rhodes v. Shaw, 43 N. J. Eq. 430, 11 Atl. Rep. 116.
In the case now considered, it is apparent that by deferring possession under the devise to the children the testator's purpose was to let in a trust-estate for the life of their father. The life-estate was guarded by a trust designed to secure its continuous beneficial enjoyment by the testator's son, who would naturally care for his children. For some reason undisclosed by the will, the testator deemed it unwise to bestow any legal estate upon his son; and yet it is plain that he designed for him and his children the benefits which would naturally flow from the fee,—that is, the use Of the land by the son for life in the maintenance of his family, and the remainder to the son's children. The assurance of this course by the testator was a mere arrangement for the convenience or safety of the estate. No reason appears, personal to the children of Charles, why their interests should be postponed. I think that this case is clearly within the rule adopted in Post v. Herbert's Ex'rs, and that the children of Charles B. Newell, at the death of their grandfather, took a vested remainder in fee in the farm, subject to the trust-estate for the life of their father. This being so, they could mortgage their interest.
In the next place, it is too clearly established to need citation of authority that Charles B. Newell, as cestui que trust, could assign or mortgage his beneficial interest in his father's estate, subject, however, to such rights as the trustees may have in it. The father and children, then, could give the mortgage in question.
But the wife of Charles W. B. Newell and the husbands of Eliza Bradway and Deborah Tuft did not join in the mortgage. The effect of their failure to join must be considered. It is clear that the wife of Charles W. B. Newell has an inchoate right of dower in the property, of which she cannot be divested for the payment of either the mortgage or the debt it represents. The failure of the husbands of Eliza A. Bradway and Deborah Tuft to join in the mortgage renders that instrument void as to the wives; for it is established that the execution of such an instrument by a married woman, without her husband, is a nullity. Den v. Lawshee, 24 N. J. Law, 613; Moore v. Rake, 26 N. J. Law, 574; Wilson v. Brown, 13 N. J. Eq. 277; Harrison v. Stewart, 18 N. J. Eq. 451; Armstrong v. Ross, 20 N. J. Eq. 109. This court will not give effect to it. Phelps v. Morrison, 24 N. J. Eq. 195. The bond, however, is an acknowledgment, of a debt due from the married women, which has been shown to have been given for the benefit of their property. In such case, equity will hold their separate property liable to pay it. Although the mortgage is not valid as such, it will nevertheless operate in equity as an appointment of the property described in it for the payment of that debt; and equity will decree that the debt be a charge upon the property so appointed, and that the property shall be sold to pay it. The debt is not a lien upon their estate until made so by the decree of this court. The lien is in virtue of the decree of this court, not in virtue of the mortgage Pentz v. Simonson, 13 N. J. Eq. 232; Wilson v. Brown, Id. 277; Harrison v. Stewart, 18 N. J. Eq. 451; Cutler v. Tuttle, 19 N. J. Eq. 560; Armstrong v. Ross, 20 N. J. Eq. 109; Perkins v. Elliott, 22 N. J. Eq. 127; on appeal, 23 N. J. Eq. 526; Insurance Co. v. Marshall, 32 N. J. Eq. 103; 2 Story, Eq. Jur. § 1399.
I think that William Newell and Elijah W. Dunn, as trustees, are entitled to be repaid their proper disbursements, at least so far as the interest of their cestui que trust is concerned, prior to the enforcement of the mortgage or the lien imposed by decree of this court in virtue of the debt of the married women. They were called into action by the testator to execute his specified purpose concerning certain property. In order to the accomplishment of that which was required of them, they were clothed with legal title to the property, to hold primarily as security for the repayment of their proper expenses and disbursements. 2 Perry, Trusts, § 907; Drake v. Williamson, 4 Jur. (N. S.) 1009: Williams v. Allen, 32 Beav. 650; In re Bleckley, 35 Beav. 449. The mere fact that the mortgage debt was created to pay for that which the trustees might properly have paid in the protection of the farm does not give it priority over, or even equality with, the trustees' proper advances. To give it such priority or equality, the trustees should have joined in it, or should have expressly agreed that it should have equality or priority. They paid interest upon it from the income of the farm, it is true; but, for aught it appears to the contrary, that payment was made at the request or with the consent of the life-tenant. It has not been shown that the mortgagee, Hershon, dealt at all with the trustees when he placed his loan, or that he then expected priority over or equality with any right the trustees had acquired or might acquire, in virtue of their position. He, seemingly, was content with the security which the mortgage made by the cestui que trust and remainder-man gave him.
What are the proper expenses and disbursements of the trustees, in this case.us the proofs stand, is difficult to define. It may be stated generally that they must be limited to charges concerning matters within the scope of the trustees' authority. Accounts which the trustees have rendered to the orphans' court exhibit that they have themselves worked the farm; and, by those accounts, their proper disbursements appear to have been for taxes, insurance, repairs, seed, fertilizers, expenses of accounting, counsel fees, and perhaps interest upon the mortgage and upon their advances, to which must be added reasonable allowance for their pains, trouble, and risk as trustees. All the expenditures thus enumerated were properly chargeable to the cestui que trust as life-tenant; and, until the advances for the in were paid, no part of the income should have gone to him. If, instead of satisfying those advances with the income they received, the trustees allowed the income, which would have paid them, to go to the cestui que trust, they did so at the peril of not being able to recoup, by withholding future income, for their right to do so exists only during the life of their cestui que trust, (2 Perry, Trusts, § 543;) and, I may add, not during that life, as against the mortgage debt, of which they had notice before they allowed income to go to the cestui que trust, which is prejudiced by their failure to reimburse themselves from the moneys that they thus suffered to depart from their control. If, however, income thus suffered to be used was not sufficient to reimburse the trustees, equity will be subserved by permitting the trustees to hold the lands until they shall have repaid themselves so much of their expenditures as the income which they suffered their cestui que trust to use would not have paid, and by making sale of the farm, subject to that right in the trustees, and, after paying the amount decreed in favor of the complainant, investing the remainder of the proceeds of sale, that the income therefrom may be paid to the trustees during the life of their cestui que trust. I do not mean to be understood, by that which I have said, to intimate that the trustees will not, under any circumstances, be permitted to hold the farm beyond the life of their cestui que trust, for the purposes of reimbursement. On the contrary, I can conceive that necessary expenditure for permanent betterment of the farm may extend such right, or, indeed, that insufficient income to meet the proper expenses of the execution of the trust, either in the past or in the future, may extend it. It must be referred to a master to take an account of the moneys chargeable to the trustees, and, as well, of the trustees' payments to their cestui que trust and their proper disbursements Upon the accounting the master will take testimony and other proof explaining the particulars and purposes of the several disbursements, so that the court may be able to determine whether any part of them shall be charged upon the remainder after the particular estate expires. The amount of the mortgage debt will be charged upon the farm, subject to the trustees' right, as above defined, and the inchoate right of dower of the wife of Charles W. B. Newell, therein. Charles W. B. Newell will be foreclosed of his right to redeem the farm, and the farm will be directed to be sold, subject to the rights aforesaid, to raise and pay the sum which shall be found to be due to the complainant. To ascertain that sum, there must also be a reference to a master.