Estate of Mehaffey , 139 Pa. 276 ( 1891 )

OpinioN,

Mb. Justice Stebbett :

It is well settled by an unbroken line of cases, commencing with Fisher v. Taylor, 2 R. 33, that, by using apt words, a parent may create a special trust for the benefit of an unfortunate or a spendthrift child, without exposing his bounty to liability for any debts, contracts, or engagements of the beneficiary.

In the third item of his will, the testator, Alexander Mehaf-fey, created such a trust for the benefit of his son Madison, one of the appellants, by devise to James Evans, Esq., in trust to lease the farm devised, “ receive the rents and income thereof, and pay over the same to my son Madison Mehaffey, or to such persons as he may authorize to receive the same, or, at the option of the said trustee, to permit the said Madison Mehaffey to occupy and enjoy said farm, for and during the full term of his natural life, for his own separate use, so that the same shall not be in his power, or liable to his debts, contracts, or engagements,” etc.; and, after the death of the beneficiary, to hold said farm for the use of his wife, so long as she shall remain his widow, upon the same trusts, “ without any liability for any debts or contracts she may make ; ” and, after the death or marriage of said widow, “ to and for the only proper use and benefit of the heirs and legal representatives of said Madison Mehaffey, their heirs and assigns forever.”

In the second and fourth items of the will, similar special trusts are in like manner created in favor of the other sons, and the wife of one of them. These trusts, respectively, are expressed in substantially the same language as those above quoted. In the second item, the word “ direct ” is used instead of the word “ authorize; ” and the trust for the benefit of the son’s wife is expressed to be without any liability for “ any debts which she may contract,” while in that above quoted the words employed are “ any debts or contracts she may make.”

In the fifth item of his will, the testator disposes of the residue of his personal estate and the proceeds of coal which his executor is directed to sell, as follows:

1. He directs |3,000 thereof to be invested by the trustee, and the interest thereon paid over annually to Ms .son William, “ or to sucb person as he may authorize to receive the same ” for and during his natural life; “ and without any liability for any debts, contracts, or engagements which he may make.”

2. One third of the residue to be given to his daughter.

3. He directs that the remaining two thirds shall be held in trust for his sons Charles and Madison, one half for each, during their lives, “ the interest accruing thereon to be paid over to them, annually, or to such person or persons as they shall severally authorize to receive the same, without any liability for any debts, contracts, or engagements which they may make.”

The testator died in 1886, and on December 19, 1887, the spendthrift cestui que trust gave an order on the trustee, Mr. Evans, in favor of W. F. Barclay, for $250, payable out of the first trust income, and to be applied to Barclay’s judgment entered in 1883, and revived by confession on the day the order was given. Mr. Evans, the trustee named in the will, having declined to serve, the appellant William C. Soles was appointed in his stead; but, although he had notice of the order, he refused to pay it, not only for the reason that he had no funds, but mainly because the cestui que trust had notified him, after his appointment, not to recognize any order given by him, as he might and did sign papers when he was intoxicated which he should not sign.

The decree of the court is virtuallygroundedontheorder to pay on account of the judgment debt contracted before the testator’s death ; and it was made because the learned judge was of opinion that the income arising from the trust created by the fifth item of the will, was unprotected as against previously contracted debts of the cestui que trust; that, while said income, according to the expressed terms of the will, was “ without any liability for any debts, contracts, or engagements which he (the cestui que trust) may make ” after the death of his father, it was not exempt from liability for such as were made before.

Giving the words “ may make ” a strictly literal construction, the exemption from liability may be restricted to debts, contracts, or engagements of the cestui que trust made after the trust went into operation; but we are not satisfied that the learned court was right in its conclusion. There is no apparent reason why the testator should exempt the income from liability for future, and not for past debts, contracts, or engagements of his son. On the contrary, there is a strong presumption that he intended to protect his bounty from liability for any debt, contract, or engagement, whether made before or after the trust went into operation. It is difficult to consider the several provisions of the will without coming to the conclusion that such was testator’s intention; in other words, that he intended, in each and every case, to create a special trust that would protect his bounty against past as well as future acts of the respective beneficiaries. But, whether that be the proper construction of the trust or not, it cannot be doubted that the income accruing therefrom is protected from liability for or by reason of any future act, debt, or engagement of the cestui que trust. If that be so, the decree, which is founded on the order, was unwarranted and erroneous, because the order, if it have any efficacy at all, is in the nature of a contract or engagement made since the trust became operative. It was only by virtue of the order on the trustee, that the petitioner claimed the right to have the income appropriated to the payment of his judgment. The execution of the decree, if permitted, would operate, substantially, as a specific enforcement of the order.

The alternative provision, to pay the interest to such person or persons as the cestui que trust shall authorize to receive the same, was intended merely as a recognition of his right to appoint an agent to receive the income to his use, and not to enable him to transfer his right thereto to another, or otherwise dispose of the income in anticipation of payment to himself. To hold that he could do that, would be to expose the testator’s bounty to any debt or engagement the cestui que trust may see fit to make.

As was said in Stambaugh’s Estate, 135 Pa. 597, when we come to consider a will and interpret its meaning, “ we must do so in the light of all the circumstances by which the testator was surrounded when he made it, and by which he was probably influenced.” Testing the will before us by that rule, we are satisfied that the testator did not intend to expose the bounty, provided for an improvident and spendthrift son, to liability for such a claim as the one on which the decree in this case is based.

Decree reversed and petition dismissed, at the costs of the appellee.