McEwen v. Brewster , 24 N.Y. Sup. Ct. 223 ( 1879 )

Dykman, J.:

By his last will and testament, Peter Neafie directed his executors to keep the proceeds of his personal property invested during the lives of his wife and Eliza McEwen, the plaintiff, and during the life-time of the survivor of them, and pay the interest and income therefrom to them, during their joint lives, in equal shares, and to the survivor during her life. The wife of the testator is dead, and Mr. Brewster, as one of the executors, has the fmid invested, and there is now in his hands about $500 óf the accumulated income. This money is claimed by the plaintiff in this action, by the defendant Weed, a receiver appointed in supplementary proceedings under a judgment in favor of Caroline Millspaugh against this plaintiff for her board and maintenance, and by the defendant Parmenter, a receiver under a judgment against Newton B. Millspaugh, the husband of Caroline Millspaugh, and the referee .has decided that the last receiver is entitled to it. This conclusion is based upon the fact found by the referee that Newton B. Millspaugh agreed to give the plaintiff a home, furnish her with clothes and what she should need, and to take the income under the will for his pay; and that, about the same time, the plaintiff gave him a power of attorney to receive the income from the executor, which has never been revoked. The referee further finds, as a legal conclusion, that, by acquiescing in and accepting board and maintenance under this arrangement, the plaintiff is estopped from denying that the income was applied to her use, and has been transferred to and become the property of Millspaugh.

If this fund can now be reached by Parmenter, as receiver, it must be through Millspaugh, and because it belonged to him. It did not belong to him, unless it had been in some way transferred to him. Has that been done ? In the first place, the contract with Millspaugh was nothing more than an agreement to pay him out of this particular fund. That did not amount to an assignment of it. There was no appropriation of the fund, by order upon it or otherwise, by which the executor would have been justified in paying it to the creditor, without the further interference of the plaintiff, and because the fund belonged to the plaintiff, a power of attorney was necessary to authorize the executor to pay the money to Millspaugh for her. She controlled the fund, and could have revoked the power of attorney at any time, and required the payment to be made to her personally.

Certainly the power of attorney did not operate to assign the fund. That only created an agency to draw money belonging to the principal for her, and the acceptance of it was an acknowledgment of that relation, and an admission that the money to be drawn did not belong to the attorney, but was the money of the plaintiff.

The referee fell into an error, and the judgment entered on his report must be reversed, with costs ; but, as there will probably be a new trial, it may be well to indicate our views respecting the ultimate rights of these parties.

A receiver in supplementary proceedings cannot take the interest of a beneficiary in a trust fund, because it is inalienable and cannot maintain an action to reach the surplus income beyond what is required for the support of the debtor. (Campbell v. Foster, 35 N. Y., 361.) In the recent case of Williams v. Thorn (70 N. Y., 270), it was held that an action may be maintained by a judgment creditor, after the returns of an execution unsatisfied, to reach surplus income beyond what is necessary for the suitable support and maintenance of the cestui que trust, and those dependent upon him. The doctrine of Campbell v. Foster on the point .above mentioned is expressly recognized. Neither of these receivers can, therefore, reach this fund. Caroline Millspaugh might reach it by a direct action upon her judgment, after execution returned, but she has commenced no such action.

It follows, therefore, that the plaintiff is entitled to recover in this action.

Judgment reversed, with costs.

Barnard, P. J., and Gilbert, J., concurred.

Judgment reversed and new trial granted at circuit, costs to abide event.