In a proper case, an intent to make debts or legacies a charge on land may be implied from the whole will, as well as be express." But in such a case 10 the intent must be clear, as the personalty is the primary fund for the payment of debts,11 or legacies.12

A mere residuary clause following after specific legacies does not in itself make the legacies a charge on land in case there is a deficiency of personalty.18

13

In England it is the rule, that where the real estate and the personal estate are by the residuary clause blended into one fund or mass, legacies are chargeable on the real estate. They are not then primarily chargeable on the personalty, but on both realty and personalty proportionately.14 How far this rule prevails in this State is regarded as open,15 and to be determined rather by the particular circumstances of each case than by the hard and fast English rule,16 and for this purpose the testator's extrinsic circumstances will be regarded.17

Three years' limit. Section 2750, Code Civil Procedure, was intended to fix a time limit after which heirs, devisees, and bona fide purchasers of land would be protected in their estates.18 After the filing of the petition to sell the lands, a delay of many years in doing more will not, however, be regarded as a waiver.19

9 Harris v. Fly, 7 Paige, 421; Reynolds v. Reynolds' Exr., 16 N. Y. 257, 259; Hoyt v. Hoyt, 85 id. 142; McCorn v. McCorn, 100 id. 511; Stewart v. Crysler, 52 App. Div. 597; Dunham v. Deraismes, 165 N. Y. 65; Wellbrook v. Otten, 35 Misc. Rep. 459; McManus v. McManus, 86 App. Div. 240; Youngs v. Youngs, 102 id. 444; Irwin v. Teller, 115 id. 17; 188 N. Y. 25, 33.

10 Clift v. Moses, 116 N. Y. 144, 155; Matter of City of Rochester, 110 id. 159; Davidson v. Rightmyer, 38 Misc. Rep. 493; Lodiger v. Canfield, 70 App. Div. 596.

111 Roper & White, Legacies, 671; Harvey v. Kennedy, 81 App. Div. 261; Matter of Paddock, id. 268; Gillurve v. Becker, 56 Misc. Rep. 157: et supra, p. 471.

12 Schmidt v. Limmer, 91 App. Div. 360.

13 Lupton v. Lupton, 2 Johns. Ch. 614, 625; Myers v. Eddy, 47 Barb.

263, 267; Matter of City of Rochester, 110 N. Y. 159; Bevan v. Cooper, 72 id. 317; Brill v. Wright, 112 id. 129; Irwin v. Teller, 188 id. 25, 32.

14 Reynolds v. Reynolds' Exr., 16 N. Y. at p. 261.

15 Myers v. Eddy, 47 Barb. 263; Bevan v. Cooper, 72 N. Y. 317, 322; Hoyt v. Hoyt, 85 id. at p. 149.

16 Scott v. Stebbins, 91 N. Y. 605; Wiltsie v. Shaw, 100 id. 191, 196; McCorn v. McCorn, id. 511; Brill v. Wright, 112 id. 129; Briggs v. Carrol, 117 id. 288.

17 Brill v. Wright, 112 N. Y. 129; cf. Morris v. Sickly, 133 id. 456; Lyons v. Steinhardt, 37 Misc. Rep. 628.

18 Slocum v. English, 62 N. Y. 494; White v. Kane, 7 N. Y. Civ. Proc. Rep. 267, 271. And see § 1538, Code Civ. Proc., and Wood v. Hubbard, 29 App. Div. 166, 169, as to partition. 19 Matter of Van Vleck, 32 Misc. Rep. 419.

§ 98. Surplus income of trust property liable to creditors. Where a trust is created to receive the rents and profits of real property, and no valid direction for accumulation is given, the surplus of such rents and profits, beyond the sum necessary for the education and support of the beneficiary, shall be liable to the claims of his creditors in the same manner as other personal property, which cannot be reached by execution.

Formerly section 78, Real Property Law of 1896, chapter XLVI, General Laws:

§ 78. Surplus income of trust property liable to creditors. Where a trust is created to receive the rents and profits of real property, and no valid direction for accumulation is given, the surplus of such rents and profits, beyond the sum necessary for the education and support of the beneficiary, shall be liable to the claims of his creditors in the same manner as other personal property, which cannot be reached by execution.20

Section 78 was formerly Revised Statutes, 729, section 57:

§ 57. Where a trust is created to receive the rents and profits of lands, and no valid direction for accumulation is given, the surplus of such rents and profits, beyond the sum that may be necessary for the education and support of the person for whose benefit the trust is created, shall be liable, in equity, to the claims of the creditors of such person, in the same manner as other personal property, which cannot be reached by an execution at law.21

Comment on this Section. Prior to the Revised Statutes, trusts could not be created by third persons with a proviso that the interest of cestui que trust should not be alienated, unless it were a trust for a married woman.22 The history of restraints on alienation of trust estates will be noticed under the appropriate and subsequent section.23 That section was, in all probability, originally framed at a time when the revisers intended to limit express trusts to apply income to the instances of minors, femes covert, lunatics, and

20 Repealed by Real Prop. Law of 1909, 460, art. 14, chap. 50, Consolidated Laws. See below, § 460. 21 Repealed, chap. 547, Laws of 1896.

22 Supra, PP. 454, 455; Lewin, Trusts (Last ed.), 98, 693, 781; Bryan v. Knickerbocker 1 Barb. Ch. 409, 412; Graff v. Bonnett, 31 N. Y.

9, 25; Schenck v. Barnes, 25 App.
Div. 153, 155; 156 N. Y. 316; Rome
Exchange Bank v. Eames, 4 Abb. Ct.
App. Dec. 83, 99; Hallett v. Thomp-
son, 5 Paige, 586; De Graw v. Cla-
son, II id. at p. 140; Raymond v.
Harris, 84 App. Div. 546.
23 Real Prop. Law, § 103.

spendthrifts; 24 for a general restraint on the alienation of all trusts of this character was unknown in the best days of equity jurisdiction.25 When the Revised Statutes imposed a general restraint on alienation 26 by certain cestuis que trustent, the section now under consideration 27 was deemed necessary to prevent unjust appropriations of income from trust estates.28 But notwithstanding the fact that there was, before the Revised Statutes, no restraint on the power of alienation by cestuis (which fact frequently led to the loss of the corpus of an executed trust), estates could then be limited in trust for the benefit of persons until they became insolvent or bankrupt and then remainder over, in the nature of a shifting use; 29 and this class of limitations remains still valid.30

Effect of this Section. The effect of section 98, from the point of view of creditors, is to limit all trusts, created by third persons, to receive and pay over rents, or apply them to the use of another, to trusts for actual education and suitable maintenance 31 a principle eminently proper in view of the unlimited adoption by the statute of a restraint on the power of alienation.32 In ordinary trusts "to receive and apply to the use of, etc., etc.," the trustee has no discretion and cannot withhold from the beneficiary the net income of the estate.3 33 But the trust may be so drawn as to give the trustee sole discretion,34 but in that event the discretion would die with the trustee 35 unless carried forward by the settlor of the trust. In all cases of this character, the court alone was, prior to 1903, the final arbiter, therefore, of the beneficiaries' necessities; and the

24 Supra, pp. 451, 452.

25 Lewin, Trusts, 98; see argument in Noyes v. Blakeman, 6 N. Y. at pp. 574, 575, 576.

261 R. S. 730, § 3; Real Prop. Law, § 103.

27 § 98, supra; 1 R. S. 728, § 57. 28 Clute v. Bool, 8 Paige, at p. 87. 29 Lewin, Trusts (Last ed.), 101, and cases cited.

30 Bramhall v. Ferris, 14 N. Y. 41; Raymond v. Tiffany, 59 Misc. Rep. 283.

37

adjudged surplus might be reached by a creditor's bill,36 after the return of an execution unsatisfied. It could not be reached by proceedings supplementary to an execution.38 The question, how far a court of equity has power to reach equitable assets, independently of statute, has been much debated. In 1903, the power of the court in cases of trusts was much modified by statute.40

39

Spendthrift Trusts and Their Limit. In the text under section 96 of this act, spendthrift trusts, or trusts created by third persons for the benefit of improvident children or dependents have been noticed, and it is there intimated that the conservative wisdom of the authorities of this State tolerates such trusts even against the criticism of many reformers and legal theorists. Until 1903, as just stated above, a court of equity alone was the arbiter of the amount necessary for the support and maintenance of the beneficiaries of trusts of this character.42 But as of September 1, 1903, the Legislature intervened, and where an execution was obtained on a judgment for necessaries the judgment creditor might have execution against the trustee for ten per cent. of the income of trusts producing in excess of $20 a week.43 This act was subsequently applied to trusts productive of $12 a week. It was very properly held that such legislation did not affect trusts created before Sep

36 §§ 1871-1879, Code Civ. Proc.; First National Bank v. Mortimer, 28 Misc. Rep. 686; Sherman v. Skuse, 45 App. Div. 335; affd., 166 N. Y. 345; Matter of Temple, 36 Misc. Rep. 620; McGlynn v. McGlynn, 37 id. 12; Raymond v. Harris, 84 App. Div. 546; Rider v. Mason, 4 Sandf. Ch. 351; s. c., 2 Barb. Ch. 79; Williams v. Thorn, 70 N. Y. 270, 273; Tolles v. Wood, 99 id. 616; Wetmore v. Wetmore, 149 id. 520; Schenck v. Barnes, 25 App. Div. 153; 156 N. Y. · 316; Miller v. Miller, 1 Abb. N. C. 30; Bunnell v. Gardner, 4 App. Div. 321; cf. Graff v. Bonnett, 31 N. Y. 9; Locke v. Mabbett, 2 Keyes, 457; as to personalty, Code Civ. Proc., §§ 1871, 1879, 2463; Bergmann v. Lord, 51 Misc. Rep. 213; Raymond v. Tiffany, 59 id. 283; see a valuable note to 16 Abb. N. C. at p. 20 seq.

37 Williams v. Thorn, 70 N. Y.

270; Dittmar v. Gould, 60 App. Div. 94; Sherman v. Tucker, id. 127; Raymond v. Tiffany, 59 Misc. Rep. 283.

38 Matter of Seymour, 76 App. Div. 300, 301.

39 2 R. S. 174, §§ 38, 39; § 1871, Code Civ. Proc.; Story, Eq. Juris., §§ 366, 367, 368; Harper v. Clayton, 35 Law Rep. Annot. 211; 4 Kent Comm. 61; Tompkins v. Fonda, 4 Paige, 448; Stewart v. McMartin, 5 Barb. 438, 446; Hadden v. Spader, 20 Johns. 554; Dittman v. Gould, 60 App. Div. 94, 97; Newton v. Jay, 107 id. 457, 466; Campbell v. Foster, 35 N. Y. at p. 365.

40 See next paragraph, Spend

thrift Trusts.

41 Supra, p. 452.
42 Supra, p. 477

43 Chap. 461, Laws of 1903.

44 Chap. 175, Laws of 1905.

tember 1, 1903, when the first act took effect.45 This legislation was a very radical change in the law of New York relative to trusts for the maintenance and support of helpless or improvident beneficiaries. Recent legislation has, however, somewhat modified the new departure for the present.47

Assignees in Bankruptcy. It has been both held and denied that receivers and assignees in bankruptcy may reach the surplus income of cestuis que trustent, in trusts under the third subdivision of section 96 of this act, and that it passes under an assignment in bankruptcy. Certainly, in justice to creditors, it should so pass.49

When Trust Created by the Beneficiary. When a trust is created by the beneficiary himself for his own benefit solely, the trust is not regulated by this section, but is made void by statute as against creditors, existing or subsequent, of the settlor.49 Yet it is good as an express trust as to other persons.50 Trusts for the benefit of the settlor himself may easily be executed into legal estates by virtue of this statute.51 But the provisions of the statute, avoiding such trusts as to creditors, can have no effect on the limitation of a remainder to a third person if the settlor was solvent when the settlement was made, for the remainder is not for the benefit of the settlor.

45 King v. Irving, 103 App. Div. 420; Sloane v. Tiffany, id. 540; Demuth v. Kemp, 130 id. 546.

48 See 896, supra, pp. 452, 453. 47 Chap. 148, Laws of 1908; cf. 1879, Code Civ. Proc.; Bergmann v. Lord, 51 Misc. Rep. 213.

48 In re Baudoine, 76 Fed. 556; modified in C. C. App., 101 Fed. Rep. 574; Brown v. Barker, 68 App. Div. 592; McNaboe v. Marks, 51 Misc. Rep. 207; sed cf. Butler v. Baudoine, 84 App. Div. 215.

49 2 R. S. 135, § 1; Young v. Heermans, 66 N. Y. 374; Spies v. Boyd, I E. D. Smith, 445, 448; Schenck v.

Barnes, 25 App. Div. 153; Schenck v. Barnes, 156 N. Y. 316; § 34, chap. 45, Laws of 1909, formerly § 23, chap. 417, Laws of 1897; Hadden v. Spader, 20 Johns. 554; Kane v. Hill, 102 App. Div. 370; cf. Wainwright v. Low, 132 N. Y. 313.

50 Gilman v. McArdle, 99 N. Y. 451, 457; Townshend v. Frommer, 125 id. 446; Raymond v. Harris, 84 App. Div. 546; Newton v. Jay, 107 id. 457; cf. Wainwright v. Low, 132 N. Y. 313.

51 Supra, Real Prop. Law, § 92; and see note to 16 Abb. N. C. 23.