Devise and Legacy, What estate. Trust, Alienability of interest of beneficiary. Assignment. Equity Jurisdiction, To reach and apply equitable interest. Equity Pleading and Practice, Costs.
Where one undivided third of certain real estate is devised to a trustee "the net income . . . to pay to my son E. during his life, or to permit him to occupy and enjoy the use of said property in common with his brothers as he may prefer," the right of E. to one third of the income is an equitable interest which can be reached by his creditors by a bill in equity at any time when he chooses to receive such income rather than to avail himself of the permission given him to occupy the property in common with his brothers; but, while he is availing himself of the privilege of such occupation, he has no right which his creditors can reach, since such privilege is personal to him and unassignable and inalienable.
By the provisions of a will an undivided one third interest in certain real estate was devised to a trustee "the net income . . . to pay to . . . E. during his life." E. made an agreement in writing for a good consideration that his life interest "shall remain so held in trust, but if at any time any of said properties shall be sold, the value of the life interest of E. in the proceeds shall be computed . . . and shall be" applied by E. or the trustee in payment of certain debts due other parties to the agreement; "or if the said trustee shall prefer he may invest E.'s share of such proceeds and pay or apply the income thereof during the life of E. upon such" debts. A creditor of E. who was not a party to the agreement sought by a bill in equity to reach and apply the interest of E. under the will, and contended that he was not affected by the agreement because it was not recorded under R.L.c. 127, § 4, as a conveyance of real estate, and because he had no notice of it as a trust, as required by R.L.c. 147, § 3. A single justice ruled that the creditor could reach and apply in satisfaction of his debt only E.'s interest in the trust subject to the agreement; and the creditor appealed. Held, that the ruling of the single justice was correct, since no recording or notice of the agreement was necessary because it did not purport to convey any interest in the realty, but only in E.'s share of the proceeds in case of a sale during his lifetime.
In a suit in equity by a creditor to reach and apply in satisfaction of a debt due to the plaintiff from the principal defendant equitable assets of the principal defendant in the possession of a second defendant, where it is determined that the principal defendant owes the plaintiff as alleged, a decree, that a sale of the principal defendant's interest in the equitable assets be made and that from the proceeds there shall be paid among other items "taxable costs" to the second defendant, is not objectionable in failing to award to the second defendant costs "as between solicitor and client" since the determination of costs is a matter within the discretion of the presiding justice and nothing appears to show that such discretion was not exercised properly.
BRALEY, J.
Upon proof of the debt, which does not appear to have been in dispute, the plaintiff was entitled to have applied in payment the vested interest of Edward A. Bangs in the contingent remainder devised to him by the eighteenth clause of the will of his mother, Anne Outram Bangs; and the interlocutory decree, so far as a sale was ordered of this portion of the debtor's estate, is not questioned by the defendants. R.L.c. 134, § 2. Trumbull v. Trumbull, 149 Mass. 200, 204.
The principal controversy has been confined to the construction of the seventeenth clause, and, when the nature and extent of the debtor's estate has been defined, to determine whether the plaintiff's rights of attachment are subject to the agreement that, upon a sale of his interest, the proceeds are to be applied to the payment of certain of his promissory notes held by members of the family.
By the seventeenth clause of the will he was given outright the net income for life of one third, or, at his election, he was to be permitted to occupy and enjoy the use of the estate in common with his brothers, who were seised of two undivided thirds in fee. The equitable life tenant's right to the income is absolute, but the alternative provision is not expressed so broadly. The gift is not of a general right of occupancy in land, which confers upon the devisee or beneficiary the power to occupy by a tenant. Rabbeth v. Squire, 19 Beav. 70; S.C. 4 DeG. J. 406. But it is limited by the phrase "to permit him to occupy and enjoy the use of said property." Upon reference to the character and use of the property, which is described generally in the sixteenth clause but more particularly in the agreed facts, very likely the testatrix had in mind a probability that, if she gave to him an alienable estate in the land, her other sons might be greatly annoyed in their enjoyment and management of the property by the intrusion of a stranger. But, however that may be, these words of limitation cannot be rejected, but must be accorded their ordinary meaning. Towle v. Delano, 144 Mass. 95, 99. When this is done, the right of occupation very plainly was not intended as merely an incident to a complete life estate, but only as an alternative privilege to be exercised at his option. This freedom of choice being purely personal is not assignable, and consequently cannot be taken on execution. But until exercised, the income did not cease, and the choice of occupation, when once made, is not irrevocable by the terms of the will. The legatee might change back again to income if he desired, and, if it were not for the agreement, the plaintiff, under an appropriate decree, then could reach and apply the entire income, whenever it accrued, in satisfaction of her debt.
While not denying the right of this defendant to alienate the income, the plaintiff claims that the agreement is in the nature of a conveyance of an equitable interest in real property, which, under the provisions of R.L.c. 127, § 4, and c. 147, § 3, not having been recorded and of which she had no notice, is not valid against attaching creditors. The answer, however, is that, as the agreement does not purport to convey any interest in the realty, but only in the proceeds if a sale takes place during his life, the rights of creditors claiming under the instrument are superior, and the plaintiff can hold only what, if anything, may remain after their demands are satisfied. Putnam v. Story, 132 Mass. 205, 211. Hill v. Hill, 196 Mass. 509, 516, 518.
But if the plaintiff fails to show that the decree was erroneous, the defendant trustees ask for a reversal of the part which gave to them only taxable costs, and that costs may be taxed as between solicitor and client. The suit is neither for instructions as to the construction of a will, even if that question is involved, nor a bill of interpleader to determine the title of claimants to a fund, nor for the benefit of all in the preservation of a fund in which many persons have a common interest, where usually costs are taxed as between solicitor and client, to be paid out of the fund. Davis v. Bay State League, 158 Mass. 434, 435, and cases cited. But it is a creditor's bill analogous to the process of foreign attachment under which, by R.L.c. 189, § 67, the trustee recovers only taxable costs, "and such further amount for counsel fees and other necessary expenses as the court may allow." What sum, if any, should be allowed for such disbursements was discretionary with the single justice, and although the report presents all questions which were before him, we see no sufficient reason to differ from his conclusion.
Decree affirmed.