## Facts

- In 1899, James J. Hanigan conveyed a New York City house and lot to a trustee under an inter vivos trust.
- The trustee was directed to pay Hanigan annual income of $1,500 from rents and profits (with discretion to pay more), and to pay certain debts and existing mortgages.
- The trustee had authority to mortgage the property to pay liens or carry out the trust and had power to sell the property.
- If the property was not sold, the trustee was directed, upon Hanigan’s death, to convey the premises “to the heirs at law” of Hanigan; if sold, the trustee was to pay the heirs the unexpended balance of sale proceeds.
- The trustee also had authority, if he wished, to reconvey the premises to Hanigan and terminate the trust.
- Hanigan was alive during the litigation and had two daughters as his only descendants.
- In 1902, one daughter, Elizabeth L. Hughes, deeded to her husband, Augustus S. Hughes, all her interest in the real estate.
- Judgment creditors obtained a money judgment against Mr. and Mrs. Hughes and sued to reach any interest the Hugheses allegedly held in the trust property.

## Issues

1. Whether the trust’s direction to convey the property (or remaining sale proceeds) to the settlor’s “heirs at law” at the settlor’s death created a present remainder in those heirs.
2. Whether, while the settlor was alive, a daughter’s potential status as heir constituted a present property interest that could be conveyed to her husband or reached by judgment creditors.

## Decision

- The Court of Appeals affirmed the Appellate Division, rejecting the creditors’ claim.
- The instrument did not create a remainder in the settlor’s heirs; it left a reversion in the settlor.
- Because the settlor was alive, the daughter had no present estate—only an expectancy—which could not be seized by creditors.
- The deed from Mrs. Hughes to Mr. Hughes transferred no attachable interest in the land.

## Legal Principles

- When an express trust is created, any estate or interest not embraced in the trust and not otherwise disposed of remains in or reverts to the creator of the trust (a reversion), rather than creating a remainder by implication in persons described as the creator’s “heirs.”
- A direction to convey trust property at the settlor’s death to the settlor’s “heirs” may be treated as restating the legal consequence of descent, not as creating a purchaser’s remainder in the heirs.
- While a person is living, no one is that person’s heir; a potential heir’s interest is a mere expectancy, not a present property right.
- A mere expectancy is not a present legal estate in land and is not subject to levy or attachment by judgment creditors.
- The Rule in Shelley’s Case (and statutes abolishing it) does not apply where the limitation is not “to A for life, then to A’s heirs” in a manner that would merge life estate and remainder.

## Conclusion

The court held that the trust language directing a conveyance to the settlor’s “heirs at law” did not create a present remainder in the daughters but left a reversion in the settlor; consequently, the daughter’s purported transfer and the creditors’ attempted lien failed because the alleged future interest was only an expectancy and not property subject to execution.


Doctor v. Hughes, 225 N.Y. 305, 122 N.E. 221 (N.Y. 1919)