Garnell Gaw School Library Cornell University Library KFP 119.F76 “Hani A TREATISE ON THE RULES AGAINST Perpetuities, Restraints on Alienation and Restraints on Enjoyment AS APPLICABLE TO GIFTS OF PROPERTY IN Pen nsylvania WITH A PARTICULAR DISCUSSION OF SPENDTHRIFT TRUSTS MARRIED WOMEN’S TRUSTS ACCUMULATIONS AND GIFTS TO CHARITIES BY ROLAND R. FOULKE Of the Philadelphia Bar PHILADELPHIA: GEORGE T. BISEL COMPANY Law Publishers, Booksellers and Importers 1909 B77355 Coprricut, 1909 BY ROLAND R. FOULKE PREFACE It has been thought that there is need for text books dealing with the important topics of the law, but which are confined to the law of a single state. This need is particularly great in the older jurisdictions, such as Pennsylvania, which by this time have accumulated a sufficient volume of decided cases to furnish a respectable body of jurisprudence. It is perhaps superfluous for any author who has written on the topics treated in the pages which follow, to acknowledge his indebtedness to the masterly treatises of Mr. Gray.1 The difficulty, however, for the practitioner and the student in the use of these general treatises is, that they shed very little light upon the law of his own state. As the topics to be treated of deal with the technical law of property and wills, detailed and exact information is more than ordinarily neces- sary. This book has been written with the object of supplying this need, so far as the law in Pennsylvania is concerned, which law is, on many of the points to be discussed, confused in the extreme. One of the reasons why the subject in hand has been considered so immensely difficult is because it has been commonly discussed in terms of the involved limitations of the older English cases. Those limitations are unlike any- thing to be met with in Pennsylvania to-day, and it seems useless to require a student to master the subtleties of an intricate rule by studying obsolete limitations, when he can achieve the same result by considering limitations which he will meet with in everyday practice. In order that the book may be useful to both the student and the practitioner, dis- cussions of the law have been separated from statements of the law, so that the reader can avoid whichever appears to be unnecessary to the matter he has under investigation. An examination of the topic headings of the chapters will indicate the relative position of these discussions. This method of treatment has perhaps produced a diffuseness to which some 1 Restraints on Alienation, 2 ed. (1895); Rule Against Perpetuities, 2 ed. (1906). iv PREFACE objection will be made. The author has, however, felt it better to err on that side than on the side of too much con- densation. Some of the discussions of the cases are perhaps more lengthy than is usual in a text book. It is permissible, however, to introduce more detailed discussions in a work treat- ing of the law of one state, in which the cases will assume a relatively greater individual importance. An attempt has been made at an exhaustive citation of all cases from the beginning in the Supreme Court Reports. The lower court reports have not been so carefully examined. These cases, however, on the subject in hand, are of little value. They are generally very poorly reported, and it is diffi- cult to determine their exact weight. For many of the duplicate citations the author is indebted to Pepper & Lewis’s Digest of Decisions. An appendix has been added, which brings the citations down to 224 Pa. 416, and 39 Super. Ct. 368. ROLAND R. FOULKE. Philadelphia, July 1, 1909. TABLE OF CONTENTS (For detailed table of contents, see page 499.) CHAPTER I INTRODUCTION. gees gicin so he heii ho Wea teeny See on §§ 1- 15 PART I PROPERTY CHAPTER 2 AurenaBitiry. Mopirtep Frees................0 00-0020 0 eee §$ 18- 30 CHAPTER 3 Future Lecat Interests 1vn Rea Property Preliminary iss.s4 oes aie Paws tends cya Sats a vee eee eye ne §§ 35- 37 Vested Remainders............... 0.00.0 c eee ee eee eee §§ 38- 47 Contingent Remainders: Origin and Nature........... §$ 48- 53 Contingent Remainders: Destructibility................ §§ 54- 62 Distinction between vested and contingent remainders.. §§ 63- 66 Remainders: to: a: class... ic... c cee eee ene §§ 67- 71 Possibilities of reverter.................00 cece eee eee §§ 72- 75 Rights of entry for condition broken.................. §$ 76- 77 Exectitary devise 2.4 Jecsenceinsas vue orienta genset ee ieee §§ 78- 80 Interests arising by operation of law and by contract... §$ 81- 83 SUMIMALY scannnasigs dae daw eiae ans edad SOLAR AA obi wees § 84 CHAPTER 4 Personal Property Aliena bitty ye ycegeagie citer gigaee Boece tateeee asd §§ 86- 90 Future Legal Interests.......... 0000000 e eee eee ees §§ 91-100 CHAPTER 5 Uszs anp Trusts Brerore Tur Statute or 27, Henry VIII §$105-110 vi TABLE OF CONTENTS CHAPTER 6 Tus Statute or Usrs The statute: its operation and effect..........-..---. §§113-117 The application of the statute.......--..+++eee reese §§119-133 Necessity for a conveyance where the statute applies.. §§135-139 CHAPTER 7 Trusts Nature and definition of a trust.........-.---..00-055 §§146-151 The trustéGs 45... hacece eecuse eo seee esa cee ak eee aoe §§153-160 The interest of the cestui que trust..........-.....-- §§161-163 PART II THE RULE FORBIDDING THE CREATION OF RESTRAINTS ON ALIENATION CHAPTER 8 ReEsTRAINTS ON ALIENATION DEFINED AND ANALYZED...... «+ §§171-175 CHAPTER 9 AssoLuTe Lecat Inrerests—VoLuntTary ALIENATION Preliminary coccente advert aa wans Miweeee one ded ies §§182-185 Unqualified restraints on alienation.................... §§$187-190 Restraints qualified as to persons.............-...... §§191-198 Restraints qualified as to time.....................05. §§199-204 Restraints qualified as to manner.................... §§205-209 Forfciture for failure to alienate. Gift over on intestacy .. §§212-213 Personal property :.icckcurk dw ieietees eens esa cee were §§214-215 CHAPTER 10 AxnsoLuTe LeGaL INTERESTS—INVOLUNTARY ALIENATION Forfeiture for involuntary alienation....................... §217 Prohibition of involuntary alienation................... §§218-224 TABLE OF CONTENTS CHAPTER 11 Leeau Estates ror Lire Voluntary Alienation: vil Forfeiture for voluntary alienation..................60. §225 Prohibition of voluntary alienation ................ §§226-228 Involuntary Alienation: Forfeiture for involuntary alienation................... §229 Prohibition of involuntary alienation .............. §§230-235 CHAPTER 12 ABSOLUTE EquiTaBLe INTERESTS Voluntary Alienation: Forfeiture for voluntary alienation..................... §237 Prohibition of voluntary alienation ................ §$§238-243 Involuntary Alienation: Forfeiture for involuntary alienation.................. §244 Prohibition of involuntary alienation .............. §§245-254 CHAPTER 13 EqurrasLe Lire Esrares—Invotuntary ALIENATION (SPENDTHRIFT Trusts) Preliminary fs pio coceeace ues Sele AN RM ce Ss Ss §§266-269 The clause prohibiting involuntary alienation.......... §§270-281 Effect. of the clause prohibiting involuntary alienation.. §§282-289 Origin of the notion that the clause is valid.......... §§291-294 CHAPTER 14 EquiraBLe Lire Estares—VoLtunTary ALIENATION Forfeiture for voluntary alienation.................0....00, §311 Prohibition of voluntary alienation ................0.5. §§312-320 Vili TABLE OF CONTENTS PART III THE RULE AGAINST PERPETUITIES CHAPTER 15 Tur Rute Acarnst PERPETUITIES Preliminary dliscussion............0. 000s cece eee eee eee ee §325 History, definition and object ...............--.--0 eee §§326-333 The rule discussed and explained...................-- §§334-338 The period prescribed by the rule..................4. §§339-342 Corollaries of the rule............. 00:0 eee eee ee eee §$§343-345 Pennsylvania cases on the rule...................2000- §§346-351 CHAPTER 16 InTERESTS SUBJECT TO THE RULE Preliminary discussion........... 0.022.000 cc cece c cece eee aee §360 Tegal) interestsiis eidx oes ay de Sa kara swe ga ay dos dime §§$361-370 Equitable interests..........0..00 0.000 cee cece §§373-377 Destructible interests..............00 0.000000. §378 Where the interest cannot take effect apart from therule....... §379 Interests arising by operation of law...................000. §380 Interests arising by contract...............0........0.2000, §381 SUMMATY 4, coducsaandedsce tees phe wy REE EE RN eedys §382 CHAPTER 17 Powers AND THE RuLE AGAINST PERPETUITIES PreliMiNaryigedaed tas woents ee Megan ee Oe a ie ee eae §§386, 387 Powers of appointment...........................000. §$388-401 Powers in trust............... PROGR SU ERA Renan Camand §§402-406 Powers: ine 8 trustee). ois cae conn aa eae oh ee eee de §§410-436 Powers of revocation.......... 0.00... cece cece cece eee ee eees $437 TABLE OF CONTENTS ix CHAPTER 18 Girts TO A CLASS AND THE RuLE AGaInst PERPETUITIES PrelMINAry 2aciwet.oreteadeenieaendh eh eA SeeouR Reo ee iy §440 Definition of a class and a gift to a class................. §441 Closing of the: classic: 22. evsaveus pine desc assis hate §§442-444 Application of rule against perpetuities to gifts toa class.... §§445-447 Special cases calling for the application of the rule.... §§448, 449 Pennsylvania. cases. .icisecegs ede caste wigacsaereeiew. §§450-453 CHAPTER 19 WHERE THE Furure Interests arg InvaLip UNDER THE RULE Preliminary discussion..........0 00060 e cece eee §458 Where the whole gift is void........................ §§$459-462 Where the limitations are valid and invalid and cannot be BEPATALEC scnmand ca wes aeed ae legosge ye gm ye egos Ae LA se Ne §463 Where the subsequent limitations are void............ §§464-476 Where the prior limitations are void................2..000. §478 PART IV THE RULE FORBIDDING THE IMPOSITION OF RESTRAINTS ON ENJOYMENT CHAPTER 20 PRELIMINARY Discussion or THE Rute Forpippinc RESTRAINTS ON EINJOYMENT.......00..0. 0000000 e eee eee §§485-490 CHAPTER 21 POSTPONEMENT OF ENNJOYMENT......... 0000002 cece eee eee §$495-508 CHAPTER 22 Trust or AN ApsoLuTE INTEREST.................0.-000-. §$§515-526 x TABLE OF CONTENTS CHAPTER 23 DiscRETION Preliminary acscnes pig aie Maas tee teas ees ee eae OKs §§530-533 Legal discretion as to principal ........-.-....++..00- §§534-539 Absolute discretion as to principal................... §§537-539 Discretion as to income..........---.+ee rere eee ee eee §§540-545 PART V SPECIAL TOPICS CHAPTER 24 MarrigeD WoMEN’s TRUSTS Preliminary discussion.........6 0.0000 s eee ee cect e teens $554 Origin and definition............6 60 c eee eee §§555-559 Form of the clause of sole and separate use.......... §§560-568 Circumstances under which the law will give effect to the CASO reo. sie ayladatducd altite ws oie atte eet bdo Guta owiesaye seeeneecereties §§570-582 Effect of the clause of sole and separate use.......... §§587-597 Rights and power of the husband.................... §§599-604 Origin of peculiar Pennsylvania doctrine.............. §§605-608 CHAPTER 25 ACCUMULATIONS Preliminary discussion..............00 0.0 e eee eee §§615-622 The statute against accumulations eA kc ate eta aaa ate §§623-657 Accumulations in the interest of judicious management §§658-669 Accumulations in pursuance of express discretion...... §§671-678 Distribution of income where direction to accumulate is VOI sesanandns alsucee ds cece Saal Reon a ene awh Soh ok artoentenad ae eae §§679-697 CHAPTER 26 CHARITABLE GIFTS Preliminary isis ssarccde es spac dened Lala wals ye awe Berea eee re ees 8715 Charitable objects defined..................0.0000005. §$716-718 Indefinite and definite objects and the application of the tule against perpetuities, etc. ...................0.0. §§720-734 Pennsylvania legislation relating to charitable gifts..... §§735-737 Trusts for charities............. 0.00 cece eee eee cease §§$739-760 Cy pres. cas.<5 caesarean eteanea dens tes ener Gees §§$761-777 Charitable corporations. ....................00000 00000. §§782-786 Trusts for tombs and monuments.................... §§787, 788 Trusts to say MASSES....6..5 5.6 ss cee e sees eee eee enon §789 Trusts for school houses.............. 0.00.0. c eee §790 Religious. trusts. osss2ic6s igs vaWie sa aeki ence ns wees cews §791 Determinable charitable gifts.............00.0.0.00.0.0.. $§792, 793 ABP RN DIN inci we scale snes cies sitesi sald gaat auike Walesaic eaten aes hasta §§794-810 DETAILED TABLE OF CONTENTS... 0.0.0.0... 00000 0e ccc cece ee eee p. 499 (xi) TABLE OF CASES CITED (If the case is discussed, the place of discussion is indicated by heavy face type.) A PAGE Algaier’s HStaté 2c. sauce bos dies eee ad ea aie Cee EI es eee em 42 Allter’s Estate vicvecigesctes adenoid eo Rea Meee Pena ea 447, 477 Amberson’s Mstatéxsc say save ooo A WGG Rie wl Ra Rese AE see 436 Amole!’s states su.0 vee eve asa ee de eee ed eee Whee ewe ee eee See ene Re 435 Andréss. Lewistssneisceisiaeeieeioke: kedieuweteieelspereeor es 163 Appt). Congregation ac sncdinas dv se eile edd ei aa wees go eee sels 433 Apprentices’s Fund Case........ 6.600 c eee e eect e eee 399, 435 Arnistrong’s Hstatecinocieaconreesiashicteerdianengs esas wpadss 77, 81 Arnold vy Harpetsiaiy tear susie gan ey yw Gee EN ae A Sh Vaan ay 73 ABA yt: HOOVER ysis ties cals t densa wal dasys cise habe Meee a HONE tebe BAS 357 Ash’s Appealss..c «sors cea ssosegiadeeiarraease ae eresers 78, 353, 368 Ash’). AShs ».cc.acanecees 8 areadte mesg cae theese see ae tame wee 364 Ashford v. Ewing........6. 00.00 e cece cece n tenes 126 Ashhurstis Appeal } .22...scc0i einen ad Sieh aialies aie SS A wh ce giclee eal ae 78, 82 Asbhurst v. Given.................0020005 71, 76, 93, 133, 172, 382 Ashton’s [states wasedc Satine Ses Baie ae SESE GRD AAT ale ace A AE Rete Sy 59 Atty.-General v. Downing. «2.2.45 s0820 664 fe eee ee ns sean se ce ueenes wes 468 Atty.-General v. Mayor of Newark...........0.0 00.0 e cece eee eee eee 464 B BADD @- Read ueuns oatastata ta Vaan mee ine EA Marea AAS peas 436 Bacoi’s Appealeciacioedcayeare aces eedeerntdaegieis 73, 77, 82, 83 Baeder’s! Estate jain paine Rees ae EG eee ea ees 165, 318 Bailey v. Allegheny Nat’l Bank.....................2000000, 343, 360 Bainbridge’s Appeal vi.sevvusads ane creed givgs os wis wee Ee ES e5 456, 481 Bancrotta Ashhurst), sccccuos ecg da. wis Ma aaee nee Hira a on Pena es oe aed 258 Barber @ Snyders 5.c6 14 sick os aed Ne dghe canna giehindy cata dule te oe 163 Barclay v. Lewis........... 00. cc cece 199, 202, 267, 268 Bargér’s Appeal i... i2%ecsoiiee soa e Re che oy eee ey 411, 412, 414, 417 Barker’s Estate................. 109, 118, 136, 142, 143, 319, 324, 394 Barnes” Lessee: 0: Hartineiesie ci eeucds ais oes oe gE oe WE Ee Qe wo 333 Barnett 2, Blake :wicssoveic vewdwcee beds 2 Paci a secede he ah wR aw elas 137 xil TABLE OF CASES CITED (If the case is discussed, the place of discussion is indicated by heavy face type.) PAGE Barnet:a, Detutlecc..esacasi win eee ok eeeniaee cy Pee eRe 16 Barnett seAp peal cuss y wsaiiteig ned paces uae ers eae sea i eee at 82 Bare is Wells csc ¢ oss 3c sh SB Gaels igcse wens blel Bre aid ey Renu a ler Oe Sr 464, 483, 485 Bassett v. Hawk ......... 00. cee eee eee soos Si alestusws aya aladeeena stacey 29 Bayard -o,Athinsy 4 casi ce seed tet oad erage MEGA s qtr Shales 375 Beara; Whistlers ..s4 sia s0 soeerereas wir de oi c hee ore tee ge eeeer ies 216 Beamont?s: states osasieounes Soe Me Gays eqs ap ewe ee Pea Genes 319 Beaver: Milsons coycank ace edhuas setae ewestee even 8e 4 433, 448, 455 Beul’s Wstatescovcci vse cosa ore reve daeserwavers 126, 127, 128, 137, 142 Bell’s' Mstate.:.veciasene samen gah et Kee ee ed aa ee ees ae eae eee Se 92, 168 Pella S’ 5 UStALE > Sia dic sae asso eid doe aia tr are eithon oe eae abana cise reseed Se Pe Ree 310 Belts RergusOns 2 aise aes dkieedm ptelndan acydS qaecwe aderleg s 332, 367 Bennett Os. MOMmriss aac: paltuds cadens PAwde Aeneid nwa ed glee 32, 34, 36 BE Vans: Hsta te mince ican ns a Wa Oe nn eo ead aea ed Maas 346, 350 Biddle’s Appeal ccias<2csccae4 gona seeps kw eedh eas sie e ewe bees 398, 400 Biddle’s HState ccacaqdeesaecanaed ike Cog doen eee oa ae LS 347, 353 Bird’s HState rojas: wspde iw Sea Ser ae eoniany eS pte Ave Pate Giga Sadiekmelea wats 375 Birkbeck’s Estate: wnwanns cogs eae ya eee oe de Ae eee a selnye dees 333 Blake 0. Dexter ye cinuic sath iavcs ede Sees mea eG Ye oe Seeer tae we 190 Blenon’s Estate..................0005 jn hele vade ER es MERE ate ee 434 Board of Charities v. Lockard............ 0000.20.00 0 0c eee 140, 166, 167 Board of Charities v. Moore... 0.0.00... 0.000 c ccc ccc cece eae 166 Boies’ Estate c.saccccves eyes 45 Sees sieades ob euth nie iu de aa eloawess 305, 312 Bouvier’s Histate..oe.9aicaiv-en jaaiee case weed peed Ghee eee sled 307, 345 Boyd’s Estate, No. 1.. 74, 82, 97, 155, 199, 233, 234, 236, 278, 350, 353, 421 Boyd; Bigham, 3 cediancsw uid ial ed sens iodale cad AA ae Ee eed 47, 120 BOver Os SMe annanndisnateieen sade. bale LALA aed SARS aS awe eaNs 35 Brabson's MStates 255i 2s) nidaumen Gks A 4Wiaqane dam ioeen Mass 4 deg Maly eueale gad 482 Bremer’s Sons v. Mohn......... 0.0... 159 Brendle v. Congregation........0. 000000. c ccc eee teen eee ee eens 450, 464 Brewster's: Appeal.cccs axis opsa aeeGaunenvearedlume ee cum etabe ae 376, 393 Brieesi: DAVIS ss asconed. ig woke athens ai ean ae ded eee sh oa-aeh ones 220 Britighurst v. Cuthbertic agus cow cs we ode vee deere we sete eed denne 30+ Brink a; Michtelacocsrougs eh ir en eeeas gees Hee kee) aeke eA aS 56, 92 Brisven'sAppeals casas save sh saute egee an observation which would not apply to limitations at law where there are no_ trustees. Furthermore, even if the trustees can sell, the subject matter of the trust remains tied up. The principle that all property shall be in circulation is clear enough. The other branch— the prevention of the tying up of property—does not tell us why property should not be tied up, unless it be understood that the reason is that property is thereby taken out of commerce. There is, however, another reason. Reason Suggested by the Auther 12. Property which is tied up may be thereby kept in the enjoyment of an individual who does not possess the self- restraint and ability which he must have to keep the property if be has absolute control. He is, therefore, maintained in a position of superiority over his fellowmen by the artificial advantages of inherited wealth. This is a surviving relic of aristocratic and feudal institutions and is contrary to the public policy of a democracy. An aristocracy is a good thing in its way, but is only compatible with the public policy of a free democratic community when it must sustain itself by the force of the individual superiority and ability of its mem- bers, and not on prerogative or on the accumulations of the dead. Whatever, therefore, tends to keep people beyond the 4 Gray, Rule Perp., 2 ed. (1906), §603a. 5 Gray, Rule Perp.,2 ed. (1906), §603a. [13, 14] INTRODUCTION 7 reach of want, without the responsibilities of caring for wealth or the necessity of work, is contrary to this principle of public policy for two reasons: first, it produces an artificial inequal- ity, and second, it deteriorates the character of the person provided for, and if there are many such, the general quality of the race will be lowered. There is no objection to an individual receiving a large fortune by way of gift, provided he has unfettered control of it. If he has the sense to keep the property, he can and probably will make proper use of it, and is not an undesirable member of the community. Reasonable opportunity must be afforded, on the one hand, for the gratification of natural affection and the desire to provide for offspring, but on the other hand, the door must be closed on the undue gratification of the wish, common to most parents of wealth, to preserve their descendants in an advantageous position without the danger .of falling therefrom through incompetence and folly. Reason jor Exception as to a Charity 13. A charitable gift is not within the public policy sus- taining these rules, because money devoted to charity does not produce any of the evils mentioned in the last section. Con- sequently where a charitable gift cannot be sustained within reasonable limits without violating the restraining rules of law,® an exception will be allowed.’ That this is the underlying thought of a charitable gift, is shown by the persistence with which the motive of the donor is dwelt upon in the attempt to define it. The motive need not be altruistic, but the object of the gift must be, and while, therefore, it is fair to assume that in such case the motive also is charitable, such assump- tion is unnecessary. Mr. Gray’s Reason 14. Mr. Gray suggests that when ownership of property is in danger of being lost by a future contingency, the property is not likely to be used with the same energy and _ interest as it would were the contingency absent. This reason goes to °The rule against perpetuities; the 7For the exact application of the rule forbidding restraints on alienation; rules, see Chap. 26 on Charitable Gifts. and the rule forbidding restraints on ® Gray, Rule Perp., 2 ed. (1906), §603f. use and enjoyment. 8 INTRODUCTION [15] the rule against perpetuities and has force, but does not explain, as Mr. Gray observes, the exception as to a charita- ble gift. Furthermore, the more remote the contingency, the more energy in the present use, as the probability of losing the property will be less present to the mind. A man who is going to lose his property in ninety-five or one hundred and fifty years is not likely to bother himself much about that re- mote contingency, whereas if he may lose it in three or five years, his attitude towards the use of the property will be radically different. It is apprehended, therefore, that the reason suggested by Mr. Gray is not a sufficient explanation either of the rule or the exception in the case of a gift to a charity. The Application of the Principle of Public Policy 15. The expression of this principle of public policy in the rule forbidding restraints on alienation and the rule forbidding restraints on use and enjoyment, is clear. It is plainly the effect of such restrictions to prevent the free circulation of property and to protect the holder from the consequences of his own lack of discretion. The application of the rule against perpetuities is not so clear. It is this: if the donor can create interests to begin at indefinite times in the future, he can create a succession of life estates in his descendants, which will result in keeping the property in his family to the remotest generation, and in restraining the dominion of each successive owner to his life only, and it is this very kind of a settlement that it is the purpose of this principle of public policy to prevent.° The principles relating to restrictions on involuntary alienation are somewhat different, and are dis- cussed at another point.’ ® For further discussion of the object 1 See §§252-254. of the rule against perpetuities, see §§332-333. (9) PART 1 PROPERTY Common Law Reat Property Chap. 2. Alienability. Modified Fees. Chap. 3. Future Legal Interests. PrersonaL PROPERTY Chap. 4. Alienability. Future Legal Interests. Equity Chap. 5. Uses and Trusts before the Statute of 27, Henry VIII. Chap. 6. The Statute of Uses. Chap. 7. Trusts. (10) (11) CHAPTER 2 ALIENABILITY MODIFIED FEES ALIEN ABILITY Alienability of land in feudal times...............00000 000 § 18 Conflicting interests as to alienability.................-...-- § 19 Development of alienability..........0 6... cece eee eee § 20 Mopiriep Frss Prelimingty ss acciue erateniere g4 Se eae eNO SR a gees wee eRe § 21 Conditional: fee. ve ce ae sa Shes eae Bhs eee ee aves Renee 4 § 22 USCA CO VALID x sicns iss gusstne dis) Bia andste ash Byes Eade Seal eu aes lapel mae Rae Pt acne ees § 23 Act of 1855 misunderstood by the court.................0. § 24 BASE TOO io hcaoed aceon enone ah na uGa os Mea MRegmigguls name adele § 25 Qualified: fe6:, 5.5 oacvsacd rk wae age ae tale es eee eee ee ees § 26 Déterminable- fees as evsccrsawn coe coy eee spe ue ditnen Seid comves § 27 Confusion in terminology as to modified fees in Pennsylvania. § 28 Title acquired in eminent domain.......................000. § 29 Summary as to modified fees......... 0. ccc cece eee § 30 Alienabilily of Land in Feudal Times 18. Two theories have been entertained as to the aliena- bility of land at the early common law. The first theory is that land was alienable, and that restrictions on that alien- ability gradually grew up.’ The other, that land was inaliena- ble, and that powers of alienation were subsequently acquired from time to time.? The latest authority on the subject says that we cannot start from absolute alienability or absolute inalienability, but from a state of affairs in which the lord 1This was the view held by Coke, ? This was the view held by Black- 2nd Inst., 65; Coke, Lit., 43a. stone, Com. II, 71, 72. 12 ALIENABILITY OF LAND [19, 20] could prevent any alienation by his tenant which was detri- mental to his interests.* Conflicting Interests as to Alienability 19. Each tenant in the feudal ladder would be subject to conflicting considerations of self-interest in his attitude towards the development of alienability. In so far as his feudal super- ior was concerned, he would wish to have full power of alienation, and when he in turn came to grant to a feudal inferior, he would wish to impose as much inalienabilty as possible. The same conflict appears in modern times. The owner of property, when he is a donor, wishes to have his power of dominion increased. When he is a donee, his interest is the other way. It will thus appear that the development of the notion of alienability has been a very complex process. Development of Alienabilily 20. Whatever the feudal theory was, real property was gradually made alienable and liable for debts,* and inaliena- bility is the exception in modern times. In Pennsylvania, land and rights in land have from the first been freely aliena- ble and liable for the debts of the owner.® There is, therefore, no occasion for us to consider, in a treatise on Pennsylvania law, any of the conflicting steps which have entered into the development of the theory of alienability. The only ancient theory which persists in Pennsylvania today, in so far as this ® «We cannot hold that the free aliena- of the land itself. The notion of the bility of the fee simple is the starting point of English law. We must be con- tent with a laxer principle, with some such idea as this: that the tenant may lawfully do anything that does not ser- iously damage the interests of his lord. He may make reasonable gifts but not unreasonable. The reasonableness of the gift would perhaps be a matter for the lord’s court. A tenant would be entitled to the judgment of his peers.” Pollock & Maitland, Hist. of Eng. Law, Vol. I, led., p. 324, 2 ed., p. 343. It is to be observed that alienability in feudal times was conceived of as an actual delivery transfer of rights in land was of much later growth. The transfer, further- more, might be by way of settlement or for services to be rendered, and we thus observe the same distinction in those days as we have now between the case of a gift without consideration and a transfer for value. The attitude of the lord and his tenant would be different in the case of each kind of a transfer. ‘The various English statutes and decisions are referred to by Mr. Gray, Restraints on Alien., 2 ed. (1895), §4. 5 Mitchell, Real Est. & Conv. in Penna. (1890), pp. 352, 487. [21, 22] CONDITIONAL FEES 13 subject is concerned, is the conception of the power of dominion. The question for our consideration in this con- nection is this: how far may the donor in the exercise of his power of dominion take away the quality of alienability, voluntary or involuntary, with respect to the property which he gives to the donee? MODIFIED FEES Preliminary 21. The estate in fee simple presents no difficulty, so far as the matter in hand is concerned. A number of variations of this estate have occurred which are of some importance. These have been classified® as modified fees, and are as fol- lows: (1) conditional fees, (2) estates tail, (3) base fees, (4) qualified fees, and (5) determinable fees. They will be dis- cussed in this order. Conditional Fees 22. A conditional fee was where the inheritance was restricted to the heirs of the body of the donee. It was said that he took the estate subject to the condition that he have the heirs.” By the construction adopted by the judges, the fee was alienable if the donee has heritable issue born, but if no alienation was made-it descended to the issue named. Down to the end of the twelfth century, however, the tenant in fee very commonly had to seek the consent of his heirs before making a conveyance. This restriction disappeared in the next century. The construction put upon these gifts inter- fered with the plans of the aristocracy, who had sought by this means to settle their estates so that they would remain in their families. They obtained the passage of the Statute De Donis, which modified the conditional fee, and which will be referred to in the next section. ® Challis, Real Prop., 2 ed. (1892), and 2 ed, p. 19; 2 Law Quar. Rev., p. 52. Mr. Challis seems to have been 276 (1886); Gray, Rule Perp., 2 ed. the first writer to accurately distinguish (1906), §14, n. 3. The conditional fee the modifications of the fee. was the first attempt at a settlement: 7 Challis, Real Prop., 2 ed. (1892), Lewis, Perp., (1843), pp. 28, 29. Chap. 18, p. 224; Pollock & Maitland’s 5 Pollock & Maitland’s Hist. Eng. Hist. Eng. Law, Vol. 2., 1 ed, p. 14, Law, 1 ed. and 2 ed., Vol. 2, p. 13. 14 _ ESTATES TAIL [23] Estates Tail 23. Conditional fees were turned into estates tail by the provisions of the Statute De Donis.? The statute in effect provided that the estate should descend as specified in the gilt. An estate tail was, therefore, a fee simple conditional modified by the Statute De Donis.’? No conditional fee, therefore, has been created since the thirteenth century: hence, the term conditional fee is entirely out of place in describ- ing any limitation in modern times.’ The estate tail continued in the descent designated, it could not be aliened by the tenant in tail, and the remainders limited after it were indestructible. This state of affairs did not long continue. By various decisions of the courts, and with the help of several statutes, the estate tail became alienable, and the reversions and remainders limited after it became destructible. A tenant in tail was permitted, by a cumbersome process known as a common recovery, to turn his estate tail into a fee,* and bar the issue in tail and remainders. The Statute De Donis is in force in Pennsylvania.* No conditional fee, therefore, has ever ex- isted in Pennsylvania, and estates tail were introduced into Pennsylvania as part of the common law, and were barrable by a common recovery.” Common recoveries fell into disuse after the Act of January 16, 1799, which provided that an entailed estate could be barred by deed duly recorded.? By the Act of April 27, 1855,° it was provided that any gift, conveyance or devise which, under existing laws, would create an estate tail, should be construed to create an estate in fee. Since this Act, estates tail have ceased to ‘be of practical importance 913 Edward I., C. 1. (1285) commonly known as the Statute of Westmin. II. 10 Challis, Real Prop., 2 ed. (1892), Chap. 20, p. 259. 1 The phrase, however, is occasionally misused by the judges: see §§28, 29. 2 Gray, Rule Perp., 2 ed. (1906), $19. 3 For discussion of a common recovery, see Lewis, Perp., (1843), Chap. III, “of the unfettering of entails;’’ Mitchell, Real Est. & Convey. in Pa. (1890), p. 109, u. 4 Report of the Judges, 3 Binney, 595 at 603 (1808). 5 Act of Jan. 27, 1750; 1 Smith’s Laws, 203, §1; Dunwoodie v. Reed, 3 8S. & R. 4388 (1817). °3 Smith’s Laws, 338, §1. 7¥or an instance of such a deed, see Hichelberger v. Barnitz, 9 Watts, 447 (1840), and for a recent case of « deed barring an old entailed estate, see Coch- ran v. Cochran, 127 Pa. 486 (1889). SP. L. 368, §1; see Pepper & Lewis’s Digest, title “Estates Tail,” Vol. 1, Col. 1877, et seq. A judicial sale of an estate tail or a decree in partition will operate as u common recovery under the Act of April 15, 1859, P. L. 670, §1. See Curtis v. Longstreth, 44 Pa. 297 (1863). [24, 25] BASE FEE 15 in Pennsylvania.? The Act in turning the estate tail into a fee, does not displace the remainder, which may be limited thereon. It can take effect as an executory devise.’ Act of 1855 Adiswnderstood by the Supreme Court 24. There were two cases which might arise at common law: (1) where there was a gift of a life estate followed by words importing an indefinite failure of issue, which sometimes had the effect of enlarging the life estate to an estate tail; (2) the gift of a fee followed by words importing an indefinite failure of issue, which sometimes had the effect of reducing the fee to an estate tail. Where the words imported a definite failure of issue within a life in being, the life estate was not enlarged and the fee not reduced.' Yet in Nicholson v. Bettle,? where there was a gift of a fee with words which were construed to import a limitation over on a definite failure of issue in the first taker, Strong, J., in the Supreme Court, seemed to think it necessary to apply the Act of 1855, and to say that the supposed estate tail was turned into a fee simple. At common law, without the Act, the result would have been the same, as there was no fee tail at all. The ultimate limitation was valid as an executory devise, because being limited after the definite failure of issue at the death of the first taker of the fee, it must take effect within the period prescribed by the rule against perpetuities.* Base Fee 25. A base fee is a fee descendible to the heirs general upon which subsists a remainder or reversion in fee simple. "The Act does not apply to estates tail created by the will of a testator dying before the passage of the Act, but does apply to an estate created by will dated before the Act, where the testator has died after the Act; Rein- hart v. Lantz, 37 Pa. 488 (1860). For other cases of estates tail created before the Act, see Price v. Taylor, 28 Pa. 95 (1857); Morris v. Fisher, 8 D. R. 161 (1899); Kinsel v. Ramey, 87 Pa. 248 (1878); Titzell v. Cochran, 7 Sad. Cases, 15 (1887). An estate tail descends in Pennsylvania as at common law; Guthrie’s App., 37 Pa. 9 (1860), appa- rently overruling some earlier cases to the contrary. 10 Nicholson v. Bettle, 57 Pa. 384 (1868). The remarks of the court in this case, that the Act of 1835 remits us to the common law before the Stat- ute De Donis, seem to be open to objection. If it did, the grantee could not alienate before he had heritable issue born, and nobody ever contended that such was the law in Pennsylvania. 1 Lewis, Perp., (1843), pp. 187, 188. 257 Pa. 384 (1868). 3 See §336, post, as to gift on death with- out issue. 16 QUALIFIED FEB [—25, 26] As no fee descendible to the heirs general which arises by mere limitation can have subsisting upon it any remainder or reversion, a base fee can only arise by the conversion of a fee tail into a fee descendible to the heirs general by some method which does not destroy the remainder or reversion properly subsisting on the fee tail* A base fee cannot exist in Pennsylvania today except by a conveyance by the tenant of an old estate tail. It seems that under the decision in Nicholson v. Bettle,> the Act of April 27, 1855,° does not have the effect of turning an estate tail into a base fee. No case of a base fee has been found in Pennsylvania, and it is not likely that such a case has ever existed. The term base fee has been improperly used.’ Qualified Fee 26. A qualified fee simple was a fee limited to a man and the heirs of any ancestor in the paternal line whose heir he was.® Mr. Challis® says that the rare occurrence of this species of estate, if it ever has actually occurred, has prevented it from receiving much notice. It is not worth while, therefore, to spend much time on so hypothetical a subject. The phrase qualified fee has, however, been used inaccurately in Penn- sylvania.*° It has been said™ that in the case where the court recognizes the validity of an executory devise, there is a quali- fied fee simple, as it is the very essence of such an executory devise to reduce the estate upon which it is limited from an absolute fee simple to a qualified fee simple. The notion is without weight. There is nothing in the definition or idea of a qualified fee simple to sustain the remark. Furthermore, as 4 Challis, Real Prop., 2 ed. (1892), Chap. 22, p. 297. 557 Pa. 384 (1868), see §24, ante. ®P. L. 368, §1, see §23, ante. 7See Slegel v. Lauer, 148 Pa. 236 (1892). Reporter in the head line to the syllabus in Evangelical Luth. Church v. Township, 35 Pa. C. C. 348 (1908); there is nothing in the opinion of the court to sustain this notion of the reporter. ® Challis, Real Prop., 2 ed. (1892), p. 241. * Challis, Real Prop., 2 ed. (1892), p. 244. 10 See §28, post. Mr. Edward Brooks, Jr., 32 Amer. Law Reg., N.S. 1044 (1893); Mr. Henry Budd in note to 2 Sharswood & Budd’s Leading Cases, 482; per Master in the court below in Fisher v. Wister, 154 Pa. 65 at 71 (1893); called a conditional fee by Woodward, P. J., in the court below in Barnet v. Deturk, 43 Pa. 92 at 94 (1862); Gordon, J., in Wentz’s App., 106 Pa. 301 at 308, 309 (1884). ¥ [27] DETERMINABLE FEE 17 one of the well admitted peculiarities of the executory devise lies in the circumstance that it can take effect after an abso- lute fee simple, there seems to be some confusion in thought in saying that the effect of the executory devise is to reduce the quantum of the feet An executory devise operates to transfer or defeat the fee, not to reduce or qualify it. Determinable Fee 27. A determinable fee is where a fee simple estate is limited to the grantee and his heirs until the happening of some future event which may never happen at all. It is clear that the time of the termination of the estate must be uncertain. A limitation to a grantee and his heirs until the happening of an event which is sure to happen, does not create a fee simple at all. A learned writer* divides deter- minable fees into two classes: (1) where the fee is to last until a specified contingency shall happen, the contingency being such that it may never happen; (2) where the estate is to last so long as an existing state of things shall endure, the state of affairs being such that it may endure forever. Deter- minable fees may be created in Pennsylvania. A list of the determinable fees which have arisen in Pennsylvania is given in the note.2 Mr. Gray says that determinable fees are invalid 1See Gray, Rule Perp., 2 ed. (1906), §32. ? Challis, Real Prop., 2 ed., Chap. 17, p. 224. 3The language, therefore, of the re- porter in the first paragraph of the syllabus in Methodist Church v. Public Grounds Co., 103 Pa. 603 (1883), in which he speaks of a determinate fee is clearly incorrect and unsupported by any respectable authority. For a proper use of the word, see Pollock & Maitland, History of English Law, Vol. 2, 1 and 2 ed., p. 111. The word determin- ate means fixed, certain. ‘ 4Challis, Real Prop., 2 ed. (1892), p. 225. 5 Conveyance of a certain mill dam and pond of water &c., “to and for the use and service of a certain mill with the land thereto belonging, and for no other use whatsoever:’”’ Scheetz v. Fitzwater, 5 Pa. 126 (1847). Grant in fee for “‘ the use and purpose of a certain railroad and no other use whatsoever: Penna. R. R. Co. v. Parke, 42 Pa. 31 (1862). “For the use of a certain church and no longer and then to revert back: Henderson v. Hunter, 59 Pa. 335 (1868). See Gum- bert’s App., 110 Pa. 496 (1885) and Saxton v. Mitchell, 78 Pa. 479 (1875). See also remarks of Rogers, J., in Union Canal Co. v. Young, 1 Whart., 410 at 427, 428, (1836), and Kerlin v. Campbell, 15 Pa. 500 at 506 (1851). Grant to a school-board provided that ‘‘in case the school law now in existence should be abolished and the public school should cease to exist,’ the land should revert: Courtney v. Kel- ler, 4 Penny. 38 (1884). Grant to 18 CONFUSION IN TERMINOLOGY [28] in England since the passage of the Statute of Quia Emptores.* Mr. Challis? reaches a contrary conclusion.2 The tenant of the determinable fee may alienate or will his estate, and it will descend to his heirs, subject in all these cases to be deter- mined by the qualifications annexed to the grant.° Conjusion in Terminology as to Modified Fees in Pennsylvania 28. While the distinction between these different kinds of fees is clear and easily understood, the language of the judges in Pennsylvania has been loose and inaccurate.’ It is to be observed, however, that the language of the older text writers county commissioners of a tract of land adjoining the county jail “for an open yard,” so that the same “ be and remain forever hereafter unbuilt on, in order to prevent any prisoner or prisoners making their escape over the said prison wall by reason or means of any building to be erected contiguous to the same wall:” Slegel v. Lauer, 148 Pa. 236 (1892). A devise by a testator to his wife ‘“ and her heirs and assigns forever so long as she remains my widow,” creates a deter- minable fee, erroneously called a condi- tional estate: Scott v. Murray, 218 Pa. 186 (1907): case arose on a question over the title derived from the widow who died without having remarried. This case does not sustain the validity of the clause, upon which latter point there is probably some doubt. Grant to a railroad company “so long as” the grantee “shall use and occupy the same as a pas- senger depot and offices: Young »v. Oviatt, 35 Super. Ct. 603 (1908). The case put by Mr. Challis, Real Prop., 2 ed. (1892), p. 230, “‘till the marriage of a person shall take place,” is probably used in practice in Pennsylvania, but has not come before the court. ® Gray, Rule Perp., 2 ed. (1906), §32. 7Challis, Real Prop., 2 ed. (1892), Appendix IV, p. 398 8 or list of English determinable fees, see Challis, Real Prop., 2 ed. (1892), p. 228, et seq. See also Mr. Preston’s list quoted in Mitchell, Real Est. & Conv. in Pa. (1890), at p. 100. ®The question as to how far cour- tesy and dower are incident to deter- minable fees, does not seem to have arisen in Pennsylvania. For a dis- cussion of the question, see Gray, Rule Perp., 2 ed. (1905), §14, n. 3. 10 Determinable fee called a qualified fee by Krause, P. J., in the court below, in Scheetz v. Fitzwater, 5 Pa. 126 at 128 (1847), and a base fee by the reporter in the second paragraph of the syllabus. Determinable fee called a base or quali- fied fee, it could not be either of these, by Endlich, J., in the court below, in Slegel v. Lauer, 148 Pa. 236 at 241 (1892). See also language of Mercur, J., ia Methodist Church »v. Public Grounds Co., 103 Pa. 608 at 615 (1883); Rogers J., in Union Canal Co. v. Young, 1 Whart. 410 at 427-428 (1836); Kerlin v. Campbell, 15 Pa. 500, per curiam opinion at 506 (1851). Determinable fee called a conditional estate by Bouton, P. J., in the court below, in Young v. Oviatt, 35 Super. Ct. 603 at 605 (1908), and a base fee by the reporter in the syllabus of the same case. [29, 30—] TITLE ACQUIRED IN EMINENT DOMAIN 19 on the subject is just as confusing.'' The Supreme Court, if the case should come before it again, can do no better than follow the accurate distinctions pointed out by Mr. Challis. Title Acquired in Eminent Domain 29. The title acquired by a railroad company under con- demnation proceedings in eminent domain, was called a base or conditional fee by Mitchell, J., in Railroad Co. v. Paper Mills Co.1 It is true that the land does revert to the former owner when the use ceases.” This reversion appears to exist under the statutes relating to eminent domain, and does not arise out of a grant. The application of the technical term of the common law to the case, seems to be somewhat con- fusing. If the estate is to have any such name, the phrase determinable fee is the only one which seems possible. The application of the term base or conditional fee seems very questionable. Summary as to Modified Fees 30. It will thus appear that an attempt was made at the early common law to tie up property by creating inalienable conditional fees. This device was rendered useless by the decision of the judges.* Recourse was then had to the legis- lature, and the conditional fee was turned into an estate tail. The evil results of this estate were soon removed by the decisions of the courts, and the estate itself was abolished in Pennsylvania in 1855.° The base fee seems to be a _neces- sary evolution of the estate tail, and to fall with it.6 A "The confusion in the language of Kent and Blackstone is pointed out by Mr. J. M. Zane in an article in 17 Harv. Law Rev., 297 at 300 (1904), and the confusing language of Lord Coke is pointed out in Challis, Real Prop., 2 ed. (1892), pp. 52, 53. 1149 Pa. 18 at 20 (1892), quoted by Paxson, C. J., in Rwy. Co. v. Peet, 152 Pa. 488 at 492 (1893), and McCarthy, J., in Speese v. Railroad Co., 23 Pa. C. C. 17 at 19 (1899). The same remark has been applied to the title acquired by a municipal corporation under emi- nent domain; see Sterrett, C. J., in Reading v. Davis, 153 Pa. 360 at 365 (1893); Green, J., in Phila. v. Ward, 174 Pa. 45 at 49 (1896). 2See Lance’s App., 55 Pa. 16 (1867). 3A determinable fee may exist where the owner of the property makes a grant to the railroad company, for a case of which see Railroad Co. v. Parke, 42 Pa. 31 (1862); Young v. Oviatt, 35 Super. Ct. 603 (1908). 4See §22, ante. 5 See §23, ante. ® See §25, ante. 20 SUMMARY AS TO MODIFIED FEES [—30] qualified fee has probably never existed in Pennsylvania, and furnishes a fit topic only for academic discussion.’ The determinable fee still remains in Pennsylvania and is freely alienable.* The only objection to the determinable fee lies in the circumstance that the possibility of reverter may take eflect at a period beyond that prescribed by the rule against perpetuities.° 7See §26, ante. 2 As to this point see §368, post. ® See §27, ante. (21) CHAPTER 3 FUTURE LEGAL INTERESTS IN REAL PROPERTY PRELIMINARY Definition of afuture interest. ........... 0.00... c eee eee eee § 35 Early common law theory of future interests............... § 36 REVETSION 6 9 AU EN ERE om dle A Ried gO as Res § 37 VESTED REMAINDERS Origin of vested remainders............. 0000 c eee eee eee § 38 Seisitiian va yee kee oceans Oe RR Ce eee ew amend at Saath at § 39 Characteristics of a vested remainder....................... § 40 Vested remainder a quasi future interest....................- § 41 Definition of a vested remainder........................00. § 42 Pepper & Lewis’s definition of a vested remainder........... § 43 Attributes of a vested remainder....................000005. § 44 Remainders subject to a term of years...................... § 45 Conditions subsequent and vested remainders................ § 46 Remainders after an estate tail.............. 0.0.0. c eee eee § 47 CoNTINGENT REMAINDERS: ORIGIN AND NATURE Origin of contingent remainders.....................-.0000 0s § 48 Contingent remainders valid.............. 0.2000 cece cece eee § 49 Definition of a contingent remainder......................... § 50 Attributes of a contingent remainder at common law......... § 51 Attributes of a contingent remainder in Pennsylvania......... § 52 Contingent remainders in Pennsylvania................000000 § 53 ConTINGENT REMAINDERS: DeEsTRUCTIBILITY Preliminary discussion........... 000000000 e cece cee eee eee § 54 FROTIEIGUEE S sJsp Fics Oa abies Soda a eee Sees etd avarice Set eee § 55 DUITENCE! ee cenhak eudciinte ae aR eid Amati Danes da Deepa ctavnes § 56 Tortious alienation............0..0 0.0.0 cece cece eee ..... § 58 Innocent conveyance (Pennsylvania Deed)................... § 59 Turning into a right of action..............0......0. cee eee § 60 Natural termination of the preceding estate................. § 61 Summary of law in Pennsylvania as to destructibility of con- tingent remainders..............0. 0c eect eee ences § 62 DistincTion BETWEEN VESTED AND CONTINGENT REMAINDERS Distinction stated by the author.......................2... § 63 Mr. Gray’s distinction.............0cccceeee cence eee e cerns § 64 Obliteration of the distinction....... si cviad tornetlateesttaiseh each Stee Md § 65 Remainder to the unborn child of an unborn person......... § 66 REMAINDERS TO A CuaAss Preliminary discussion........... 0.0.0... c cece eee eee eee ee § 67 Mr. Gray’s view of remainders to a class...............-... § 68 Author’s view of remainders to a class. ..................4-. § 69 Conditions annexed to remainders to a class................. § 71 PossiBitiry oF REVERTER Definition of a possibility of reverter...................05. § 72 Validity of a possibility of reverter......................... § 73 Possibility of reverter in Pennsylvania....................... § 74 Attributes of a possibility of reverter ...................... § 75 Ricut or Entry ror Conpirion BRrokEN Definition of right of entry for condition broken............ § 76 Distinction between possibility of reverter and right of entry for condition broken................ 000.00 cece eee eee eee § 77 Executory Drvisr Origin and definition..............0..00.0000 0000 c eee eee eee § 78 Attributes of an executory devise.......................000. § 79 Distinction between a contingent remainder and an executory CEVISE ois shoes dos BaGeemena Weg lye Weddle eV arnt CAA an eine § 80 IntTERESTS ARISING BY OPERATION oF Law AND BY CONTRACT Escheat, dower and curtesy............00 0.0.0.0 c cece eee eee § 81 Rights in the land of another....................0...0..0...., § 82 Rights arising by contract....................0000..00.0000, § 83 SUMMARY ccs canis sat ev CS SH CGS eh bald aera Gia Sad te wea § 84 [35-37] REVERSION 23 Definition of a Future Interest 35. The logical conception of a future interest is that of an interest which is to arise at some time in the future as distinguished from an interest which exists at the present time, and the conception admits of a distinction between those interests which are certain to arise, and those which are uncertain to arise. Remainders were the only future in- terests in real property which were known to the common law. They did not, however, owing to certain doctrines of the early common law, square with the logical conception of a future interest. The common law forced them into a tech- nical and artificial mold which has remained until this day. To understand this matter, it will be necessary to trace the origin of remainders and point out the doctrines which gov- erned their creation at the early common law.’ Early Common Law Theory of Future Interests 36. The feudal law appears to have evolved no conception of a future interest. All ownership in land, whatever its nature, was present ownership or holding. All grants of land were grants for life, and when the heirs were added the notion was that the heirs of the grantee took by substitution in his place and not by way of succession. Reversion 87. A reversion was the estate or interest which was left in the feoffor after he made the grant for life? The land, as it was said, came back to the feoffor after the termina- tion of the life estate. The reversion always arose by impli- cation of law on a grant inter vivos, and consequently could 1The nature of future interests has been the subject of considerable recent discussion: see article by Mr. Kales, “Several Problems of Gray’s Rule Against Perpetuities, Second Edition,” 20 Harv. Law Rev., 192 (1907); “Future Interests in Land,” 22 Law Quar. Rev., 250, 383 (1906), and criticism thereon in 20 Harv. Law Rev., 243 (1907); Article “Future Interests in Land” by Edward Jenks, 20 Law Quar. Rev., 280 (1904); Article of Mr. Kales, 24 Law Quar. Rev., 301, 305. ? Challis, Real Property, 2 ed. (1892), p. 68. Not the same as the reversion existing after a term of years: Challis, ubi supra, p. 70. The relation existing between landlord and tenant, is not feudal. This distinction is not taken in Pennsylvania, and seems unnecessary for practical purposes in modern law. 24 VESTED REMAINDERS [—37-39—] not be created by deed. It has always been considered as having all the incidents of a fee, being devisable, assignable and heritable. Reversions exist in Pennsylvania today and are governed by the same rule as at common law. Grants for life are rare in modern times, and reversions, therefore, are of infrequent occurrence. In the case of a will, where there is a gift of a definite estate with a residuary clause, the residuary gift will be a reversion. A reversion is devisable, and there seems to be no objection to permitting it to be devised by the same will upon which it arises. In the similar case of a deed, the grant of the purported reversion is a disposition of the balance of the fee, and must take effect as a remainder. This point, perhaps, is not of much practical importance. Origin of Vested Remainders 38. It was therefore said that when the feoffor limited an estate in another person after the life estate, he directed where the land should remain after that termination instead of com- ing back to him.* This interest was consequently called a remainder. It was the interest substituted for the reversion. The first life estate created by the feoffment was called the particular estate;> and the estates limited thereafter, whether for life, in tail, or in fee, were called the remainders. When the particular estate and remainders together made up the fee, there could be nothing else limited thereafter. There could not be a remainder after a fee. There are certain pecul- iar characteristics of a vested remainder which can only be understood by considering the common law doctrine relating to seisin. Seisin 39. Seisin meant possession, fact. The land was immovable, and was an always existing and consequently seisin could 3 Houston, J., in McCay v. Hughes, 6 Watts, 345 at 348 (1837); Kennedy, J., in Brown v. Boyd, 9 W. & 8. 123 at 128 (1845); Lowrie, J., in Leah Pass- more’s Administrators’ App., 23 Pa. 381 at 382 (1854); Gray, Rule Perp., 2 ed. (1906), §113a. * Pollock & Maitland, Hist. of English Law, Vol. 2, 1 ed. and 2 ed., p. 21. 5Mr. Lewis, Lewis, Perp., p. 410, (1843), says that he is unable to find any authority for the opinion that the par- ticular estate meant first estate limited. Mr. Gray, Rule Perp., 2 ed. (1906), §8, says that the first life estate is called the particular estate. °When the whole fee was limited, but there was a possibility that it might not last forever, there was said to be a possibility of reverter. See §72, post. [—39, 40] VESTED REMAINDERS 25 be acquired only by coming into a certain relation with the land, and could be gotten rid of only by a corresponding exit from that relation. A chattel could be thrown away and the possession lost. In the case of land, the owner could get rid of the seisin only by transfer to another, death, or disseisin. He could not bury the seisin in the ground or hang it on a tree. He could, therefore, do no act by which the seisin would be in abeyance, not because of any principle of the feudal law, but because the nature of the seisin itself did not admit of any such disposition.’ The doctrines relating to seisin, while they existed in feudal times, are not neces- sarily feudal. The feudal system could just as well have existed as it did with some other theory of possession in force. The theory adopted was, more properly speaking, a fundamental legal conception which was entertained by the lawyers at that time, and which worked its way into the feudal system. When a feoffment was made, according to the common law, the feoffor distributed the seisin, or such part of it as he chose to dispose of, among the feoffees designated, and the whole seisin or possession was conceived of as existing at any particular moment’ of time parceled out among the various owners. It necessarily followed that no one could be a grantee or take any part of the ownership unless he was present at the time of the feoffment and had part of the seisin or possession delivered to him. The remainderman was one of the feoffees. Characteristics of a Vested Remainder 40. A vested remainder, therefore, was always limited directly and immediately to a specified person, and could not be subject to a condition precedent. If there was a condition precedent, the seisin could not be immediately disposed of. For the same reason, @ remainder could not be limited to begin in futuro. Tt is also to be noted, although the explanation is somewhat different, that a remainder was a freehold estate, and could only be limited after a freehold estate; or, as it is said, must be supported by a freehold estate. These principles of the com- 7 The reason ascribed in modern times, that there must always be some one to render the services due the lord of the fee, does not, it is believed, touch the real root of the matter. This reason is further weakened when it is remembered that each lord could distrain directly on the occupant of the land for the ser- vices due him, and no arrangement or hiatus in the feudal chain below him could affect his right. 26 VESTED REMAINDERS [41, 42] mon law have survived to modern times, and a vested remainder has today the same characteristics as it had in the thirteenth century. The common statement is that the remainder is lim- ited to take effect immediately upon the termination of the preceding particular estate. While this is, perhaps, an accurate description of the language used, it puts the matter more clearly to say that the remainder is directly limited subject to the preceding particular estate. Vesied Remainder a Quasi Fulure Interest 41. A vested remainder is, in fact, a future interest, because a remainderman does not have the use and enjoyment of the property until the termination of the preceding particular estate. It is in theory a present interest, for reasons which have already been discussed. It is vested in interest, but the enjoyment is postponed. It may with propriety be called a quasi future interest. The peculiarity of a vested remainder lies in the circumstance that it may vest in interest before it vests in possession, while other future interests vest in interest and possession simultaneously. The latter are true future estates. The vested remainder is a relic of the struggle to evolve the theory of a future interest out of the hard and fast doctrines of the early common law. Definition of a Vested Remainder 42. A vested remainder, therefore, may be defined as a freehold interest in real estate directly limited to an ascer- tained person, subject to a prior estate or estates of freehold less than a fee, created by the same instrument in the same property.* Since estates tail are obsolete in Pennsylvania, we may for the purposes of Pennsylvania law, reduce the definition to its lowest terms, and say that a vested remainder is an estate for life or in fee in real property, directly limited to an 8 A remainder is an estate limited to (1890). ‘The event which terminates commence after the determination of a the particular estate must be an event particular estate previously limited by implied in the character of the estate the same deed or instrument out of the itself, and not an external contingency:” same subject of property: 1. Preston’s Edward Jenks, 20 Law Quar. Rev., 281 Est., 90; see language of Clark, J., in (1904). Lawrence’s Est., 136 Pa. 354 at 366 [43] VESTED REMAINDERS 27 ascertained person subject to a preceding life estate or series of life estates in the same property created by the same instrument. Pepper & Lewis's Definition of a Vested Remainder 43. The learned editors of Pepper & Lewis’s Digest of Decisions, title Remainders,® offer the following definition of a vested remainder: “A vested remainder may be defined as an estate in real or personal property which will necessarily take effect in possession upon the termination of a precedent estate created by the same instrument, and which is subject to no other contingency than the termination of the precedent estate; and it is immaterial that the remainderman will not necessarily be in esse when the precedent estate ends, since the certainty of his actual possession of the property in the future is not a pre-requisite to the immediate vesting of the remainder in interest.” To this definition, there are several serious objections. (1) It assumes the disputed point whether there can be a remainder in personal property.’? (2) The notion that it must necessarily take effect in possession upon termination of the precedent estate is clearly erroneous. Thus, suppose a devise to A. for life, then to B. for life, then to C. in fee. In this case the life estate of B. is vested, although since he may die before the death of A. it may never take effect in possession. (3) The suggestion that “it is immaterial that the remainderman will not necessarily be in esse when the prece- dent estate ends’ is difficult to understand. The learned editors perhaps meant by this phrase that if the remainder in fee is vested it is immaterial if the remainderman dies during the continuance of the precedent estate, as in such case his heirs will take. This is the law, but if they meant it, they should have said so. Even thus qualified, the remark applies only to a remainder in fee, and not to a remainder for life. (4) The last part of the definition, ‘‘since the cer- tainty of his actual possession is not a pre-requisite to the immediate vesting,’ is more accurate but totally inconsistent with the first part of the definition, which says that the remainder must necessarily take effect in possession upon the termination of the precedent estate. ® Column 30294. 1 See §§95, 95, 97, as to future inter- ests in personal property. 28 VESTED REMAINDERS [44-46—] Altribules of a Vested Remainder 44. A vested remainder has always been freely alienable, descends to heirs, and is devisable, the same as a fee or a reversion, and the same principle, without doubt, obtains in Pennsylvania today." Cases of vested legal remainders, except where there is a remainder to a class, are very rare in modern times owing to the increasing use of equitable limitations. Remainders Subject to a Term oj Years 45. The tenant for years was not seised.' Consequently when the seisin was distributed at the time of the feoffment, an at- tempt to give any part of the same to a lessee was nugatory, and any attempt to give the seisin to the remainderman after the expiration of the term, was unavailing as an attempt to create a freehold to begin in futuro. In order that the remain- der might not fail, the courts construed words importing a gift of the remainder after the term as an immediate gift of the freehold subject to a term of years.* All terms were originally short, and the long terms were introduced after the rule be- came fixed. The error, therefore, if any, was not in allowing such a construction of the gift, but in permitting terms of undue length.* A limitation of this kind was before the court of Common Pleas of Philadelphia County, in Morris v. Fisher.* Sulzberger, J., in delivering the opinion of the court, admitted that the law in England was as stated, and then came to the conclusion that the law in Pennsylvania was otherwise, on grounds which are not easy to understand. This was a case of a gift of an estate tail subject to a term of ninety-nine years.® No other case on the point has been-found in Pennsylvania. Conditions Subsequent and Vested Remainders 48. A condition subsequent did not affect the quality of the remainder as a vested remainder, because the condition Ys devisable: Commonwealth v. after a term of years, is pointed out by Hackett, 102 Pa. 505 (1883). No other Mr. Challis, Real Prop., 2 ed. (1892), case has been found. p. 70. 1See §88, post. 48 D. R. 161 (1899). 2 Challis, Real Prop., 2 ed. (1892), 5 For further criticism of the case, pp. 89, 90. see §363, post. 3 The ambiguous nature of the interest [—46] VESTED REMAINDERS 29 would not affect the immediate grant by the feoffor to the remainderman. Indeed, the condition subsequent could not operate unless there had been a previous vesting. If the con- dition subsequent happened, it was said to divest the remain- der, and if the condition was uncertain or might happen before the termination of the preceding estate, it would necessarily follow that the remainder might never vest in possession.® A vested remainder, therefore, partook of the nature of both kinds of future interests—those which were sure to arise, and those which might never arise. The court will, however, whenever possible, construe a condition as a condition subse- quent or as annexed to other estates. This is a rule of con- struction supposed to be founded on the alleged partiality of the law for vested rather than contingent remainders. There is room to surmise that this is not the real reason. This point will not be further pursued, as rules of construction will, so far as possible, be avoided. A few examples of the application of the rule in Pennsylvania are given in the note,” and it may be remarked, before leaving the subject, that a large part of the cases on vested remainders arise over the application of this rule of construction. There is, first, the principle of law that a condition subsequent does not make a remainder less vested, then the principle of construction, which turns every condition into a condition subsequent whenever possible. ° For a further discussion of this point, see §63, n. 2, post. 7A devise to A. for life, and if he leaves lawful issue, to such issue, and if he dies without issue or they die under 21 without lawful issue, then to B. and his heirs and assigns, on condition that he pay three hundred pounds to a hos- pital three months after the death of A.; held, an estate tail in A., with a vested remainder in B.; Evans v. Davis, 1 Yeates, 332 (1794); Shippen, J., at 341 said that the condition as to payment was a charge, particularly as it was payable after the death of A. To A. for life, and to his heirs, if he have any, and if he does not have any heirs, then to his grandchildren, B., C. and D.; A. took a fee tail; B., C. and D. took vested remainders; Bassett v. Hawk, 118 Pa. 94 (1888). To A. for life, and at her death, to testator’s son, provided he shall “re- main with my wife and myself until our decease,”’ and provided also, that he shall pay certain sums to testator’s other chil- dren upon certain contingencies; vested remainder in the son; McCall v. McCall, 161 Pa. 412 (1894). So also where there is a power of appointment and a remain- der in default of appointment, the exercise of the power is construed as a condition subsequent and the remainders are vested; Gray, Rule Perp., 2 ed. (1906), §112; Challis, Real Prop., 2 ed. (1892), p. 65, semble; Freeman’s Est., No. 1, 35 Super. Ct. 185 (1908). 30 VESTED REMAINDERS. CONTINGENT REMAINDERS [47, 48] Remainders After an Estate Tail 47. A remainder after an estate tail, not subject to any condition precedent, was, of course, vested. When such re- mainders could be barred by the destruction of the estate tail, the contingency of the tenant in tail not suffering a recovery or levying a fine was considered as a condition sub- sequent and the remainders were still regarded as vested.* As the estate tail is obsolete in Pennsylvania,® these remainders are likely to be of infrequent occurrence. Vested remainders after an estate tail, when it is turned into a fee, become executory devises..° As a case of an old estate tail may arise, it is perhaps worth noting that a limitation over after indefinite failure of issue after a previous life estate or a fee, was construed as an estate tail. This was a rule of construc- tion adopted in order that the limitation over could take effect.?, Consequently, the limitation which would otherwise be void as an executory devise was valid as a vested remain- der.2 The dictum contra of Woodward, J., in Vaughan v. Dickes,* is inexplicable. Origin of Contingent Remainders 48. Where, however, the remainder was subject to a condi- tion precedent, the case was different: It could not be said to vest immediately in anyone, because it could not vest until the condition happened. It could not, therefore, fulfill the feudal notion of substitution for the reversion, nor could it partake of the seisin distributed by the feoffor at the time 8 Gray, Rule Perp., 2 ed. (1906), §111; Eichelberger v. Barnitz, 9 Watts, 447, Sergeant, J. at 450 (1840), semble; Lapsley v. Lapsley, 9 Pa. 130 (1848), vested remainders after an estate tail were barred by a common recovery in Pennsylvania and by a deed under the Act of January 16, 1799. Eichel- berger v. Barnitz, 9 Watts, 447 (1840); Vaughan v. Dickes, 20 Pa. 509 (1858). *See §23, ante. 10 For instances of a vested remainder after an estate tail, see Clark v. Baker. 3 8. & R. 470 (1817), and Irvin v. Dun- woody, 178. & R. 61 (1827). ? Lewis, Perp., (1843), pp.177,178. It is to be observed, however, that the failure may be in issue of the devisee taking an estate capable of being enlarged or di- minished, or may be failure in the issue of a third party. There is, of course, no room for implication of an estate tail except in the first instance. Sce Jar- man on Wills, 6th Amer. ed. (1893),Vol. 1, Chap. 17, §6; Lewis, Perp. (1843), pp. 175-177. 3 See remark of Sergeant, J., in Eichel- berger v. Barnitz, 9 Watts, 447 at 450 (1840). 420 Pa. 509 at 514 (1853). [49, 50] CONTINGENT REMAINDERS 31 he made the feoffment. The result was the same whether the condition was sure to happen or might never happen. A remainder subject to a condition precedent was therefore utterly void at the early common law. The history of con- tingent remainders is involved in great obscurity, and many interesting points yet remain to be cleared up. Contingent Remainders Valid 49. The validity of remainders subject to a condition pre- cedent, was finally allowed® when the contingency happened before or at the termination of the preceding estate. The contingent remainderman was then entitled to the remedy of a vested remainderman, the remainder becoming vested. The difficulty consisted in giving the remainderman any seisin when the contingency happened. He was not present at the feoff- ment; how, then, could he acquire any seisin? The difficulty was gotten over by the fiction of a constructive seisin, by the notion that a seisin sprang from another part of the fee to sustain the remainder, when the event happened. If the con- tingency happened after the termination of the preceding estate, the contingent remainder could never take effect.® Definition of a Contingent Remainder 50. A contingent remainder, therefore, was a remainder 7 subject to a condition precedent, which condition might be (1) the ascertainment of a person; (2) the happening of an event other than the regular termination of the preceding estate.® >Date uncertain. Digby, Hist. Law Real Prop., 5 ed., (1897), p. 265, says by the reign of Edward II1., middle of 14th Cent.; Williams on Real Prop., 6 Amer. ed. (1886), p. 263, says by the end of the 15th Century. Earliest form appears to have been to A. for life, and then to the heirs of B. Digby, ubi supra. p. 266. ® For further discussion of this point, see §§54-62, on destructibility of con- tingent remainders. 7Mr. Fearne’s definition is as follows: . Remainders, p. 3: “A contingent remain- der is a remainder limited so as to depend on an event or condition which may never happen or be performed, or which may not happen or be performed till after the determination of the preceding estate, for if the preceding estate determ‘ne before such event or condition happens, the remainder will never take effect.” § This is the classification suggested by Lord Chief Justice Willes, in Smith v. Packhurst, House of Lords, 3 Atk. 135 (1742): (1) where a remainder is limited to a person not in being, and who may possibly never exist; (2) where the remainder depends on a contingency collateral to the continuance of the par- ticular estate. All four classes of Mr. Fearne may be reduced to these two heads. See article Vested and Contingent Interests and the Rule against Perpetui- ties, 56 Univ. of Pa. Law Rev., p. 245 (1908).; Challis, Real Prop., 2 ed. (1892), p. 65. qe lo CONTINGENT REMAINDERS [51-53] Attributes of a Contingent Remainder at Common Law 51. A contingent remainder was nothing in the eye of the law.° It was a mere possibility, and consequently was not transmissible to heirs, and was not alienable inter vivos, nor devisable by will. A contingent remainder was also liable to be destroyed by the destruction or termination of the preceding particular estate before the happening of the condition pre- cedent.?° Attributes of a Contingent Remainder in Pennsylvania 52. Under the law of Pennsylvania, a contingent remainder, before the happening of the contingency, is subject to execu- tion,’ is inheritable when the person who is to take is ascer- tained,” and probably devisable. A contingent remainder is not assignable at law by deed inter vivos, although the deed may operate as an estoppel in equity. Contingent Remainders in Pennsylvania 53. The same principles govern the creation of contingent remainders in Pennsylvania, as obtained at common law. A few examples are given in the note.’ ® Challis, Real Prop., 2 ed. (1892), p. 76. 10 For a discussion of this, see §§54- 62, post. 1 Drake v. Brown, 68 Pa. 223 (1871); see, however, Wilson v. Denig, 166 Pa. 29 (1895). ? Brooke’s Est., 15 D. R. 137 (1905). 3 Stewart v. Neely, 189 Pa. 309 (1890). 4 Remainders to an unascertained per- son. Remainder to the heir male of A. if living at her death. Contingent remainder in the heirs male: Dun- woodie v. Reed, 3 S. & R. 4385 (1817); Challis, Real Prop., 2 ed. (1892), p. 120. To A. for life, then to her only heir during its life; contingent remainder in the heir, as the meaning was, to such person as should be A.’s heir: Bennett v. Morris, 5 Rawle, 9 (1835). Remainders to a class are discussed §§67-71, post. Contingent remainders to an ascertained person subject to a condition precedent. To A. for life, and after his decease, if he shall die leaving lawful issue, to his heirs as tenants in common, and their respective heirs and assigns for- ever, but in case he shall die without leaving lawful issue, then to B. and his heirs; contingent remainder in B.: Stump v. Findlay, 2 Rawle, 168 (1828). To A. for life, and if he have lawful issue, to him in fee, and if he should die without leaving issue, then to testator’s other children in fee, in equal shares; contingent remainder in A.: Waddell v. Rattew, 5 Rawle, 231 (1835); see also Drake v. Brown, 68 Pa. 223 (1871). To a daughter and her husband for life, and if she dies without children, her husband, if he survives her, to have the property (by codicil) in fee, contingent remainder in husband: Fife v. Miller, 165 Pa. 612 (1895). Contingent remain- ders of this class are rare, as in most cases the court will construe, see §46, ante, the condition as a condition subsequent. [54, 55—] DESTRUCTIBILITY OF CONTINGENT REMAINDERS 33 Preliminary Discussion of Destructibility of Contingent Remainders 64. Whenever the preceding particular estate came to an end or was destroyed before the happening of the event, the contin- gent remainder limited thereon was deprived of any opportunity of taking effect, or, as was more commonly though less accurately said, the contingent remainder was destroyed.° The circum- stances mentioned prevented the remainder from existing. It could not be destroyed before it existed. The common state- ment is, however, perhaps sufficiently accurate for practical use, and will be adopted in the discussion which follows. If the event happened before the termination or destruction of the preceding estate, the remainder at once became vested. The destruction or termination of the preceding estate might happen in one of several ways: (1) forfeiture, (2) surrender, (3) merger, (4) tortious alienation, (5) turning to a right of action, (6) natural expiration of the precedent estate.® In England, as well as in some jurisdictions in this country, statutes have been passed saving contingent remainders upon the too early termination or the destruction of the preceding estate.’ There is no such statute in Pennsylvania.* It will therefore be necessary to ascertain how far the destruction of the preceding particular estate will destroy contingent remain- ders limited thereon in Pennsylvania. The subject can be con- veniently discussed under the headings above indicated.® Forfeiture 55. When the tenant of the preceding estate did any act which resulted in forfeiture of his estate, the contingent remain- ders limited thereon were destroyed if the event had not yet happened.’ The cases of forfeiture which could occur at com- mon law are, with the exception of the common recovery,’ obsolete in modern times. There are a few instances, however, 5 Challis, Real Prop., 2 ed. (1892), p. 110. ®It was this liability to destruction of the contingent remainder which led ® Challis, Real Prop., 2 ed. (1892), p. 124. 7Gray, Rule Perp., 2 ed. (1906), §286; Williams, Real Prop., 6th Amer. ed. (1886), p. 278. § See remarks of White, J., in the court below in Stewart v. Neely, 139 Pa. 309 at 311 (1890). to the device of trustees to preserve con- tingent remainders, for a discussion of which see §§159, 160, post. 1 Challis, Real Prop., 2 ed. (1892), p. 124. ? Discussed §23, ante. 34 DESTRUCTIBILITY OF CONTINGENT REMAINDERS — [56, 57] which may occur in Pennsylvania. Forfeiture for treason is limited by the constitution of Pennsylvania,’ to the life of the offender. It is doubtful how far forfeiture of the life estate in such case would destroy the contingent remainders limited thereon.1 Where there is a valid clause of forfeiture attached by a donor to a life estate,® with contingent remainder limited thereon, and the forfeiture takes place, it is appre- hended, although no case has been found, that the contingent remainders will be destroyed. So also alienation in mortmain without license will work a forfeiture,* and probably destroy the contingent remainders limited on the life estate aliened. Surrender 56. Surrender was where the tenant of the precedent estate gave up his estate to the next vested remainderman. This resulted at common law in squeezing out the intervening contingent remainders, if any.” There is no reason why the law should be different in Pennsylvania. The question does not seem to have arisen. Merger 57. Merger was where the next vested estate of inheritance came to the tenant of the preceding estate, which could happen by a conveyance or devise. Merger operated to destroy the contingent remainders limited on the preceding estate.® The law in Pennsylvania appears to be the same.® Where the merger takes place simultaneously with the creation of 3 Art. 1, §19, Const. of 1874. ‘There is a dictum in Evans v. Davis, 1 Yeates, 332 at 341, 342 (1794), that forfeiture of the particular estate for treason destroys the contingent remain- ders limited thereon, which dictum was criticised by Gibson, J., in Lyle v. Rich- ards, 98. & R. 322 at 344 (1823), on the ground that the life estate only was forfeited to the commonwealth, just as it existed in the traitor, and there was no annihilation of the life estate itself. No other case on the point has been found. * As to when such a clause is valid, see §§225-229, post. ® Act of April 26, 1833, P. L. 167, §1. 7Challis, Real Prop., 2 ed. (1892), p. 125. 8 Challis, Real Prop., 2 ed. (1892), p. 125. ®In Bennett v. Morris, 5 Rawle, 9 (1835); Jordan v. McClure, 85 Pa. 495 (1877), it was decided that a merger destroyed the contingent remainders. In Stewart v. Neely, 139 Pa. 309 at 311 (1890), there is a dictum to the contrary, which can have no weight in view of the express previous decisions. on [58, 59] DESTRUCTIBILITY OF CONTINGENT REMAINDERS 3D the preceding estate, as by the application of the rule in Shelly’s case, the contingent remainders were not destroyed,” and the same principle obtains in Pennsylvania.’ It is import- ant to remember that merger arises by operation of the law because of the union of the estates in the same_ person, while surrender is due to the intention of the parties.’ Tortious Alienation 58. Tortious alienation at common law took place by a fine, a feoffment or a common recovery. These assurances could operate to vest a greater estate than that previously owned, and destroyed the estate of the person making the assurance. And where contingent remainders were dependent on that estate, they were in like manner destroyed.* Fines and feoffments are obsolete in Pennsylvania; common recoveries were in frequent use,‘ and it seems that a common recovery had the same effect as at common law, and when suffered by the tenant of the preceding estate, destroyed the contingent remainders limited thereon.° Innocent Conveyance—Pennsylvania Deed 59. Where, however, the conveyance was innocent, it vested in the grantee the same estate which the grantor had, and the contingent remainders limited thereon followed the estate in the hands of the grantee, and could take effect if the contingency 19 Challis, Real Prop., 2 ed. (1892), p. 126. Rawle, 168 (1828), would seem to indicate that he had come to the opposite conclu- 1 Stewart v. Kenower, 7 W. & S. 288 (1844); Eby v. Shank, 196 Pa. 426 (1900). ? Challis, Real Prop., 2 ed. (1892), p. 77. 3 Challis Real Prop., 2 ed. (1892), p. 127. ‘For a history of common recoveries in Pennsylvania and their effect on estates tail, see §23, ante. > Dunwoodie v. Reed, 3S. & R. 435 (1817), Tilghman, C. J., Gibson, J., dis- senting, said that a contingent remainder could not be destroyed by a common recovery, and that there was a difference of opinion among the members of the profession on the point. The language of Gibson, C. J.,in Stump ». Findlay, 2 sion, and was of the opinion that the common recovery would bar the contin- gent remainders. See also language of Clayton, P. J., in Boyer v. Smith, 1 Del. Co., 93 (1880). Deed to bar an entail made under the Act of Assembly, does not destroy the remainder to a class, if it is vested in some members of the class during the continuance of the preceding estate. Some of the remainders were clearly vested when the conveyance was made: Gernet v. Lynn, 31 Pa. 94 (1857); same will as was before the court in Miller v. Lynn, 7 Pa. 443 (1848). The report is not clear as to whether they were all vested at that time. 36 DESTRUCTIBILITY OF CONTINGENT REMAINDERS [60] happened in time. A conveyance by a cestui que use® and a conveyance by lease and release” are innocent. So also a Pennsylvania deed under the Act of 1715,8 does not operate to destroy contingent remainders limited on the particular estate conveyed.° Turning Into a Right of Action 60. If the precedent estate was first turned into a right of entry by the disseisin of the tenant thereof, and that right of entry was turned into a right of action by descent cast on the part of the disseisor, and the latter event took place before the happening of the contingency, the contingent remainders limited on the preceding estate were destroyed.’° It seems that the right of the disseisee in Pennsylvania is a right of action, and further, that the doctrine of descent cast does not obtain.' A contingent remainder, therefore, is not destroyed by an 6 Fearne, Remainders, p. 321. 7 Fearne, Remainders, p. 322. 8 May 28: 1 Sm. L. 94, §5. *Dictum, Gibson, C. J., in Stump »v. Findlay, 2 Rawle, 168 at 175 (1828); Miller v. Lynn, 7 Pa. 443 (1848). It was argued by counsel, however, in Carmichael v. Thompson, 8 Sadler’s Cases, 120 at 126 (1886), that a con- tingent remainder was destroyed by the conveyance of the precedent life estate. The point was not passed on by the court. The argument is probably unsound. The Act of April 18, 1853, §2, P. L. 503, as amended by the Act of June 14, 1897, P. L. 144; amendment passed in consequence of the decision in Keller v. Lees, 176 Pa. 402 (1896), authorizing the sale of land subject to contingent remainders, the proceeds of the sale to take the place of the land, seems to lend strength to the view that the con- veyance of the precedent estate does not destroy the contingent remainder. Mr. Justice Thompson, in Grenawalt’s App., 37 Pa. 95 at 99 (1860), made use of the following language: “It was clearly an object of the statute, which I think clearly appears, that whenever a sale is required of real estate on which are limited contingent interests by way of remainder or executory devise, to sell the entire estate out and out, and substi- tute the proceeds for the realty, after the necessary deductions for expenses and the means applicable to the objects calling for the sale. This would produce clear titles to the land, and give effect to the limita- tions on the fund. In fact, it is a method of clarifying, if I may use the term, titles otherwise clouded with contingent inter- ests.”” See Westhafer v. Koons, 144 Pa. 26 (1891), where the Supreme Court held that the contingent remainders were not barred by the proceedings in question because the requirements of the act had not been complied with. See Smith’s Est., 207 Pa. 604 (1904). Where, how- ever, the conveyance operates as a mer- ger, it will destroy the contingent remain- ders; Bennett v. Morris, 5 Rawle, 9 (1835); see remarks of Porter, J., in Funck’s Est., 16 Super. Ct. 434 at 441 (1901). 10 Challis, Real Prop.,2 ed. (1892), p. 128. 1 Mitchell, Real Est. and Conveyancing in Penna., pp. 265, 266 (1890); Price, Limitations and Liens, Chap. III, pp. 35, 36 (1857). [61, 62] DESTRUCTIBILITY OF CONTINGENT REMAINDERS 37 adverse possession against the tenant of the precedent life estate. The remainder, if it is going to take effect at all, becomes vested at or immediately before the termination of the preceding estate. The right of action or right of entry on the part of the remaindermen, therefore, accrues at that time, and the statute begins to run from the termination of the precedent life estate.’ The Natural Termination of the Precedent Particular Estate 61. A contingent remainder was always destroyed by the termination of the precedent life estate before the happening of the contingency. It is clear that this is the law in Penn- sylvania today. It was doubtful at common law whether an infant en ventre sa mere could take by virtue of a contingent remainder if the precedent estate expired before his birth.* This doubt has been remedied by statute in England.* There is no such statute in Pennsylvania, and the law, therefore, is in the same condition of uncertainty as at common law, as the point does not appear to have been decided. By statute in England, contingent remainders which conform to the rule against perpetuities are saved from destruction by the termina- tion of the precedent estate before the happening of the con- tingency.* There is no such act in Pennsylvania, and the law is clear that the remainders are destroyed by such termination. Summary of Law in Pennsylvania as to Destructibility of Con- tingent Remainders 62. It will therefore appear that contingent remainders in Pennsylvania are destroyed by the surrender,® merger’? or natural expiration of the preceding estate upon which they depend,*® and also by a common recovery suffered by the ten- ant of that preceding estate tail;° that it is doubtful whether they are destroyed by forfeiture of the preceding estate for treason or for violation of a restriction imposed by a previous owner of the title,*° and that they are not destroyed by a ? See Gernet v. Lynn, 31 Pa. 94 (1857), 5 Challis, Real Prop., 2 ed. (1892), p. semble. The point does not appear to 129. have been expressly decided. ® §56, ante. 3 Challis, Real Prop., 2 ed. (1892), p. 7§57, ante. 128. 8 §61, ante. ‘Challis, Real Prop., 2 ed. (1892), p. 9 §55, ante. 129. 10 §55, ante. 38 VESTED, CONTINGENT REMAINDERS DISTINGUISHED [63] conveyance of the preceding estate by a lease and release," by a Pennsylvania deed under the Act of 1715," or by a conveyance by the cestui que trust.” Distinction Between Vested and Contingent Remainders 63. It is not easy to state the distinction between a vested and contingent remainder. The difficulty is caused by the perhaps unconscious effort to make the conception of a vested and contingent remainder square with the natural idea of certain and uncertain future interests. It is therefore frequently concluded that the uncertainty of its ever taking effect is a distinguishing characteristic of a contingent remainder. This notion is erroneous,’ as is also the idea that a vested remainder is a remainder which is certain to take effect. A vested remainder may be just as uncertain of coming into possession as is a contingent remainder.*? The distinction between a vested and contingent remainder lies solely in the absence or presence of a condition precedent incorporated into the gift, and the certainty or uncertainty of its ever coming into possession is utterly immaterial. This distinction was a vital one while the common law doctrines relating to seisin pre- vailed. Although the importance of seisin has disappeared, the distinction remains as a mere empty form of words entirely disassociated from any natural conception of a classification of future interests, and it is this unhappy legacy from the common law which causes the difficulty. The distinction has 11 §59, ante. 1 See remarks of Willes, C. J., in Smith v. Packhurst, 3 Atk. 135, House of Lords (1742), as follows: “The definition of a contingent remainder laid down by the counsel! for the plaintiff that a remainder wes contingent when it was uncertain whether it would take effect or not, is by no means the legal notion of a contingent remainder.’ See also remarks of Allison, J., in Kirk’s Est., 6 Phila. 73 at middle of page 74, (1865). ? A vested remainder is uncertain to arise when it is liable to be prevented from coming into possession by the happening of an uncertain event. Thus, where there is a devise to A. for life, remainder to B. and his heirs, but if B. dies before the termination of the particular estate, then to C. and his heirs, B. has «1 vested remainder which may never take effect. This is the case discussed by Mr. Gray, Rule Perp., 2 ed. (1906), §104 et seq., and Mr. Kales, 20 Harv. Law Rev., 192 (1907). The diffi- culty in the case is caused by the attempt to force this remainder into the class of contingent remainders, merely because it is uncertain to arise, and the con- dition is precedent to the coming into possession. [64] VESTED, CONTINGENT REMAINDERS DISTINGUISHED 39 been perpetuated because of the difference in the attributes of the two kinds of remainders.’ Mr. Gray's Distinction 64. Mr. Gray‘ draws the line between vested and contingent remainders thus: ‘‘A remainder is vested in A., when through- out its continuance, A., or A. and his heirs, have the right to immediate possession whenever and however the preceding estate may determine.” This test is merely a statement of the practical result of the circumstance that a vested remain- der is never subject to a condition precedent. There is, there- fore, no inconsistency between this and the language of Mr. Gray,> where he says that the distinction depends on the language used. The question whether there is a condition precedent depends on the: form of the gift. If there is no condition precedent, the practical results stated in the test follow. Mr. Kales® appears to have misunderstood this prop- osition. Mr. Gray says the remainder is vested in A., when throughout its continuance, A., etc. Mr. Kales speaks of the remainder as being vested, when the remainder is ready throughout its continuance, etc., overlooking the fact that there must be a specific person who is ready, etc. From this misapprehension, he slips into the fallacy that a limitation to A. for life, remainder to his surviving children, may be a vested remainder in the children because under certain con- struction which may be put upon the gift, the children are ready at all times to take whenever and however the precedent estate ends. This remainder, however, cannot be vested, because even if there is a child ascertained he cannot take until he has fulfilled the condition precedent of surviving A. It is further to be observed that Mr. Gray’s test does not actually solve the problem because the vital question is this: when there is a right to immediate possession, and the answer to this question depends on whether there is or is not a con- dition precedent. 3 The learned reader will observe that * Rule Perp., 2 ed. (1906), §101. a remainder may be contingent as origin- 5 Gray, Rule Perp., 2 ed. (1906), §108, ally limited in the settlement, but by although Mr. Kales, in 20 Harv. Law the happening of the event may, when Rev., 192, 193 (1907), supposes such the time for the consideration arises, an inconsistency to exist. be a vested remainder. °20 Harv. Law Rev., 192, 193 (1907) 40 VESTED, CONTINGENT REMAINDERS DISTINGUISHED [65-67] Obliteration of the Distinction Between Vested and Contingent Remainders 65. The vesting in interest of the vested remainder gave it certain attributes? which did not pertain to a contingent remainder.* The contingent remainder has acquired all of the attributes in Pennsylvania * of a vested remainder except two: (1) the quality of assignability at law inter vivos; but as a contingent remainder is unquestionably assignable in equity, the distinction is not of great practical importance. (2) The other distinction is the destructibility of the contingent re- mainder,’ by the termination of the preceding estate before the happening of the contingency. It is hardly likely that the court can get rid of these distinctions without the assistance of the legislature. It is very much to be desired that these distinctions be abolished, as there is no practical usefulness whatever in maintaining the two kinds of remainders. Remainder to the Unborn Child of an Unborn Person 66. It has been said that there was a common law rule that you could not limit a remainder to the unborn child of an unborn person, because you could not have a_ possibility upon a possibility. Mr. Gray® examines this doctrine most thoroughly, and comes to the conclusion that there is no such rule of common law. It appears to have been recognized in England,’ and it is perfectly possible for the Supreme Court in Pennsylvania to reach a similar conclusion. The question whether this rule shall be adopted seems to be one rather of expediency than of principle, and is discussed in the subse- quent part of the work relating to the application of the rule against perpetuities to contingent legal remainders.® Remainders to a Class 67. The case of a remainder to a class stands midway between a vested remainder and a contingent remainder. The statement usual in the books is that the remainder is to the 2 See §44, ante. 7 Whitby v. Mitchell, 42 Ch. D. 494; 3 See §51, ante. 44 Ch. D. 85; see 19 Harv. Law Rev., 4See §52, ante. 635 (1906). 5 See §62, ante. 5 See §§364-367, post. ® Rule Perp., 2 ed. (1906), §§125-134, 287-298, 294-298¢. [68, 69] REMAINDERS TO A CLASS 41 class, as if the class were an entity; that the remainder vests as soon as one member of the class is ascertained and then opens to let in after-born children.® Mr. Gray’s View of Remainders to a Class 68. Mr. Gray? is of the opinion that although the remain- der is said to be vested, it is in truth contingent; that it is vested in so far as it is certain that whenever and however the preceding estate determines there will be one or more persons who will surely come into possession of the land ;' but contingent in so far as it is not certain what the number of those persons will be. In other words, as the number and consequent size of the share is contingent, the remainder cannot be truly said to be in all respects vested.? This position of the learned author is made necessary by his apparent accept- ance of the notion that the gift is to the class. The test suggested, as to the vesting of the remainder, only applies to the case where one or more members are ascertained. This view has the further disadvantage that under it the remainder is named as vested, and then described and analyzed as con- tingent, a confusion in terminology to be avoided, if possible. Author’s View of Remainders to a Class 69. but to the members of the class as individuals. It is suggested that the remainder is not to the class Those who ® See Keller v. Lees, 176 Pa. 402 (1896). ground for the decision. Crawford v. In this case the court said that the remainder became vested as soon as a child was born, and therefore the case was not within the Act of 1853, see §59, n. 9, ante, providing for the sale of land subject to contingent remainders. If, however, the interest of one child was vested, that was enough, under the law as it then stood, to prevent the sale. The other remainders could not be divested and the one remain, because it could not be determined until the termination of the life estate, what the share of each in the land would be. It is suggested that this was the proper Forest Oil Co., 208 Pa. 5 (1904). 1 Rule Perp., 2 ed. (1906), §$110, 110a, 205a. 1 This language should, of course, be understood, although such may not have been the author’s meaning, to have reference only to the case where there has been at least one member of the class already ascertained. 2 If the uncertainty that a remainder will ever take effect cannot destroy its quality as a vested remainder, neither, it is submitted, can the uncertainty of the value of the remainder be of any moment. 42 REMAINDERS TO A CLASS [—69-71] are ascertained when the gift is made® take vested remainders.’ The notion that the gift is to a class is a fiction, which no doubt played a part in the development of contingent remain- ders. While it is not likely that the Supreme Court will easily abandon the notion, it is necessary to clear thinking to bear in mind what the real nature of the remainder is. If the class is such that other members may be ascertained after the date of the gift, there is a contingent remainder as to such members.> The contingency as to those members not in esse at the time of the gift is that the remainder is to unascertained persons. Such a remainder might partake of the nature of either class of contingent remainders: (1) A gift to a class all of whom will be ascertained before the expiration of the preceding particular estate; a contingent remainder of the second class.° (2) A gift to a class, some of whom may not be ascertained until after the expiration of the preceding particular estate;’ a contingent remainder partaking of the nature of both classes. The remainders vested in the members already ascertained are not disturbed, but there is a diminution in the size or value of each remainder. Conditions Annexed to Remainders to a Class 71. A condition may be annexed to a gift of the remainder to a class, which condition may be precedent or subsequent. 3This is at the testator’s death, in the case of a will, and the date of the deed in the case of a gift inter vivos. 4Gift by a testator to his widow for life, and at her death to his children in equal shares, gives a vested remainder in the children who are ascertained at the testator’s death; McKee’s App., 96 Pa. 277 (1880); Algaier’s Est., 16 D. R. 913 (1907). 5 Consequently, an action of partition at law will not lie during the continuance of the life estate; Gest v. Way, 3 Whart., 445 (1837). The law on this point partially changed by the Act of June 3, 1840, P. L. 593. See opinion of the court below in Seiders v. Giles, 141 Pa. 93 at 99 (1891). For a case of a defec- tive partition under the Act, see Holmes v. Woods, 168 Pa. 530 (1895); see also Holmes v. Fulton, 193 Pa. 270 (1899). Judgment in ejectment will not be entered for those already ascertained to the exclusion of those who may after- ward be ascertained; Rudebaugh v. Rudebaugh, 72 Pa. 271 (1872). ®B.g.,a gift to A. for life, and after his death to his children, would partake only of the second class, as all his chil- dren must be ascertained at his death. There would be no contingency of any child being ascertained after the termina- tion of the preceding particular estate. 7E. g., a gift to A. for life, and after his death to his grandchildren, would partake of the first class, as the grand- children born after the death of A. could not take because they would be ascer- tained after the termination of the pre- ceding particular estate. (72, 73] POSSIBILITY OF REVERTER 43 When the condition is subsequent, it will not affect the vesting in the members of the class as they are ascertained.® The same rule of construction applies here es noted before,® and the court will construe the condition as a condition subsequent whenever possible."® Definition of a Possibility of Reverter 72. The possibility that a fee other than a fee simple absolute may revert to the grantor by the natural determina- tion of the fee or by breach of the condition upon which it is granted, is a possibility of reverter. It is not an estate but a possibility to have an estate at a future time.* Validity of Possibility of Reverier 73. Mr Gray takes the ground? that the Statute of Quia Emptores? put an end to determinable fees by abolishing the 8 Thus, a devise to A. for life, remainder to his children, but if any child dies in the lifetime of A., his share to go to those who survive. The remainder is vested in each child as born, subject to be divested. For an instance of a re- mainder to members of a class vested in one member subject to an executory devise, see DeHaas v. Bunn, 2 Pa. 335 (1845). "See §46, ante. 10See Johnson v. Morton, 10 Pa. 245 (1849). The usual difficulty is over the word “surviving,” which will be construed to mean surviving at the death of the testator unless a contrary meaning is clearly indicated. Thus, where there was a devise to A. for life, and when she shall depart this life, the children born of her body shall possess the land, and I give the land at the time of A.’s decease to the children which are born of her body. The children of A. living at the death of the testator took vested remainders: Minnig ». Batdorff, 5 Pa. 503 (1847). To A. for life, and at his death, to be divided equally among his surviving children. Vested remainder in the children living at testa- tor’s death. Ross v. Drake, 37 Pa. 373 (1860). For a few cases where the re- mainder was construed as contingent, see Waddell v. Rattew, 5 Rawle, 231 (1835); Goddard v. Goddard, 10 Pa. 79 (1848); Rudy’s Est., 185 Pa. 359 (1898). 1Gray, Rule Perp., 2 ed. (1906), §31; Challis, Real Prop., 2 ed. (1892) p. 73. Mr. Challis distinguishes several possi- bilities of reverter. He also points out, p. 66, note, that the word “ possibility” has been used in a number of different senses. The distinctions he draws would seem to have no practical value in Pennsylvania law. The word “pos- sibility” is rarely used with us, and when used, would seem to be confined to the possibility of reverier. The use of the word with reference to a contingent remainder is perhaps obsolete now that contingent remainders have acquired a present legal value. See §52, ante, on the attributes of a contingent remainder. ? Rule Perp., 2 ed. (1906), §§31-41, and Appendix KE. 3 Westminster III, ce. 1 (1283). 18 Edward I, 44 POSSIBILITY OF REVERTER [74] possibility of reverter, without which the words of qualification would be a mere empty declaration. Mr. Challis* says that the statute did not put an end to determinable fees, and the instances of determinable fees which he cites which have been recognized in England, would seem to make the question of little practical value. There is a doubt whether the Statute of Quia Emptores is in force in Pennsylvania.’ Since possi- bilities of reverter have been recognized and enforced in Eng- land, where the statute is admittedly in force, and have also been recognized and enforced in Pennsylvania,® any discussion on the Statute of Quia Emptores in this connection would seem to be somewhat remote and is therefore omitted. Possibilities of Reverter in Pennsylvania 74. The cases relating to determinable fees already cited’? impliedly recognize the validity of a possibility of reverter. In only three cases has the right actually been enforced. In Henderson v. Hunter’ the fee had determined, and _ the grantees thereof were not allowed to recover in an action of trespass q. c. f., as their title was gone. In Courtney v. Keller ° the right was enforced in an action of ejectment. In Slegel v. Lauer’? the parties entitled to enforce the reverter filed a bill in equity to have the original deed of conveyance of the determinable fee cancelled, and the court made a decree ordering the deed delivered up and the recorder to cancel the deed on the record. The interposition of equity here seems questionable. The title went back of itself, and if possession were refused the parties entitled could have brought ejectment or trespass, and if there was any doubt about the marketa- ‘Challis, Real Prop., 2 ed., (1892), it is believed that the better opinion is Appendix IV. 5 Charter to William Penn (1681); Ingersoll v. Sergeant, 1 Whart. 337 (1836). In the case of Wallace v. Harmstad, 44 Pa. 492 (1863), the court said, although unnecessary to the decis- ion of the case, that there was no tenure in Pennsylvania, but did not profess to overrule Ingersoll v. Sergeant. Wallace v. Harmstad has been criticised, and that the Statute of Quia Emptores is not in force in Pennsylvania. See Gray, Rule Perp., 2 ed., (1906), §26, for a very able discussion of the law in Pennsylvania. ® See §74, post. 7See §27, ante. 859 Pa. 335 (1868). See remarks of Agnew, J., at 341 and 343. ®4 Penny. 38 (1884). 10148 Pa. 236 (1892). [75-77] RIGHT OF ENTRY FOR CONDITION BROKEN 45 bility of the title, that doubt could have been settled in a proper action between the plaintiffs and their vendees.' Attributes of a Possibility of Reverter 75. A possibility of reverter was heritable at common law and devisable under the Statute of Wills, but was not assign- able inter vivos.2 The possibility is clearly inheritable and devisable in Pennsylvania, although no decision to that effect has been found, and is assignable by deed inter vivos at law.® Right of Entry for Condition Broken 76. A condition is where there is annexed to the grant of an estate at common law, a proviso either in the same deed or in another deed, that upon the doing of some act dependent on the will of the grantee, the grantor can re-enter and have back the estate which he granted. The right of the grantor is called a right of entry for condition broken, and can be enforced only by actual re-entry by the grantor or his heirs.* Such conditions are of frequent occurrence in modern times, and the right to enter for condition broken has been recognized in Pennsylvania.» The right to re-enter at common law was an estate in the land, was heritable but was not devisable or assignable inter vivos.® It is assignable inter vivos in Penn- sylvania at least in the case of a ground-rent deed. Distinction Between Possibility of Reverter and Right of Entry jor Condition Broken Tl. The distinction between a possibility of reverter and a right of entry for condition broken depends on the difference 1 The decree actually made would seem to have no real effect on the matter. The court was powerless to order the destruction of the original deed as a common law conveyance. It had already operated at common law, and the court could no more recall it than it could recall the day before yesterday. It is important to recollect in this connec- tion that the cancellation of the deed is only necessary in a jurisdiction like England, where there are no recording acts, and consequently a deed is liable to be used fraudulently. In Pennsylvania the proper decree would seem to be to order a reconveyance where a reconvey- ance is necessary, and have that recon- veyance recorded. ? Challis, Real Prop., 2 ed. (1892), 66, n. 2. 3 Penna. R. R. Co. v. Parke, 42 Pa.. 81 (1862); Slegel v. Lauer, 148 Pa. 236 (1892). * Challis, Real Prop., 2 ed. (1892), p. 192. 5 See cases cited, §367, post. ® Challis, Real Prop., 2 ed. (1892), pp. 66, 67. 46 EXECUTORY DEVISE [78] in the grants upon which they respectively arise. In the case of a determinable fee, the title reverts of itself 7 upon the hap- pening of the event specified, without any clause to that effect,’ and without any conveyance. This consequence flowed from the theory of the determinable fee, which is that the fee is granted until a certain event shall happen, and no longer. In the case of a condition, the whole fee is granted, and there is a condition upon which it can be taken back. The grantor or his heirs must make an entry before the right can be enforced.® It is often difficult to distinguish between the two cases.’° Executory Devise Defined 78. The exact origin of the executory devise and the mean- ing of the term are involved in some obscurity. It will be sufficient for our purpose to refer the limitation to the pro- visions of the Statute of Wills,’ which permitted devises to be made by the owner ‘at his free will and pleasure.” The courts, therefore, allowed a freedom of disposition which had been unknown at common law.? An executory devise has been defined as “a limitation by will of a future estate or interest in land, which cannot consistently with the rules of law, take effect as a remainder.’ ? The two most common instances of 7 This is neatly illustrated by the case of Henderson v. Hunter, 59 Pa. 335 (1868), see §74, ante. § Although such a clause is some- times inserted. ® Challis on Real Prop., 2 ed. (1892), p- 234 et seq. This distinction was overlooked by the reporter in the first paragraph of the syllabus of Methodist Church v. Public Ground Co., 103 Pa. 608 (1883), which reads at follows: “Wherever words in a conveyance are relied upon as creating a condition sub- sequent, so as to create a base or deter- minate fee, they must not only be such as would of themselves create a condition, but must be so connected with the grant as to qualify or restrain it.” This is plainly a notion of the reporter, and is not supported by any decided case or by any- thing to be found in the language of the court. The nearest approach is the lan- guage of Mr. Justice Mercur, on p. 614, where he says: “‘ Whatever words arerelied on as creating a condition must not only be such as of themselves would create a condition, but must be so connected with the grant as to qualify or restrain it.” See also opinion of the court below, in Slegel v. Lauer, 148 Pa. 236 at 244 (1892). 10 See Challis, Real Prop., 2 ed. (1892), p. 233. See the doubtful case of Penna. R. R. Co. v. Parke, 42 Pa. 31 (1862). 132 Henry VIII., Chap. 1 (1540); 34, 35 Henry VIII., Chap. 5 (1542). ? Challis on Real Prop., 2 ed. (1892), p. 157. 3 Watson, P. J., in Lovett v. Lovett, 10 Phila. 537 at 540 (1873). See Fearne, Remainders, p. 382, et seq. There is a rule of construction to be noticed, which is that no limitation shall be construed to be an executory devise if it may take effect as » remainder; Fearne, Remain- ders, p. 387; Challis, Real Prop., 2 ed. (1892), p. 161. [79, 80] EXECUTORY DEVISE 47 an executory devise are a devise over after a fee,* and a gift of the whole estate to begin in futuro? Attributes of an Executory Devise 79. An executory devise was generally indestructible at common law by any determination or disposition of the preceding estate except with the concurrence of the executory devisee. Where, however, an executory devise was limited after an estate tail, it was destructible by a common recovery, and in Pennsylvania by the deed which took the place of that cumbersome action.® Under the Acts turning an estate tail into an estate in fee,’ an executory devise limited on the estate tail would remain and take effect if otherwise valid, and become indestructible, as a common recovery cannot be suffered by a tenant in fee.* An executory devise in Pennsylvania is heritable, although the devisee die before the happening of the contingency,® is a subject of levy and sale under execu- tion,’° and is devisable under the Statute of Wills.1 An execu- tory devise was not assignable by deed inter vivos at common law,? but the law is now probably otherwise in Pennsylvania.* An executory devise may also be released by the executory devisee.* Distinction Between a Contingent Remainder and an Executory Devise 80. The distinction between a contingent remainder and an executory devise is well put by Mr. Butler® as follows: ‘The principal difference between contingent remainders and executory 4See Nicholson v. Bettle, 57 Pa. 384 (1868). 5 Chambers v. Wilson, 2 Watts, 495 (1834); stated §450, post. ® Fearne, Remainders, p. 423-424; Linn v. Alexander, 59 Pa. 43 (1868), semble; Sharswood, J., in Taylor v. Taylor, 63 Pa. 481 at 486 (1870); Ralston v. Trues- dell, 178 Pa. 429 (1896). The dictum of Gibson, C. J., contra in Boyd v. Big- ham, 4 Pa. 102 at 109 (1846), is obscure and may be disregarded. 7 See §23, ante. 8 Fearne, Remainders, p. 424 (Butler’s Note E. V.); see also pp. 428, 429. ® Challis, Real Prop., 2 ed. (1892), p. 164; Fearne, Remainders, p. 554. 10 DeHaas v. Bunn, 2 Pa. 335 (1845). 1 Challis, Real Prop., 2 ed. (1882), p. 164. > Challis, Real Prop., 2 ed. (1892), p. 164. 5 Dictum, Parsons, J., in Rash’s Est., 2 Parsons, 160 at 161 (1850). *Coates Street, 2 Ash. 12 (1881); Fearne, Remainders, p. 423. 5 Note to Fearne, Remainders, p. 416. 48 ESCHEAT, DOWER, CURTESY, EASEMENTS [81, 82] devises is, first, that a contingent remainder may be limited im conveyances at common law; an executory devise is admitted only in last wills and testaments. Secondly, that a contingent remainder relates only to lands, tenements and hereditaments; an executory devise respects personal estates as well as real. Thirdly, that a contingent remainder requires a freehold to precede and support it; an executory devise requires no pre- ceding estate to support it. Fourthly, that a contingent remainder must vest, at farthest, at the instant the preceding estate determines; but in respect to an executory devise, if there be any preceding estate, it is not necessary that the executory devise should vest when such preceding estate deter- mines. And fifthly, that the great and essential difference between the nature of a contingent remainder and that of an executory devise consists in this, that the first may be barred and destroyed or prevented from taking effect by several different means; but it is a rule, that an executory devise cannot be prevented or destroyed by any alteration whatsoever in the estate out of which or after which it is limited.” Escheal, Dower and Curtesy 81. Escheat occurred when the lord, by virtue of the feudal tenure, took the land upon a failure of the heirs of the tenant. The right was feudal,° and extended only to real estate. It exists in Pennsylvania today by statute, and therefore arises by operation of law. In like manner, dower and curtesy are not created by the act of the donor. They are, therefore, not within the rules treated in this book.’ Rights in the Land of Another 82. There are a number of cases of rights which one man may have in the land of another, such as easements, profit a prendre, etc. These rights cannot arise except by the consent, expressed or implied, of the servient tenement, and are rarely created by gift. For that reason they will not be: discussed .* ® Challis, Real Prop., 2ed. (1892), Chap. 7 See §380, post. 6, p. 33, 5 See §366, post. [83, 84] SUMMARY 49 Rights Arising by Contract 83. Interests in property sometimes arise by contract, as in the case of covenants as to the use of land, etc. These interests are outside the scope of this book, as they do not arise by way of gift.® Therefore no further comment on them is necessary. Summary of Future Legal Interests in Land 84. The reversion is a present interest in land. The future interests in land are remainders, vested and contingent, possi- bilities of reverter, rights of entry for condition broken, and executory devises. All of these future interests have survived in Pennsylvania. Vested remainders, executory devises, rights of entry for condition broken, are indestructible except by the consent of the party entitled thereto, but contingent remainders are destructible under certain circumstances. Whatever the common law may have been, all of these interests are now freely devisable, heritable, and probably assignable by deed inter vivos, and are liable for debts. It would also appear that there is no rule of the common law relating to the creation of any of these estates except the rules to which we have particularly referred. We have now examined the legal future interests in land, and in Part III ‘° will consider the application of the rule against perpetuities to these interests. *See §381, post. . 10 See Chap. 16, §§360-370, post. (50) (51) CHAPTER 4 PERSONAL PROPERTY ALIENABILITY History of personal property........... 0.0 c cece eee eee § 86 Kinds of personal property........... 00. cece eect e een ees § 87 Term of Years sn’: ws sniae sci scan tih eR agen oe gende dunes § 88 ChOSES: 11 GObOM a «sic aissencsnces toad odie wade esheatds gana Aebeess Vase eased adhe gio § 89 Alienability of personal property............ 0... 0c eee eee eee § 90 Future Lecau INTEREsTs IN PERSONAL PROPERTY PRELIMINARY DISCUSSION......6.0 00. 0c ce ee cece ence teen teen eee § 91 Cuatrets Reau Transfers inter ViVOS........ 00... c cece cece ee eee e nee eee .. § 92 Pransiers «by walllva Vussisodacct ale aitlaaach dunes Ratadatacduss nate oncay aie § 93 Reason why question of a future interest in chattels real has not arisen in Pennsylvania............... cee cee eee ees § 94 CuHATTELS PERSONAL Gifts: INbEI VIVOS2 ce uie tite Seue nce gawk ated ako my naan § 95 Gifts by will. General discussion.........-. 0.00.00 cess ee eens § 96 Law in Pennsylvania as to gifts by will............. pike Deen ad § 97 COHVETSION: aagadge caer eynan damian ied ieee OMS cae epee § 98 Statutes relating to future legal interests in chattels personal created by will in Pennsylvania................ 000s eee eee § 99 ULIMIT A EY 225s eel glk spre ha eae sigc ig GA Gere heros BDI re aael S meatrce Rees an aSeNe-S $100 History of Personal Property 86. It is a mistake to assume, as is often done, that per- sonal property was scarce and of little value in feudal times.' 1 Pollock & Maitland’s Hist. Eng. Law., Vol. 2, 1 ed., p. 148, 2 ed., p. 149. 52 PERSONAL PROPERTY [87, 88] Rights in personal property, if not older than rights in land, are at least as old.’ Little is known about the early law of personal property,? and its subsequent development is involved in considerable obscurity. It will not be possible in the space available to introduce a thorough discussion. Our chief con- cern will be with the nature of future interests in personal property. Kinds of Personal Property 87. Personal property is of three kinds: (a) chattels real, the only instance of which is a term of years, or what we would in modern times call a lease; (b) chattels personal; (c) choses in action. All words attached to a gift of personal property which would have the effect of passing less than an absolute estate in real property were disregarded as they could have no legal effect. The first taker had the entire interest, and if the gift was of a term of years, and the term lasted longer than the life of the first taker, it went to his executors. This principle has been relaxed in modern times so far as to admit of a life estate in chattels real or personal. It seems clear, however, that there can be no estate tail in a chattel real.* Term of Years 88. The term of years occupies an anomalous position. It was formerly an unfree tenement and protected only in the lord’s court. It was subsequently, by the invention of a special action, brought within the jurisdiction of the King’s court. The estate, although thus made practically a freehold 2 Ownership in land was a much more intense and completely protected right than was the ownership in a chattel. There is no absolute ownership in chat- tels in modern law. Pollock & Mait- land’s Hist. Eng. Lew, Vol. 2, 1 ed., p. 151, 2 ed., p. 153. It may be doubted, however, whether the prevailing con- ception of ownership in chattels is not a conception of an absolute ownership. 3Pollock & Maitland’s Hist. Eng. Law., Vol. 2, 1 ed., p. 149, 2 ed., p. 150. *Smith, Executory Interests, 307 et seq; Smith’s App., 23 Pa. 9 (1854); Brewster, J., in the court below in Kar- ker’s App., 60 Pa. 141 at 151 (1869). The dictum contra of Sulzberger, J., in Morris v. Fisher, 8 D. R. 161 (1899), may be disregarded as opposed to prin- ciple and the weight of authority. The Act of 1855, see §23, ante, probably does not apply to personal property for the reason that it was not supposed that at that time an estate tail could be created in personal property. The law has struggled for centuries to get rid of the estate tail, see §§23, 24, ante, in real estate, and there is no occasion to intro- duce it now into the law of personal property. [89] ALIENABILITY OF PERSONAL PROPERTY 53 estate, retained its former characteristics as an unfree tene- ment. The termor was still said to be possessed and not seised. Leases in England were uncommon before the year 1200, and originally ran only for a very short period. In their earliest form they were beneficial to the lessee, and were purchased for a premium as investments for capital. From these circumstances, the term came to be considered as a chattel interest and as devisable by will.* The lease in modern times partakes more of the nature of a contract than it does the nature of an estate. It is usually considered under the separate heading of the law relating to landlord and tenant, and most of the principles discussed in this book are subject to some variation in the case of a term of years. This estate will therefore only be referred to incidentally at a few points, and will be considered in the main as outside the scope of the book. Choses in Action 89. A right in personam arising from a tort is, in its nature, not assignable. A right under a contract is not assignable without the consent of the other party to the contract. Insur- ance policies are not assignable, but restrictions on their assign- ment will be upheld. The right of a partner is not assignable at common law without the consent of the other partner. Right of a stockholder is generally assignable. Promissory notes and bills of exchange were in a class by themselves; they were neither choses in action nor were they chattels personal; they were considered as things, the title to which passed by delivery in some cases; in others, when so expressed, by assignment on the back. They originated in the law merchant, which was introduced from the continent of Europe, and principles relating to them cannot be said to be a part of the early common law.* It has been suggested by a learned author,’ that the non-assignability of choses in action at the common law was the result of the incapacity of the medieval lawyers to think of a right as being transferred, and was not the result, as has been commonly supposed, of the laws of champerty and maintenance. 5 Tor a discussion of the reason why ®Gray, Restraints on Alien., 2 ed. a term of years came to be personal (1895), §2. property, see Pollock & Maitland’s 7The Mystery of Seisin, by F. W. Hist. Eng. Law, Vol. 2, 1 ed., p. 105, Maitland, 2 Law Quar. Rev., 481 at 2 ed., p. 106 et seq. 495 (1886). 54 PERSONAL PROPERTY [30-92] Alienability of Personal Property 90. It thus appears that there has been very little contro- versy over the alienability of personal property. It was freely alienable inter vivos and by will from the earliest times. and no restrictions on such alienability appear to have been attempted. Inalienability of choses in action appears to have been the result of incapacity to think of such rights as being assignable, and when such inalienability has survived to modern times, it is to be explained by the nature of the chose itself. Preliminary Discussion of Future Legal Interests in Personal Property 91. That we can today have future legal interests in personal property is familiar to every lawyer, and most of them will be surprised that any question should be raised as to the matter. This, however, has not always been the law, and it is not quite clear on just what theory future interests are sustained.2 We will therefore discuss future interests in personal property and briefly notice the various theories which have obtained as to such interests. Transfers Inter Vivos of Chaltels Real $2. In the case of chattels real, the only instance of which is a term of years, the interest passes to the executors on the death of the lessee. An estate in fee could formerly be created in a term of years, that is, an estate which passed on the death of the lessee to his heirs.° By the subsequent common law, a limitation to heirs was considered as a limitation to executors."° A term of years or sub-lease was always allowable, 8 A future interest in personal prop- erty may, of course, easily be raised by way of a trust. For discussion of this see §163, post. All equitable lim- itations of personal property, chattels real or chattels personal, are trusts, if the statute of uses does not apply to personal property. If it does apply, a use of personal property becomes a legal interest, and future legal interests in personal property can be limited by way of use. Since it is doubtful whether the statute of uses applies to personal property in Pennsylvania, the possibility of the creation of such future legal inter- ests would have to be left open on the authorities. See §123, post, on the ap- plication of the statute to a use of personal property. ’ Pollock & Maitland’s Hist. Eng. Law, Vol. 2, 1 and 2 ed., pp. 110-117; Gray, Rule Perp., 2 ed. (1908), §805. 10 Gray, Rule Perp., 2 ed. (19068), §805. [93, 94] FUTURE LEGAL INTERESTS 55 and is in frequent use today.’ There could be no life estate in a chattel real, because there was a legal presumption that a life estate was greater than a term of years, which, no matter how long, would merge in the life estate; consequently, when there was a grant of a long term of years to one for life, with remainders over, the grant was void and the life tenant took the whole, and, if he died, it went to his execu- tors.2. This seems to be the law in England today.? No case has been found in Pennsylvania. Mr. Gray‘ thinks that a grant of a life estate with remainders over by deed inter vivos would be good in the United States generally. It is probable that the Supreme Court will find some way to sustain the gift. Transfers by Will of Chattels Real 93. The validity, however, of a limitation of a future inter- est in a term of years after a life estate when made by will, was established in the sixteenth century.2 The theory upon which it was sustained was this: the apparent order of the limitation was reversed, and the gift of the term to A. for life and after his death to B., was considered as a gift by way of an executory devise or bequest of the whole term to B., after the death of A., and then a gift of what remained to A.® The validity of such limitations has been confined in England to gifts by will. No case has been found in Penn- sylvania which raises the point nor has any case been found of a limitation of a future interest in a term of years. There is no reason why the law should be different from that which obtains at the common law, and unless, therefore, some particular reason should be pointed out, it would seem that the law in Pennsylvania is the same. Reason Why Question of Future Interest in a Chattel Real Has Not Arisen in Pennsylvania 94. The lessor, the owner of the land, had a reversion’ after the termination of the lease. A gift to A. for ten years 1 Pollock & Maitland’s Hist. Eng. Law, Vol. 2, 1 and 2 ed., 112; Gray, Rule Perp., 2 ed. (1906), §806. In such case, the reversion remains in the owner of the chattel and is a vested interest. Gray, ubi supra §806. ? Lewis, Perp., (1843), p. 85; Gray, Rule Perp., 2 ed. (1906), §§71, 807, 808. 3 Gray, Rule Perp., 2 ed. (1906), §71b. *Gray, Rule Perp., 2 ed. (1906), §71b. 5 Lewis, Perp., p. 85 (1843); Gray, Rule Perp., 2 ed. (1906), §813. ® Gray, Rule Perp., 2 ed. (1906), §§74, 815. 7 See §§37, 45, ante. 56 PERSONAL PROPERTY [95] created a term of years in A., a leasehold interest. The idea familiar in modern times is that a lease implies a payment of rent and must be drawn up on some one of the forms in common use for that purpose. This idea is not altogether accurate, but represents practically the view of a chattel real in modern times. The tenant is a man who must pay the rent, and that liability to pay the rent is of very little value. The terms of years are usually very short--three or five years generally the longest, and no interest in a leasehold is likely to be of any value until real estate conditions change very materially, and until that time none of the questions pre- sented by this discussion are likely to occur in Pennsylvania law. A gift of a term of years is very rare in Pennsylvania. Gifts Inter Vivos of Chattels Personal 95. An absolute interest wasthe only kind of interest recognized in chattels personal and a gift of a life estate carried the whole ownership. There could be no reversion or remainder in a chattel personal. The absolute owner of chattels personal, however, might give thé use and occupation thereof to another. He might make a bailment.® Since a parol gift of a chattel is invalid without delivery, there can be no gift of a chattel personal by parol to begin in futuro.’ If the conveyance is by deed or for value, the law, of course, is otherwise. It seems, therefore, that in England there can be no limitation of a future legal interest in chattels personal by deed inter vivos.".| Mr. Gray points out there is no decision or authoritive dictum to that effect, that the author- ity of Blackstone” is to the contrary, and that it is the law in the United States generally that legal future interests in personal property may be limited by deed inter vivos.? No case has been found in Pennsylvania on this point, but there is no reason why such a limitation should not be valid ® Gray, Rule Perp., 2 ed. (1906), §822; Ames, Disseisin of Chattels, 3 Harv. Law Rev., 23, 313, 337 (1890); Maitland, Seisin of Chattels, 1 Law Quar. Rev., 324 (1885). * Gray, Rule Perp., 2 ed. (1906), §§78, 825. 10 Gray, Rule Perp., 2 ed. (1906), §77. ‘Gray, Rule Perp., 2 ed. (1906), §829. 22 BL. Com., 398. 3 Gray, Rule Perp., 2 ed. (1906), §§91, 97, 844. 4 The validity of such limitation seems to be admitted by Woodward, J., in a dictum in Brink v. Michael, 31 Pa. 165 at 169, 3rd paragraph, opinion (1858). [96, 97] FUTURE LEGAL INTERESTS 57 and of the same nature as a future interest limited by will. But on the other hand since an executory bequest cannot be created by deed, it seems that such an interest, if limited by deed, must take effect as a remainder. Gift by Will of Chatiels Personal 96. The validity of a bequest of chattels personal to A. for life, and after his death to B., was established by the last half of the seventeenth century, on the ground that there was a bequest of the use and occupation to the life tenant for his life, and a bequest of the right of property to B.,° and the validity of such bequests in modern times is unquestioned.’ Law as to Future Legal Interests in Personal Property Created by Will in Pennsylvania 97. A future legal interest in personal property can be created by will in Pennsylvania, is devisable, assignable in equity,* and passes to personal representatives if the legatee 5 As to this, see §96, post. _ ® Gray, Rule Perp., 2 ed. (1906), §§84, 828. 7Gray, Rule Perp., 2 ed. (1906), §95. The theory upon which the bequest is to be sustained is not clear. There are, according to Mr. Gray, taking the case of a bequest of a personal chattel to A. for life, and at his death to B., three views: (1) A. may be considered as having a right to possession at law, and the immediate vested right of property as being in B. (2) A. may be considered as having the legal right to property which at his death shifts to B. (8) The whole interest may pass at law to A., who will hold the chattel in trust for himself for life, and, on his death, for B. Mr. Gray, ubi supra §90a, says that the choice between the theories is mate- rial in determining whether (1) there is a reversion after a gift of a life estate, without any disposition of the remainder; (2) whether the future interest violates the rule against perpetuities. It is sub- mitted that the first question does not concern us here, because if there is a reversion, it is not subject to the rule, and if there is no reversion, the first taker has the whole interest, and there is no occasion for the rule to apply. As to the second, the learned reader will find the subject discussed in chapter 16, dealing with the interests subject to the rule. See also Gray, Rule Perp., 2 ed. (1906), Appendix F. 8 Fearne, Remainders, 549. As to the assignability in equity, it is to be observed that the phrase is not strictly accurate. The assignment is of the legal interest, but cannot take effect before the hap- pening of the contingency, because there is nothing to assign. A court of equity, however, compels the assignor to make good the assignment when the contin- gency happens. The assignment, there- fore, does not take place in equity, but is an attempted assignment at law of the legal interest, which the assignor is com- pelled to perfect under processes of the court of equity, in order to prevent unjust enrichment on his part at the expense of the assignee who has paid for the interest. 58 PERSONAL PROPERTY [—97—] dies before the happening of the contingency.®° No case dis- cussing the nature of such an interest has been found, and the remarks of the judges are conflicting. The cases are poorly digested and difficult to find. A few have been collected in the note.° A future legal interest in personal property created by will may be described as a remainder or executory devise. Unfortunately, however, the courts have carried over into the construction of limitations of future interests in personal prop- erty, the feudal notions which obtain at common law with respect to limitations of future interests in real property, and have said that a future interest in personal property is vested when limited by the words which would create a vested inter- esi if the limitation were of real estate, and is contingent when ® Hopkins v. Jones, 2 Pa. 69 (1845). 10 Pennsylvania cases of future legal interests: Scott v. Price, 2 8. & R. 59 (1815), Tilghman, C. J., said of a gift of money, that it was an executory de- vise; Deihl v. King, 6 8. & R. 29 (1820), executory devise; Patterson v. Haw- thorn, 12 8. & R. 113 (1824). Where there was a gift of personal estate to C. for life, with a gift over at her death if there was a certain sum left to B. and D. and B. died before C. An action of debt was brought by the administrators of B. against the executors of C. Judg- ment for the plaintiff in the court below was affirmed on appeal. Rogers, J., in the Supreme Court, said: “‘We are therefore of the opinion that this was an executory devise of all the personal estate to C. with a vested legacy to B. and D. and as such, transmissible to representatives; Candler v. Dinkle, 4 Watts, 143 (1835); Brownfield’s Est., 8 Watts, 465, Kennedy, J., at 469 (1839); King v. King, 1 W. & 8. 205 (1841); Kelso v. Dickey, 7 W. & S. 279 (1844); executory bequest; Hopkins v. Jones, 2 Pa. 69 (1845). Fearne, Remainders, p. 402, Butler’s Note; Burd v. Burd, 40 Pa. 182 (1861); Stehman’s App., 45 Pa. 398 (1863); Kirk’s Est., 6 Phila. 73 (1865); Umstead & Reifi’s App., 60 Pa. 365 (1869); Chess’s App., 87 Pa. 362 (1878); Pennock v. Eagles, 102 Pa. 290 (1883); Gormley’s Est., 154 Pa. 878 (1893); Bruch’s Est., 185 Pa. 194 (1898). Called a remainder; Zimmerman’s Est. 23 Super. Ct. 130 (1903). Future legal interests in personal property are desig- nated as remainders in the Acts of Feb. 24, 1834, P. L. 70, and May 17, 1871, P. L. 269, as to which see §99. Heiss’ Est., 1 Pa. C. C. 397 (1888), is a good instance of a life estate in personal prop- erty followed by a limitation, called by Penrose, J., at p. 399, an executory bequest. In many cases of a gift of personal property, which, strictly speak- ing, are limitations at law, the court has said that there was a trust, and con- sidered the case accordingly: Bruch’s Est., 185 Pa. 194 (1898); McKee’s Est., 198 Pa. 255 (1901); Reilly’s Est., 200 Pa. 288 (1901); Menoher’s Est., 18 Super. Ct. 335 (1901). In many cases of u residuary clause, where there is real and personal property, the court has not made any distinction. Menoher’s Est., 18 Super. Ct. 335 (1901). In a number of cases, where a legacy is given at a future time, the court has said that the legacy is vested in interest with the postponement of time of payment. Maxwell v. McClintock, 10 Pa. 237 (1849). [—97-99] FUTURE LEGAL INTERESTS 59 the limitations would create a contingent interest in real estate. A future legal interest in personal property, therefore, whatever its nature, may be vested or contingent. This is a case where the law of real property has invaded the domain of personal property. A future legal interest in personal property can take effect even though there is a gap between that and the precedent particular estate, as the doctrines of merger, sur- render and tortious alienation are not applied to personal property, and the destruction of the precedent estate will not affect the validity of the contingent interest. The fungible nature of personal property makes all future interests thereof precarious in a manner which does not obtain with respect to remainders in personal property. This difficulty has been remedied in Pennsylvania by the legislation hereinafter referred to." Conversion §3. Where there is such a direction in the will that there is an equitable conversion, the conversion operates immediately as of the death of the testator, and the limitations are to be construed as if they were limitations of personal property. Strictly speaking, however, the interests are equitable and should not be considered as legal limitat:ons. This point seems to have been overlooked in practice. Pennsylvania Statutes Relaling io Future Interests in Personal Properly 99. The Act of February 24, 1834,‘ provides that the exe- cutors of a will shall not be compelled to deliver personal property bequeathed to a legatee not having an absolute inter- est therein, without security being given to secure the interest of those entitled in remainder. The Act of May 17, 1871,° pro- vides that an executor or trustee shall deliver the personal property upon security being entered, and the Act of April 17, 1869,° provides that the owner of a contingent interest in personal property may require an account and compel the 1Candler v. Dinkle, 4 Watts, 143 see remarks of Gordon, J., at 245 (1877); (1835); Burd v. Burd, 40 Pa. 182 (186i). Ashton’s Est., 134 Pa. 390 (1890). 2 See §99, post. 4P. L. 70, §49. 3 Patterson v. Hawthorn, 12 8S. & R. 5 PL. 289, §1. 113 (1824); Eby’s App., 84 Pa. 241, 6p, L. 70, §1. 60 PERSONAL PROPERTY [1 00] previous legatee to give security before receiving the same. These acts were probably intended’ to restore the old English chancery doctrine, which required security to be given to protect future legal interests in personal property,’ although it has been intimated *® that the acts apply to trusts, which question however does not further concern us here. Reference to the acts is useful as showing the legislative recognition of future legal interests in personal property.° Summary 100. It appears, therefore, that the validity of a future interest in personal property, when created by will, is unques- tioned in Pennsylvania; that it is an executory bequest ?? in the case of chattels real, with the theory uncertain in the case of chattels personal;’ that perhaps no future legal interests can be created by deed inter vivos in England, but that the law in Pennsylvania is uncertain, with the probability that such an interest can be created.” 7 Jarman, on Wills, Vol. 1, p. 850, 6th Pa. 451 (1889); McCann’s Est., 16 Phila. Amer. ed., (1893). 270 (1883); Oakford’s Est., 4 Pa. C. C. 8 Penrose, J., in Mooney’s Est., 27 Pa. 465 (1888), s. c. 18 Phila. 662; Key’s C. C. 450 (1902). Est., 16 Pa. C. C. 456 (1895); Teller’s 9 A few of the cases which have arisen Est., 15 D. R. 53 (1905). on these acts are as follows: Culbertson’s 10 See §93, ante. App., 76 Pa. 145 (1874); Feiser’s Est., 1See §96, ante. 1 Walk. 256 (1879); Watson’s App., 2 See §$92, 95, ante. 125 Pa. 340 (1889); Sims’s App., 130 (61) CHAPTER 5 USES AND TRUSTS BEFORE THE STATUTE OF 27, HENRY VIII Origin and history of the use.......... 60... c cece eee eee eee §105 Express use raised on transmutation of possession............... §106 Implied use raised on transmutation of possession...........-... $107 Uses raised without transmutation of possession...........-..... §108 Definition. of @ Useaccsry sie gansateoddsoatoteeeea cake Reames §109 Special, Trists: co .ccueu vei iaowe eae saakaes Meas Hosea Pega ines §110 Origin and History of the Use 105. Equitable limitations of land began with the use. The word “use” is derived from the Latin word ‘opus,’ which, in. the old French, became ‘‘os’”’ or “‘oes,’”’ and was often used in the early thirteenth century to denote what, in modern times, would be called an agency, and was applied to chattels as well as to real estate. Property was conveyed by John to Stephen ad opus et ad usem William, and the significance of the transaction was that William alone was to benefit from the property conveyed to Stephen.” The use was chiefly 1 Pollock and Maitland, Hist. of Eng. Law, Vol. 2, 1 ed., p. 231, 2 ed., p. 233, et seq. The use represented a vague idea, which idea branched, on one side, into the law of agency, and, on the other side, into the law of trusts; the distinc- tion perhaps being that a trust is always predicated of a specific res, which an agency isnot. The researches of modern scholars have so thoroughly exploded the notion which was discussed at length in the older text books, see Perry, Trusts Vol. 1, §2, 5 ed. (1899) Mitchell, Real Est. and Conveyancing in Penna. (1890), p. 211, that the trust had its origin in the fidei commisium of the Roman law, that further reference to the subject is superfluous. 2 A use was a confidence placed in the feoffee to permit the feoffor, or such other person as he should direct, to receive the rents and profits and also to make such legal estates as he or they should direct. Saunders, Uses, Vol. 1, p. 3 (1823). 62 THE ANCIENT USE [—105, 106—] employed to vest the beneficial ownership of land in such a way as to escape creditors,® the Statutes of Mortmain, and the burdens of feudal tenure.* The use was enforced solely in chancery and the cestui que use escaped many burdens and restrictions which fell on the holder of the legal title. This condition of affairs was felt, for many reasons, to be undesir- able, and statutes were passed from time to time to bring the use within the rules of the common law.® These efforts toward a control of the use, which, as was quaintly said, was a nimble and elusive thing, culminated in the statute which will be discussed in the next chapter. Before proceeding to this, a brief reference will be made to some of the salient character- istics of the use. A use was raised on transmutation of pos- session, in which case it would be express or implied, or with- out transmutation of possession, in which case it would require a bargain and sale or covenant to stand seised to uses. Express Use Raised on Transmutation of Possession 106. The usual method of conveying land in England was by feoffment with livery of seisin. At the time of the feoff- ment, the feoffor declared the use, if any, to which the feoffee was to hold the land. This declaration could be by parol, and it seems as if the practice originally was to make the feoffment to the use of the feoffor.* No consideration was necessary to the validity of such a use, either on the part of 3 See Statute 50, Edward III, Chap. 6 (1876), avoiding gifts made to use by collusion to escape creditors. ‘Such as the right of the lord of the fee, to relief, wardship, fine for alienation and escheat for want of heirs. The method of getting rid of feudal burdens was this: land was conveyed to A., B. and C., as joint tenants to the use of X. and his heirs. When A. and B. died, C. would convey to three other persons, and thus the legal title would be pre- vented from falling into the condition in which the lord of the fee would be entitled to any of his feudal rights. In the meantime, the equitable owners succeeded each other without being sub- ject to any feudal burdens. The use “enabled the equitable owner to extract the honey while the legal tenant guarded the hive:’ Edward Jenks in 20 L. Q. Rev., 284 (1904). The use, therefore, was a disadvantage to the feudal lord in so far as his feudal inferior was con- cerned, and an advantage to him in so far as his feudal superior was concerned. 5 For a very good collection of these statutes and the early cases, see pam- phlet by Mr. Ames, Uses and Trusts Before the Statute of 27, Henry VIII. See also article by Mr. Ames, Origin of Uses and Trusts, 21 Harv. Law Rev., 261 (1908). ® Thus, John would enfeoff William of Blackacre to the use of himself or to the use of Stephen. [107] THE ANCIENT USE 63 the cestui que use or the feoffee to uses.’ If, however, a consideration passed, the feoffor could not declare the use to himself. Implied Use Raised on Transmulalion of Possession 107. The use, being the right to the possession, to take the rents and profits, was, in fact, a part of the entire owner- ship of the land, and seems to have been conceived of by the medieval lawyers as passing with every feoffment, separate and apart from the ownership, but included therein as a part of the whole. Whether because of this technical notion of the use, or because of the almost universal custom of declaring a use on every feoffment, there grew up a number of pre- sumptions which have survived to modern times. It was said that where no use was declared, it would result to the person who paid the consideration. Thus, where William enfeoffed Stephen of Blackacre in fee, and John paid the con- sideration, the use resulted to John, and Stephen became seised to the use of John in fee. The reason given in the later text books is that the law presumed that a man would not part with value without expecting some recompense, and that it was therefore the intention of the parties that the feoffee should hold to the use of the person paying the money. If, however, no consideration was paid, and no use declared prior to the Statute of Quia Emptores, a use was in the feoffee, as there was a tenure implied in every feoffment which was a sufficient consideration. But after the statute, if no use was declared and no consideration paid, the use resulted to the feoffor. So also where the feoffor declared a partial use to himself, the fee was in the feoffee, because there was no room for any presumption as to the intention of the parties since the intention was expressed. And since every grant is to be taken most strongly against the grantor, it is presumed that if the feoffor wished to have a larger use in himself, he would have said so. Where the feoffor declared a partial use to a third person, the remainder resulted to him- self, because after the termination of the partial use, the pre- sumption applied. It seems, however, that there was no 71 Anderson, 37, placitum 95 (1535); —_ ed. (1897), pp. 370-372, calls attention to Ames, Cases on Trusts, p. 108. the scholastic notions which affect the 8 Digby, Hist. Law of Real Prop., 5th development of the use; see §147, post. 64 THE ANCIENT USE [—107-110] resulting use except in the case of a conveyance in fee simple, and that all resulting uses were in fee. Uses Raised Without Transmutation of Possession 108. If the owner did not part with the title, he could create a use in either one of the following ways: first, by covenant to stand scised to uses. This was a covenant by which the owner declared that he held the property for the use of the persons designated. Such a covenant was valid only in so far as the parties designated stood in a relation of blood or affection to the covenantor. Second, by bargain and sale, which was where the owner agreed to sell the prop- erty to someone else. A consideration was necessary to support the bargain and sale. After the execution of the agreement, the use was in the bargainee. The use could be raised with- out transmutation of possession only by words in praesenti and upon a good and valuable consideration.* Where there was a transmutation of possession, the feoffor could keep the land for nothing unless the use was enforced, and the fact, there- fore, that the original declaration of trust was gratuitous, was immaterial. When there was no transmutation of possession, the owner himself would keep the land which was his own before if the use was not enforced. Chancery, therefore, requires a consideration before enforcing the use against him, and depriving him of his property. These principles underlie the modern law of trusts. Definition of a Use 109. A use, therefore, was a relation enforceable only in chancery, in which the feoffee to uses had no duties to per- form, except (1) to permit the cestui que use to take the rents and profits, (2) to convey the legal title at the latter’s direction, and was the exact counterpart of what is known in modern times as a dry or passive trust. Special Trusts 110. It was frequently the case that the feoffor vested active duties in the feoffee, directing him to take and receive °Callard v. Callard, Croke. Eliz. 344 See Ames, Hist. of Assumpsit,” 2 Harv. (1594), s. ¢. Moore, 687, placitum, 950 Law Rev., 1. at 18, 19 (1888). (1596); Ames, Cases on Trusts, p. 117. [—110] THE ANCIENT USE 65 the rents and profits or perform some other duty in con- nection with the legal, title. Such directions created an active or special trust which was different from a use.’ There were, therefore, two distinct equitable limitations: the use and the trust. We will now consider the statute of uses, and the effect which it had on these two relations, and then briefly notice the law relating to trusts. 10 Bacon, Uses, Rowe’s ed., pp. 8,9; Saunders, Uses, Vol. 1. pp. 3, 4, 5 (1823). (66) (67) CHAPTER 6 THE STATUTE OF USES Tue Stature: Its OPERATION AND Errect The Statute of Uses...............0....0000. Fa bute sialens Cueva §113 Effect of the statute on the legal title...................... §114 Effect of the statute on the common law.................... §115 Springing and shifting uses and conditional limitations...... §116 Executory limitations: <2000s 5s ¢seee ees wd enh e wee Poe ae ee we §117 Tue APPLICATION OF THE STATUTE General principle as to the application of the statute........ §119 Devise (6: USS ex Lee ses sas eRe a saad ahem tea esas §120 Use. upon @ USC nevseeswesdeuyy sme coe sawes bird cee eee s §121 Use in a Pennsylvania conveyance ............. 2. eee eee es §122 Use of personal property........... 06.0 ce esse tee eee eee ees §123 Use in a residuary clause of realty and personalty.......... §124 CONVERSION y sutacee ed tee eae deke ce aad enly ea sad-oy megane & §125 User fOr 18h: MINOR a cogy sere ae a reeiee ce ae ea ee eee §126 Continirent -Us@savin take dger os eae PeResancen ee eRe eee §127 Use after termination of active trust....................0005- §128 Sole and separate use.......... 0. cece e eee eee ene eens §129 Charitable: Use. 603%, pea nubian hie ay Aaa eed Misia eae Le Wann ass §130 Use with clause against alienation attached (spendthrift trust). §131 MOdertiUiS6 ss saie ridin cpg ed eyes iA Oey E Ea Le ARAr TRANG Weng §132 TTUSESewa vines sinriiess MAAK ee ae ena Oe ewe mses sa eee key $133 NEcrEssITy FOR A CONVEYANCE WHERE THE STATUTE APPLIES General principles 4 s¢ coy dac.eecdagdla ie aedeaeleaale a meaniee aus §135 Law in Pennsylvania examined...............-00s ec ee ee eeee §136 Probable cause of confusion in the law...................0.. §1387 Fallacious notion as to test of an active trust.............. §138 Conclusion as to Pennsylvania law............-..0...e eee §139 68 THE STATUTE OF USES [113, 114] The Statute of Uses 113. In the case of an equitable limitation of real estate, the intention of the settlor may be frustrated by (1) the Statute of Uses, (2) the rule against perpetuities, (3) the rule forbidding restraints on alienation, (4) the rule forbidding re- straints on enjoyment. The distinction between these four prin- ciples has not always been clearly observed, and it is necessary to the proper understanding of the last three to give some attention to the first. The final legislative effort’ to control the use, was the passage of the act of 27 Henry VIII,? commonly known as the Statute of Uses, which provided, inter alia, that where any person was seised to the use of anyone else, the legal seisin should be in that person, according to the character and quality of the use or trust that was in the cestui que use.? This is the most important statute affecting the use, and we shall give it careful attention. The Effect of the Statute on the Legal Title 114. By the operation of the statute, the legal title imme- diately passes from the feoffee into the cestui que use, or, viewing the transaction from the point of view of the donor, the legal title passes by the statute through the feoffee into the cestui que use, and, as is said, the use is executed in the cestui que use, and he has at once, by the force of the statute, the legal title. The feoffee in such cases, it is said, acts as a mere conduit pipe to transfer the title from the donor into the cestui que use.* It is clear, however, that the statute cannot pass any greater title into the cestui que use than was in the feoffee to uses.® 1The student will observe that the Statute of 27, Henry VIII, is the last of a series of statutory regulations extend- ing over a century, and is not, as some statements in the books would seem to imply, the only statute on the subject. 2 Chap. 10, (1536). 3 The first ten sections of the statute, except the eighth, are in force in Pennsyl- vania. Report of the Judges, 3 Binney, p. 618 (1808). The learned reader will find the full text of the statute given in Gray’s Cases on Property, Vol. 1, p. 468 and Digby, Hist., Law Real Prop., 5th ed. (1897), p. 347 et seq. * Lowrie, J., in Kuhn v. Newman, 26 Pa. 227 at 230 (1856), said, speaking of the operation of the statute, that it was merged. This is a somewhat inaccurate statement. A statute can never be merged. The learned judge probably had in mind the thought that the legal title was merged in the use by the opera- tion of the statute. 5 Perry on Trusts, Vol. 1, §312, 5 ed. (1899). [115, 116] OPERATION AND EFFECT 69 Effect of the Statute on the Common Law 115. The probable intent of the statute was to make the . use a common law right, and thus subject it to common law rules. The real effect, however, was to draw the use into the common law, taking with it the freedom of disposition which had theretofore obtained only in equity. The courts said, that as a use could be created before the statute, that it could be created as well afterward, and when so created, the statute stepped in and vested the title in the cestui que use, who thus obtained title by force of the statute and not by force of any feoffment or conveyance under the common law. It therefore became competent for the feoffor to make future limitations unhampered by the technical requirements which obtained as to common law estates. This is what is meant by the statement frequently found in the books, that the use was introduced into the common law. Where the estate limited by way of use comform to the rules of the common law, the cestui que use had at once by force of the statute the same legal estate as he would have had if the limitations had been made by a common law conveyance. Even if the uses were contingent, they were immediately executed by the statute.® Shifting and Springing Uses 116. Where, however, the limitation was such that it did not conform to the rules of the common law, the case was different. There was no legal estate to correspond to the executed use. Although the cestui que use had in theory a legal title, his estate was called a use. These uses were of two kinds: springing and shifting. When the use cut short another estate granted, it was called a shifting use, and when it cut short the estate of the person making the limitation, it was called a springing use.’ As the statute operates on a devise to uses,® a shifting use may be created by will as weil as by deed. Since a springing use cuts short the estate of the person granting it, it obviously can be created only by a deed inter vivos.* Springing and shifting uses, therefore, arose under the statute of uses, whereas executory devises and ® See §127, post. J., in Pepper’s Est., 120 Pa. 235 at 243 7Gray, Rule Perp., 2 ed. (1906), §54. (1888), where he called the use, created 8 See §120, post. in that case by will, a springing use, ®The remark, therefore, of Penrose, was somewhat inaccurate. 70 THE STATUTE OF USES [—116, 117] bequests operated at law dnd were dispositions of legal inter- ests..° The term conditional limitation is used to designate shifting uses and executory devises! The language of the judges in Pennsylvania is hopelessly inaccurate in this par- ticular. Equitable limitations are called executory devises; conditional limitations are called conditions, and vice versa. The distinction between these different kinds of estates, how- ever, is clear. It is not very easily borne in mind, and it is perhaps impossible to expect technically accurate language from the judges in the practical everyday work of the courts. The law is perfectly plain, although the point has not come up for decision in Pennsylvania, that springing and shifting uses are indestructible by any disposition or termination of the preceding estate.? Executory Limitations 117. An executory limitation has been defined as follows: “As a deduction from the foregoing observations, we arrive at the following general definition: an executory limitation is a limitation of a future estate in lands, or of a future interest in chattels, or chattels real, which would be invalid, if made in an assurance at the common law, but which, so far as regards the freehold and inheritance of lands, is valid either in a will or in a conveyance to uses, and, so far as regards chattels or chattels real, is valid in a will or testament.’’* This definition does not help us much. It simply says that an executory limitation is a limitation which is invalid in a common law conveyance. The term, therefore, seems to include executory devises and bequests, and springing and shifting uses. While such a general term may be convenient, the author of this book has found no occasion to resort to it.* 10 Challis, Real Prop., 2 ed. (1892), future uses were indestructible. The Chap. 14. See particularly p. 156. 1Gray, Restraints on Alien., 2 ed. (1895), §22, n. 1. Where the limitation operated to revest the estate in the grantor, if entry made, it was called a condition; see §76 on Conditions. 2Mr. Lewis points out, Lewis, Perp., (1843), Chap. 10, that there was much difference of opinion, after the passage of the statute of uses, as to whether learning on this point is obsolete, as it is now settled they are indestructible. See Gray, Rule Perp., 2 ed. (1906), §§124- 147. 3 Challis, Real Prop., 2 ed. (1892), p. 161. 4 For definition of an executory devise, see §78, ante; for definition of shifting and springing uses, see §116, supra. [119, 120] APPLICATION OF THE STATUTE 71 General Principle as to the Application of the Statute 119. The statute applies to a use but not to a trust. A special trust or duty was something different from ause before the statute, and the statute is, by its terms, expressly con- fined to uses. A use existed where the feoffee to uses had no duties to perform. A trust was where the feoffee had active duties.” The same rule obtains today. It is, of course, a question of intention whether a trust or a use is created in any given case. That intention must first be ascertained and then the statute applied or not, as the case may be. There is a certain fallacy in the assumption ® that the statute cannot operate where there are active duties, because it would be con- trary to the manifest intention of the donor to give the cestui que use the legal title. The statute is a positive act defeating intention; how, therefore, can it be said that its operation can be defeated by the addition of a few other words indicating an intention that the statute should not apply?® To say that it is a question of intention whether the statute applies, is to put the cart before the horse. The application of the statute will next be discussed with reference to the different instances of the use which may arise. Devise to Uses 120. The case of a devise to uses was supposed to be an exception because the Statute of Wills’’ was not passed until after the Statute of Uses, and it was much debated whether the former applied to wills. It seems, however, to have been finally settled that it did apply,’ and such is undoubtedly the law in Pennsylvania, although the point seems never to have been decided.” 5“ An equitable interest not a use, within the statute, may with propriety be called a trust.’’ Saunders, Uses, apply,” defeat its operation. To state such a proposition is to refute it. 10 32, Henry VIII. ¢. 1 (1540). Vol. 1, p. 2 (1823). ®See §109, ante. The proper words for a use were “to permit and suffer the said C. to take and receive the rents.” 7 See §110, ante. 8 Made by Kennedy, J., in Ashburst v. Given, 5 W. & S. 323 at 328 (1843). °Tf this is accurate, the settlor can, by adding to the settlement the words “IT intend that the statute shall not 1 Saunders, Uses, Vol. 1, (1823), p. 241; Sugden on Powers, Vol. 1, 8 ed. (1861), p. 148. ? Mr. Chief Justice Gibson, in the case of Ross v. Barclay, 18 Pa. 179 at 183 (1851), after pointing out that a devise was a species of conveyance, said that a trust of land created by will is of the same stamp as a trust created by deed. 72 THE STATUTE OF USES [121,122—] Use Upon a Use 121. Where a feoffment was made to A. to the use of B., to the use of C., the second use to C. was void before the statute, because the second use was repugnant to the first, and the two could not stand together. The statute, therefore, could not apply to the second use because it was first void by the principles of chancery, and the statute never had a chance to affect it.* Since, therefore, the first use was executed by the statute, and the subsequent use void anyhow, the result was that there could be no use of land created at all. This was the law for nearly a hundred years until, in the early part of the seventeenth century, the court of chancery recognized the second use® as a distinct valid equitable limita- tion. When the second use was finally recognized, it was held that the statute did not apply. The second use was recog- nized as a means of giving the court of chancery jurisdiction to prevent a faithless donee to uses from running away with property which had been given to him in confidence. This is the same reason which lay at the foundation of recognition by the court of chancery of the use in the first instance. It has been said*® that in- Pennsylvania the statute executes the second use, the law differing, therefore, from that which obtains elsewhere. No authority for the statement has been found and there is a dictum to the contrary.? It is believed, however, that the better opinion is that the statute does not apply to the second use in Pennsylvania. Use in a Pennsylvania Conveyance 122. A use limited to A. on an ordinary Pennsylvania conveyance to B. is executed by the statute. It might be supposed ® that the use to A. is not executed, because the 3 Ames, “The Origin of Uses and Trusts,” 21 Harv. Law Rev., (1908), at 270-271. Saunders, Uses, Vol. 1, p. 228 (1823). 4Tyrrel’s case, Dyer, 155 (1557); Doed. Lloyd v. Passingham, 6 B. & C. 305 (1827); Gray, Cases on Property, Vol. 1, pp. 510 and 516, respectively. 5 Mr. Ames says, 21 Harv. Law Rev. (1908), p. 273, that the first instance of a use upon a use was in 1605. ®° Gray, Restraints on Alienation, 2 ed. (1895), §215, and Lowrie, J., in Kuhn v. Newman, 26 Pa. 227 at 237 (1856). 7 Kennedy, J., in Franciscus v. Reigart 4 Watts, 98 at 118 (1835). 5 As was done by Kennedy, J., in Franciscus v. Reigart, 4 Watts, 98 at 118 (1835). [—122, 123—] APPLICATION OF THE STATUTE 73 habendum contains the words ‘‘unto and to the use of B.” and that there is, therefore, a use upon a use. The statute, however, only applies to the chancery use, which necessarily implies a relation between two persons. The use to B. does not come within this definition, and the statute does not apply.® The use to B. is introduced to rebut the presumption of a resulting use, which presumption formerly obtained when there was no declaration or consideration paid,'® and is prob- ably unnecessary at the present time. Use of Personal Properly 123. The overwhelming weight of authority elsewhere is that the statute of uses does not apply to personal property.! The law in Pennsylvania is in doubt.? There are, in Pennsyl- vania, numerous cases* in which, in construing limitations of personal property, the court has considered the trust as saved from extinction because it was active, and used terms only proper when the question of the application of the statute is under discussion, and yet in many of these cases,’ the court made an order for the transfer of the legal title which was totally unnecessary if the statute applied, as the effect of the statute is to vest the title in the cestui que trust immediately without any conveyance. Since the title to personal property passes only by delivery or some agreement between the parties, from which the court can say that it was their intention that the title should pass, it is apparent that to apply the statute ’ Ames, 21 Harv. Law Rev., (1908), 270. 10 Williams, Real Prop., 6th Amer. ed. (1886), p. 187. 1 Hill on Trustees, Bispham’s (1867), p. 366, note 2; Perry on Trusts, 5 ed. (1899), Vol. 1, §311; Bacon on Uses, Rowe’s ed. (1804), p. 43; Saunders on Uses, Vol. 1, p. 231 (1823). ? There is a dictum that the statute does not apply to personal property; Rhone, P. J., in Sharp’s Est., 155 Pa. 289 at 294 (1893), citing Perry on Trusts, Vol. 1, §311. Mr. Gray, Restraints on Alienation, 2 ed. (1895), §§124g and 215, and Lowrie, J., in Kuhn v. Newman, 26 Pa. 227 at 231 (1856), express an opinion otherwise. 3B. g. Bacon’s App., 57 Pa. 504 (1868); Freedley’s App., 60 Pa. 344 (1869) ; Yarnall’s App., 70 Pa. 335 (1872); Deibert’s App., 78 Pa. 296 (1875); Keene’s Est., 81 Pa. 133 (1876); Osborne v. Soley, 814 Pa. 312 (1876); Kreamer’s Executors v. Showalter, 1 Pa. C. C. 453 (1886); Harbester’s Est., 133 Pa. 351 (1890); Fetherman’s Est., 181 Pa. 349 (1897); Krebs’s Est., 184 Pa. 222 (1898); Eshbach’s Est., 197 Pa. 153 (1900); West’s Est., 214 Pa. 35 (1906). 4 Koenig’s App., 57 Pa. 352 (1868); Ogden’s App., 70 Pa. 501 (1872); Arnold v. Harper, 4 Sadler’s Cases, 126 (1886). 74 THE STATUTE OF USES [—123, 124: to personal property will give it an effect totally at variance with the received notions and practice on the subject. In the case of real estate, when the statute applies, the cestui que use may at once deal with the property as his own as to third parties. No case has been found in which a similar principle has been applied as to personal property.® There are a great many cases in which the presence of active duties is dwelt upon, in which it does not appear what the nature of the property was. The ground of decision in some cases of personal property appears to have been that the trust was dry and executed.” In this condition of the cases, no state- ment as to the law can be ventured. It will be observed that no case has been found which expressly decides that the statute does apply to personal property, and reason and author- ity are in favor of the proposition that it does not apply. If the statute does not apply to personal property, all the uses of personal property are the same as trusts. If the statute does apply, the same distinction must be taken in considering limitations of personal property, as to whether the trust is active or dry, as is taken in considering a use of real estate. Residuary Clause 124. Where real and personal property pass under the same residuary clause, there is some doubt as to how far the language should be construed differently with respect to each kind of property.2 The true principle is illustrated by the 5 If a man died possessed of a mort- gage, judgment or silver service, no one would argue that because he bequeathed such property to A. in trust for B., that B. was immediately possessed of the legal title and could satisfy the mortgage or judgment or be entitled to bring replevin for the silver service. In all these cases, the title would vest in the trustee named in the will, and he would have to transfer the title to or hand the article to the beneficiary. It is no answer to this to say that the executor must take the personal property in order to pay the debts, for land is subject to debts as well as personal property, and the liability for debts does not interfere with the operation of the statute of uses. The cestui que trust has the title vested in him by the force of the statute, sub- ject to the debts. ®¥For instance, see Boyd’s Est., 199 Pa. 487 (1901); Shower’s Est., 211 Pa. 257 (1905), and many others might be cited. 7 McCune v. Baker, 155 Pa. 503 (1893). The decision was correct as there was a trust of an absolute interest, see §§515- 517, post. 8 See language of Duncan, J., in Deihl v. King, 6 8. & R. 29 at 30 (1820), and in Steele » Thompson, 14 8S. & R. 84 at 101 (1826). [125, 126] APPLICATION OF THE STATUTE 75 case of Smith’s Appeal,® and the two kinds of property should be dealt with separately. The common practice of failing to distinguish between the two kinds of property is illustrated by several cases.’ In most cases neither the reporter nor the court thinks it necessary to indicate what the subject matter of the gift is. Conversion 125. The doctrine of conversion depends on the circumstance that the parties entitled to the proceeds can compel a sale. If the statute applied, it would defeat that right, as the exe- cutor would be deprived of the legal title and consequently of the power to make the sale. The direction to sell seems to make the trust active. As soon as the sale is made, the proceeds are personal property, apart from the doctrine of conversion, to which the statute would not on principle ap- ply. When the parties agree to reconvert and dispense with the sale, the power of the executor is at an end. There seems to be some force in the argument that in this case the statute applies and gives the cestui que trust at once the title. No authority for the proposition has been found, and it would undoubtedly be safer to have a conveyance of the legal title, and such, probably, is the prevailing practice. Use For a Minor 126. Where the cestui que use is a minor, the legal title would be executed in him just the same, as the statute con- tains no exception in favor of minority, and there is no reason at common law why an infant cannot take title to real estate. In some cases, however, the courts seem to think that the trust would not be executed until the cestui que use arrived at majority,” and it has been said that if there are active duties during minority, the statute does not apply during that time, but when the minor comes of age, the use is executed and the legal title passes to him at once.* There is no reason why 923 Pa. 9 (1854). See also language ? Dictum Cable v. Cable, 146 Pa. 451 of Penrose, J., in Francis’s Est., 17 Pa. C. C. 163 at 165 (1895). 10 Moorhead Est., (1897). * See Koenig’s App., 57 Pa. 352 (1868), where there was a conversion and a sale, yet the court seemed to think that the activity of the trust was material. 180 Pa. 119 (1892); Mitchell, J., at p. 455 said that the trust was executed on the majority of the cestui que use, if not before; see Jeremy’s Est., 178 Pa. 477 (1896). 3 Mark v. Mark, 9 Watts, 410 (1840); Dictum Black, J., in Steacy v. Rice, 27 Pa. 75 at 81 (1856). 76 THE STATUTE OF USES [127] the operation of the statute should be suspended merely because the cestui que use is a minor. A guardian can be appointed, if necessary, to take care of the property and collect the rents until the cestui que use comes of age. Contingent Use 127. It was at first thought that a contingent use was not executed by the statute pending the contingency.* Mr. Sugden, however,® goes thoroughly into the notion and explodes the theory that a contingent use is not executed. The weight of authority in Pennsylvania is to the effect that the contingent use is executed by the statue.® There are, however, some cases and expressions to the contrary,’ which may be con- sidered as overruled by the other authorities, although the conflict does not appear to have been called to the attention of the Supreme Court or the point ever argued. In some cases contingent uses in personal property have been said to be executed.® If the statute does not apply to personal property,° these cases are open to grave objection. The case of a contin- gent use which commonly arises is that of a use after the termin- ation of an active trust, which is discussed in the next section. Ajter Termination of the Active Trust 128. The statute applies to the uses which take effect upon the termination of the active trust.’° The ordinary instance of this class of cases is where the trust for life is terminated and the property becomes vested in those in remainder. The existence in the trustee of a power to sell and make partition 4 Saunders, Uses, Vol. 1, p. 231 (1823). 5 Sugden, Powers, Vol. 1, p. 18 et seq., 8 ed. (1861). ® See cases cited in §128, post. 7 Sharswood, J., in Rife v. Geyer, 59 Pa. 393 at 397 (1868), said that they are executed when vested. Pratt v. McCawley, 20 Pa. 264 (1853), was a case of a settlement by a woman on the eve of her marriage, in trust for her separate use for life and after her death to convey the same in trust for her children. She died, and the conveyance was made upon active trusts for the children for life, and after their death to convey to their appointees by will. The court held, in a controversy over the validity of a mortgage given by one of the sons during his lifetime, that the whole estate was equitable. Accord Morton’s Est., 24 Super. Ct. 246 (1904). Kennedy, J., in Ashhurst v. Given, 5 W. & S. 323 at 328 (1843), said that the statute did not apply where there was no cestui que use in being to whom the possession could be transferred. SE. g., West’s Est., 214 Pa. 35 (1906). ®See §123, ante, on a use of personal property. 10 As to what is an active trust, see §110, ante. No question has ever been raised as to a vested use. For a dis- cussion of the case of a contingent use, see §127, ante. [—128, 129] APPLICATION OF THE STATUTE 77 does not prevent the operation of the statute,' and where there is a direction to convey at the termination of the - life estate, the statute applies.2 Where, however, there is a dis- cretion to terminate the trust, it has been said that the statute dees not apply.? It seems, however, on principle, that the title should remain in the trustee. It is difficult to see how he can sell, make partition or convey unless he has the legal title. The law on this point is far from clear. The Sole and Separate Use 129. The statute does not apply to the sole and separate use,* even though there are no active dutics in the trus- 1Dodson v. Ball, 60 Pa. 492 (1869); Chamberlain v. Maynes, 180 Pa. 39 (1897). In this case there was a vested remainder which became executed, if at all, immediately upon the execution of the trust, and not after the termina- tion of the life estate, as argued by the counsel for the appellee. One of the remaindermen conveyed, and it was held that her grantee could maintain ejectment against the other remainder- men. If this was considered as a legal title, the reasoning of the court was confusing. To say that the statute executed the use, and that the power vested in the trustee to make partition could not prevail as against the cestui que trust who wished to terminate the trust, is correct, but in no case could the vesting of the legal title depend on whether the cestui que trust chose to treat itasin her. It would be in her either by force of the statute or by force of the conveyance from the trustee, and in no other way. The learned judge, Mitchell, J., seemed to think that the remainder- man or woman or her grantee, had a title which was available in ejectment without a deed. If this is so, why say that she took the title without the deed? See, however, Smilie’s Est., 22 Pa. 130 (1853). 2 Bacon’s App., 57 Pa. 504 at 512 (1868); Earp’s App., 75 Pa. 119 (1874), point not discussed here, decision not sustainable on any other ground; Arm- strong’s Est., 9 W. N. C. 289 (1880); Gray, Restraints on Alien., 2 ed. (1895), §216. The remarks of Penrose, J., in Snyder’s Est., 180 Pa. 70 (1897), were dicta, for an equitable interest could vest and pass under the intestate laws as well as alegal interest could. Contra: Rice, P. J., in Rockhill’s Est., 29 Super. Ct. 28 at 35 (1905). The learned judge, however, does not mention the statute of uses, and his language seems unneces- sarily restricted to the case of a will. 3 Paxson, J., in Wallace v. Denig, 152 Pa. 251 (1898); see Bank v. Denig, 131 Pa. 241 (1889), and Wilson »v. Denig, 166 Pa. 29 (1895). See, how- ever, remarks of Rice, P. J., in Rock- hill’s Est., 29 Super. Ct. 28 at 35, 36 (1905). *The clause of sole and separate use originally was “to permit and suffer the cestui que trust to receive and take the rents” for her sole and separate use, etc.; Pullen v. Rianhard, 1 Whart. 514 (1836); Dodson v. Ball, 60 Pa. 492 (1869). It was not until modern times that the words of activity, such as “to receive and collect the income” were inserted. 78 THE STATUTE OF USES [—129—] tee.® The sole and separate use clause standing by itself does not necessarily prevent the operation of the statute of uses, since the incidents of the separate estate in equity can easily be carried over into the common law in the same manner as were the other peculiar incidents of the use. Since, however, the chief protection to the woman lay in the presence of the trustee to stand between her and the importunities of her husband, an application of the statute would have left her a free agent at law, and defenceless against his influence. Various reasons have been assigned for the non-application of the statute, but this is the principle underlying all of them.® Where the circumstances requisite to the validity of the sole and separate use have ceased to exist,’ the statute applies and the beneficiary becomes immediately seised of the legal title, and entitled to deal with it as her own,® and her life estate will unite with the legal remainders, under the rule in Shelly’s case. If the active duties, however, have reference to some other object, or there is some other reason for continuing the trust, the termination of the sole and separate use will not entitle the cestui que trust to call for a conveyance,’® unless she has a fee simple estate, in which case she is entitled to a conveyance, as the trust is a restraint on her absolute owner- ship.’ In a number of cases where there was an active trust, 5 Lancaster v. Dolan, 1 Rawle, 231 (1829), language of Gibson, C. J., at 247; Pullen v. Rianhard, 1 Whart. 514 (1836); Cochran v. O’Hern, 4 W. & S. 95 (1842) dictum. For a case where there were no words of separate use, and it was held that the statute applied, see Kinsel v. Ramey, 87 Pa. 248 (1878). The dictum contra in Carson v. Fuhs, 131 Pa. 256 (1889), may be disregarded. ® Grier, J., in Cochran v. O’Hern, 4 W. & 8. 95 at 96 (1842); Lowrie, J., in Kuhn v. Newman, 26 Pa. 227 at 231 (1856). 7 As to what these circumstances are, see §570, post. ’ Smith v. Starr, 3 Whart. 62 (1838); Steacy v. Rice, 27 Pa. 75 (1856); McKee v. McKinley, 33 Pa. 92(1859). See §571, post. *Steacy v. Rice, 27 Pa. 75 (1856); Nice’s App., 50 Pa. 143 (1865). The decision contra in Harris v. McElroy, 45 Pa. 216 (1863), may be considered as overruled. Dodson v. Ball, 60 Pa. 492 (1869); Tucker’s App., 75 Pa. 354 (1874). 10 Ash’s App., 80 Pa. 497 (1876); Delbert’s App., No. 1, 83 Pa. 462 (1877); Dunn’s App., 85 Pa. 94 (1877); Inger- soll’s App., 86 Pa. 240 (1878), reversing 2W.N.C.13. Her life estate will not unite with the legal remainders; Earp’s App., 75 Pa. 119 (1874); Ashhurst’s App., 77 Pa. 464 (1875). The court will sometimes construe the active duties to relate solely to the sole and separate use, and not to the life estate. See Megargee v. Naglee, 64 Pa. 216 (1870). 1 See §516, post; Megargee v. Naglee, 64 Pa. 216 (1870). The court said in this case that the trust fell, but neverthe- less directed a conveyance. The trust would remain until the cestui que trust chose to call for a conveyance; see §525, post. If the reasoning of the court, [—129, 130] APPLICATION OF THE STATUTE 79 the court has said that the statute applied when the sole and separate use came to an end.” No conclusion as to the law can be drawn fronr these cases. The author has discov- ered no principle upon which they can be reconciled, and the remarks of the judges shed no light on the question what- soever. It is submitted that on principle the law should be as follows: the circumstances requisite under the peculiar doc- trine of Pennsylvania law to the validity of the sole and sepa- rate use must be present to defeat the operation of the stat- ute. When those circumstances have ceased to exist, the statute at once applies when there are no other active duties. Where there are active duties, the statute does not apply, and the right of the cestui que trust to have a conveyance depends on whether she has a fee or a life estate. The trust only falls of itself in those cases where the statute applies; in other cases, the trust remains until the cestui que trust calls for a conveyance. Charitable Use 130. The effect of the statute of uses on a charitable use is not clear. In those cases where the cestui que use is indefinite, there would seem to be a practical bar to the opera- tion of the statute, as there is no one to take the legal title. It seems that this is the case of a special trust, as the trustee has active and special duties to perform, to wit, to select the cestui que trust. It is true that the statute executes a con- tingent use. This case presents, however, no greater difficulty than that which exists in the case of a contingent legal remain- der at law; whereas, in the case of an indefinite charitable cestui que trust, there is not, and never can be, anyone to take the legal title. Where there is a use for a definite charitable object, there is no difficulty and the statute executes the use in the cestui que use.* that the statute applied, had been cor- rect, there would have been no con- veyance decreed, as the title would have passed by force of the statute. See also Chadwick v. McCombs, 4 Sadler’s Cases, 121 (1886). ? Strong, J., in Kay v. Scates, 37 Pa. 31 at 38, 39 (1860) ; Strong, J., in Koenig’s App., 57 Pa. 352 at 355 (1868), there was a conver- sion here, see §125, ante; Agnew, J., in Me- gargee v. Naglee, 64 Pa. 216 at 218 (1870). 3This was probably the result in Henderson v. Hunter, 59 Pa. 335 (1868), although the point was not discussed, and in Funck’s Est., 16 Super. Ct. 434 (1901). Where there was a direct gift at law to a charity, the gift could not take effect, and was administered by the chancellor under the sign manual. See Chap. 26, on Gifts to Charities. * App. of St. Luke’s Church, 1 Walk. 283 (1863). Where, however, there was 80 THE STATUTE OF USES [131—] Clause Against Alienation—Spendthrijt Trust 131. The clause against alienation, if valid at all, can affect a legal title as well as an equitable title. There is nothing, therefore, in the clause itself when attached to a bare use to prevent the application of the statute.® Since, however, the clause is perhaps valid in equity, when it would be void at law, the Supreme Court has said that the clause prevents the operation of the statute, as it is necessary to support the use as a trust in order to keep the title of the beneficiary in equity where the restraint imposed will be upheld, and as this cannot be done without the legal title remaining in the trustee, it is necessary for him to retain it, and consequently the clause creates an active trust when attached to a life estate.® It is not very clear, therefore, what the law in Pennsylvania is, and the statement may perhaps be ventured that the clause, when attached to a life estate, will prevent the operation of the statute. There is, it is apprehended, a fallacy in this view of the case. The upholding of the clause in equity when it would be void at law, is a case where equity does not follow the law. There must, therefore, be an equitable limita- tion first present before the court can say that the clause is valid. The question whether there is an equitable limitation where the subject matter is real estate, depends on the non- application of the statute of uses. To say, therefore, that the statute does not apply where a clause is present, is to defeat a use for a county, the court seemed to think that the county had the equitable estate: Seebold v. Shitler, 34 Pa. 133 (1859). there was an equitable life estate, how- ever, depended on whether the statute of uses applied. The court said that the words of the will were such that 5 It is the general practice in Pennsyl- vania, in drawing settlements and wills, to engraft the restraint against aliena- tion on trusts which would be valid for some other reason. The case, there- fore, where the clause stands alone, rarely arises. ® Rife v. Geyer, 59 Pa. 393 (1868), stated §314, post, semble, Gray, Restraints on Alien., 2 ed. (1895), §231, observes that the remarks in this case as to spend- thrift trusts were dicta, as there was an equitable life estate and legal remainder which could not unite under the rule in Shelly’s case. The question whether without the clause, the statute would apply. This is objectionable; there was plainly an active trust; see §133, post, u. 3. The court based the deci- sion on the ground that the clause against alienation prevented the operation of the statute of uses. It seems, there- fore, that the clause against alienation was the express ground of decision, although not necessarily involved in the case. Phila. Trust Co. v. Guillou, 100 Pa. 254 (1882), semble; see §315, post, as to this case. Carmichael v. Thompson, 8 Sadler’s Cases, 120 (1886), 8. v., 122 Pa. 478 (1888). [—131, 132] APPLICATION OF THE STATUTE 81 the provision of a positive act of the legislature by the inter- position of an equitable doctrine which, strictly speaking, cannot prevail except where the statute does not apply. This view of the question does not seem to have been called to the attention of the Supreme Court.’ Where, however, the interest was in fee, the court held, as under the law as it stood at that time, the clause was invalid in equity,® that it did not prevent the operation of the statute.° The Modern Use 132. A use may be created as well today as before the passage of the statute of uses, and is called a passive or a dry trust. It only remains to collect a few instances of a use or dry trust.’ A trust to permit and suffer the cestui que use to take the rents and profits, is unquestionably a dry trust. This was the form in which the ancient use was gen- 7These remarks would also apply to the sole and separate use except that there is an absolute necessity for the trust to be active, as the chief benefit to the woman is in the interposition of the trustee between herself and the importunities of her husband. The chancellor, therefore, laid down the doctrine that the sole and separate use was an active trust. The doctrine as to the clause against alienation has grown up in the last century, and the sine qua non of its validity is the existence of a trust. 8 As to the present state of the law on this point, see §251, post. ® Keyser’s App., 57 Pa., 236 (1868), stated §246, post,where the court held that all the active duties imposed by the will had been accomplished, and the only question remaining was whether the clause prevented the operation of the statute, and it was held that it did not, the interest of the cestui que trust being in fee. The reasoning of the court was that as the intention to tie up the equi- table fee was against the law, and that there was a dry trust, no other reason remained to oppose the statute and the use was executed. It is believed that there was ample evidence of the testator’s intention that the title should remain in the trustees, and that there- fore, the statute did not apply, but granted this, the son should call for a conveyance because the attempted restraint of a fee was invalid; see §524, post, and he, as the party entitled, could terminate the trust and take in his own control what was his own. 10The mere use of the words “in trust” creates a use, and the statute applies; Eckels v. Stewart, 53 Pa. 460 (1866); List v. Rodney, 83 Pa. 483 (1877), semble; Kinsel v. Ramey, 87 Pa. 248 (1878); Warn v. Brown, 102 Pa. 347 (1883); Cable v. Cable, 146 Pa. 451 (1892); Jeremy’s Est., 178 Pa. 477 (1896); Darrah v. Darrah, 202 Pa. 492 (1902); Rohrbach v. Sanders, 212 Pa. 636 (1905), semble, see remarks of Fell, J., at top of p. 641; and the application of the statute is not defeated by a direction to the trustee to make a@ conveyance in accordance with an executory limitation; Armstrong’s Est., 9 W. N. C., 289 (1880). 82 | ‘THE STATUTE OF USES [133] erally worded. The phrase is utterly out of place in any case where it is desired to create an active trust, and if inserted in such a settlement, would, it is conceived, have no legal sig- nificance whatever." Trusts 133. The statute of uses does not apply to a trust. A trust is a use with active duties.2 The activity of a trust, accurately speaking, is only of importance in an inquiry as to the application of the statute of uses, where the subject matter is real estate and is of no importance or relevancy for any other purpose. The usual words of activity are, “to collect the rents” or “collect and pay over the income.’* There are a few dicta that the words do not prevent the application of the statute.* It is submitted that the weight of authority and reason is with the former view, and that the words are sufficient to prevent the application of the statute. A devise to trustees in trust to pay debts and legacies is generally 1 See Rife v. Geyer, 59 Pa. 393 (1868), stated §314, post; Dodson v. Ball, 60 Pa. 492 (1869); Phila. Trust Co. v. Guillou, 100 Pa. 254 (1882), stated §315, post. ?¥or definition of an active trust, see §110, ante. 5In these cases the court has held that such a clause made the trust active and the statute did not apply. Rush v. Lewis, 21 Pa. 72 (1835), semble, Black, C. J.; Vaux v. Parke, 7 W. & S. 19 (1844), dictum; Pratt v. McCawley, 20 Pa. 264 (1853); Barnett’s App., 46 Pa. 392 (1864), doubtful whether real estate was involved here; Shankland’s App., 47 Pa. 113 (1864); Sheets’ Est., 52 Pa. 257 (1866); Bacon’s App., 57 Pa. 504 (1868); Earp’s App., 75 Pa. 119 (1874); Ashhurst’s App., 77 Pa. 464 (1875); MclIntosh’s Est., 158 Pa. 528 (1893); Boyd’s Est., 199 Pa., 487 (1901). * Gray, Restraints on Alien., 2 ed. (1895), §216, citing the case of Rife v. Geyer, 59 Pa. 393 (1868). In that case, however, the court ignored the words ‘'recover and receive the rents and income,” and placed the case on the ground of the presence of the clause against aliena- tion. Dictum, Lowrie, J., in Kuhn ». Newman, 26 Pa. 227 at 231 (1856), Harkinson v. Bacon, 3 W. N. C., 403 (1877). In Hemphill’s Est., 180 Pa. 95 (1897), the court said that because there was a direction to pay the net income, there was an active trust, as it necessarily involved discretion. This is undoubtedly correct. Judge Ashman, however, in the court below, took the distinction that there can be no active trust in Pennsylvania unless the duties imposed on the trustee require dis- cretion as well as activity. This is a new thought in the construction of the statute of uses, and one which, it is believed, the cases do not sustain. Judge Ashman further said, “The auto- matic function of merely receiving for the cestui que trust and immediately paying over to him the trust fund or its income, will not make a trust active. The cestui que trust could perform the act as well, and he has no protection in the superior judgment of the trustee, because the trustee is not empowered to exercise his judgment. The cases [135, 136] NECESSITY FOR A CONVEYANCE 83 considered as active in Pennsylvania, although no case deciding the point has been found.® It frequently happens that there is a power in trust or a power in an executor, and a question arises as to whether the legal title is in the trustee, in the executor or in the heir or devisee. The answer to this ques- tion depends on the terms of the will and the law of powers. The statute of uses obviously has no bearing on the case at all. General Principle as to Necessity for a Conveyance 135. It seems plain that in all cases which are within the statute, there is no necessity for a conveyance, since the statute of itself passes the title into the cestui que trust. To say that a conveyance is necessary, is to deny the effect of the statute. Law in Pennsylvania as to Necessity for a Conveyance 136. The law in Pennsylvania is far from clear. The remarks of the judges on the point are in conflict. In Bacon’s Appeal,® Strong, J., said, speaking of a contingent use: “It is true that we have in some cases decreed conveyances from a trustee to a cestui que trust, when the purpose of a trust has been fulfilled; but this is not because the equitable and legal titles remained apart. It was to dissipate a useless cloud upon the title, and make the property more marketable.” In this remark, the learned judge is involved in a contradiction of terms, for if the legal and equitable titles did not remain properly describe him as u mere con- duit.” The learned judge overlooked the practical aspect of the case. The receiving and paying of income can never be automatic. An automatic action is one which proceeds of it- self without any intelligence or outside agency. The question before the court in that case was evidently as to real estate, and the collection of income of real estate certainly requires discretion as to making leases, repairs, collecting rents and attending to taxes and water rent, all of which duties the trustee has to perform, see §§154, 155, post, because of his ownership of the legal title. The description of a mere conduit applied to a trustee, applies to those cases where the statute of uses operates. Further- more, a mere direction to pay over the rents and income does not imply a direction to pay the gross income, which must be the case if the dictum of the learned judge is correct. In Wolfinger v. Fell, 195 Pa. 12 (1900), there was a direction to pay the income. The court, McCollum, J., under a misapprehen- sion as to the terms of the will, thought there was a direction to pay the net in- come, and said the trust was active on the authority of Hemphill’s Est. 5 See Hill, Trustees, Bispham’s ed. (1867), p. 358. 857 Pa. 504 at 513 (1868). 84 THE STATUTE OF USES [—136—] apart, how could there possibly be anything for the trustee to convey? In Westcott v. Edmunds,” Agnew, J., said, by way of dictum: ‘‘It is very clear that the active duties of the trust under this will ceased at the death of Catharine Hance, the life tenant under the trust; and after that there remained no further duty to be executed by the trustee, but to convey the estate to the persons in remainder. But this, it has been decided, does not continue the trust, the law, in this state, executing the legal title in the remaindermen with- out the formality of a conveyance. It is true that decrees have been made in such cases, compelling trustees to convey to the person in remainder or to married women after cover- ture had ceased; but it is said that this is merely to remove the cloud arising from the apparent trust. Whatever might have been the impression as to the necessity of such a decree, it is now clearly settled by authoritive decision that the legal estate vests without a conveyance.”® In many cases the court has said that the trust was executed but nevertheless directed a conveyance.® In some cases, the court has dismissed the bill for a conveyance on the ground that the cestui que use already had the legal’ title under the statute.!° In other cases where the statute applied, the cestui que use was held to have the legal title without a conveyance, and permitted to deal with 768 Pa. 34 at 36 (1871). 8 See also remarks of Rice, P. J., in Rockhill’s Est., 29 Pa. Super. Ct. 28 at 35, (1905). In the case of Carson v. Fuhs, 181 Pa. 256 at 266 (1889), Mr. Chief Justice Paxson said, after stating that the trust was dry: ‘The trustee, in this case, had no active duties to perform; it is a passive dry trust, with no interest to guard, no rights to protect. In such case, the cestui que trust is entitled to a recon- veyance of the legal title; equity will consider that done which ought to be done, and declare the legal title in Mrs. Hamilton.” This is a new ground on which to put the operation of the statute of uses, and somewhat inconsistent with the established construction of the act. ®See Nice’s App., 50 Pa. 148 (1865); Keyser’s App., 57 Pa. 236 (1868); Dod- son v. Ball, 60 Pa. 492 (1869); Megargee v. Naglee, 64 Pa. 216 (1870); Ogden’s App., 70 Pa. 501 (1872); Rodrigue’s App., 22 W. N. C. 358 (1888). See Gray, Restraints on Alien., 2 ed. (1895), §§124g, 194, n. See Kuhn v. Newman, 26 Pa. 227 (1856). This case has been considered revolutionary in the law of trusts. There were no active duties imposed in the trustee. The sole and separate use fell, and the beneficiaries, therefore, became vested with the legal title; see §§131, ante, 137, post. The remarks of the court as to the case before it were correct. The decree for a conveyance was refused, because if they had the title, the decree in partition embraced it, and, of course, no conveyance was necessary. See Rush v. Lewis, 21 Pa. 72 (1853). [—136, 137] NECESSITY FOR A CONVEYANCE 85 it as owner.’ In still other cases, where the life estate came within the statute, it was united with the legal remainder.” If a conveyance is necessary, how could the life estate unite with the remainder until a conveyance had been made? If necessary in one case, it must be necessary in another. It is perhaps the tendency to require a conveyance when the con- troversy is between the cestui que use and trustee, but when between the cestui que use and third persons, to consider the title as having passed.? Probable Cause of Confusion in the Law 137. Further confusion has existed on this point because of the failure to bear in mind the distinction between a trust which is executed by the statute, and a trust which can be terminated by the cestui que trust. In the former case, the interest becomes legal at once; in the latter, it does not become legal until the cestui que trust has proceeded in a court of equity for transfer of the title or the trustee has made a conveyance. It is probable that some of the peculiar principles of Pennsylvania law relating to the validity of the sole and separate use,* and the application thereto of the statute of uses,” have arisen because of this misunderstanding of the operation of the statute of uses. As long as the court failed to distinguish between the case where the trust fell of itself because of the operation of the statute of uses, and the case where it was terminable only by a conveyance from the trustee, it was easy to slip into the position that a sole and separate use fell of itself when the circumstances requisite to its validity had ceased to exist.® Fallacious Notion as to the Test of an Active Trust 138. It is sometimes said that where a court of equity would decree a conveyance of the legal title to the cestui que trust, the trust would be considered as executed without a 1Smith v. Starr, 3 Whart. 62 (1838); 3 Eckels v. Stewart, 53 Pa. 460 (1866); McKee v. McKinley, 33 Pa. 92 (1859); List v. Rodney, 83 Pa. 483 (1877); Cable v. Cable 146 Pa. 451 (1892); Kinsel v. Ramey, 87 Pa. 248 (1878). Chamberlain v. Maynes, 180 Pa. 39 4 See $570, post. (1897), semble. 5 See §129, ante. 2 Steacy v. Rice, 27 Pa. 75 (1856); 8 For a further discussion of this point Nice’s App., 50 Pa. 143 (1885). see $129, ante. 86 NECESSITY FOR A CONVEYANCE [135 formal conveyance by the trustee.” This is the same thing a saying that no conveyance is necessary where a court of equit; would direct a conveyance. Now, the only case where a cour of equity will direct a conveyance is where there is an activ trust which has terminated or where the trust can be termine ted by the cestui que trust under some rule of law. Th very case, therefore, in which a court of equity will decree conveyance, is the case where a conveyance is necessary, an when the title has passed by the force of the statute, the com will not decree a conveyance. The statement, therefore, clearly fallacious and should be disregarded. Conclusion as to Pennsylvania Law 139. No statement of the law as to the necessity of conveyance can be made in this condition of the authoritie: It will undoubtedly be safer to always take a conveyance, an that, probably, is the universal practice, which of cours practically repeals the statute of uses. The statute is of n vital importance in modern times except in so far as conve} ancing is concerned. It will be easy to confine the operatio of the statute to those cases and deny its effect in all othe cases. The line of distinction is so clear between the case ¢ a simple use and all other equitable limitations, that n difficulty can arise. If the statute applies and no conveyanc is necessary there will often be a practical difficulty in decidin whether, in a given case, there is a use or a trust.® 7This notion apparently has its origin in the 4th paragraph of the syllabus of the case of Rife v. Geyer, 59 Pa. 393 (1868), which is as follows: “The true test as to a trust being dry or active is, whether equity in Pennsylvania would decree a conveyance of the legal title.” Mr. Justice Sharswood, on p. 396, made use of the above language, leaving out that part of the sentence in quotation “as to a trust being dry or active.” It is believed, however, that the court did not mean to announce any such state- ment of law, for the connection in which Mr. Justice Sharswood uses the language above mentioned is to elaborate that part of the opinion which follows the sentence, to wit, as to how such a trust is to be treated in a common law pr ceeding, and has no reference to tl previous paragraph where he is di cussing the distinction between an acti’ and a passive trust. Cited and followe by Mehard, P. J., in the court below Carmichael v. Thompson, 8 Sad. Case 120 at 125 (1886); Mitchell, J., in Char berlain v. Maynes, 180 Pa. 39 (189% SIt is to be observed, however, th: under the Act of June 14, 1835, P. : 628, §30, the court has power to comy the conveyance by trustees of the leg estate when the trust has become executi or has expired. While this act is not : together clear, it may be that under its pr visions a conveyance is necessary in eve case where the statute of uses applies (87) CHAPTER 7 TRUSTS NaTuRE AND DEFINITION OF A TRUST Préliminary v4.csineesdis seven Oe daaae dae sa eye deere tesa Early conception of the nature of a trust.................. Objections to the early conception....................00000. True notion of trust suggested.................. 0000. e ee eee Definition of a trust and division of trusts.................. Resulting trusts. ays saae sri en akon dee ow aren meee Rae THE TRUSTEE The title of the trustee......... eee eee The power of the trustee Preliminary discussion.............. cece eee e ene Power’ over: ‘the: legal! titless: also noticed by Mr. Chief Justice Gibson in Lancaster v. Dolan,® that alienability is not the necessary incident of a life estate and is a doctrine engrafted on the common law by the English courts of equity. In this reason, as pointed out by Mr. Gray,’ the learned judge overlooks the history of the law, which is that legal interests were alienable at law, and that equity, in this respect, followed the law. (3) The notion that the clause against involuntary alienation is 3The course of decision in this par- ticular in Pennsylvania is very striking. In Pennsylvania, in early times, equity and equity jurisdiction and all power of a chancellor, were looked upon with fear and dread, and equitable doctrines were introduced sparingly and with great hesitation. Now, however, in this very same State, the power of the chancellor has been carried to lengths which would probably startle the most high-handed lord chancellor who ever occupied the woolsack. In Pennsyl- vania the chancellor nullifies the solemn law of the land when the creditor en- deavors to take in execution the equi- table assets of his debtor, and when the clause is present, says that the law declared by the legislature shall not apply, although there is no warrant in that law for any such exception. It is no answer to this to say that the chancellor in so doing only carries out the express wishes of the donor, for that wish is admittedly void at law and can only be effective in equity because of the interposition of the chancellor. * For a further discussion of this point, see §2, ante. 5 In Nichols v. Eaton, 91 U. S. 716 (1875). °2 Rawle, 231 (1829), stated §590, post. > Restraints on Alien., 2 ed. (1895), §256. [—254—] INVOLUNTARY ALIENATION 149 repugnant to a legal estate, but not to an equitable estate. As Mr. Gray points out,’ no reason is given why there should be any distinction between law and equity. And, furthermore, if the clause is not repugnant to an equitable estate, why should it be held invalid in the case of an equitable fee, and valid in the case of an equitable life estate? (4) That the only objection to the invalidity of the clause is that it de- frauds the creditors of the beneficiaries, and that it does not defraud them because they extend credit to their debtor pre- sumably with knowledge of the presence of the clause. It does not follow that they do not know of the presence of the clause, or that they know that the debtor has this particular piece of property, and furthermore the assumption that this is the only objection is an assumption for which there is no warrant. It can easily be shown that the objection is of no weight, because in many cases the instruments containing such clauses are not of record, and very rarely does a case arise where it can be shown that the creditor actually knew of the presence of the clause. Even if the creditor did know of the clause, this pertinent question might be asked: upon what is he entitled to rely—upon the law of the land, which makes that property liable to his claim, or upon the attempted ex- emption created by a private individual? (5) The analogy of the statutes of exemption advanced by Mr. Justice Miller? Mr. Gray* says that this analogy is imperfect because those statutes were intended to help the poor, and the clause in question tends to enable the rich to live without paying their debts. There is also the further objection to this analogy, that the statutes of exemption are of equal application to all members of the community, while the clause in question oper- ates to destroy that equality and give to certain members an additional exemption which others do not have. Therefore, the courts, which sustain the clause, by so doing destroy, in that respect, one of the most boasted principles of American juris- prudence—the equality of all men before the law.® (6) It has been said that the donor has an individual right of prop- erty in the execution of the trust, and to deprive him of it ? Restraints on Alien., 2 ed. (1895), 5 For a very excellent summary of §257. the arguments for and against the 3 Nichols v. Eaton, 91 U.S. 716, (1875). validity of the clause, see Gray, Re- ‘Restraints on Alien., 2 ed., (1895), straints on Alien., 2 ed. (1895), §251, §263. et seq. 150 ABSOLUTE EQUITABLE INTEREST [254] would be a fraud on his generosity.° The notion arose at a time when equity was in its infancy in Pennsylvania and is to be received with caution, and until a case has arisen in which a donor has actually appeared before the court and been pro- tected in the assertion of this so-called right of property it may be seriously doubted whether there is any such right of property at all. It is certainly contrary to all the prin- ciples of the law of trusts, to say that the donor has any interest in the property after he has fully created the trust and the cestui que trust has acquired a vested right. ® Gibson, C. J., in Holdship v. Patter- in Carmichael ». Thompson, 8 Sad. son, 7 Watts, 547 at 551 (1838), quoted Cases, 120 at 124, 125 (1886). by Mehard, P. J., in the court below (151) CHAPTER 13 EQUITABLE LIFE ESTATES. INVOLUNTARY ALIENATION (SPENDTHRIFT TRusTS) PRELIMINARY Forfeiture for involuntary alienation......................04. §266 Prohibition of involuntary alienation.....................004. §267 Spendthrift trusts defined......... 0.00.0... ee eee §268 Objections to validity............. 0.0. cece eee eee eee eee §269 THe Lanauace NEeEcEssARY TO CREATE THE CLAausE Pro- HIBITING INVOLUNTARY ALIENATION General principles: :seec¢csave wen es eee Sate aes eeee pases aye es §270 (Note collecting cases on the form of the clause) Extreme cases Preliminary discussion..............0 0.002 c eee eee eee §271 SMith OW. SavidGeicc cewek ei saedae nea ewerees cea §272 Stambaugh’s Estate........... 000... cee eee eee eee §273 Creéssler‘s: HState..cainagei ving sin wk ute waa wae tes §273a Winthrop Co. v. Clinton................ 0.0. eee eee, §274 Shower’s Estate............. 000 eee cece e cee ee eee §275 Notion that putting in trust indicates a distrust...... §276 Summary of extreme cases............. 0.000 e eee eee §277 Clause void when imposed by settlor upon interest reserved to Himself diene sire aecledadeegaes jeiccitls SIS Ska oaelonats- ata tacs §278 Discretionary powers in a trustee..............0.. 0c cee, §279 Clause against anticipation..............0.. 0.6 cece eee §280 Part of the estate covered by the clause..................-. §281 Tur EFFECT OF THE CLAUSE PROHIBITING INVOLUNTARY ALIENATION Character of the obligation immaterial.................-.2... §282 Decker v. Directors of the Poor........-...+++e seers eee ee §283 Clause does not protect estate in the hands of the cestui que 152 [266, 267] Extent of protection as to previously incurred obligations.... §285 Effect on assets appointed under a power.................- §286 Effect on accumulated income due cestui que trust at time OF CORED bass ioc nacaor aes Sen eee AMOR Bb eel SRE a eae $287 Effect on accrued income.........0. 00000 e ee eet eee §288 Effect of the clause as between trustee and cestui que trust.. §289 OricIN or tHE Notion Tuat THE CLausr Pronipirinc INVOLUNTARY ALIENATION IS VALID Mr. Gray’s reasons for the origin of the notion.............. §291 Author’s observations on the origin of the notion Dietum: im Fisher o: ‘Taylotss:2sThe true ground is found in the Green, J., in King’s Est., 147 Pa. opinion of the Chief Justice on p. 598. “The release of the life tenant does not bind him. The release of the alleged remaindermen does not protect the trustee. Non constat that the releasors will be the remaindermen at the death of Moses Stambaugh. If the trustee suffers by this ruling, it is the result of his own folly. * * It is to be observed that no question arises as to creditors. As between the trustee and his cestui que trust, we must give this will the effect of a spendthrift trust.” The case so understood by 410 at 415 (1892); understood by the court below in Seitzinger’s Est., 170 Pa. 500 at 517 (1895), as going on the ground of construction that Moses was only to have a life estate. ®From the report of the auditor it appears that no contention was made before him as to the payment to the other two children. The exceptions filed, however, very specifically com- plained of the finding as to them, and there is, therefore, no doubt that the matter was squarely before the court. (273, 273a——] INVOLUNTARY ALIENATION 159 the admission of evidence of the insolvency was erroneous. There was no latent ambiguity in the will requiring explanation. The terms were perfectly plain, and there could be no doubt as to what the testator meant. On this point, the case may be considered as overruled by Shoup’s Estate,’ where evidence of the insolvency of the cestui que trust was expressly ex- cluded. Cressler’s E'state 273a. In Cressler’s Estate * there was a direction as follows: “As to any interest and estate which my son Daniel may take under this will, I direct the same to be held by my executor * * * in trust, the interest and income thereof to be paid to said Daniel * * * .” The interest of Daniel was sold under a vend ex. The auditor, W. Trickett, Esq., in the court below, whose opinion was affirmed on appeal by the Supreme Court,® said, by way of dictum, the sale having occurred in the lifetime of the testatrix: ‘‘Even had it taken place after his mother’s death, it would have conveyed no interest, for her will 731 Super. Ct. 162 (1906). The very able opinion of Rice, P. J., at p. 166, is well worth quoting: “But while under the law of this commonwealth spendthrift trusts are not regarded with disfavor, yet they are not looked upon with such special favor as warrants the courts in construing a trust to pay the income of a fund to the testator’s son for life, without more, to be a spend- thrift trust, or, in case of such a gift, departing from the general rule that when the language of will is clear and unambiguous a doubt suggested by extrinsic evidence cannot be permitted to affect the construction of the instru- ment. * * If parol evidence was admis- sible in this case to sustain a construction whereby the trust as to the fund in question would be converted into a spendthrift trust, it is difficult to see why such evidence should not be ad- mitted in every case, no matter how clear and unambiguous the terms of the will, where a testator has given a share of his estate to one child absolutely, and has restricted his gift to another child to the income of another share which he has put in trust. This would be in plain contravention of the general tule that extrinsic evidence will not be admitted to create a doubt, and thus affect the construction of a will which on its face is clear and free from doubt and needs no construction. We all con- cur in the conclusion reached by the court below, and in the reasons assigned therefor in the opinion filed by its learned president. His discussion of the questions involved, and of the dis- tinctions between Stambaugh’s LEst., 135 Pa. 585, (which in Winthrop v. Clinton, 196 Pa. 472), was conceded to be an extreme case, and the case at bar, renders further elaboration by us unnecessary.”” See also opinion of the court below in Bremer’s Sons v. Mohn, 169 Pa. 91 at 93 (1895). It is sub- mitted, therefore, that the statement of law in Pepper & Lewis’s Digest of Decisions, Vol. 22, col. 38553 (1341), is hardly accurate. 8161 Pa. 427 (1894). ° At p. 437. 160 EQUITABLE LIFE ESTATES [274] converted the land into personalty, and gave Daniel the interest of his share of the principal for his life, so as not to be liable for his debts.” It is difficult to see how, under the words of the will as given, there was any exemption from liability for debts, or how the fact that it was converted into personalty could have any such effect. Winthrop Co. v. Clinton 274. In Winthrop Co. v. Clinton’ the provision in the will was to pay the net income to A. “for his use and support for and during all the term of his natural life, and not to be liable to anticipation, and his receipt alone to be the sole discharge,” with a gift over after A.’s death. The Supreme Court, in an opinion by Mr. Justice Green, held that the creditors of A. had no claim on the income in the hands of the trustee. The learned judge quoted the language used in the will in Stambaugh’s Estate,’ without adverting to the extrinsic evidence considered by the court in that case as shedding light on the intention of the testator. The learned judge also referred to Smith v. Savidge,’ without noticing that there was in that case the same inadmissible extrinsic evi- dence, and relied on the notion that the mere placing in trust implied a distrust. The case of Girard Life Ins. Co. v. Chambers,? where the creditor prevailed, and the words were “use and benefit,” was distinguished on the ground that the word “support’’ was equivalent to sustenance, and the income could not be used for the sustenance of the cestui que trust if his creditors could take it away from the trustee, while “benefit” meant a more general use. The learned judge also said that there were other elements of distinction, but did not point out what they were, which is to be regretted, since the cases appear on careful examination to be indistinguishable. If the principle of this case is to prevail it should be carried to its logical conclusion, and a creditor who has furnished necessaries for the sustenance of the cestui que trust should be permitted to recover. It is respectfully submitted that this case is too extreme to be safely followed, that the decision in Girard Life Ins. Co. v. Chambers represents the better view, and that there is no solid distinction between the two cases. 10 196 Pa. 472 (1900). 14 Penny. 320 (1844), §272, ante. 11135 Pa. 585 (1890), see §273, ante. 246 Pa. 485 (1864). [275, 276] INVOLUNTARY ALIENATION 161 Shower’s Estate 275. In Shower’s Estate* there was a direction to trustees to so control the shares of the cestui que trust that ‘they may enjoy the interest thereof only, but in no way impair or diminish the principal.’ Mestrezat, J., said, by way of dictum, that the testator “limited and restricted the use of the estate he gave his three children so that they could enjoy only the income thereof, and without the right of anticipation, and not subject to the claims oj their creditors in the hands of the trus- tee.” How the learned judge could read into the will words (indicated by italics) which were not there, is difficult of comprehension.* The learned judge cited Stambaugh’s Estate,® entirely overlooking the fact that that case went on inad- missible extrinsic evidence, and followed the extreme decision of Winthrop Co. v. Clinton. It is bad enough to alter the words of the will on inadmissible extrinsic evidence, as was done in Stambaugh’s Estate; it is, however, still more objectionable to add words without any extrinsic evidence at all, as was done in this case. As there were other grounds of decision assigned and no rights of creditors were involved, the remarks as to the spendthrift trust may be con- sidered as dicta. Notion That a Mere Putting in Trust Indicates Distrust 276. The learned reader will find that in a number of cases the court has said that the fact that the testator put the estate in trust indicates a distrust on his part of the bene- ficiary, and lends strength to the conclusion that a so-called spendthirft trust was created. This notion, it is submitted, is without weight and is a fallacy. Property may be put in trust for one or more reasons, and to say that when it may serve one or two of several purposes, that the creation of the trust indicates one purpose rather than the other, is to draw an unwarranted conclusion from the language of the testator. This notion was pressed on the Superior Court by the learned 3211 Pa. 297 (1905). See this case considered as overruled by the decision further discussed in §250, ante, as to in Shoup’s Est., 31 Super. Ct. 162 (1906); spendthrift trusts of a fee, and §522, see §273, n. 7, ante. post, as to trust of an absolute interest. 5 139 Pa. 585 (1890), stated §273, ante. 4 This reasoning of the judge may be 6 196 Pa. 472 (1900), stated §274, ante. 162 EQUITABLE LIFE ESTATES [277—] counsel for the appellant in Kunkel v. Kemper,’ and was repudiated by the court. It may therefore be said that it is no longer the law. This is somewhat the same fallacy as that involved in the proposition, that putting an estate in trust indicates an intention to cut down the estate previously given.® Summary of the Extreme Cases 277. It is apprehended that all the cases which have just been noticed are too extreme to be followed. In Smith v. Savidge ® there was no clause prohibiting involuntary alienation at all. In Stambaugh’s Estate }° the court went on the inad- missible evidence of the insolvency of the cestui que trust, and the case may be considered as overruled by the decision in Shoup’s Estate... The remarks in Cressler’s Estate? and in Shower’s Estate * were plainly dicta. In Winthrop Co. v. Clinton * the court followed the discredited decision in Stambaugh’s Estate,’° and Shoup’s Estate’ may be regarded as also overruling 732 Super. Ct. 360 (1907). See also Shoup’s Est., 31 Super. Ct. 162 (1906). The opinion of Rice, P. J., on this point in the latter case at p. 166, is well worth quoting: “But it is argued that, the mere creation of the trust for a son, while reposing confidence in others ‘contrary to the usual order of things,’ is enough in itself to raise a doubt as to the intention of the testator, thus taking such a case out of the general tule last stated. This argument, as applied to this case, is based largely on the distinction which the testator made between his only son and his married daughter. But assuming for a moment, as the learned counsel contends, that ‘this indicates that the testator had less confidence in the former than in the latter, it seems to us a non sequitur to say that it also gives rise to doubt whether the language of the gift of $10,000 in trust to pay the income to the son for life fully expresses the testa- tor’s intention as to the right of the son to subject the same to liability for his debts and engagements. The lan- guage of the gift to the son being clear and unambiguous is not rendered doubt- ful in meaning by the mere fact that the gift to the daughter was not restricted to the income. Why the testator made this difference is matter of speculation; but inability to discover from » perusal of the will the reasons which influenced him to make the distinction is one thing, while to doubt whether the will fully expresses his intention is another and quite different thing. The former, stand- ing alone, is no ground for resorting to extrinsic evidence. Presumably, with- holding the principal from the son, and giving him the income only, constituted the full measure of restriction upon the son’s possession and enjoyment of that part of the estate which the testator deemed wise under the circumstances.” Kuntzleman’s Est., 136 Pa. 142 (1890), accord. 5 As to which, see §522, post. ® 4 Penny. 320 (1884), stated §272, ante. 10 135 Pa. 585 (1890), stated §273, ante. 131 Super. Ct. 162 (1906), see §273, ante, n. 6. 2161 Pa. 427 (1894), stated §278a, ante. 3211 Pa. 297 (1905), stated §275, ante. 4196 Pa. 472 (1900), stated §274, ante. [—277, 278—] INVOLUNTARY ALIENATION 163 Winthrop Co. v. Clinton. It is, therefore, apprehended that it is the law that the clause prohibiting involuntary alienation must be clearly expressed, and that the principle of law sus- taining the validity of the clause is so objectionable and so contrary to common honesty and the principles of public policy, that it is to be applied only in a case where the court is forced to apply it by precedent, and then only if the clause is so plainly expressed that there can be no doubt as to the meaning. Clause Void When Imposed by Setilor Upon Interest Reserved to Himself 278. The clause prohibiting involuntary alienation is invalid when imposed by the settlor of a trust upon the interest reserved to himself by the settlement, whether the interest reserved is for life or in fee, and the law is the same whether the settlement is made by a man or a woman.’ A clause of forfeiture upon involuntary alienation of the interest reserved to the settlor is, in like manner, void. No Pennsylvania case on this point has been found. The learned reader will observe that in these cases the creditor may proceed on the theory that the deed is valid, but that nevertheless he can seize the interest reserved to’ the settlor, notwithstanding the clause against involuntary alienation, and that is the procedure he will observe when he wishes to reach the life interest, the set- tlor being still alive. Or, he may proceed upon the theory that the check, was held void as against the Consider in this connection 5 Gray, Restraints on Alien., 2 ed. (1895), §268a. Ghormley v. Smith, 139 Pa. 584 (1891), same deed of trust in Patrick v. Bingaman, 2 Super. Ct. 113 (1896); Hay v. Price, 32 Pa. C. C. 197 (1906), s.c. 15, D. R., 144 semble, stated §544, post; Andress v. Lewis, 17 W. N. C. 270 (1886), ». c., 1 Pa. C. C. 293; Barber v. Snyder, 17 Mont. Co. 195 (1901); Lewis v. Miller, 21 W. N. C. 94 (1888). In Loyd v. McCaffrey, 46 Pa. 410 (1864), an arrangement between the depositor, the bank, and a creditor of the depositor, that a certain check given by the deposi- tor to his creditor should, on an attach- ment laid on the bank by the creditor of the depositor, be immediately passed to the credit of the creditor, payee of creditor. those cases where the creditor of the cestui que trust cannot reach a trust fund because the cestui que trust him- self is not yet in a position to receive payment of his interest under the trust; as in Foster’s Est., 179 Pa. 610 (1897); where the court put the case on the ground that the trust property (furniture) was, in its nature, indivisible. The real reason, it is believed, was that the time had not yet arrived for the termination of the trust. The interest of the cestui que trust here was an interest in remainder. SGray, Restraints on Alien., 2 ed. (1895), §§90-95. 164 EQUITABLE LIFE ESTATES [279, 280—] the deed is void under the Statute of 13 Elizabeth, in which case the clause prohibiting involuntary alienation does not figure in the decision, and he can reach both principal and life es- tate even though there is a gift over the principal.’ Discretionary Powers in a Trustee 279. The cases where the trustee has discretion as to the payment to the cestui que trust, although sometimes con- sidered under the heading of spendthrift trusts,? come under a different principle. If the discretion is such that the trustee can make the payments so that they will amount to a restraint on the enjoyment by the cestui que trust, the cestui que trust can ask relief from a court of equity. These cases, therefore, come under the rule forbidding restraints on enjoyment, and will be discussed in Part IV.® Under the same principle come the cases of trusts for support, mainte- nance, education, etc., of the cestui que trust. In a number of these cases the court seemed to think that there was exemption from involuntary alienation because of these dis- cretionary words,—that there was a spendthrift trust. The words, however, might have the effect of inducing the trustee to make the payments in such a way as to amount to a restraint on the enjoyment by the cestui que trust, and we would then have the question as to how far he can proceed under the discretion against the wishes of the cestui que trust.'° Clause Against Anticipation Where There is a Clause Prohibiting Involuntary Alienation 280. The clause against anticipation is properly introduced only in the case of a married woman’s trust,’ and has no place whatever in a trust of any other kind. The effect of the clause 7JIn Mackason’s App., 42 Pa. 330 (1862), the settlor was dead, and his creditors came in on the fund held by the trustees under the settlement as against the settlor’s appointee. The clause prohibiting involuntary aliena- tion applied only to the income, as to which no question was before the court. Catherwood’s Est., 29 W. N.C. 344 (1891), accord. In Nolan v. Nolan, 218 Pa. 135 (1907), there was no clause prohibiting involuntary alienation, but the creditor was allowed to satisfy his claim out of the principal, even though the debt was contracted after the creation of the deed of trust. 8 See Brubaker v. Huber, 13 Pa. C. C. 78 (1893), s. vc. 2 D. R. 703, 10 Lane: L. R. 99. ®See Chap. 23 on discretion. 0 See Chap. 23. See §§596, 597, post. [—280, 281] INVOLUNTARY ALIENATION 165 is to prohibit voluntary alienation, and it can, therefore, have no weight whatever in considering whether the interest is exempt from involuntary alienation. If a clause prohibiting the voluntary alienation of an equitable life estate is void, and it is submitted that it is,” then the clause against anticipation is, in like manner, void. If such a clause is valid, then the same object can be obtained by an ordinary prohibition clause, and there is no occasion to resort to the clause against antici- pation. It is the common practice, for reasons which are not very clear, to insert in trust settlements in Pennsylvania a clause against anticipation, without consideration of whether the case is that of a married woman’s trust or not, and in most of these cases there are so many other clauses of pro- hibition and of forfeiture, that a case turning solely on the clause against anticipation is rather unlikely to arise. Part of the Estate Covered by the Clause 281. Several cases have arisen presenting the question of construction as to what part of the estate is subject to the clause against alienation. In Moore »v. Deyo* the testator created spendthrift trusts for life, with remainders to charities. The gifts to the charities fell because the will was executed within thirty days of the testator’s death, and it was held that the clause against alienation did not apply to the remainders, although they went by way of resulting trust to the cestuis que trustent of the life estates. In Baeder’s Estate* there was a trust as to the share of the son, by which the trustees were empowered to advance one-half of his share to the son upon his attaining the age of twenty-five years, and the other one-half was directed to be held in a spendthrift trust. The trustees decided not to pay the son his half. Held, that that part was covered by the spendthrift trust also. Where the trustee commits a devastavit, and his share in the estate is appropriated to make up the loss due a cestui que trust whose interest is subject to the clause against alienation, the money so appropriated is, in like manner, subject to the clause. It takes the place of the other fund and is embraced in the same limitations.® 2 See §319, post. 5 Seitzinger’s Est., Illig’s App., 170 3212 Pa. 102 (1905). Pa. 500 (1895). See also Phillips’s £190 Pa. 614 (1899). See this case Est., 1 D. R. 311 (1892), 5. c. 11 Pa. discussed as to discretion §536, post. C. C. 500, 30 W. N. C. 241. 166 EQUITABLE LIFE ESTATES [282, 283—] Effect of the Clause Prohibiting Involuntary Alienation 282. The character of the obligation incurred by the cestui que trust is immaterial. If the interest is protected from involuntary alienation generally, the point covered is the alienation, and that necessarily includes any process, and it is of no moment for what the process is issued.° It is to be observed, however, that no case has arisen presenting the question of how far the prohibition protects from proceedings in eminent domain. To be logical and consistent the court should reach such conclusion and allow the exemption. It would be hazardous to venture any proposition as to the conclusion that will be reached. There is one case turning on the character of the obligation incurred, which requires atten- tion. Decker v. Directors of the Poor 283. In Decker v. Directors of the Poor’ the income of the ccestui que trust was held liable to proceedings under §29 of the Act of June 13, 1836,° for the maintenance of his wife and family. The terms of the will are not clearly given in the re- port of the case, so that it is difficult to understand the de- cision. It seems as if the cestui que trust had the right to terminate the trust at his pleasure. It was intimated by the court below that the claim was not strictly a debt, as the term was used in the will, and also that there was no expression in ® The clause was sustained as against an attachment to enforce a decree for alimony: Thackara v. Mintzer, 100 Pa. 151 (1882). As against complaint by the Guardians of the Poor for the support of the wife in the above case: Guardians of the Poor v. Mintzer, 16 Phila. 449 (1883), s. c. 40 L. I. 37. Where, however, there are other words in the will indicating that the income is to be used for the maintenance of the wife of the cestui que trust, an order for the support of the wife will be made: Board of Charities v. Moore, 6 Pa. C. C. 66 (1888), s. c. 19 Phila. 540, 45 L. I. 216, 5 Lanc. L. R. 229. As against execution issued at the instance of the Board of Charities and Correction under the desertion act for the maintenance of the wife and children of the cestui que trust: Board of Charities v. Lockard 198 Pa. 572 (1901). As against claim at audit of account: Mannerback’s Est., 133 Pa. 842 (1890). Attach- ment against the trustee: Winthrop Co. v. Clinton, 196 Pa. 472 (1900). Where one cestui que trust was trustee, the clause prevented a surcharge on his share in the estate for loss occasioned by his mismanagement: Overman’s App., 88 Pa. 276 (1878, 1879); Dunglison’s Est., 201 Pa. 592 (1902). Attachment sur judgment in an action of tort: Wright’s Est., 28 Pa. C. C. 540 (1903); dictum, Mercur, J., in Thackara v. Mintzer, 100 Pa. 151 (1882). 7120 Pa. 272 (1888). SP. L. 539. [284, 285—] INVOLUNTARY ALIENATION 167 the will which referred to future debts, and further, that the claim at bar was incurred after the death of the testator who created the trust. The case is distinguished on the ground of the special provisions of the will by Mr. Justice Potter, in the case of Board of Charities v. Lockard.* It may there- fore be considered as being in entire conformity with the cur- rent of authority above noted. Claim Does Not Protect the Estate in the Hands of the Cestui Que Trust 284, All these proceedings were against the trustee attempt- ing to reach the sum in his hands due the beneficiary. It may not seem unnecessary, however, to point out, as was done by Mr. Justice Mercur,’® that where the proceedings are against the beneficiary to collect the debt out of money in his hands, a different question is presented, as for instance, an attach- ment of bank account in which the cestui que trust has de- posited the money received from the trustee. That the creditor could succeed in such case is beyond dispute. As to the Extent of the Protection as to Previously Incurred Obligations 285. Will words exempting the interest from debts which the cestui que trust may contract, protect from involuntary alienation for obligations incurred before the date of the settle- ment? The law is not clear. In Mehaffey’s Estate ' the words of the trust as to which the controversy arose were: ‘without any liability for any debts, contracts or engagements which they may make.” The cestui que trust gave an order on the trustee to pay a certain sum to a creditor for a debt con- tracted before the death of the testator. The court below said that the force of the words ‘may make’ was to exempt the interest only from debts contracted after the death of the testator. Therefore, the order was valid, as it operated as an assignment, and the creditor was entitled to recover from the trustee the amount of the order. On appeal, the Supreme Court reversed, saying that although this might be a proper 9198 Pa. 572 at 574 (1901). at 155 (1882). 10 In Thackara v. Mintzer, 100 Pa. 151 11139 Pa. 276 (1890). 168 EQUITABLE LIFE ESTATES [—285, 286—] construction of the trust, yet as the right of the creditor was founded on the order, to the making of which order the cestui que trust was incapacitated, the creditor could not recover, the order being made after the death of the testator! No statement as to the law can be made in view of the authorities. It is submitted that it is open to the Supreme Court to decide that words of future exemption do not protect from obligations incurred before the interest vests, and that such a decision would be in conformity with the policy of strictly construing the clause prohibiting involuntary alienation. As to Effect of Clause Against Involuntary Alienation on Assets Appointed by Life Tenant Under a General Power 286. Since a power of appointment does not enlarge a life estate to a fee, and the donee under the power is considered as taking under the original instrument,’ it follows that the creditors of the donee can have no claim at law against the assets appointed under the power. The donee of a general power may, of course, appoint to his creditors.? In some juris- dictions the creditors of the donee may in equity come in on the assets notwithstanding an appointment to some one else. This result is reached on the principle that as the donee has practically all the powers of an owner in fee, the chancellor will compel him, if he exercises the power at all, to first appoint, to his creditors, and as equity will consider that as done which ought to be done, the creditors will be allowed to come in in all cases of appointment. The law in Pennsylvania has been understood to be that the creditors have no claim on the 1See also remarks of the court below the time when it was incurred imma- in Decker v. Directors of the Poor, 120 Pa. 272 at 274 (1888). See §283, ante, to the same effect. This difficulty arises from the unscientific form of the prohibition which has been generally adopted. The point is involuntary alien- ation. The obligation incurred cannot affect the interest of the cestui que trust until it has been reduced to judgment and execution issued. The common notion seems to be that the interest is free from debts, obligations, etc., and the clause is worded accordingly. If the nature of the debt is immaterial, why is not terial? ? Bell’s Est., 15 Phila. 589 (1882), ‘s. c. 89 L. I. 430. See §389, post, on the application of the rule against perpetu- ities to powers of appointment. 3 As to what constitutes such an ap- pointment, see Stokes’s Est., 3 Pa. C. C. 193 (1887), s. c. 18 Phila. 175; Horner’s Est., 4 Pa. C. C. 189 (1887), s. c. 3 Montg. Co. 155 (sub. nom. Spencer’s Account), 3 Del. Co. 341; Fell’s Est., 14 D. R. 827 (1905); Kensel’s Est., 21 Montg. Co., 67 (1905); Fisher’s Est., 16 D. R. 151 (1907). [—286, 287—] INVOLUNTARY ALIENATION 169 assets, although no case has been found deciding the point.‘ In a number of cases where there was a clause against invol- untary alienation, it was held that the creditors of the life tenant could not come in on the assets appointed under a general power.’ If it is the law that the creditors cannot come in anyhow, then the clause against involuntary alienation is a superfluity. If they can, the clause under the cases cited prevents the creditors’ claims from attaching. In any event, no matter which view is adopted, it may be said to be the settled law that the clause against involuntary alienation prevents the creditors of the life tenant from coming in on the assets appointed under a general power. It is submitted, however, that these cases are unsound; that the clause only applies to the life estate, that it is a severe stretch to extend it to the principal, and that such extension is practically the same as saying that the clause is valid when attached to an absolute interest. As to Accumulated Income Due the Cestui Que Trust at the Time of His Death 287. Where the cestui que trust dies and there is income accumulated in the hands of the trustee which has not been paid over, does the clause against involuntary alienation prevent the trustee from paying those accumulations to the personal representatives of the deceased cestui que trust? It was said in two early cases that the personal representatives of a cestui que trust, upon whose interest the restraint against alienation has been imposed, could not recover from the hands of the trustee, the accumulated income which the cestui que trust would have received, if living. To permit them to receive the income, it was said, would subject it to the claims of the cestui que trust’s creditors.° In a recent case the court reached a differ- *The cases are not clear, and the point appears to be open on the authori- ties: Morris v. Phaler, 1 Watts, 389 (1833), dictum Gibson, C. J., at 391; dictum Gibson, C. J., in Commonwealth v. Duffield, 12 Pa. 277 at 279 (1849); see argument of the late Mr. McMurtrie in Swaby’s App., 14 W. N. C. 553 (1884). 5Swaby’s App., 14 W. N. C. 553 (1884). Point not decided in Mackason’s App., 42 Pa. 330 (1862), although so argued in Ghormley v. Smith, 139 Pa. 584 (1891). Dunglison’s Est., 201 Pa. 592 (1902). As to Fleming’s Est., 219 Pa. 422 (1908), see §241, ante. ® Horwitz v. Norris, 49 Pa. 213 (1865); Huber’s App., 80 Pa. 348 (1876). “The income was committed to the disposal of the trustees, to be applied to his main- tenance, support and benefit, and they were to exclude his creditors. * * * He owned nothing which he could dis- 170 EQUITABLE LIFE ESTATES [—287-289—] ent conclusion, although the point was not argued.’ The latter view seems to be the better. If the income is paid to the cestui que trust in his lifetime, it becomes subject to the claims of his creditors in his own hands. Why, then, should there be any difference when the income is paid to his personal representatives after his decease? The fact that, in one case, the creditors are not likely to get anything, and that in the other, the executors cannot get away with the assets, being under the necessity of filing an account, has no logical bearing on the principle involved. Furthermore, to permit the trustees to retain the income, involves to that extent an accumulation of income which is directly within the provisions of the Act of April 18, 1853.8 This does not seem to have been called to the attention of the court in the earlier cases. Furthermore, to whom is the accumulated income to be paid? The trust makes no provision for this addition to principal, and the court would have difficulty in ascertaining who should receive the amount. The question seems to be open on the cases, as there was no argument of the point in Seitzinger’s Estate.° Accrued Income 288. The cases do not touch the question of accrued income. There should, however, be no distinction on principle between accrued income and accumulated income.?° Effect of the Clause as Between Trustee and Cestui Que Trust 289. It is the duty of the trustee to see that the terms of the trust are observed, and since the clause is imposed for the benefit of the cestui que trust, it follows that the trustee is responsible, if he permits the cestui que trust to circumvent the clause. The trustee cannot, when there is a clause against pose of by will, as owner. And as he had no power apart from ownership, over income, it is impossible to see income due the cestui que trust had been wrongfully withheld by the trustee, and it was decided that the part so how that not received, whether due and payable, or only accruing at his death, can go either to his executors or the trustees appointed by him in his attempt to execute the power:” Strong, J., in Hor- witz v. Norris, 49 Pa. 213 at 222, (1865). 7Seitzinger’s Est., 170 Pa. 500 (1895). The question was discussed from another point of view. There the withheld could be paid to her personal representatives. Point not noticed in the syllabus. See Walters’s Est., 223 Pa. 598 (1909) accord. ®The statute against accumulations, for discussion of which see Chap. 25. ®170 Pa. 500 (1895). 10 See remarks of Strong, J., §287, n. 6, ante. [291] INVOLUNTARY ALIENATION 171 involuntary alienation, seek refuge in the connivance of the cestui que trust when the terms of the trust have been vio- lated. No cases have been found in Pennsylvania raising this point. In two cases’ there are dicta lending countenance to the view that the acquiescence of the cestui que trust will relieve the trustee from liability. While this principle carried out might furnish a means of ridding the state almost entirely of the doctrine of spendthrift trusts, it is submitted that it is inconsistent with the entire theory of equity which obtains when a cestui que trust is under disability, whether natural or imposed by the terms of the trust.’ Mr. Gray’s Explanation of the Origin of Spendthrijt Trusts 291. Spendthrift trusts appear to have made their first appearance in the state of Pennsylvania, and it is a matter of some interest to ascertain, if possible, the exact origin of this extraordinary doctrine. Mr. Gray® gives the following account of the origin of these trusts. As there were formerly no courts of equity in Pennsylvania there was no way to enforce equitable rights, and in order to give such a remedy, many equitable rights were turned into legal rights. This was done in two ways, (1) by extending the operation of the statute of uses to a use of personal property,* (2) by con- sidering as executed trusts which elsewhere would be con- sidered as active and without the statute of uses.®° That equitable rights in land could be taken on execution by legal process, but when spendthrift trusts made their appearance, the court hesitated to permit the taking of the complicated interests of the cestui que trust under a legal process, and when equity jurisdiction was finally established the hold of spendthrift trusts was too strong to be shaken off. This explanation of the learned author, however, it is submitted, begs the question. Why should the court hesitate to extend the execution to the case of a spendthrift trust any more than to the case of an ordinary trust, and that executions are permitted as to ordinary trusts is beyond dispute. This 3 Restraints on Alien., 2 ed. (1895), §214, et seq. 1Clemens’ Est., 175 Pa. 110 (1896), stated §317, post, and Jones’s Est., 199 Pa. 143 (1901), stated §318, post. 2 See §597, post, as to acquiescence of trustee in the violation of the clause against anticipation. *This statement is open to question. See §123, ante. 5 See this point discussed, §§132, 133, ante. 172 EQUITABLE LIFE ESTATES [292—] explanation would relieve all equitable interests from liability for execution for debts. Dictum in Fisher v. Taylor 292. It is submitted that spendthrift trusts had their origin in a dictum of the court in the case of Fisher v. Taylor.° There was a gift in trust for a son for life, without liability for debts, with remainder over to his heirs, etc. The equitable interest of the son was taken in execution by the sheriff, and sold under a legal execution. The purchaser at the sherifl’s sale brought an action of ejectment against the trustees, in which he could not succeed anyhow, as he acquired no greater right than his debtor had. The debtor had no right to the legal title in any event, as he had only an equitable title and the trust was active. The language of the court is not very clear, and there is some doubt as to the real thought that was in the mind of the learned judge who wrote the opinion. In the latter part of his opinion he seems to go on the ground that the plaintiff bought an equitable title. In the first part of his opinion he adopts the argument of the learned counsel for the defendant in error, that a man has a right to dispose of his property as he pleases, and consequently, to make a provision for his son, which could not be taken away from him for the payment of any debts which he might contract, and that there was no law which forbade such a disposition of the parent’s estate. The attention of the court was not called to the fact that there was a positive rule of law forbidding such a dis- position, to wit, the acts making all property liable for debts. The remarks of the court, therefore, in this case may be regarded as ill-considered dicta. There are a number of cases’ where property was given in trust to the trustee to hold, manage, and use for the benefit of his family or children, he to have no interest therein excepting only an allowance for services to be rendered. It is, of course, obvious that no creditor of the trustee could seize his interest in the ®2 Rawle, 33 (1829). 7 Ashhurst v. Given, 5 W. & 8S. 323 (1843): Holdship v. Patterson, 7 Watts, 547 (1838); Brown v. Williamson, 36 Pa. 338 (1860); Rees v. Livingston, 41 Pa. 113 (1861); Heazelton’s Est., 2 W. N. C. 204 (1874); DeRoy »v. Richards, 8 Super. Ct. 119 (1898); Gil- lespie v. Miller, 37 Pa. 247 (1860). The chief controversy in these cases was between the creditors and the cestui que trust of the trust estate. It is [293, 294—] INVOLUNTARY ALIENATION 173 trust estate. Any provision in the trust exempting the inter- est from alienation would be superfluous, in so far as the creditor of the trustee was concerned. The allowance for services would only be a compensation to the trustee, and would not subject the trust estate to his creditors. These cases are frequently cited as spendthrift trusts, and are really not in point. Vaur v. Parke 2938. In Vaux v. Parke® there was no clause against invol- untary alienation, but the trustee had discretion as to trans- ferring the real estate comprised in the trust to the cestui que trust. The interest of the cestui que trust was taken in execu- tion and sold, and the purchaser brought ejectment against one of the other children apparently in possession who was entitled to a one-third interest therein. The plaintiff, of course, could not succeed in his action, and his only remedy, if he had any, would be in an action of partition, and in no event could he secure the legal title under the sale at the execution. The remarks of the court as to the clause against alienation were, therefore, dicta. Author’s Conclusion as to Origin of Spendthrijt Trusts in Pennsylvania 294. The conclusion, therefore, is that the doctrine of spendthrift trusts in Pennsylvania originated in the ill-considered dictum of Smith, J., in Fisher v. Taylor,? and was adopted by the judges in a number of subsequent cases, where also, the remarks were unnecessary to the decision of the case, and that subsequently, when a case arose presenting the point for decision, the Supreme Court seemed to feel itself bound by these dicta, and the doctrine was thus introduced into the law of Pennsylvania.‘ Such dicta, perhaps, were to be expected in perfectly clear that the creditors of the trustee, on his own individual in- debtedness, could not, in any event, take in execution the assets of the trust estate. Where, however, the debt was contracted for the purposes of the trust, the result would be different, as where the debts were contracted in carrying on the business. Stevenson v. Matthews, 9 Pa. 316 (1848), s. c. 6 Pa. 496 (1847). No case has been found where there was a clause against involuntary aliena- tion applicable to such debts, and the validity of the clause in such a case would be extremely doubtful. 87 W. & S. 19 (1844). ®2 Rawle, 33 (1829). 1¥For a discussion of the part which the notion as to the operation of the statute of uses entertained by the Supreme Court played in the develop- ment of this doctrine, see §131, ante. 174 EQUITABLE LIFE ESTATES [—294] a state where the development of equitable doctrines was so long in a backward condition.” It was many years before the Supreme Court reached a definite and clear notion of the nature of a trust and the principles pertaining thereto. The judges at the time the early cases were decided felt that the trustee’s title could not be taken away by the cestui que trust’s creditors. But they did not know exactly how to jus- tify the result, which they could have easily done had the distinction between law and equity been made clear to their minds. ? For an excellent statement of the doctrine of spendthrift trusts, see Gray, probable cause of the spread of the Restraintson Alien., 2 ed. (1895), preface. (175) CHAPTER 14 EQUITABLE LIFE ESTATES. VOLUNTARY ALIENATION Forfeiture for voluntary alienation............... 00.0 cece eeee eee §311 Prohibition of voluntary alienation Preliminary discussions sarc. ania de WEN pe aaes REx ee aya ees §312 Shankland’s: Appealwas xox veredes tenes aries se aed hows ean §313 Rife: Oy ‘Geyer se sane sv ico kane ote sack utam Wedd doe deeaecses §314 Philadelphia Trust Co. v. Guillou......................-. §315 Mehafiey’s; -“Bstatews ci 34 vices dw teeudadts ardgea eet oda wy §316 Clemeéiis's, Estates s.o2.-245.5 Paakeacien dea weg ecole diene §317 Jones's: HState ve sea pace ise via ee eaten re Payee gcd seaee HOeke §318 Summary of the Pennsylvania cases and statement of the law as to validity of prohibition of voluntary alienation........ §319 Trusts for support and maintenance..............-..-...05. §320 Forfeiture jor Voluntary Alienation of an Equitable Lije Estate 311. A clause of forfeiture for the voluntary alienation of a legal life estate, is valid. There is no reason for any dis- tinction in the case of an equitable life estate. No Penn- sylvania case on the point has been found, and the clause is probably valid when attached to a gift of an equitable life estate. Preliminary Discussion of Prohibition of Voluntary Alienation of an Equitable Life Estate 312. A prohibition of the voluntary alienation of a legal life estate is void at common law,’ and is probably void in Pennsylvania.* Equity should follow the law, and the clause 1 See §225, ante. 3 See §228, ante. 2 See §226, ante. 176 EQUITABLE LIFE ESTATES [313, 314—] be of like invalidity in the case of an equitable life estate, unless there is some reason to the contrary. There are several cases of importance in this connection, and it may be observed, before proceeding to discuss them, that as a power to will is not an incident of a life estate, a restraint on testamentary ‘power attached to an equitable life estate is a superfluity.* Shankland’s Appeal 313. In Shankland’s Appeal® the property was devised in trust to pay the income for life, without being subject to debts or liabilities. The cestui que trust undertook to sell his life estate, and it was held on a bill in equity for specific performance that he did not have a good title. The language of the court seems to indicate that the real ground of the decision was that the parties intended that the legal title was to be transferred. The form of the contract as given in the report leaves the matter in some doubt,® and unless the case can be thus explained, it is difficult to sustain the decision as there was no prohibition of voluntary alienation. Rije v. Geyer 314. In Rife v. Geyer” the testator devised one-eighth part of his estate in trust, ‘“‘to let and demise the real estate * * and recover and receive the rents and income thereof, and pay over the same when received into the hands of S. or such other person or persons as he may authorize, * * or at his option to permit and suffer him, the said S., to let, demise, occupy and enjoy * * and receive and take the income thereof, during all the term of his natural life, for his own separate use, and so the same shall not be in the power, or liable to the debts, control or engagements of the said S.”’ And from and immediately after the decease of Stephen, then to hold the estate in trust for the heirs and legal representatives of Stephen. Partition was made under the will of the decedent, and a certain piece of real estate was allotted to the trustee under the trust for Stephen. The trustee then con- veyed the premises to the son in fee. The son then conveyed 4See Levy’s Est., 153 Pa. 174 (1893). see Gray, Restraints on Alien., 2 ed. 547 Pa. 113 (1864). (1895), §229, for observations on this case. ®See language of Read, J., at p. 114; 759 Pa. 393 (1868). [—314, 315--] VOLUNTARY ALIENATION 177 to the defendant who gave a mortgage in part payment. Suit was brought on the mortgage given to the son, and, on a case stated for the consideration of the court, it was held that the deed to the son was of no effect; that therefore he had no title, and could not recover on the mortgage. The son had an equitable life estate. The conveyance to him by the trustee was a breach of trust, and the purchaser, of course, would get a bad title from the son upon which he could defend in the suit on the mortgage. The court said that the life estate was equitable, as the statute of uses did not apply because of the clause exempting from liability for debts, but took no notice of the word control. The case is therefore of doubtful authority for the validity of the clause, as the estate was equitable on other grounds, and in that event the disposition of the legal title by the cestui que trust was void anyhow.® Philadelphia Trust Co. v. Guillou 315. In Philadelphia Trust Co. v. Guillou® there was a gift to trustees in trust to let and manage the real estate, collect the rents “or allow my said son, W. J. F. (the cestui que trust), at his option to use and occupy any lands,” etc., belonging to the estate, and to invest the personal estate and pay over the income from the real and personal estates to the cestui que trust for life, “and in no event shall the principal or income thereof be liable in any way or manner whatsoever for any of the debts, liabilities or engagements of my said son or to any attachment or execution or proceeding in the nature thereof.” It appeared that before his death the testator rented certain of his properties to a firm, and that after the testator’s death, the cestui que trust, who was also one of the trustees under the will, collected two months’ rent. He was then discharged as trustee and made an assignment for the benefit of creditors. The case arose on a controversy between his assignee and the substituted trustee for the next month’s rent of the premises, and it was contended, that as he had collected the rent, he had exercised his option to use, occupy and enjoy, and had _ there- fore a legal title to the rents which passed to his assignee. Judgment for the assignee in the court below was, on appeal, ® Contrast this case with Keyser’s ante, as to application of the statute App., 57 Pa. 236 (1868), stated of uses. §246, ante. See §§131, n. 6, 133, n.3, °100 Pa. 254 (1882). 178 EQUITABLE LIFE ESTATES [—315-317—] reversed. Mr. Chief Justice Sharswood said that it was im- material how the cestui que trust had collected the rent; the trustees could intervene at any time they saw fit and collect any future rent. This case, therefore, can hardly be considered an authority against the right of the cestui que trust to assign, as in any event the trustee, as custodian of the legal title, would have been entitled to the rents, and the assignment would only give the assignee the right to receive the income from the trustee, and not to collect the rent of the property of the trust estate. The clause was against involuntary aliena- tion only, and while it was perhaps necessary for the trustee to have power to collect the rents in order to defeat the claim of creditors, it did not follow that the cestui que trust could not make an assignment of his equitable interest. The assignee meddled in that which was none of his business. Mehaffey’s Estate 316. In Mehaffey’s Estate,!° where, under the terms of the trust, there being a clause against involuntary alienation with a proviso as to part that the income should not be “in the power of the cestui que trust,’ there was an alternative provision to pay the interest to such person or persons as the cestui que trust should authorize to receive the same, the court said that the clause did not permit the cestui que trust to give an order on the trustee to pay the sum out of the income to his creditor. The remarks of the court were dicta, as (1) the trustee did not have any funds with which to pay the order, (2) the cestui que trust had notified the trustee not to recognize any order which he might sign.' Clemens’s Estate 317. In Clemens’s Estate* the trustee invested a portion of the trust funds in a mortgage on real estate owned by the cestui que trust. By an arrangement between the trustee and the cestui que trust, the interest due on the mortgage was paid by debits in the trust income accounts. The cestui que trust made an assignment for the benefit of creditors, which assignment included the real estate in question, and the assignee subsequently sold the property subject to this mortgage. The 10139 Pa. 276 (1890). (1903). 1See Wright’s Est., 28 Pa. C. C. 540 7175 Pa. 110 (1896). [=317; 318—=| VOLUNTARY ALIENATION 179 trustee then made a claim against the assignee under the assignment for the interest due on the mortgage between the date of the assignment and the sale by the assignee.* It was held that there could be no recovery, and the claim was dis- allowed. The interest was paid by the items in the account, and the trustee could not collect the same sum over again in cash. The question presented is, whether the cestui que trust can, by a bookkeeping arrangement with the trustee, divert a portion of the income of the trust estate to the payment of a debt due to her assignee. If she can, the case is the same as if she were allowed to voluntarily assign that much of the income to the assignee to be used by him for the benefit of her creditors. As the terms of the will are not given, the case is utterly valueless as a precedent on the question under discussion, which is to be regretted, since much depends in these cases on the exact wording of the clause against alienation. It cannot be ascertained, therefore, whether the clause was against voluntary alienation or involuntary alienation or either. It further appears that the trustee, when the property was sold, gave a certificate that nothing was due on the mortgage in the way of interest, and on that ground the case can be supported as to the interest unpaid to that time, even if there was a prohibition of voluntary alienation, as the trustee could not claim against its own certificate. But the fact that it had given such a certificate would not avail it in a claim by the cestui que trust for the income due and unpaid. Jones’s Estate 318. In Jones’s Estate* the clause was, “The principal or interest of said trust fund, whilst in the hands of the trustee, shall not be taken or used or in any way become liable for the debts,” etc. There were two questions raised in the case as to the payment of income to the cestui que trust: (1) receipts were prepared in advance in blank and signed by the cestui que trust. His wife then took the receipts to the trustee, who gave her a check, sometimes to her order, sometimes to the order of the husband, for the amount which was found to be due. The trustee asked credit for these amounts, which credit 3It appears that the interest before question was raised as to these pay- the assignment had been in like manner ments. credited in the income account. No #199 Pa. 143 (1901). 180 EQUITABLE LIFE ESTATES [—318, a=] was sustained. This seems to be an unobjectionable method of paying income to the cestui que trust. (2) The cestui que trust had been sent to jail for failure to pay alimony to his wife. He then made an arrangement with her through counsel by which he was to give her a certain portion of the income from the trust estate and pay her counsel fee. This was accomplished by the subterfuge of the cestul que trust specially endorsing in advance to the wife certain checks drawn by the trustee for income, which checks were then delivered by the trustee to the wife. It did not appear whether the counsel fee was paid by a check endorsed to them or by a check to the wife who paid it herself subse- quently. A credit for these items was upheld by the court as against the objection of the cestui que trust. If this arrangement was anything, it was a payment in pursuance of a voluntary equitable assignment. It is difficult to discover any prohibition upon voluntary alienation in the terms of the will, although Brown, J., in delivering the opinion of the Supreme Court, said that a spendthrift trust was clearly created.® Summary of the Pennsylvania Cases and Statement of the Law as to the Validity of a Prohibition of the Voluntary Alienation of an Equitable Life Estate 319. No very clear conclusion as to the law can be drawn from these cases. The notion seems to run through the minds of most of the judges that a so-called spendthrift trust is of itself inalienable. This conception, perhaps, springs from the ambiguous nature of the term spendthrift, and overlooks not only the very clear distinction between voluntary and involuntary alienation but also the circumstance that a pro- hibition of one form of alienation does not prohibit the other.’ This notion clearly appears in Shankland’s Ap- peal,® where there was no prohibition of voluntary alienation. This case is doubtful, and may be explained on the ground that the parties intended to dispose of the legal title. Rife v. Geyer ® and Philadelphia Trust Co. v. Guillou® may also be 5 At p. 144. ment. See, however, §270, n. 10, °It might have been argued that the ante. word “use” made it incumbent on the 7 See §173, ante. trustee to see that the income was not 847 Pa. 113 (1864), stated §313, ante. paid to a creditor, either in pursuance 959 Pa. 393 (1868), stated §314, ante. of a voluntary or involuntary assign- 10 100 Pa. 254 (1882), stated §315, ante. [—319, 320] VOLUNTARY ALIENATION 181 explained on the ground that the controversy was over the legal title. It is beyond the power of the cestui que trust in any kind of a trust to deal with the legal title. The remarks in Mehaffey’s Estate’ were dicta. The facts in Clemens’s Es- tate? are so meagrely given that the case is utterly value- less as a precedent. Jones’s Estate? clearly recognizes the right of the cestui que trust to make a voluntary alienation, although the clause against voluntary alienation is difficult to discover. It therefore appears that there is no case which decides squarely that the clause of prohibition against vol- untary alienation is valid; that the notion that there can be no voluntary alienation in the case of a so-called spendthrift trust is a fallacy, and that all the cases in which the ques- tion is directly or indirectly involved can be explained on other grounds. No statement as to the law can be ventured, but in this condition of the authorities it may perhaps be said that on principle the clause is void, and there is no clear decision to the contrary in Pennsylvania. Trusts for Support and Maintenance 320. It has been said that a trust for the personal support, comfort and maintenance of the cestui que trust cannot be alienated. This notion may be traced to the case of Lancaster v. Dolan.* It is submitted that such directions in a trust, if they have any effect at all, are a restraint on the use and enjoyment by the cestui que trust of his equitable life estate and have no effect on the alienability of the interest.* The cestui que trust may alienate in the absence of any valid clause to the contrary,® and the trustee, if the directions in the trust are valid, may use the income for the support and maintenance of the new cestui que trust. While this is prob- ably the proper principle, it has not been recognized by the Supreme Court of Pennsylvania. 1139 Pa. 276 (1890), stated §316, ante. of Gibson, C. J., on p. 247. See this case ? 175 Pa. 110 (1896), stated §317, ante. stated $590, post. 3199 Pa. 143 (1901), stated §318, ante. 5 See §545, post, as to this point. 41 Rawle, 231 (1829). See argument 6 See §162, ante. of Mr. Ingersoll on p. 239 and language (182) (183) PART III THE RULE AGAINST PERPETUITIES Chap. 15. Chap. 16. Chap. 17. Chap. 18. Chap. 19. The Rule Against Perpetuities. Interests Subject to the Rule. Powers and the Rule Against Perpetuities. Gifts to a Class and the Rule Against Perpetuities. Where the Interests Violate the Rule. (184) (185) CHAPTER 15 THE RULE AGAINST PERPETUITIES Preliminary discussion........... 0... c cece cece eee erences §325 History, definition and object of the rule Historical evolution of the rule............... ccs eee eee eee §326 7 a; common law rule) oa.2 ou cua nea ae Ve Siete gee eee towed §327 . Gray’s statement of the rule against perpetuities........ §328 a author’s statement of the rule against rae platters §329 Meaning of perpetuity.................00 00. e eee eee eee §330 Meaning’ of remote. onus wage lt aie nd APL Make aw aba eaed §331 Discussion as to the object of the rule...................... §332 The true object of the rule suggested.....................-. §333 The rule discussed and explained Contingency analy zeds+ioscchivevads seated ew ssa eres ews een §334 The contingency must happen within the period............ §335 Death without issue.......0.. ccc eee ee nese eee en ee neenae §336 Separable contingencies.............. 00... e cece cece eee §337 Distinction between rule against perpetuities and rule for- bidding restraints on alienation......................2000. §338 Period prescribed by the rule DAVES In DEIN: its a scp yo sate yaad eS ee ee §339 Barclay 0. ewan igiek caecdad dota aise eaewibcn tte aly a ald wide ones ee aedes §339a The period of twenty-one years................2 cece eeee §340 The period of gestation............. 6.00 c cece §341 When the period begins to run..............0. eee eee eae §342 Corollaries of the rule Rule does not affect the right to possession................. §343 Rhodes? Mstatee sacs sue Sana wai oe ada alleen aan ye times e Bare hance §344 Continuation of a vested interest into the remote period valid §345 186 [325] Pennsylvania cases on the rule Preliminary discussion............0. 000s cece cece teen eee enee §346 Chambers v. Wilson..........0 00.0 ccc ccc e een t eects §347 Donohue v. McNichol..........0.. 0000 ccc ccc eee eee eee §348 Béibert: a. “Wise ba se.ee celal wie oate-ew erate en din oh Su nw aie ons §349 Weardis Nstates .«uisidwoy gs igeecace nes a nen onus vas eas §350 Cases where the limitations did not violate the rule......... §351 ¥ Preliminary Discussion 325. The power to create future estates has already been noticed. The estates or interests, legal and equitable, in realty and personalty, which may be created under that power have been discussed and classified.2 At the risk of some repetition, it may be observed at this point that this power was originally conceived of as a power to divide the absolute ownership, and at that time the notion of a future interest had not been introduced into the law.? The fundamental con- ception has changed. The obstacles to the division of the fee or absolute ownership, which obstacles were probably more metaphysical than feudal,* have practically disappeared,® and in modern times the power to create future estates is easily conceived of. The principle of public policy which demands ° the restraint on this power expresses itself in the rule against perpetuities—perhaps more accurately designated as the rule forbidding the creation of a perpetuity. It is to this part of the subject that our attention will now be directed. The law relating to the rule against perpetuities in Pennsylvania is, with very few exceptions, plain and well settled. The student will have no difficulty in mastering this part of the subject aside from that. arising from the subtlety of the subject. itself, and the practitioner can advise his clients with a confidence which is in refreshing contrast to the doubts he feels when advising them on the law treated in many other parts of this book.’ : 1 See §5, ante. 5 See §§115, 116, ante. ? See Chap. 3 as to future legal inter- ® See §§11-14, ante. ests in real property, Chap. 4 as to future 7 The learned reader will remark at the legal interests in personal property, and small number of cases which have arisen Chap. 7 as to trusts. on the rule against perpetuities, in con- 3 See §36, et seq., ante. trast with the abundant crop of litigation * See §39, ante. noted under Part II. The difference is [326, 327] HISTORY, DEFINITION, OBJECT 187 Hislorical Evolution of the Rule 326. The rule against perpetuities first took its shape in the discussion of cases arising on executory devises of chattels real,® and was first suggested at bar in 1616.° It seems that the validity of contingent interests depended at first on the nature of the contingency upon which they were limited to take effect,'° and that no question of remoteness of a limitation of a free- hold estate arose until 1664.' Lord Nottingham, in the Duke of Norfolk’s case, in 1681,? established the points (1) that the validity (invalidity) of the future interest depended on_ its remoteness, and not on the nature of the contingency, (2) that the contingency must occur within a life or lives in being.’ The limits within which the contingency must occur were sub- sequently extended (1) to cover the time necessary for the birth of a posthumous child;* (2) twenty-one years were then added to provide for the minority of the children in esse at the expiration of the life estate; (3) the consideration of minor- ity was lost sight of, and the period of twenty-one years was allowed in gross without reference to an existing minority.® The Rule Against Perpetuities is a Comunon Law Rule 327. The rule against perpetuities, therefore, has been developed entirely at common law, and is not the result of nor has it been affected by any statute® except with respect to directions to accumulate income.’ The rule was_ brought significant. Had the Supreme Court ‘Gray, Rule Perp., 2 ed. (1906), §§171- adhered to the common law with the same firmness with regard to the rule forbidding restraints on alienation as they have with respect to the rule against perpetuities, they would have relieved themselves of much extra labor, and have saved the people of the commonwealth from a heavy toll in litigation. 8Gray, Rule Perp., 2 ed. §§148-160. ® Gray, Rule Perp., 2 ed. (1906), §154. 10 Gray, Rule Perp., 2 ed. (1906), §168. 1Gray, Rule Perp., 2 ed. (1906), §139. See §§158-168, ante. 23 Chance. Cases, 1; Gray, Rule Perp., 2 ed. (1906), §169. 3 Gray, Rule Perp., 2 ed. (1906), §170. (1906), 175. 5 Gray, Rule Perp., 2 ed. (1906), §§176- 185, §§186-188, §§223-224. Lewis, Perp., (1843) p. 168. For a good short state- ment of the history of the rule, see Gray, ubi supra, §§296-298. ®Tt was erroneously referred to, how- ever, as the statute against perpetuities by the reporter in Weinbrenner’s Est., 173 Pa. 440 at 441, (1896) and in a per curiam opinion in Smith’s Est., 181 Pa. 109 at 117 (1897). 7 See Chap. 25 on Accumulations and remarks of Clark, J., in Lawrence’s Est., 136 Pa. 354 at 363 (1890). The Act of 1855 referred to by the learned judge does not touch the rule against perpetuities. 188 [328, 329] RULE AGAINST PERPETUITIES to America as part of the common law then in force and is imbedded in the common law of Pennsylvania.® Mr. Gray’s Statement of the Rule Against Perpetuities 328. The rule against perpetuities, as finally defined by Mr. Gray,® is as follows: ‘No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.” It is submitted, with diffidence, however, that this is not the rule against perpetu- ities at all. The rule destroys interests limited upon contin- gencies which may occur after a certain period. The interests which the rule does not destroy are the interests which, so far as the rule is concerned, are good. Mr. Gray’s statement simply describes the class of future interests to which the rule does not apply. It is, therefore, respectfully submitted that it is not a statement of the rule itself.’ The Author's Statement of the Rule Against Perpetuities 329. The following statement of the rule is suggested: all future interests which are limited to an unascertained person, or to take effect upon a contingency other than the regular termination’ of the preceding particular estate, are void when- ever such person may possibly not be ascertained before, or the contingency may happen after, (1) the expiration of a life or lives in being at the creation of the interest and twenty- 8 Gray, Rule Perp., 2 ed. (1906), §§200, 200a. The earliest reference to the rule which has been found in a Pennsyl- vania case is by McKean, C. J., in Ruston v. Ruston, 2 Dall. 243 at 244 (1796). ®Gray, Rule Perp. 2 ed. (1906) §201. 10 The relation which Mr. Gray’s state- ment bears to the rule may be illustrated as follows: suppose an act were passed, making it unlawful to enter a dwelling- house after eleven o’clock at night with- out the consent of the owner. If there were no further law on the subject, an entry in the daytime without the con- sent of the owner would be lawful. The law punishes an entry made after eleven o’clock. It is, however, a statement only of the practical result of the law to say, that no entry in a dwelling-house, without the consent of the owner, is law- ful unless made before eleven o’clock at night. Furthermore, Mr. Gray’s state- ment is ambiguous in so far as the term of twenty-one years is concerned, as it does not seem to provide for the case where the term is allowed without being preceded by a life in being, as to which see §340, post. See criticism of Mr. Gray’s statement by Mr. Kales, 20 Harv. Law Rev., 198 (1907). 1 And an estate in fee simple absolute never determines, and a determinable fee may be said to terminate in a regular manner. See §27, ante, as to determinable fee. [330—] HISTORY, DEFINITION, OBJECT 189 one years and possibly nine months thereafter, or (2) the expiration of twenty-one years after the creation of the interest.? The learned reader may choose which statement of the rule he will bear in mind. It is immaterial, in so far as the practi- cal operation of the rule is concerned, which one is selected. It is believed, however, that the form suggested is clearer and more easily understood. Meaning of Perpetuity 330. Mr. Lewis points out* that while legal lexicography supplies few words less susceptible of full and adequate defini- tion, few have been the subject of more frequent and varied attempts at description. The term was ambiguous while the rule was developing, and it was not until recent times that anything like an accurate definition became possible. A number of definitions by eminent judges and text writers have bcen collected in the note in chronological order.* It will appear ? This is very much the language in which Mr. Gray referred to the rule, Gray, Restraints on Alien., 2 ed. (1895), §272, where he said “The rule against perpetuities declares that every estate or interest which requires the happening of a contingency or the arrival of a time certain as w condition precedent, is bad unless the contingency must happen or the time must arrive within a life or lives in being and twenty-one years.” 3 Lewis, Perp. (1843), Chap. 12, p. 163. Mr. Challis, Real Prop., 2 ed. (1892), p. 168, says that it is unnecessary to expend any labor in an attempt to define a per- petuity—that the rule is easily intelli- gible without any such definition. This is perhaps true, but unless the word per- petuity is accurately defined, it is diffi- cult to distinguish this rule from the rule forbidding restraints on alienation. Mr. Challis’s attention does not seem to have been directed to this point. 4 Lord Chancellor Nottingham, in 1681: “A perpetuity is the settlement of an estate or an interest in tail with such remainders expectant upon it as are in no sort in the power of the tenant in tail in possession, to dock by any recovery er assignment. But such remainders must continue as perpetual clogs upon the estate.’ Norfolk’s case, 3 Ch. Cas. 1, 31. Lord Keeper Guildford, in 1683: “Tf in equity you should come nearer to a perpetuity than the rules of common law would admit, all men, being desirous to continue their estates in their families, would settle their estates by way of trust, which might indeed make well for the jurisdiction of the court, but would be destructive to the commonwealth”; Norfolk v. Howard, 1 Ver. 163. Powell, J., in 1698: “But they were not for going one step further because these limitations make estates unalienable, every executory devise being a perpetuity so far as it goes; that is to say, an estate unalienable though all mankind join in the convey- ance”; Scatterwood v. Edge, 1 Salkeld, 292. Lord Talbot, in 1736: “However unwilling we may be to extend executory devises beyond the rules gencrally laid down by our predecessors, yet * * * * considering that the power of alienation will not be restrained longer than the law would restrain it (viz. during infancy of 190 the first taker), which cannot reasonably be said to extend to a perpetuity”, etc., Stephens v. Stephens, Temp. Talb. 228, 232. Lord Eldon, in 1805: “The ques- tion always is whether there is a rule of law fixing the period during which prop- perty may be unalienable”; Thellusson v. Woodford, 11 Ves. 146. Lord Chan- cellor Cottenham, in 1849: “These rules are to prevent, in the cases to which they apply, property from being inalienable be- yond certain periods’; Christ’s Hos- pital v. Grainger, 1 McN. & G. 460. Kay, J., in 1889: “The truth is that under the old feudal law existing in England which is only being broken down slowly by legislation and decisions of the court, and which still exists to a very great ex- tent, there has been a constant attempt on the part of owners of land to limit it in the most elaborate fashion, in order to tie it up as long as possible, and that con- stant attempt has been constantly de- feated both by legislation and the de- cisions of the courts of law”; Whitby v. Mitchell, L. R. 42 Ch. D. 494, 500 (1889). Shaw, C. J., in 1853: “A man cannot, under this general jus disponendi, thus tie up property in perpetuity and make it inalienable in his own posterity—it is a legal impossibility’; Blake v. Dexter, 12 Cush. 559, 570. Gray, J., in 1865: “The reason of the rule is, that to allow a contingent estate to vest at a more re- mote period would tend to create a per- petuity by making the estate inalienable” ; Odell v. Odell, 10 Allen. 1, 5. The fore- going definitions are given as collected in an article by Mr. Fox, 6 Harv. Law Rev., 195 (1892). The following definitions areadded: “Aperpetuitymay * * * be defined to be a future limitation, re- straining the owner of the estate from aliening the fee simple of the property discharged of such future use or estate before the event is determined or the period arrived when such future use or estate is to arise. If that event or period be within the bounds prescribed by law, it is not a perpetuity”; Saun- RULE AGAINST PERPETUITIES [—330—] ders, Uses, Vol. 1, p. 196 (1823); quoted by Lowrie, J., in Phila. v. Girard, 45 Pa. 9, at 26, (1863). “A perpetuity is a fu- ture limitation, whether executory or by way of remainder, and of either real or personal property, which is not to vest until after the expiration of or will not necessarily vest within the period fixed and prescribed by law for the creation of future estates and interests, and which is not destructible by the persons for the time being entitled to the property sub- ject to the future limitation, except with the concurrence of the individual inter- ested under that limitation”; Lewis, Perp., Chap. 12, 163 (1848); quoted with approval by Gibson, C. J., in Hill- yard v. Miller, 10 Pa. 326 at 333 (1849). Mr. Justice Sharswood in Yard’s App., 64 Pa. 95 at 98 (1870), said that nothing was denounced by the law asa perpetuity un- less it restrained the vesting of the estate beyond the period of a life or lives in being, etc., and further, that a vested in- terest was not a perpetuity. The learned judge uses the word in two senses: (1) as meaning something which restrains; in this he confused the perpetuity with the rule against perpetuities; (2) as meaning that the future interest itself is a perpetu- ity. Hare, P. J., in the court below, in Mifflin’s, App. 121 Pa. 205 at 213 (1888): “Agreeably to the view taken by Mr. Gray, a perpetuity is an estate or interest which from its indestructibility and in- capacity for alienation, if the law tolerated it, might be transmitted indefinitely, under the authority conferred by the original donor, without power on the part of the holders to treat absolutely as their own, or blend it with the mass of property which each successive owner may dis- pose of as he thinks proper.” “With us in Pennsylvania, the word ‘ perpetuities’ is used in its largest sense, including as well the interests or estates that are in- alienable or indestructible, as those which are bad for remoteness’; Sulzberger, J., in Morris v. Fisher, 8 D. R. 161 at 163 (1899), see this case criticised, §363, post; [—330] HISTORY, DEFINITION, OBJECT 191 from an examination of these definitions, that the meaning of the term has changed. It appears to have meant (1) the estate on which the future interest is limited; (2) the limitation of the future interest; (3) the future interest which is remote. The judges perhaps had the idea that when the power of dominion was exercised to cut the fee into estates, the whole fee became inalienable, and the rule, by compelling these interests to vest within a certain time, hastened the restoration of the fee to its former condition of alienability. Perhaps by alienability they meant marketability. Mr. Gray defines a perpetuity as follows: “There were two kinds of perpetuities: (1) an estate tail with a condition or clause of cesser intended to prevent alienation; (2) a future contingent interest limited by way of use.’’® Mr. Gray, however, has not reduced this definition to its lowest terms, and it is open to the objection that it ignores executory devises and future equitable limitations, both of which are unquestionably subject to the rule, and embraces some future interests which take effect in time and cannot, in any sense of the word, be said to be perpetuities. In the first edition of his book ® Mr. Gray defines a perpetuity in the modern sense, as meaning a remote interest. He apparently abandoned this idea in the second edition, and offers no substitute other than that quoted above. To speak accurately, a perpetuity is something which lasts forever. A future interest, therefore, obviously cannot be a perpetuity, nor can the limitation of that interest be a per- petuity nor the estate on which the future interest is limited. Mr. Gray seems to have been the first writer to clearly point out that the subject of the discussion is the future interest which is destroyed by the rule. We may, perhaps, venture the statement that a perpetuity is a future interest which is destroyed by the rule. Although this definition is not in accordance with the natural sense of the word, it is at least intelligible and easy of application. it is submitted, however, that this defini- tion is entirely too broad and is not sus- tained by even the dictum of any other Pennsylvania judge. A term which has so extended «a meaning as that given by the learned judge, is utterly out of place in any scientific conception of the law, is » dangerous two-edged sword to use in practice, and, furthermore, fails to distinguish between the rule forbidding restraints on alienation and the rule against perpetuities. See §338, post, discussing this distinction. 5 See Gray, Rule Perp., 2 ed. (1906), §14le. ° Gray, Rule Perp., 1 ed., (1886), §141. 192 RULE AGAINST PERPETUITIES [331, 332—] Meaning of Remote 331. Mr. Gray appears to use the word remote in two senses: first, as meaning the period beyond that prescribed by the rule;’ second, as describing an interest which violates the rule.2 The word is used in this book as meaning the period beyond that prescribed by the rule. Discussion as to the Object of the Rule 332. There has been some discussion as to the real object of the rule against perpetuities. Mr. Gray takes the ground that the rule is not aimed at the suspension or restraint of alienation, assigning as a reason that a future interest which is destroyed by the rule is not saved by the fact that it is alienable.° He further concludes that because such alienable interests are subject to the rule, it must follow that the rule is not aimed at alienability; that to suppose that the rule is aimed at the restraint of alienation, is to introduce the idea that the rule has something to do with provisions restrain- ing the alienation of present interests, which idea is erroneous, and confuses the rule with the rule forbidding restraints on alienation. Mr. Jabez Fox, in an article in the Harvard Law Review,” criticises this view. He quotes from a number of opinions delivered from 1618 to 1853,’ and takes the ground that it was clearly the idea of the judges that the rule was aimed at preventing inalienability. It is believed that both authors are correct. The judges thought that the rule was aimed at preventing the inalienability of the present estate upon which the future interests were limited, and Mr. Gray contends that this notion introduces the idea that the rule has to do with express restraints on the alienation of present interests. 7 Thus, where he says that the inter- est is bad because too remote; Gray, Rule Perp., 2 ed. (1906), §249d. 8 Thus, where he says a limitation after an estate tail can never be too re- mote, although it may take effect at a period beyond that prescribed by the rule; Gray, Rule Perp., 2 ed. (1906), §443. ®Rule Perp., 2 ed. (1906), Chap. 7, §§268-278d, Mr. Gray says, there seems to be no reason for the extension of the rule to such interests, because it would always be perfectly compe- tent for the owner of the particular estate to unite with the owner of the future interest in a conveyance of the fee. He admits that the rule applies to such cases. As to the law with respect to the application of the rule to such interests, see §378, post. The Criticism of Cases, 6 Harv. Law Rev. 195 (1892). 1 See §330, n. 4, ante. [533] HISTORY, DEFINITION, OBJECT 193 The notion does not logically introduce this idea. Such a conclusion has, however, frequently been drawn, and has been caused largely, it is believed, by the vague idea which has been entertained as to the meaning of the word perpetuity fany jurisdictions in this country appear to have adopted the view that the rule is aimed at the suspension of alienation, and it has been suggested that this is the better view.? The two views are, however, reconcilable, as suggested in the next section. It is probably the law in Pennsylvania that the rule is aimed at the destruction of future interests and has nothing to do with restraints on alienation although the Supreme Court have taken no definite position on either side of the question. The True Object of the Rule Suggested 333. The rule has nothing to do with the alienability or inalienability of the particular future interest which it destroys. If that interest may vest at a period beyond the rule, it is void and nothing can save it. The rule, therefore, is directly aimed at compelling such a limitation of future interests that they will vest within a certain time. As when an_inter- est is remote, it cannot take effect, and there is a reversion or resulting trust of the fee after the termination of the last valid interest, the rule, by fixing an early period at which estates must vest, promotes the return to the former condition in which the fee existed as a whole, in the absolute and un- trammeled ownership of a single individual. In that sense, therefore, the rule has the effect, if not the ulterior object, of making the property more alienable. The rule promotes alienability by destroying future interests. Alienability is its object, the destruction of future interests is the means of attaining that object. There is no danger to the community in permitting anyone to acquire an interest at a remote period in future, or in permitting a present estate to be destroyed or taken away at a remote period in the future.* Public policy is against the tying up of property,’ and uses the rule against perpetuities as a knife to cut out the limitations, which ?See §330, ante. on meaning of per- See 4, L.R.A.N.S.140; 11,L.R.A., 85. petuity. *See §14, ante, for discussion of this 3 See Review of 2 ed., of Gray, Rule point. ~ Perp., in 19 Harv. Law Rev., at 635 (1906). 5 See §§11-14, ante. 194 RULE AGAINST PERPETUITIES (334, 335—] if they were allowed to take effect, would produce the conse- quences which are to be avoided.® Contingencies Analyzed 334. The contingencies upon which future interests may be limited to take effect are impossible of enumeration. They may, however, be divided into two classes: (1) the happening of an event, (2) the ascertainment of a person. The chief difficulty is as to the second case, the usual instance of which is that of a limitation to a class. These limitations are discussed more at length in a separate chapter.’ We will first observe that the contingency must happen within the period, and that the chief controversy is over the case of death without issue. These points will be discussed in the order named. The Contingency Must Happen Within the Period 335. If it is possible for the contingency to happen at a remote period, the interest limited thereon is destroyed, or, as is commonly said, the application of the rule is tested by possible and not by actual events, and the fact that the contingency actually did happen in time will not save the interest.? In like manner, if there is any possibility that the person who is to take may not be ascer- tained until after the expiration of the period, the limitation to him is void.* No reason for this has been given in the books. A reason ®See §15, ante. 7 See Chap. 18, post. 8 Thus, to A. in fee, and if B. returns from Rome, to C. and his heirs. The limitation to C. is void, because although B. may return from Rome in the life- time of A., yet he may not return until more than 21 years after A.’s death. The law does not wait until A.’s death, and then, if B. has returned from Rome, give the estate to C., and, if he has not declare it void. See remarks of Strong, J., in Smith v. Townsend, 32 Pa. 434 (1859); Williams, J., in Donohue v. McNichol, 61 Pa. 73 at 78 (1869); Paxson, J., in Smith’s Appeal, 88 Pa. 492 at 495 (1879), which case is open to criticism on this point; see §395, post; Coggins’ App. 124 Pa. 10 (1889); the class did actually close in time, but it might not be closed until too remote a period. Lewis, Perp., (1843), pp. 170, 171, 478 and 481. Gray, Rule Perp., 2 ed. (1906), §214. For the purpose of de- termining questions of remoteness, men and women are deemed capable of hav- ing issue as long as they live; Gray, Rule Perp., 2 ed. (1906) §215; Coggins’ App.,124 Pa. 10 at 21(1889). Thus, a limi- tation over on the probate of a will is void as the will may be probated at a remote period; see 10 L. R. A. N.S. 564. ®A contingency which may happen at a remote period may be controlled by the circumstance that the limitation in question, if it ever takes effect at all upon the contingencies specified, must take effect within the period prescribed. [—335] DISCUSSED AND EXPLAINED 195 may be suggested, which is this. In nearly all the cases in which the court has had occasion to consider the application of the rule against perpetuities, the point of view, which is as of the time the litigation is commenced, is between the begin- ning of the period and the termination thereof: to suspend the application of the rule until the termination of the period and see what actually did happen, would require that the case be kept in court for an indefinite period, and subject all parties to an uncertainty which would be most distressing.’ On grounds, therefore, of practical convenience in the dispatch of public business, and the desirability of bringing the litigation to a speedy close, the law says that the rule must be applied as of the beginning of the period.’ It is also immaterial at what time during the running of the period prescribed by the rule the contingency happens or may happen, provided that it cannot happen beyond the period, or, as it is commonly said, the contingency must happen, if at all, within the period.’ An interest limited on such a contingency will be contingent at the beginning of the period, but if it takes effect at all, will take effect in time. An example of this is the case of a gift of a life estate to an ascertained person, or a gift of a term not exceeding twenty-one years, in either case upon a contingency which may be remote. As neither the life estate nor the term can continue into the remote period, they must vest, if they vest at all, in time. This is the case discussed by Mr. Gray, Rule Perp., 2 ed. (1906), §§225 to 229. Fearne, Remainders, p. 500, Butler's note. The court may have been in- fluenced by another consideration. At the time when the rule took its shape, the question which the judges had be- fore them to answer was, how long it would be before the fee was again united in one person and alienable. Looking at the question from that point of view it is easy to see how they would strike out anything which possibly might hap- pen, and only permit that which must vest in time, as otherwise the court could not definitely determine when the estate would be alienable. 1The student will here observe the distinction between the application of the rule against perpetuities and the ap- plication of the rule affecting contingent remainders. The law waits to see, in the case of contingent remainders, whether the event will happen in time, and if it does, the remainder is good. The rule against perpetuities does not wait, but immediately cuts out all limi- tations, which by any possibility may take effect at a remote period. ? Gray, Rule Perp., 2 ed. (1906), §206. For example: to A. in fee, and after B.’s return from Rome in the lifetime of X., a living person, then to Y. The return from Rome upon which the interest is limited to take effect, is B.’s return in the lifetime of X. That, if it happens at all, must happen in time, consequently there is no possibility that it may happen afterward, and the limitation to Y. is, therefore, valid. To A. in fee, and if he dies without issue living at the time of his death, to B. in fee; Lovett v. Lovett, 10 Phila. 537 (1873); see remarks at bottom of p. 540. 196 RULE AGAINST PERPETUITIES [336] Death Without Issue 336. Suppose there is a gift over on the death of A. without issue, or some such equivalent expression. The donor may mean death of all the descendants of A., that is, the extinction of all his issue. This is called indefinite failure of issue, because it cannot be known when such failure may occur, if it ever will occur. The donor may mean failure of issue of A. at some definite time. This is called definite failure of issue, and if the failure must occur within the period pre- scribed by the rule, the gift over is good.* Mr. Gray says that in the case of real estate the question whether the failure of issue is definite or indefinite is immaterial, for if it is definite the gift over will take effect in time, and if it is indefinite the first taker has an estate tail, to limitations on which the rule against perpetuities does not apply.* In Penn- sylvania, however, since all estates tail are turned into estates in fee,’ the question in cases of real estate is material. In Pennsylvania a gift over on failure of issue, when that failure must take place within the period prescribed by the rule, is good, while a gift over on indefinite failure of issue is bad.* The rule is the same whether the subject matter of the gift is real estate or personal property.° 3 Gray, Rule Perp., 2 ed. (1906), §§211- 213. In most cases of definite failure of issue, the failure is at the death of A. This, however, is not necessarily so. It may be fixed at the death of A.’s eldest son, or some other period in the second or third or subsequent generation. A frequent case is the death of A. under twenty-one, without issue, or the death of A. unmarried, without issue. *Rule Perp., 2 ed. (1906), §212. Not strictly accurate because the definite failure may be at a remote period. See Gray, ubi supra, n. 2. 7See §23, ante. 8 Hackney v. Tracy, 137 Pa. 53 (1890). ®The question as to what is definite and what is indefinite failure of issue is a question of construction very often of great difficulty. See, however, the Act of July 9, 1897, P. L. 213, by which words importing indefinite failure of issue shall be construed to mean defi- nite failure of issue, unless the contrary intent shall appear. This act was held to be constitutional in Dilworth v. Land Co., 219 Pa. 527 (1908); Siegwarth’s Est., No. 1, 33 Super. Ct., 622 (1907); Lewis v. Link-Belt Co., 222 Pa. 139 (1908). This act is similar to the acts of 7 Wil- liam IV. and 1 Vict. c. 26, s. 29, except that the English acts apply solely to wills. For a discussion of the English act see Lewis, Perp., Chap. 15, p. 291 (1843). There was a distinction at common law in the rule of construc- tion between realty and personalty. The Pennsylvania act makes no such distinction. For a case of a gift over of real estate on definite failure of issue, see Nicholson v. Bettle, 57 Pa. 384 (1868). For a like gift over of personal property see Deihl v. King, 6S & R. 29 (1820); see dictum in Scott v. Price, 28. & R. 59 [337, 338] DISCUSSED AND EXPLAINED 197 Separable Contingencies 337. If, however, there are two contingencies, and the interest can take effect on either, and one is within the period and .the other is remote, the interest will be allowed to take effect on the one which is valid.’ The contingencies, however, must be clearly separable by the terms of the gift.t If they are inseparable the limitations cannot take effect on either contingency. Distinction Between the Rule Against Perpetuities and the Rule Forbidding the Creation of Restraints on Alienation 338. The rule against perpetuities prescribes the time within which an estate must take effect.2 A restraint on alienation, voluntary or involuntary, has nothing to do with the taking effect of the estate. It does not violate the rule against per- petuities, even though the restraint may last for an indefinite length of time. The donor of an estate may make it go over upon the happening of any contingency, provided that con- tingency must occur within the limits prescribed by the rule against perpetuities.* Where, however, the event upon which the estate is to go over is an alienation by the first taker of the estate itself, the limitation amounts to a restraint upon alienation,* and may be void whether the contingency will happen within the limits prescribed by the rule against per- petuities or not.° The result is the same whichever rule is (1815); Rapp v. Rapp, 6 Pa. 45 (1847). For a case of a limitation in equity con- strued to be definite failure of issue and limitations over within the rule, see Wein- brenner’s Est., 173 Pa. 440 (1896). 10 Gray, Rule Perp., 2 ed. (1908), Chap. IX. Lewis, Perp., (1843) p. 501. For a further discussion of this point, see §463, post. * See §§332, 333, ante. 3 See §335, ante. 4 Thus, a devise to A. in fee, and upon the expiration of the term of the present President of the United States to X. and his heirs, is valid. A devise to A. in fee, with the proviso that if he shall alienate, then to X., and his heirs, is void, or a pro- viso, if he alienates, the estate shall re- turn to the grantor and his heirs. In one case, it may be said, the contingency upon which the estate is to go over happens outside of the estate itself, and in the other it is something connected with the estate and is void. See further as to this point, §$$332, 333, ante, $379, post. 5 This distinction has not always been observed. In Appeal of St. Luke’s Church, 1 Walker, 283 (1863), the tes- tator devised a lot of ground to a church, the same not to be disposed of, and if it should at any time be disposed of, then it was to go overto A., B. and ©. The court said, “The devise over on the con- tingency of alienation is not a contingent remainder nor is it a contingent re- mainder by way of executory devise. 198 RULE AGAINST PERPETUITIES [339] applied. If the rule forbidding restraints, the clause is cut out, and the estate remains in its entirety untrammeled. If the rule against perpetuities, the limitation over is destroyed, and the first estate remains even though the subsequent estate is void. Lives in Being 339. Any number of lives in being may be taken,° as the period measured by such number of lives amounts to nothing more than the life of the survivor. Mr. Lewis says that the consideration that. the lives are all wearing away at the same time, or, as it has been quaintly expressed, that all the candles are burning at once, accounts for the fact that no cases have arisen in which this point has been presented for discussion.’ All the lives designated, if more than one, must be in being at the time of the death of the testator or the date of the execution of the deed, as the case may be. A common instance is where there is a gift over on the death of the survivor of a class. If a person born after the creation of the interest may become a member of the class, the gift over is void, because the subsequently born person may be the sole sur- vivor.2 The persons whose lives are referred to need have no interest in the estate,® but the lives specified must be of such persons that the fact of their death can be ascertained by the court; as Lord Eldon puts it,!° “Any number of lives not exceeding that to which testimony can be applied to determine when the survivor of them drops.’’ This remark must be taken to mean—can be applied consistently with the It is too remote and uncertain. It does there was a gift over on the death of all not appear that it must take place if it takes place at all within a life or lives in being, and twenty-one years and nine months afterwards.” The limitation here was void as a restraint on alienation. ® Gray, Rule Perp., 2 ed. (1906), §§189, 190, 216-2192. In the case of Cadell v. Palmer, 1 Cl. & F. 372, (1833), Gray, ubi supra, §218, twenty-eight lives were permitted. 7 Lewis, Perp., p. 142 (1843). 8 Such was the case in Goddard’s Est., 198 Pa. 454 (1901). So also in Davenport v. Harris, 3 Grant’s Cases, 164 (1855), where the grandchildren of the testatrix. As some grandchildren might be born after the testatrix’s death, the gift over was in- valid. If the limitations over after the death of each member of the class are sep- arable, those which may take effect in time can be upheld and the rest destroyed. See Smith’s App., 88 Pa. 492 (1879), stated §395, post; see §337, ante, §463, post. ’ Gray, Rule Perp., 2 ed. (1906), §216. © Quoted, Gray, Rule Perp., 2 ed. (1906), §217. [339a, 340—] PERIOD PRESCRIBED 199 dispatch of public business, and within reasonable, practical limits.? Barclay v. Lewis 339a. In Barclay v. Lewis? the testator created a trust to pay annuities to his wife, daughter and sons for life, and directed that at the death of the wife and daughter, the estate should be held in trust for the benefit of the children of his sons and daughters until they should reach twenty-one, and then be equally divided among said children. The court held that the limitations over did not violate the rule against perpetuities. The wife and daughter were dead, and the court said, in an amicable action of debt, the sons being alive, that the trust continued to support the ultimate estates. If the testator meant that the lives of the sons were some of the lives in being, the decision is perfectly correct. If, however, the lives of the mother and daughter were the lives in being, the decision is incorrect, as the son might survive his mother and sister, and have a child born more than one year after their death. The limitation to such child would be remote, as the estate would vest in him more than twenty-one years after the expiration of the lives in being. The court seemed to think that the testator meant the lives of the wife, sons and daughter, a construction which is open to objection. The whole estate was given in trust, subject to annuities to the sons after the death of the wife and daughter. The Period of Twenty-one Years 240. The period of twenty-one years may be taken in gross, that is, limited simply as a space of time,*? without reference to any minority. It seems, in like manner, that the term of 1 Thus, suppose the case of a gift over upon the death of the survivor of all per- sons now living in Philadelphia, and en- titled to a fee simple estate in any real es- tate situate within the county. Itwould be possible to ascertain from the records who all the present owners of fce simple estates are, and they being ascertained, to deter- mine when the survivor was dead. The determination of the fact would be so diffi- cult and take so long, that the gift over would probably be declared void. A gift over on the death of the survivor of the present members of the United States Senate would probably be valid. 267 Pa. 316 (1871). 2 Challis, Real Prop., 2 ed. (1892), §169. *Gray, Rule Perp., 2 ed. (1906), §223. Consequently, a limitation over at a period more than twenty-one years after the end of the life or lives in being is void. Coggins’ App., 124 Pa. 10 (1889); Ger- ber’s Est., 196 Pa. 366 (1900), stated §474, post; Boyd’s Est. No. 1, 199 Pa. 487 (1901), stated §398 post. 200 RULE AGAINST PERPETUITIES [—340-342—] twenty-one years may be taken without being preceded by a life or lives in being.® It seems to have been assumed that such is the law, although the books are not very clear on the subject. Mr. Gray does not refer to the point. Mr. Lewis says ® that the term of twenty-one years is an integral part of the period of remoteness and not supplemental to it, and that a limitation to take effect within twenty-one years would be good.” No decision on the point has been found in Penn- sylvania, although there are a number of cases in which this appears to have been assumed as the law.® The term of twenty-one years, however, it seems, cannot be made to pre- cede a life in being. If it is taken as a term in gross, it must constitute the entire period and no life can be added after twenty-one years.° No case has been found as to this point either. The Period of Gestation 341. Mr. Gray lays down two rules:'® (1) Every life is to be considered as beginning from the time of conception. (2) A future interest to begin when or before a person reaches twenty-one is not too remote if such person must be begotten, though not born, within a life in being at the creation of the interest. The period must refer to an actual gestation, and there may, as Mr. Gray points out, be two or three periods of gestation. No case on this point has been found in Pennsylvania. When the Period Prescribed by the Rule Begins lo Run 342. The period prescribed by the rule begins to run from 5 Thus, in the case of a gift to A. for twenty years and then to B. and his heirs, or, to B. and his heirs twenty-one years after the testator’s decease, the limitation to B. is void. 6 Lewis, Perp., p. 560 (1843). 7See also, Perry, Trusts, Vol. 1, §380, 5 ed. (1899); Fearne, Remainders, p. 500, Butler’s note. Stewart, P. J., in the court below in Johnston’s Est., 185 Pa. 179 at 184 (1898). § Thus, a gift to a class which of itself will close at a remote period, will be made valid by a direction to distribute at the termination of a period of years less than twenty-one; Williamson’s Est., 143 Pa. 150 (1891); Forney’s Est., 161 Pa. 209 (1894). Gift at the end of five years from the testator’s decease, or before or after, in the discretion of the executors; Searight’s Est., 163 Pa. 218 (1894). Gift to A. “eighteen years after my de- cease;’ Kaufman v. Burgert, 195 Pa. 274 (1900). ® Thus, in the case of a gift to A. for twenty-one years, and after the death of his grandchildren living at the expiration of the twenty-one years, to B. and his heirs, the limitation to B. and his heirs would be remote. 0 Rule Perp., 2 ed. (1906), §§220-222. 1 Rule Perp., 2 ed. (1906), §§221, 222. [—342-344—] COROLLARIES 201 the date of the creation of the interest, and is to be com- puted from the date of the testator’s death, in the case of wills, and from the date of the deed, in the case of a gift inter vivos.? No case on this point has been found in Penn- sylvania. The law is so plain and easy of application that no controversy appears to have ever arisen as to it. There are several corollaries of the rule, which will be discussed in the ensuing sections. Rule Does Not Affect the Right to Possession 343. We have seen that an interest may be vested accord- ing to the common law notion, even though there is no present right to enjoyment. Such an interest may be called a quasi future interest.* As it is this vesting according to the common law idea which fulfills the requirements of the rule against perpetuities, it follows that the circumstance that the right to possession or enjoyment of a vested interest will not accrue until after the period prescribed by the rule has elapsed is of no consequence.’ This may happen when the preceding estates extend into the forbidden period, and when the fee is subject to a term of years.® A clause, therefore, postponing the enjoyment of a vested absolute interest does not come within the purview of the rule against perpetuities.’ This principle is clearly illustrated by a Pennsylvania case which will now be discussed. Rhodes’ Estate 344. In Rhodes’ Estate,® the testator gave his estate in trust for his wife and daughter for life, and, after their death, ? Gray, Rule Perp., 2 ed. (1906), §§231, 232. As to the case of a deed, see Lewis, Perp., p. 172 (1843), and Mifflin’s App., 121 Pa. 205 (1888), stated §401, post, sem- ble. Mr. Gray makes no observations as to settlements by deed. 3 For the application of the principle to powers of appointment, see §§388-401, post, and for the erroneous application thereof to the case of powers in a trustee, see §§410-436, post. For the case of a settlement by deed where the limitations violated the rule, computing the period from the date of the deed, see McCullough v. Seitz, 28 Super. Ct. 458 (1905), stated, §452, post. * See §41, ante. 5 Gray, Rule Prep., 2 ed. (1906), §205. 6 See §45, ante, on remainders subject to a term of years; §363, post, on the appli- cation of the rule to vested remainders subject to a term of years. 7 Gray, Rule Perp., 2 ed. (1906), Chap. IV. See §487, post, on the distinction be- tween the rule forbidding restraints on enjoyment and the rule against perpetu- ities. 8147 Pa. 227 (1892). 202 RULE AGAINST PERPETUITIES [— 344] after providing for certain annuities, the residue was to be equally divided among his nieces and nephews then living. He then, by codicil, directed that if his daughter should die leaving a child or children surviving under the age of twenty- five, that his trustees should pay to each of said children $350 a year until they were twenty-five years of age, when such payment should cease, and that his estate should not be divided until after all the children of the daughter had arrived at twenty-five. At the audit of the trustees’ account, the daughter, presumably, although not so stated, as his next of kin, claimed the whole estate on the ground that the gifts in the codicil violated the rule against perpetuities. The auditing judge, Hanna, P. J., decided that the limitations were valid and dismissed the claim of the daughter, which decision was sustained by the court in banc and by the Supreme Court, on appeal. As was pointed out by the auditing judge, these annuities each vested immediately upon the death of the daughter, no matter what age her children were under twenty-five, and the fact, therefore, that the payment might continue to a period beyond the rule did not affect the validity of the limitations.° The gift to the nieces and nephews was plainly contingent but valid, as it must vest in time, to wit, at the death of the daughter.*° Although vested then, there was a_ possibility that the possession thereof might be postponed to a future time, because of the presence of the vested interests in the children of the daughter. They were vested in time, but con- tinued to exist after the expiration of the period. The enjoy- ment, therefore, of the valid contingent interests was postponed to a period beyond that prescribed by the rule, because of the presence of prior interests in the children of the daughter. That, however, did not invalidate the contingent interests, because the rule has to do only with the vesting, and not with the time of coming into enjoyment.’ ® Where the interest takes effect in time the fact that it extends beyond the might have vested in a minor within the period, and the minor might not arrive period is immaterial. See §345, post. 10 On this point overruling Donohue »v. McNichol, 61 Pa. 73 (1869), stated §348, post. 1See also Hubley v. Long, 2 Grant’s Cases, 268 (1852), where the interest at twenty-one until some years after the expiration of the period and the gift was nevertheless valid. See also Barclay v. Lewis, 67 Pa. 316 (1871) semble, stated §339a, ante. PENNSYLVANIA CASES [345-347—] 203 Continuation of a Vested Interest Into the Remote Period Valid 345. When an interest must vest within the period pre- scribed by the rule, it is saved, and the circumstance that it may not terminate after the period prescribed by the rule has passed, is of no consequence.? If this were not so, no future interest could be remote. It is only by the cir- cumstance of a particular estate extending into the remote period that there is a possibility of an interest violating the rule against perpetuities. Preliminary Discussion of Pennsylvania Cases on the Rule 346. There are very few cases in Pennsylvania involving the application of the rule against perpetuities which are open to objection or call for any discussion. These cases will now be noticed.* Chambers v. Wilson 347. In Chambers v. Wilson* the testator devised certain real estate ‘‘to any one of my brothers’ or sisters’ children that shall or may come from Ireland first. * * * If so be they shall or do come within the term of six years, after they shall get lawful word hereof by writing, for which cause I do enjoin upon my aforesaid wife Martha, her heirs and assigns, to use all possible diligence to communicate unto all my aforesaid brothers’ and sisters’ children the import of this my will, as soon as a declaration of peace shall be between Europe and America,” with a gift over to A., B. and C., in equal shares, if none of the brothers’ or sisters’ children came ? Lewis, Perp., p. 173 (1843); Gray, until a remote period. The annuity, Rule Perp., 2 ed. (1906), §§232-246; Ste- wart, P. J., in Johnston’s Est., 185 Pa. 179 at 185 (1898), stated §472, post; Penna. Co. v. Price, 7 Phila. 465 (1870); unfortunate language in this case criti- eised by Gray, ubi supra §237a. In Brisben’s App. 70 Pa. 405 (1872), there was a direction to sell o certain tract of land, and a gift of the proceeds of the sale to a daughter. The testator then provided for an annuity to be paid to bis daughter until she should receive the proceeds of the sale of said tract of land. That conceivably might not be however, vested in time, so the remote- ness of its termination was immaterial. Lakey’s Est., 30 Pa. C. C. 287 (1904); Rhodes’ Est., 147 Pa. 227 (1892), stated §344, ante; Lennig’s Est., 154 Pa. 209 (1893) ; Ronckendorff’s Est., 1 D. R. 258, s.c. 11 Pa. C. C. 447 (1892), stated §397, post; Lawrence’s Est., 136 Pa. 354 (1890), stated §396, post; Owens’ Pet., 3 D. R. 328 (1894), in which case the ulti- mate limitation was void, see §452, post. * See also cases discussed in Chaps. 16- 19, post. 42 Watts, 495 (1834). 204 RULE AGAINST PERPETUITIES [—347, 348—] within the time specified. The action was ejectment by the heirs of A. against one claiming under the executrix. The report is obscure, and the chief attention of the court and counsel seems to have been directed to the question whether the direction as to giving notice had been properly fulfilled, without observing that the limitation violated the rule against perpetuities, and was therefore void anyhow. The gift was to such one of a class composed of the brothers’ and sisters’ children who should come upon a certain contingency. A niece or nephew of the testator born more than twenty-one years after the testator’s death might come from Ireland at a re- mote period. The notice was to be given by Martha, her heirs and assigns, and might, therefore, be given at any time in the future. If the giving of the notice had been limited to the life of Martha, the limitation would have been valid, and in that case the circumstance that a child born after the death of the testator would be the first to take advantage of the notice, would be immaterial. The remainders to A., B. and C. were vested and valid. Donohue v. McNichol 848. In Donohue v. McNichol® the testatrix gave her estate in trust for her son John for life,* and upon his death, leaving issue, in trust for such issue, and after the death of the issue, in trust for the use of her lawful heirs, and on the death of John without issue, to her lawful heirs, their heirs and assigns.’ John died without issue and his widow filed a bill in equity for a conveyance of a half interest in the real estate for life. The court said that John took a fee. Williams, J., in the Supreme Court said that if the testatrix meant her heirs at her death, the limitation was valid, but that if she meant her heirs at John’s death or at the death of his issue, the limitation over was void for remoteness. Since John was the heir of his mother, at her death it was immatcrial to the decision of the case whether the limitation to the heirs at her death was remote or not, as he would take anyhow as pur- 561 Pa. 73 (1869). and the two gifts over, therefore, were 6 As to the trust for life, see §542, post, distinct and could take effect indepen- on Discretion. dently of each other; see Gray, Rule 7The two contingencies, the death of Perp., 2 ed. (1906), §353a; see $337, John leaving issue, and the death of John ante, $463, post. without issue, were clearly separable, [—348-350—] PENNSYLVANIA CASES 205 chaser under the limitation if it was valid, and as heir at law of his mother if it was invalid. The casc, therefore, construes the word heirs to mean the testatrix’s heirs at her death. If this is so, the limitation was clearly valid. Since, however, John was not his mother’s heir at his death, and the limitation to those heirs seems to be plainly valid,® there is no way of getting around the erroneous reasoning of the court. The case is probably no longer the law.® Seibert v. Wise 349. In Seibert v. Wise’ the devise was to testator’s two nephews, one-half to John and one-half to Jacob, share and share alike, to hold to themselves and their heirs, the survivor or survivors of them forever. Jacob contracted to sell his one- half, having previously executed a deed to bar any estate tail. Judgment was rendered for Jacob on a case stated to determine whether his title was marketable. On appeal, affirmed by the Supreme Court, Sharswood, J., saying that if the word survivor meant survivorship between John and Jacob, there was a devise over after a fee, which could not stand as a remainder nor as an executory devise, because contrary to the rule against perpetuities. For this conclusion, the learned judge gave no reason, and as survivorship in either case would be determined at the expiration of a life in being, the life of John or Jacob, it is submitted that the remarks are open to serious objection.’ Ward’s Estate 350. It appears that in Ward’s Estate? there was a gift in trust for the children of the testator absolutely, with a proviso that if they died under thirty, having married and leaving issue, the share of the one so dying should remain invested and apportioned among such issue when they should ® This is plain, as the interest would vest in them immediately at her death, and therefore take effect within the period prescribed by the rule. ®The case cited by Ashman, J., in Ronckendorff’s Est., 11 Pa. C. C. 447 (1892), s.c. 1D. R. 258, as an authority for the proposition that it is immaterial whether the interest exceeds the limita- tions prescribed by the rule, if it begins within the limit. 170 Pa. 147 (1871). 2 See Lovett v. Lovett, 10 Phila. 537 (1873), Watson, P. J., at bottom of p. 540. 38D. R. 701 (1899). The case is badly reported and the words of the will are not given. 206 RULE AGAINST PERPETUITIES [351—] have arrived at the age of thirty years. Such limitations were, of course, as the learned judge said, void. The issue might take twenty-one years after the death of their parents. Pennsylvania Cases Where the Limitations Did Not Violate the Rule 351. In a number of cases, which are collected in the note,* the limitation did not violate the rule against perpetuities. That was so clear that it is not strictly necessary to cite those decisions. As, however, in each case it seems to have been argued, for some unknown reason, that the limitations were remote, and the court found it necessary to say that 4To A., and if she dies under twenty- five and without issue born, to X: Kelso v. Dickey, 7 W. & S. 279 (1844). To A. in fee, and if he dies before he marries, to B. and his heirs: Jessup v. Smuck, 16 Pa. 327 (1851). To my wife for life, then to her issue by me begotten, but if no heir by me should live to the age of twenty-one years or marry, then to the children of my sister S. and my brother W.; limita- tion over was an executory devise and valid; Wells v. Ritter, 3 Whart. 208 (1837). To A. for life, remainder to her children in fee, A. then having a child, ‘provided if she die without issue, to my son B;” limitation to B. not remote; dictum Gibson, C. J., and Ken- nedy, J., in DeHass v. Bunn, 2 Pa. 335 (1845). Gift by deed of trust to pay the income for the lives of three persons and of the survivor or survivors, and after the death of the survivor, in trust for the right heirs of the three, does not violate the rule against perpetuities; Goehring’s App., 814 Pa. 283 (1875). Gift over on definite failure of issue at the death of the first taker; Lovett v. Lovett, 10 Phila. 537 (1873). Gift by deed in trust for daughter A., for life, upon her death in trust for her children living at her death, and the issue of such as shall be deceased to be conveyed to them upon attaining twenty-one, and in default of such children or issue attaining twenty- one, then in trust for such persons as would have been entitled had the grantor died possessed thereof, after the death of A., without leaving issue, him surviving. Limitations to the heirs, valid; contin- gent until the death of A., and ascertained, if at all, within the period prescribed by the rule; Phillips’s App., 93 Pa. 45 (1880). In Myer’s Est., 17 Phila. 425 (1884), the words of the will are not given, so that the case is of little value, as it cannot be told whether the remarks of the court are dicta or not. The court seems to concede that the remarks as to perpetuities were dicta, and there is nothing in the opinion of the court which is open to objection. In Richardson’s Est., 16 Phila. 326 (1884), the report is obscure as to this point, and the words of the will are not given. Gift if A. should die without making a certain appointment, to B. a living person for life, with special power to appoint in B., and in default of appointment by B., to his right heirs; limitation to heirs valid; Brooks’s Est., 140 Pa. 84 (1891). Gift in trust in the events which happened, for the life of A., B. and C., grandchildren of the testator, and at their death, in fur- ther trust as respects the share of each for the use of their children and the issue of a deceased child in equal shares, and in the case of the death of either A. or B. with- [—351] PENNSYLVANIA CASES 207 the limitations did not violate the rule against perpetuities, it seems desirable to refer to these decisions for the sake of completeness. out children or issue, or without children or issue which shall reach twenty-one, to the survivor of the grandchildren for life, with the remainders to the children of the survivor, and in default of such children, to form part of the residue: Weinbren- ner’s Est., 173 Pa. 440 (1896). Gift in trust, in the events which happened, for A. B., C., D. and E. for life; at their death to their children, until they attained the age of twenty-one years, when each shall receive his or her share of the principal in the proportion that he or she received or were entitled to the income, agreeably to the intestate laws of the state of Pennsylvania; Smith’s Est., 210 Pa. 604 (1905). See also Horner’s Est., 10 D. R. 729 (1901). (208) (209) CHAPTER 16 INTERESTS SUBJECT TO THE RULE Preliminary. Gis@uSsSi0Ms.... ca cugces casa eke a ca ane Rhode ee eels §360 Legal interests REVErsiONS Annweidrur gta wat ania ee Dia doe aoe Lee ded §361 Vested! remisinderse-s uvaween eavariae Saas gee dee Bae G24e ew A §362 Vested remainders subject to a term of years............... §363 Contingent remainders............. 0... e cece eee ee eee eee General discussion, <.5.45.20dcene ad sab peewee ee eet eulee §364 Law in Pennsylvania as to application of rule to con- tifgent reMainders. sas cca ds soe cc ee se es eae a ee as §365 HASEMENLS ys avcccel ees ooh Se ae BNE ee eae ea ess §366 Rights of entry for condition broken....................... §367 Possibilities of Tevérte?«2ce.edscievewi esc es wus ciaed edene ween §368 Future legal interests in personal property.................. §369 Executory devises and bequests..................000020005. §370 Equitable interests Shifting and springing uses............. 0.0... cece eee eee §373 The interest of the cestui que trust.....................000. §374 Fallacy that the rule applies to the trust.................. §375 Clause against anticipation............. 00. eee eee §376 Equitable interests implied by law.....................0.00, §377 Destructible interests......... 0.0... cect eee eect et eee eens §378 Where the interest cannot take effect apart from the rule...... §379 Interests arising by operation of law......................005. §380 Interests arising by contract..............0 0. cece eee ees §381 SUSE a cessersdilnare Bakesngercaed aay @ baal wh ase haw bled hee ey wears gene §382 Preliminary Discussion 360. It is the purpose of this chapter to discuss and classify the interests which are subject or are not subject to 210 INTERESTS SUBJECT TO THE RULE [—360-362—] the rule against perpetuities. The common statement is that a vested interest is not subject to the rule. The exact point involved is this: an interest which may vest at a remote period is, if it is otherwise lawful,” prevented by the rule from ever taking effect. The statement, therefore, that an interest is or may become vested necessarily involves the idea that it has or will escape the operation of the rule. It may perhaps put the matter more clearly to say that a vested interest does not lie in the path along which the rule against per- petuities exercises its destroying effect. Reversions 361. A reversion is not subject to the rule against perpe- tuities. Mr. Gray ® says that it is because a reversion is vested. While this is perhaps a sufficient reason, there is another prin- ciple involved. If the ulterior interest limited is remote, it cannot take effect, and is as if it had been omitted from the deed. The gift stands as if the limitations had stopped with the preceding particular estate, in which latter case there would, at common law, be an undisposed of residue which would remain in the grantor and his heirs as a_ reversion. The existence of the reversion in this case is, therefore, the in- evitable consequence of the application of the rule to the void ulterior limitation. If the property did not revert to the grantor, to whom would it go: to a stranger or to the state? No other disposition is possible.* Where there is an express reversion the case is the same. The direction in the deed is coextensive with the disposition by law. Vested Remainders 362. A vested remainder is not subject to the rule against 1A vested interest, whether legal or equitable, in realty or personalty, is not subject to the rule against perpetuities: Gray, Rule Perp., 2 ed. (1906), §205; Clark, J., in Lawrence's Est., 136 Pa. 354 at 363 (1890); Rhodes’ Est., 147 Pa. 227 (1892). It has been pointed out, see §§38- 41 ante, that the notion of vesting has come down from the doctrine of the early common law governing remainders in land, and the distinction between a vest- ed and a contingent interest in modern times turns on a mere form of words. ? As to this point, see §379, post. 3 Rule Perp., 2 ed. (1906), §283. 4 The non-application of the rule to the reversion is a direct corollary of the prin- ciple disposing of the property embraced in a void ulterior limitation, as to which see Chap. 19 post. [—362, 363— ] LEGAL INTERESTS aut perpetuities.° Vested remainders were allowed at common law several centuries before the rule against perpetuities was evolved.® Historically, therefore, the rule cannot apply and no one has ever suggested any reason why the rule should be extended to cover a vested remainder. A vested remainder is a quasi future interest;7 in so far, however, as the vesting in interest is concerned, it is a present interest, and that is a sufficient reason why the rule should not apply. If the suggestion made ® is sound, that the rule against perpetuities was originally evolved to limit the gap in the seisin or possession made possible by the validity of the limitations under the statute of uses, there is another reason why the rule does not apply to vested remainders. Whatever the reason may be, the law -is plain. Mr. Gray ° mentions the case of a remainder to a class as an exception to this application of the rule against perpetuities. He is forced into this position by his acceptance of the theory that a remainder to a class is a vested remain- der. The objections to this theory have been pointed out,’° and the position taken that a remainder to a class is really a remainder to each particular member of the class, and is either vested or contingent, under the same principles which apply to remainders to an individual. It is, therefore, not an exception to the application of the rule against perpetuities.' Vested Remainder Subject to a Term of Years 363. There can be no remainder after a term of years. When the term and the fee are granted together, the gift is construed as a grant of the reversion subject to the term.’ The limitations of the fee are, therefore, to be considered, so far as the application of the rule against perpetuities is con- cerned, as if the term did not exist. The fact that the pos- session of the vested remainder is postponed to a period beyond that prescribed by the rule, by the presence of the term, is > Gray, Rule Perp., 2 ed. (1906), §§205, 205a, 283. See Kales, 20 Harv. Law Rev. (1907), p. 192, et seq. ® Vested remainders go back as far as the thirteenth century. The rule against perpetuities dates only from the seven- teenth century. See §326, ante. 7 See §41, ante. 8 See §364, n. 8, post. ® Rule Perp., 2 ed. (1906), §205a. 10 See §§67-71, ante. 1 For a discussion of the application of the rule to gifts to a class, see §445, post. 2 See §45, ante. Itis, of course, possible for the gift to be so worded that the ulti- mate limitation of the fee is contingent upon the termination of the estate for years, and must, therefore, take effect, if it takes effect at all, as an executory devise. 212 INTERESTS SUBJECT TO THE RULE [—363] immaterial.* This principle was overlooked in the case of Morris v. Fisher. In that case there was a devise to A. for life, and after her death to B. for ninety-nine years, if he should so long live, and after his death, then to the issue of his body during the remainder of the term, and after the expiration of the term, or if B. should die without leaving issue, then to W. and the heirs male of his body. A. died, B. entered into possession, and his issue succeeded him. The term of ninety-nine years expired, and the heir male of W. brought ejectment. Judgment against him in the court below was reversed on appeal by agreement of counsel. Sulzberger, J., delivered the opinion of the Common Pleas, and the grounds of his decision are difficult to understand. The exact point involved was this: the tenant in tail claimed possession, the term having ended. It was objected that he could not recover because his remainder was remote. To this it was replied that the remainder was not remote because there was a direct limitation of the estate tail subject to the term. The counsel for the defendant rejoined that the gift was not really an immediate gift subject to the term; that although it had this appearance, owing to what he termed a trick of the con- veyancer, it was really a gift to the heir male ascertained at the expiration of the term of ninety-nine years. This raised a question of construction to which no attention was paid by the learned judge, who apparently admitted that, according to the common law, there was an immediate gift of the fee tail subject to the term, and then undertook to demonstrate that the law of Pennsylvania was different. In doing this his attention was diverted by the attempted estate tail of the term.’ This point did not figure in the case, as the term had expired, and the only question was whether the heir male of W. could recover on his title as tenant in tail. The decis- ion is totally opposed to the common law and to reason, and, as has been aptly observed,® the reversal by agreement of coun- sel indicates that the counsel for the defendant had _ little hopes of holding his judgment. No other case on the point has been found. 3 §343, ante. A term of yearsof extrav- anything, is a restraint on the free use and agant length, while an undesirable state disposition of the fee. of affairs, does not, it is believed, call for 48 D. R. 161 (1899). the application of the rule against perpe- 5 See further as to this, §87, n. 4, ante. tuities. The existence of the term, if it is ® Gray, Rule Perp., 2 ed. (1906), §209a. {364—] LEGAL INTERESTS 213 General Discussion as to the Application of the Rule Against Perpetuities to Contingent Legal Remainders 364. There has been much difference of opinion as_ to whether the rule against perpetuities applies to contingent legal remainders in real estate.’ The difference of opinion which exists may be summed up as follows: it is contended, on the one hand, that the rule does not apply to contingent remainders, because (1) contingent remainders were allowed as early as 1430, nearly 300 years before the rule against per- petuities originated, and therefore, historically, it cannot apply; (2) there is no occasion to extend the rule to contingent remainders in modern times, because such remainders are destructible, and (3) because there is a rule of the common law that you cannot have a possibility upon a possibility, which rule governs the limitation of contingent remainders.* On the other hand, it is contended that although the rule does not apply historically, it should be extended in modern times to cover contingent remainders, (1) because they have ceased to be destructible; (2) because there is no rule of the common law that you cannot have a possibility upon a possibility; (3) that, as there is no other rule to govern remote contingent remainders, the rule against perpetuities should be extended to cover the case; that, even if there is a rule that you cannot have a possibility upon a_ possibility, it is undesirable that such a rule should be adopted in a 7See Gray, Rule Perp., 2 ed. (1906), §§284-298. 5 There was possibly another reason why the rule did not apply to contingent remainders, which was noticed by Sir Edward Sugden when delivering an opin- ion as Lord Chancellor of Ireland, in the case of Cole v. Sewell, 4 Dr. & W. 1. (See Gray, Rule Perp., 2 ed. (1906), §287, u. 1, where a portion of the opinion is given; and also Williams, Real Property, 6 Amer. ed. (1886), p. 274, n.; Challis, Real Prop., 2 ed. (1892), pp. 93, 184.) The Lord Chancellor said: “In the latter case the event may or may not happen before or at the instant the preceding estate is determined, and the limitation will fail or not, according to that event. It may thus be prevented from taking effect, but it can never lead to remoteness. That objection, therefore, cannot be sus- tained against the validity of a contin- gent remainder.” It is submitted that the Lord Chancellor had in mind here the point that ua perpetuity consisted in the gap between the termination of the pre- ceding estate and the beginning of the executory devise or conditional limita- tion. If this is so, and that is what the rule against perpetuities was original- ly aimed to limit, then there was no reason at the time the rule was evolved for its application to contingent remain- ders. If this reason has any weight it explains why the rule does not apply to vested remainders, because in that case there is no gap in the seisin; see §362, ante. 214 INTERESTS SUBJECT TO THE RULE [—364, 365—] jurisdiction not bound by any precedent, as limitations may be valid under that rule which would be invalid under the rule against perpetuities, and therefore, its adoption would produce a lack of uniformity in the law. Mr. Gray takes the latter view, and comes to the conclusion that the rule against perpetuities does apply to contingent legal remainders.” The Law in Pennsylvania as to the Application of the Rule to Contingent Legal Remainders 365. The question does not seem to have been passed on in Pennsylvania and is open on the authorities. Now, at common law it was said that the rule did not apply to con- tingent legal remainders because that remainder could never take effect after the expiration of the preceding particular estate, that is, the contingent remainder was destroyed by the natural expiration of the preceding estate before the happening of the event upon which the remainder was limited to take effect. If, therefore, as seems to be the case, a contingent remainder is destructible in Pennsylvania’ in exactly the same way as it was at common law in this particular, and the destructibility in this particular at common law was the rea- son why the rule did not apply, there seems to be much force in the position that the rule does not apply in Penn- sylvania. No trace has been found in the Pennsylvania cases of any application of the rule that you cannot have a possi- ® Gray, Rule Perp., 2 ed. (1906), §§123- ply the rule to a vested remainder sub- 134, 287-298. Mr. Challis, Real Prop., 2 ed. (1892), pp. 183, 184, 185, says that the rule does not apply to legal contingent remainders, because they were allowed before the rule against perpetuities was evolved, and he further says, at p. 185, that any objection to the validity of a contingent remainder on the ground of the rule against perpetuities, is not so much an objection against the time of vesting as an objection against the dur- ation of the preceding estate. Mr. Kales, 20 Harv. Law Rev., 199-200, (1907), takes exception to Mr. Gray’s po- sition that the rule does apply to contin- gent legal remainders, because he (Gray) is not consistent in that he does not ap- ject to be divested, that is, a vested re- mainder subject to a condition precedent to its coming into possession. The ob- jection to the vicw Mr. Kales takes of this kind of vested remainder has already been noticed; see §63, n. 2, ante; and also §46, ante. If this objection is sound, there is no inconsistency in Mr. Gray’s position. © Nothing has been found in Pennsyl- vania on the point except a dictum of Penrose, J., in the court below in Coggins’ App., 124 Pa. 10 at 19, (1899), as follows: “A legal remainder in lands, whether vested or contingent, is not effected by the doctrine of perpetuities.”” 1See §62, ante. [—365-367—] LEGAL INTERESTS 215 bility upon a possibility.2 The Supreme Court is, therefore, free from any necessity upon precedent of applying this rule.® The question whether the rule against perpetuities applies to contingent legal remainders in Pennsylvania is one of practical expediency rather than of principle or reason. There is no controlling reason why the rule should not apply. There are strong practical reasons why it should apply, and while, therefore, in this condition of the authorities, no statement can be ventured as to the law, it at least may be said that the Supreme Court would not go far astray if they should decide that the rule against perpetuities applies to contingent legal remainders in real estate. Easements 366. Easements and rights over the lands of another are present interests and not subject to the rule.* The right in the dominant tenant to enter on the servient tenement in pursuance of the easement, does not call for the application of the rule against perpetuities.© A grant of an easement, however, can be made to begin in futuro and such a grant seems to be subject to the rule.® Rights of Entry for Condition Broken 367. A right of entry for condition broken’ is apparently subject to the rule in England,® although there has been some difference of opinion on the point. Mr. Gray ® says that such rights are clearly within the rule, and that there is nothing in the history of the rule to exempt them from its application, but that the general law in the United States is that they 2 See §66, ante. 3 The rule is mentioned by the late Mr. Mitchell in his learned work on Real Es- tate & Conveyancing in Penna. at p. 236 (1890), apparently relying on the author- ity of Mr. Williams es a modern substi- tute for the old rule that you cannot have a possibility upon a possibility. The learned author appears to confuse this rule with the rule against perpetuities. *Gray, Rule Perp., 2 ed. (1906), §279. Profits a prendre are practically unknown in Pennsylvania. In so far as the serv- ient tenement is concerned, they are re- straints on the enjoyment of property. 5 Gray, Rule Perp., 2 ed. (1906), §281. ® Gray, Rule Perp., 2 ed. (1906), §316. No case in Pennsylvania has been found as to this point. 7 As to the nature of such a right, see §76, ante. No case of a condition attached to a conveyance of personal property has been found in Pennsylvania. The dis- cussion, therefore, is confined entirely to gifts of real property. 5 Gray, Rule Perp., 2 ed. (1806), §299- 3lla, where this subject is discussed. Lewis, Perp., pp. 618, 619 (1843). ® Rule Perp., 2 ed. (1906), §§304, 310. 216 INTERESTS SUBJECT TO THE RULE [—367—] are exempt from the operation of the rule.” The question has not been authoritatively decided in Pennsylvania, and it is not perfectly clear just what the law is. In a number of cases the condition did not violate the rule.’ In other cases the condition did violate the rule in fact, and it was held that it could be taken advantage of without the circumstance that it did violate the rule being considered by the court.’ In a number of other cases, commonly cited as authorities on the subject, the court held that the grantor, for one reason or another, apart from the rule, could not take advantage of the condition. There is, as Mr. Gray observes,* a practical inconvehience in permitting the validity of such conditions. The difficulty thereby occasioned in clearing up the title to property is frequently very great. The common opinion, how- ever, seems to be that the rule does not apply to such con- ditions, and as the Supreme Court has expressly sustained the right to recover in two cases where the condition violated the rule, and no one has thought it necessary to raise the point in a case where the court could not evade the question,* there seems to be good reason to say that it is a rule of property in Pennsylvania that the rule against perpetuities does not apply to conditions of re-entry. At least until the Supreme Court has passed upon the question it will be dan- gerous to pass a title containing such a condition that has not been released. The non-application of the rule to the clause of re-entry commonly inserted in ground rent deeds seems to have been so universally assumed in Pennsylvania, that any decision to the contrary would probably be most alarming and unsettle a great many titles.* And it is not likely 10See further 1 Am. Law Rev. 265 (1867); 17 Law Quar. Rev. 32 (1901). 1 Hamilton v. Elliott, 5 8S. & R. 375 (1819); Bear v. Whistler, 7 Watts, 144 (1838) ; Westenberger v. Reist, 13 Pa. 594 (1850). ? Pickle v. McKissick, 21 Pa. 232 (1853) ; Courtney v. Keller, 4 Penny. 38 (1884). 3 M’Williams »v. Nisly, 2 8. & R. 507 (1816); McCormick v. Connell, 6S. & R. 151 (1820); Kenege v. Elliot, 9 Watts, 258 (1840); Sharon Iron Co. v. City of Erie, 41 Pa. 341 (1861). 4 Rule Perp., 2 ed. (1906), §304. 5 The question was argued in Sharon Tron Co. v. City of Erie, 41 Pa. 341 at 347 (1861), but case went off on another point. ° No practical inconvenience has been felt on this point because the right to re- enter is reserved to the grantor, his heirs and assigns, and as his assigns have the right to release the clause and extinguish the rent, the difficulty mentioned by Mr. Gray, Rule Perp., 2 ed. (1906), §304, of hunting up the scattered heirs, does not exist in Pennsylvania. [—367-369—] LEGAL INTERESTS 217 that the Supreme Court will ever apply the rule to such a clause. Even if a clause in a ground rent deed be admittedly valid on the ground of common error, there is room to dis- tinguish between a clause of re-entry to enforce the payment of a particular sum of money, which is the case of a ground rent deed, and a clause of re-entry for other purposes.” Possibilities of Reverter 368. The rule against perpetuities probably does not apply to possibilities of reverter in Pennsylvania,* although the point has never been actually decided by the Supreme Court.’ If determinable fees are valid in Pennsylvania, and it seems that they are,’® the validity of a possibility of reverter inevi- tably follows because if there is no such possibility there can be no determinable fee. The error, as Mr. Gray points out,’ was in allowing the determinable fee in the first place. It is often an extremely difficult question of construction to deter- mine whether in a given case there is a condition or a determinable fee.” Future Legal Interests in Personal Property 369. Mr. Gray says that the question whether the rule applies to future legal interests in personal property depends on the nature of such a future interest.® a chattel real created by will A future interest in is an executory bequest in Pennsylvania,* to which, therefore, the rule applies, although no decision to this effect has been discovered.® The nature 7See article by Mr. Arthur Mackey in 17 Law Quar. Rev. 32 (1901). § There is some difference of opinion as to whether it applies in England. Mr. Lewis, Perp., p. 621 (1843), thinks that the rule does not apply. ® In Slegel v. Lauer, 148 Pa. 236 (1892), the court permitted the plaintiff to enforce a possibility of reverter which violated the rule against perpetuities, although no objection on that ground was called to the attention of the court. 10 See §27, ante. 1Gray, Rule Perp., 2 ed. (1906), §312. A possibility of reverter after a conditional fee cannot exist in Pennsylvania, as con- ditional fees can no longer be created. The point, therefore, noticed by Mr. Gray, ubi supra §313, that the possibility of reverter in such a case would not be re- mote, cannot arise in Pennsylvania. ? For an example of such an ambiguous limitation, see Courtney v. Keller, 4 Penny. 38 (1884). 3 Rule Perp., 2 ed. (1906), §§319, 320, 321, Appendix F. * See §93, ante. 5 Except a dictum of Lewis, P. J., in the court below, in Hubley v. Long, 2 Grant’s Cases, 268 at 270 (1852), where he said that the rule applies to chattel interests. 218 INTERESTS SUBJECT TO THE RULE [370-374—] of a future legal interest in a chattel personal created by will is uncertain, and it is doubtful whether a future interest can be created in either case by deed inter vivos.° As no case on the point has been found, no statement can be ventured as to the application of the rule. Executory Devises and Bequests 370. Executory devises and bequests are undoubtedly sub- ject to the rule against perpetuities.’ Shijting and Springing Uses 373. Shifting and springing uses are subject to the rule;* so also are contingent uses. If the statute of uses executes the contingent use,® it becomes at once on theory a legal contingent remainder, and the application of the rule against perpetuities is doubtful.1° If the statute does not execute the use the rule against perpetuities clearly applies. This distinc- tion does not appear to be taken in the books. Application of the Rule to the Interest of the Cestui Que Trust 374. All future equitable interests arising out of an express trust are subject to the rule against perpetuities if so limited that according to the rules of the common law the interests may vest beyond the period prescribed by the rule,’ and it makes no difference what theory may be adopted as to the nature of the interest of the cestui que trust.? If the cestui que trust has an estate in the trust property, the rule prevents the vesting of that estate at a remote period. If the cestui que trust has merely a right to compel the trustee to perform the duty designated by the trust with respect to the trust res, the rule prevents him from acquiring, at a remote period, a vested right to require the performance of the duty. A limitation may be remote in equity which would not be remote at law. Thus, suppose the case of a devise to ® For a discussion of this point, see 1See Gray, Rule Perp., 2 ed. (1906), §§91-97, ante. §§322, 323, 324; Hillyard v. Miller, 10 Pa. 7Gray, Rule Perp., 2 ed. (1906), §317. 326 (1849); Lewis, Perp., p. 622 et seq., 8 Gray, Rule Perp., 2 ed. (1905), §317. (1843). ® As to this, see §127, ante. ? For a discussion of this point, see 10 See §§364, 365, ante. §§147, 148, 149, ante. [—374, 375—] EQUITABLE INTERESTS 219 A. for life, and at his death to such cf his children as reach twenty-five, and the case of a devise to trustees in trust to pay therents to A. for life, and at his death, to convey to such of A.’s children as reach twenty-five. The limitation at law is not remote, as the remainder must become vested, if at all, at A.’s death, in such of his children as are then twenty-five. The limitation in trust is remote, as, there being no necessity for the equitable limitation to take effect as at law immediately on A.’s death, the vesting may be postponed until after A.’s death, and will consequently be remote, as all of A.’s children may not reach twenty-five within twenty-one years after his death. Fallacy That the Rule Applies to the Trust 375. and overlooked the the limitations to him must be considered as if they were life estates only. Mr. Lewis, Perp., pp. 483, 484 (1843), puts it on the ground that as the great end of the laws against remoteness is to secure the immediate alienability of property, there is no object in applyirg the rule to a gen- eral power of appointment, as the donee has already, by virtue of the power, un- limited power of alienation, as such gen- eral power practically gives the donee a new fee. So also the limitations under a general power of appointment to the un- born child of a living person are valid un- less the condition precedent to the exercise of the power is an event which may be remote; cee dictum Clark, J., in Law- rence’s Est., 1386 Pa. 354 at 364 (1890). Gray, Rule Perp., 2 ed. (1906), §477; Hinkle v. Rehm., 16 Super. Ct. 470 (1901). Since a general power to appoint by deed includes a power to appoint by will, the same reasoning would follow in a case where the power was exercisable by deed only. No case as to this has: been found in Pennsylvania. The circumstance that the life tenant has not in point of fact exercised the general power of appoint- ment in his lifetime, is immaterial. This distinction was relied on by the learned Master in the court below in Mifflin’s App., 121 Pa. 205, see 216 (1888), stated §401, post, and repudiated by the court. *121 Pa. 205 (1888). 3 Discussed $330, ante. [—401-403—] POWERS IN TRUST 241 principle that the rule applies, if at all, to the limitations under the power and not to the estate of the life tenant. Furthermore, under the reasoning of the learned judge, it would be necessary for the life tenant to actually exercise the power of appointment and destroy the supposed offending limita- tions made by the donor of the power, whereas, it was decided that no such actual exercise was necessary. In the Supreme Court Mr. Justice Green‘ said that the question was whether the provisions of the original deeds were inoperative because of the rule against perpetuities, and that they were inoperative if they created inalienable and indestructible estates to con- tinue longer than the prohibited period.© This also was objec- tionable, as the rule has nothing to do with the continuation of an estate, but with the time of its vesting, and no possible question arose as to the limitations by the donor of the power, which were admittedly valid. The sole question was whether the limitations made by the donee of the power were remote.® Definition of a Power in Trust 402. When a power is to be exercised for the benefit of some one who is or will become absolutely entitled to the pro- ceeds of the exercise of the power, and the power has no other object, there is a power in trust, so called because the party entitled can have the assistance of a court of equity to control the exercise of the power.’ Application of the Rule Against Perpetuities to a Power in Trust 403. A power in trust is a direction to dispose of the property in the manner specified, and the interests taking effect under the power are directly created by the donor. The period prescribed by the rule begins to run, therefore, from the date of the creation of the power. This is so clear that it has never been questioned, and this part of the subject 4On p. 224. judge evidently used it as meaning the 5 It is apprehended that the use of the _ period prescribed by the rule. phrase prohibited period is somewhat con- § See note on this case, 1 L. R. A. 451. fusing. Properly speaking, the prohibit- 7 As to the distinction between powers ed period is the period beyond that pre- _in trust and powersin a trustee, see §410, scribed by the rule, whereas, the learned _n. 2, post. 242 POWERS [—403, 404—] presents little difficulty. The ordinary case of such a power is a power of sale. If the limitations are such that the interests of the donees in the proceeds take effect at a remote period, they are void; consequently the power out of which they are to arise has no other reason for existence and becomes useless. A court of equity will not permit the person who is to exercise it to proceed in the matter because to do so would assist him in the creation of a perpetuity. It is not the power that is remote, but the interest limited to take effect upon the exercise of the power. Where the person or persons entitled to the proceeds take an immediate vested interest therein or an interest which vests or must vest within the period prescribed by the rule, the limitations are obviously valid,® and the person or persons entitled, or all of them if more than one, can permit the property to remain unsold for such period as they may see fit. If they do so the circumstances presented do not call for the application of the rule against per- petuities. They can, however, at any time, with the assistance of a court of equity, compel a sale. It will be observed that the power of the parties entitled to compel an exercise is the result of the validity of the limitations, and not the validity of the limitations the result of the power to compel.” The most common instance of this kind of power is a power to sell for paying debts and legacies. The debtors and legatees take an immediate vested interest in the proceeds.* There is one case in Pennsylvania illustrating this application of the rule, which will be discussed in the next section. Dawson v. Lancaster 404. In Dawson v. Lancaster* the testator made sundry specific devises of real estate to certain children for life, naming them, with a proviso in each case that in the event of their death without issue the premises devised should form part of his residuary estate, and, in a subsequent clause, directed his executors to sell his residuary estate whenever they should think best, and, whenever sold, to divide the proceeds among his children named, and the issue of such as 8 Brisben’s App., 70 Pa. 405 (1872); 3 Gray, Rule Perp., 2 ed. (1906), §486. Severns’s Est., 211 Pa. 68 (1905). 428 Pa. C. C. 657 (1903). 2Gray, Rule Perp. 2 ed. (1906), §§486-509j. [—404, 405—] POWERS IN TRUST 243 should be deceased, share and share alike. One of the children, a son, Thomas, died without issue. A bill in partition was filed by the other children, claiming that the residuary devise was void because it violated the rule against perpetuities, and that consequently the testator died intestate as to the remain- der devised. The court, in an opinion by Ralston, J., found in accordance with the prayer of the bill. The learned judge said that the power to sell was ‘‘to be exercised at such time as, in the opinion of the executors, the same shall be for the best interests of the estate,”° which might possibly be at a remote period, and the persons entitled to the proceeds could not be ascer- tained until the sale took place. He, therefore, concluded that there was no one entitled to apply to compel an exercise of the power merely for the purpose of making valid an estate which otherwise would be invalid. It is assumed that the learned judge meant valid under the rule against perpetuities. Upon this reasoning, it is to be observed, first, that the Orphans’ Court could not possibly, by any act, make valid a limitation which is void under the rule; secondly, that the fact that there was no one to proceed to enforce the sale was the result of the inva- lidity of the limitations, and that, therefore, the question of how far a court of equity can proceed in directing such a sale, was totally immaterial in reaching a conclusion as to the validity of the limitations. The limitations were invalid because, under the construction put upon the power of the sale, they might become vested at a remote period. This was a power in the nature of a trust, and upon the construction adopted by the court the interests in the proceeds were not ascertained, nor were they to be ascertained at any fixed period; consequently they were remote. The power, therefore, had no reason for its existence and was useless. The residuary devise thereof fell, as that was its sole purpose, and as there was no specific devise of the legal title to the trustees for the purposes of the sale, the title remained in the specific devisee for life, and after his death remained undisposed of and went to the heirs under the intestate laws. Direction to Sell With no Disposition of the Proceeds 405. When there is a direction to sell, without any dis- position of the proceeds, the proceeds belong to the party 5While this construction of the will of the case is offered on that point. is open to some objection, no criticism 244 POWERS 1406, 410—] entitled to the fee. Consequently the power is merely some- thing which he can do himself, and amounts to a restraint on his enjoyment of the property, and does not violate the rule against perpetuities at all, as the rule applies only to the limitations under the power.’ Powers in an Executor 406. An executor is one appointed to the office of executing a man’s last will and testament, and in strictness the executor has to do only with personalty. A will relates to lands, and a testament relates to personal property, and if a person is named as trustee, he must be so specifically designated in the will. A will, furthermore, is a mere devise of real estate and needs no executor; consequently a power of sale contained in a will is a common law power and to be strictly construed as such. At common law the power to sell conferred upon the executor was a mere warrant of attorney, did not pertain to him as executor, and therefore did not pass to his suc- cessors in the office but died with him. The case of a power in an executor qua executor is always a power in trust and subject to the principles already laid down. The case gen- erally presented is that of a power to sell real estate, and the power may be appendant when the executor has the title, or in gross when the title is in the heir or devisee.° Where a trust is created under the will, the powers conferred, if any, are powers in a trustee.’ It is often a difficult matter to de- termine when the executorship ends and the trusteeship begins. The rule against perpetuities has nothing to do with the solution of this problem, and therefore no discussion on the subject will be offered. Preliminary Discussion of Powers in the Trustee of a Continuing Trust 410. In this part of the discussion we shall examine the application of the rule against perpetuities to the interests 7 For example of such a power see Dun- survive and attach to the office. Act of das’s App., 64 Pa. 325 (1870). Feb. 24, 1834, P. L. 70 §12. 8 It is perhaps needless to observe that ® The common case of a naked power in Pennsylvania this difficulty has been of sale. overcome by statute, and it is provided 10 Discussed, §410 et seq., post. that the powers pertaining to an executor [—410, 411] POWERS IN A TRUSTEE 245 limited by a trustee under a special express power.’ Such powers may be of two kinds:” (1) power to affect the equitable estate; (2) power to dispose of or deal with the legal title.* We shall first discuss powers to affect the equitable estate, which are governed by the same principle as are powers of appointment and powers in trust. Power of a Trustee as to the Equitable Title Defined 411. An equitable power is a power to affect the equitable estate of the cestui que trust, such as powers in a trustee to change equitable estates, make advances out of principal, fix the proportions in which one or more of the cestuis que trustent shall share the fund, pay over such part or parts of the income as they may think fit to the cestuis que trustent, etc. Such powers exist only between the trustee and the cestui que trust, and have nothing to do with the legal title, and may be exercised so as to create a remote equitable limitation. 1 For a definition and discussion of pow- ers in a trustee, see §§154-158, ante. A special express power exists when a trus- tee is authorized to do some act in con- nection with the trust property which he would be incapacitated to do as trustee without authority. ?The distinction between a power in trust and a power in a trustee is this: a power in trust is where the sole benefit to the parties entitled lies in the exercise of the power, and when that is done or dis- pensed with, the trust terminates. A power in a trustee is where the trustee, who has the legal title subject to a super- imposed trust, has vested in him power with respect to the trust property, and where the trust still continues, whether the power is exercised or not. In the first case the trust cannot exist without the power; in the second, the presence or absence of the power is immaterial to the contin- uance or discontinuance of the trust. Two examples will illustrate the dis- tinction: suppose a gift to A. in trust for B. for life, and after his death to C. and his heirs, with power in A. at any time during the trust, to sell any or all of the trust property and invest the proceeds upon the same trusts. This is a power in a trustee. Suppose a gift to A. with a direction or power to sell the real estate and divide the proceeds among B. and his heirs on or before the death of C., a living person. This is a case of a power in trust. 3 An example will illustrate the dis- tinction: suppose a gift to A. in trust for B. and C. for life, and after the death of the survivor, to X. and his heirs, with power in the trustee to apportion the income between B. and C. in such pro- portions as he shall think fit. This is the power to affect the equitable estate. Suppose a gift to A. in trust for B. for life, and after his death to his children then living, for their lives, and after the death of the survivor, to the Y. charity, with power in the trustee to sell the trust property at such times and at such prices as he may think best. This is a power to affect the legal title. 246 POWERS [412, 413—] Application of the Rule to Powers of a Trustee as to the Equitable Title 412. It seems that the same principle would apply here as would apply to special powers of appointment.‘ The equitable interests limited by the trustee are created by the donor of the trust because they are made by the trustee under the special power, without which he would be unable to create them. Consequently if the power can be exercised at a remote period the interests limited thereunder will neces- sarily violate the rule. If the power is so limited that it must be exercised in time, the interests limited thereunder will be valid or not according to whether they take effect at the period which is remote, making the period run from the time of the creation of the interest.© No Pennsylvania case has been found raising any question of the application of the rule against perpetuities to powers in a trustee over the equitable title.® Determinable Trusts and the Rule Against Perpetuities 413. A determinable trust is a trust in which the trustee has discretion or power to terminate the trust at his pleasure and restore the principal to the settlor and his heirs.’ If the interests are vested, the discretion will be a restraint on enjoy- 4 As to which, see §389, ante. 5 Thus, suppose a gift to X. in trust for A., an unmarried person, for life, then to his eldest son for life, then to X., a living person, and his heirs, with power in the trustee to make advances out of principal to the various life tenants in such sums and at such times as he may, in his dis- cretion, think proper. An advance to the son forty years after the father’s death, if the son lived that long, would be remote and invalid, and in such case the trustee would be answerable to X. for the unlawful disposition of the principal. As the power in this case is so limited as to be exercisable at a remote period, no limita- tion under it can be valid. Consequently an advance to A., even though in time, would be unlawful. Gray, Rule Perp., 2 ed. (1906), §246. Where there are no statutes authorizing a substituted trustee to exercise a personal discretion, it may be argued that such powers are not re- mote, as they must necessarily be exer- cised during the life or lives of the trustee or trustees appointed under the will; see remarks of the court, Allison, P. J., in Penna. Co. v. Price, 7 Phila. 465 at 469 (1870). If the power was limited to be exercised only during the life of A., an advance under it during that time would be valid. Mr. Gray’s remarks are con- fined to discretion. There is no distinc- tion between a discretion and a power in this respect; see §158, ante. ® As to how far such powers are a re- straint on enjoyment, see Chap. 23, post. 7To be distinguished from a power of revocation, which is where the settlor re- serves to himself power to terminate the trust. As to which, see §437, post. [—413, 415—] POWERS IN A TRUSTEE 247 ment.’ If determinable fees can be created in Pennsylvania, and it seems that they can® and that the possibility of reverter existing in such case is not subject to the rule against perpetuities,!° then on the principle that equity follows the law there is room to argue that a trust can be created, with power in the trustee to determine the trust in favor of the donor, even though at a remote period, and that the exercise of the power will be valid. The validity of a determinable fee is an unfortunate relic of the early common law, and the principle relating thereto should not, it is submitted, be extended into equity. No case involving this point has been found in Pennsylvania, but such limitations are not uncommon.’ In Spring’s Estate? there was a gift in fee with a proviso putting the gift in trust, with a discretion in the trustee to terminate the trust with respect to any or all the bene- ficiaries named, at such time as the trustee might think it for the best interests of the beneficiaries or their heirs so to do. The exercise of this power seems to involve a remote limitation, as under it the trustee might terminate the trust at a period more than twenty-one years after the death of the survivor of the beneficiaries.* Preliminary Discussion of the Application of the Rule Against Perpetuities to Powers as to the Legal Title 415. A power as to the legal title is when the trustee is authorized to make some disposition thereof discharged from the equitable right of the cestui que trust.* It was for a long time the common opinion in England that such powers 8¥or the other principles involved in the exercise of the discretion, see Chap. 23 on Discretion, especially §539, post. ® See §27, ante. 1 See §368, ante. 1 See cases cited, §539, post, n. 8. 2 216 Pa. 529 (1907), stated §523, post. 3 Tf, however, the word heirs in the latter part of the limitation could be con- strued to mean children, to harmonize with the first part of the will, Warn v. Brown, 102 Pa. 347 (1883), the power would be valid as exercisable only during the life of the beneficiaries. No question as to this point was raised in the case, which, however, is useful as illustrating the form of the power. If it is the law that a trust of an absolute interest is valid, as to which see $524, post, the validity of a determinable trust would not follow, for a trust of an absolute interest is a re- straint on enjoyment, and is not with- in the rule against perpetuities. As shown in the text, the interest taking effect under the discretion in a deter- minable trust, if it violates anything, violates the rule against perpetuities. *The usual instances of such powers are: powers of sale, of mortgage, of lease, of partition and of exchange. 248 POWERS [—415—] were valid, although unlimited as to the time of their exer- cise. Lord Eldon, in the course of his opinion in the case of Ware v. Polhill,® let fall some remarks which raised a doubt as to their validity. The doubt was whether a power in a trustee unlimited as to the time of exercise did not violate the rule against perpetuities.° It is commonly stated that such a power is void. The attention of the learned reader is again invited to the principle that the rule against perpetuities applies to the interests limited under the power and not to the power itself.? There is no doubt that the rule applies to the future interests limited by the trustee. The same question arises here as before: from what date does the period pre- scribed by the rule begin to run,—from the time of the creation of the trust, or from the time of the exercise of the power, and the answer to this question depends on whether the interests limited by the trustee are considered as created by the settlor of the trust or by the trustee himself. It has been assumed by the text writers and judges who have discussed this point that the interests are limited by the donor of the trust, and that the period, therefore, begins to run from the time of the creation of the trust. It is sub- mitted that this notion is erroneous, that the interests are not created by the donor, and that the period begins to run from the time the trustee disposes of the title. A distinction is commonly drawn between (1) powers in the trustee, which are limited to be exercised within the period prescribed by the rule, and (2) powers which are unlimited as to the time of their exercise.* It is generally said that powers limited to be exercised within the period prescribed are valid. It is con- ceived, however, that the limitations thereunder may be remote and will consequently violate the rule. If this is so it is because the rule applies to the interests and not to the power. 511 Vesey Jr., 257 at 283 (1805). 6 For a discussion of the learning on the subject, see Gray, Rule Perp., 2 ed. (1906), §§487-507. Lewis, Perp., (1843), Chap. 25, p. 541. The reader will observe that the language which Mr. Lewis uses in summing up the views of the different text writers is very inaccurate and confusing. He mixes up powers of appointment with powers in a trustee, and it seems that a large part of the difficulty in the subject has arisen from the failure to sharply distinguish between these two kinds of powers. 7 As to which point, see §386, ante. 8 Sometimes when the power of sale is apparently unlimited as to the time of its exercise, the court will say that it must be exercised within a time fixed by a con- struction of the other parts of the will, as in Wilkinson v. Buist, 23 W. N. C. 311 (1889). [416, 417—] POWERS IN A TRUSTEE 249 Taking up the second case of a power exercisable at any time, we shall discuss a power of sale as the most common instance of this power. Preliminary Discussion of Power of Sale in a Trustee 416. Suppose the trustee sells the trust property under the power. What future interest is limited to which the rule can apply, and when is it created? The practical form in which the question arises is in the consideration of the validity of the title offered by the trustee. We shall consider the question, first, at law, and then in equity. We shall undertake to show that the rule applies to the limitations made by the trustee under the power, and that the period prescribed by the rule begins to run from the time he exercises it, and not from the time of the creation of the trust. Legal Reasons Why the Period Runs From the Time of the Exercise of the Power of Sale 417. The owner of the fee at law has, in his own right as dominus, sold that fee to another. There was notice of an equitable right in a third party created by an _ instrument existing in the previous chain of title. As has been shown, that equitable right does not prevent the passing of the title at law. By reason, however, of a particular provision in that instrument, the trustee can dispose of the title free from the claim of the cestui que trust, where before he could dispose of it only subject to the claim of the cestui que trust. Suppose the trustee sells the trust property to a purchaser for value without notice. Would anyone argue that in such a case the remoteness of the estate in fee limited in that conveyance was to be judged as of the time of the creation of the trust? If the purchaser became affected by the notice of the trust after the conveyance, it would necessarily follow, if the rule applies, that the limitation under which he had taken would then become void. The application of the rule against per- petuities is not an equitable doctrine, and does not depend on notice. Suppose the conveyance is to a purchaser without value who has no notice. The result under the well-settled principles of the law is that the latter takes subject to the trust, and that the cestui que trust can follow the trust property and enforce his claim. If the rule applies, the grantee 250 POWERS [—417] of the legal title would have nothing, as the limitation of the fee to him would be void, and there would consequently be nothing that the cestui que trust could follow, a result which is contrary to well-settled principles in that branch of the law. How can the circumstance that the purchaser has notice of the trust, but takes discharged thereof because of the power, invalidate on the ground of remoteness a limitation which otherwise would be valid? The trustee’s right to dispose of the title does not spring from the power but from his title as dominus. The only effect of the power is to shift the right of the cestui que trust. If, therefore, the trustee should in the conveyance limit interests violating the rule, as he undoubt- edly might, the void limitations would not arise under the power. They would be void without the presence of the power.® Are such limitations to be considered as being created by the donor of the trust? The donor parted with the entire legal title and completely exhausted the fee by his limitations. How, then, can any further limitations be said to be made by him? The trustee does not act as his attorney or under a common law power. He acts as dominus.” ® An eminent judge, Sterling, L. J., in Goodier v. Edmunds, (1893), 3 Ch. 455 at 460, has said that the power offends the rule because it enables the donee of the power to vest in a purchaser an es- tate in fee simple after the expiration of the prescribed period. This remark as- sumes the question in dispute, which is, from what date does the period run, and the same remark may be applied to an ordinary conveyance. The vendor may vest an estate in fee simple in a purchaser at a period remote, calculating from the date of the last deed. It has never been suggested that there was any reason why the rule should apply to such a case. What is the difference at law between that and a sale by the trustee? The learned judge does not point out any dis- tinction, and it is believed that there is none. 10 Mr. Gray, Rule Perp., 2 ed. (1906), §509a, says that there is no distinc- tion, in so far as the application of the rule against perpetuities is concerned, between a power in a trustee, a power in trust, and power to sell given to a stranger, and in this position he is sup- ported by the greatest modern English authorities. It is submitted, however, with due deference to this great weight of opinion, that there is a material dis- tinction. A power in trust is a common law power. It is said to be in trust because the parties to be benefitted by the exercise are entitled to proceed in equity to compel its exercise. At com- mon law, such a power operates as a warrant of attorney. It is,in the case of a power to sell, a direction to an agent to sell and distribute the proceeds. The interest in the proceeds, therefore, is limited by the donor of the power. In case, however, of a power in a trustee, it has been shown in the text that there is no room to argue that the limitations made by the trustee in disposing of the legal title can, in any sense of the word, be said to be limitatations created by the donor of the trust. [418—] POWERS IN A TRUSTEE 251 Equitable Reasons Why the Period Runs From the Time of the Exercise of the Power of Sale 418. In equity, the power operates to shift the equitable estate of the cestui que trust from one property to another. It is, therefore, submitted that in equity there is no limitation of an estate or future interest, and there is no more reason for the rule to apply in equity than at law. The argument has been put in this form: that the power does not defeat or destroy estates but only effects a change of title,’ to which three answers have been offered, (1) that it is an equitable answer to a legal objection.? To this it may be replied that there is no legal objection. The limitation at law is a transfer of the fee, and is totally outside the appli- cation of the rule. (2) The second answer suggested is, that the exercise of the power may cause an entire change in the nature of the property, as from real estate to personal prop- erty or vice versa, and may therefore alter the course of descent and the nature of the cestui que trust’s interest, and to this it may be replied that it is no concern of the rule against perpetuities whether the nature of the property is changed or not. The fact that the settlor has authorized a change is a sufficient answer in the law of trusts. Why, therefore, is it not an answer to the rule against perpetuities? (3) The third answer suggested is that the power enables the trustee to create a new equitable estate in the property pur- chased with the proceeds of the sale. To this it may be replied that the estate, or right in rem. which the cestui que trust has in the new property purchased with the proceeds of the sale, is a right created by law, and not a right created by the donor of the trust, and is, therefore, not within the scope of the rule against perpetuities. That this is so will appear after a moment’s reflection. If the trustee mixes the trust funds with his own at the remote period, or the fund becomes increased at the remote period, the cestui que trust can in each case assert his right, in the one case against all of the trustee’s property, and, in the other case, to the increase of the fund. In neither case has the right been created by 1Sugden on Powers, 8 ed. (1861), the power is void at law. In this as- p. 848. sumption, it is submitted, lies the fal- ? Hayes’ Conv. 3 ed. (1838), pp. 469, lacy of his position. The power does 470. The learned author assumes that not exist at law. 202 POWERS [—418-420—] the donor of the trust. A fresh res has been brought within the scope of the trust relation, and when that happens, the cestui que trust acquires a right in rem. as to that res by operation of law. Giving this argument its greatest force, it cannot apply to the conveyance of the old trust property made by the trustee, and yet it is to those very limitations that the objection of remoteness is commonly made. Mr. Gray’s Views as to the Application of the Rule to Powers in a Trustee 419, Mr. Gray, however,? objects to the reasoning advanced in the previous sections as unsound, and concludes that such powers are valid because the trusts to which they are attached must come to an end or be destroyed within the limits fixed by the rule against perpetuities;* that they are unobjectionable because they are destructible,» upon which it may be observed, (1) that a trust does not necessarily come to an end within the period fixed by the rule; (2) that the powers are indestruc- tible during the continuance of the trust. Mr. Gray appears to draw no distinction between the powers of a trustee over the legal title and his powers over the equitable title. Author’s Objection to the View of Mr. Gray Discussed in the Previous Section 420. A case may arise where the trust will not terminate within the period fixed by the rule against perpetuities. Thus, where there is a devise to A. in trust for B. for life, at his death in trust for the eldest grandchild of C., then living, for life, and after the grandchild’s death, to X., a living per- son, and his heirs, with power in the trustee to sell at any time during the continuance of the trust. B. dies, living a grandchild of C. The life estate in this grandchild is good, and the trust must remain until his death.° Mr. Gray” says that the power in such a case is void, because it may be exercised at a remote period. To say that the power is valid > Rule Perp., 2 ed. (1906), §488, et seq. fact that it extends into the remote period 4 Rule Perp., 2 ed. (1906), §480, et seq. is immaterial, §345, ante. The ultimate 5 Rule Perp., 2 ed. (1906), §482. limitation to X. and his heirs is vested 6 The estate in the grandchild is good and valid, and the trust must remain to because it vests within the period pre- support it. scribed by the rule. §374, ante, and the 7 Rule Perp., 2 ed. (1906), §500. [—420-422—] POWERS IN A TRUSTEE 253 because the trust must come to an end within the period fixed by the rule, and then, when faced with a case where the trust continues beyond the period, to say merely that the power is void, does not, it is submitted, meet the difficulties of the case. Application of Rule to Powers of Sale in Trustees for a Charity 421. Furthermore, if the period prescribed by the rule begins to run from the time of the creation of the trust, in considering the case of a power of sale in a trustee, this further point arises. In what respect, if any, is the case of a power of sale vested in the trustees of an indefinite trust for a charity an exception? An indefinite, or as it is sometimes called a perpetual, trust for a charity is valid. The power of a sale in the trustee is therefore indestructible by the cestui que trust. We have there another case to which Mr. Gray’s reason ® does not extend. If the court can authorize a dis- position of the trust property free from the claim of the cestui que trust at any time in the future, no matter how remote, why should there be any objection to the trustee doing the same thing under an express power in the settlement? There is no necessity that the power should be valid in such a case of a charitable trust, as the trustees can sell under the order of the court at any time during the continuance of the trust or under the act of April 18, 1853.1° A reference to this instance of a power of sale is useful as illustrating a case where, if the rule against perpetuities applies, as it is com- monly supposed, to a power of sale in a trustee, there must be an exception, whereas under the reasoning already submit- ted," the case is not an exception at all. The law in Penn- sylvania will now be examined, and we shall first notice the few cases which have been found. Cresson v. Ferree 422. In Cresson v. Ferree! there was a power of sale vested in trustees, unlimited as to time. A sale was made by the trustees under the power during the continuance of the trust, and the purchaser refused to take title. On a case stated, 8 See Chap. 26 on Charitable Gifts. 1 See §417, 418, ante. 9 See §419, ante. 170 Pa. 446 (1872). 1099, P, L. 503. 254 POWERS [—422-424—] it was held that the title was good, and that the exercise of the power by the trustee was valid. Sharswood, J., in the Supreme Court, said, “We may concede that a general power over an estate, without limitation of time, unless after an estate tail, would violate the rule against the creation of per- petuities. In this case, however, the power of sale is clearly limited to a period during which the trusts created by the will subsist, or some of them, and that cannot exceed a life or lives in being at the death of the testator.”* In this the learned judge seems to recognize the principle that the power may be exercised so long as the trust is valid, although he inaccurately states the period for which the trust may subsist.’ Wilkinson v. Buist 423. In Wilkinson v. Buist* there was a power of sale in the trustees unlimited as to time. The court in an opinion by Clark, J., said that the other provisions of the will indi- cated that it was to be exercised only during the lifetime of the widow, and then the learned judge made use, by way of dictum, of the following language:> ‘‘A power of sale without limit would doubtless be bad under the rule against perpe- tuities, and a testator will not be presumed to have intended anything so absurd.’”® Marshall's Estate 424, In Marshall’s Estate, No. 1,7 a testator gave his estate in trust for the benefit of his children.® On petition by the ?This is clearly a misapprehension. Twenty-one years may be added to the life in being, see §340, ante, and the trust may extend considerably beyond even that period in order to provide for equi- table life estates which vest in time, but continue to a remote period; see §$345, 420, ante. 3See remarks of Ashman, J., in Githens’s Est., 24 Pa. C. C. 248 at 250 (1900), where an executor had a power of sale unlimited as to time, which it was argued, was invalid, and the learned judge said that the power of sale could not outlive the purpose it was meant to subserve, and as the period fixed for final distribution was not remote, the power would be exhausted within the period prescribed by the rule. 4124 Pa. 253 (1889). 5 At p. 261. ®Dicta of Hare, P. J., in the court below, in Mifflin’s App., 121 Pa. 205 at 215 (1888), and Stewart, P. J., in the court below in Johnston’s Est., 185 Pa. 179 at 189 (1898), accord. 7138 Pa. 260 (1890). 8 The same will was before the court in Marshall’s Est., 147 Pa. 77 (1892), prob- ably on an account of the proceeds of this sale, andit was held that the trust was terminable only in the discretion of the trustee. See this question discussed, §538, post. [—424-426—] POWERS IN A TRUSTEE 255 trustees under the will, and decree thereon directing them to sell a portion of the real estate, some of the children being still living, the judge in the court below ® said, that although the will contained no limitation of time within which the sale should be made, the power was good; that it had been exercised frequently since the death of the testator, and the condition of the estate was such that the unsold portion of the real estate must be converted. No question as to remoteness seems to have occurred to either court or counsel. Affirmed by the Supreme Court on appeal without an opinion. Cooper’s Estate 425. In Cooper’s Estate’ the testatrix made a gift of all her property to her children absolutely, and then superimposed a trust in her executor to manage the trust property,’ with a power to rent, mortgage or sell unlimited as to time. The property was to be sold, and the trust terminated when two- thirds of those interested in the estate should so demand. On adjudication of the executor’s account the court refused to award the share of one of the cestuis que trustent to him free of the trust.2 The court seemed to think it necessary to go on and say that the power of sale was valid, and that the fact that the power of sale could be exercised at any time did not of itself create a perpetuity, as it must be exercised within a reasonable time, and it was within the power of the Orphans’ Court to control the exercise of dis- cretion in such case upon the application of the parties in interest. As the trust would be valid without the power of sale, it is difficult to see how any question as to the validity of the power or the application of the rule against perpetuities was properly before the court. Summary of the Pennsylvania Cases on the Application of the Rule to Powers in a Trustee 426. No very definite conclusion can be drawn from these cases. In Cresson v. Ferree*® there is a distinct recognition of ® Hawkins, P. J., in 138 Pa., at p. 262. upheld the trust. The court in banc sus- 10150 Pa. 576 (1892). tained exceptions to his adjudication, and 1 As to the validity of this, see §524, on appeal the Supreme Court reinstated post. the decree of the auditing judge. ? The auditing judge, Hanna, P. J., 370 Pa. 446 (1872), stated §422, ante. 256 POWERS [—426, 427—] the principle, although by way of dictum, that the power, even though unlimited as to time, may be exercised so long as the trust lasts. Marshall’s Estate, No. 1,4 seems to strongly sustain the validity of such a power, even when exercised at a remote period, although no question as to the application of the rule against perpetuities was raised in the case. The dicta in Wilkinson v. Buist® and in Cooper’s Estate ® are in favor of the proposition that the power must be expressly limited to be exercised within the period prescribed by the rule, apparently proceeding on the proposition that the period prescribed begins to run from the time of the creation of the trust. The question, therefore, may be said to be open in Penn- sylvania, and there is room for the Supreme Court to reach the conclusion that the period prescribed by the rule begins to run from the time of the exercise of the power by the trustee, and therefore the circumstance that such a power is limited to be exercised within or without the period, dating from the time of the creation of the trust, is utterly immaterial. Effect of Control by a Court of Equity on the Application oj the Rule to Powers in a Trustee 427. A power of sale vested in a trustee is subject to the control of a court of equity. The cestui que trust may apply for such orders as are necessary to protect his interests. The trustee may, for instance, attempt to sell at a great undervaluation. It is sometimes said that since the power is subject to the control of the court, it may be valid even though unlimited as to the time of its exercise, if the circum- stances are such that the chancellor will direct a_ sale within a reasonable time, and that reasonable time does not extend beyond the period prescribed by the rule, making the period begin to run from the time of the creation of the trust. This notion proceeds upon the fallacy that the power is sub- ject to the rule. The only effect of the approval of the sale by the chancellor is to protect the legal title in the hands of the purchaser from future claims on behalf of the cestui que trust. That approval, therefore, cannot be affected by the application of legal rules to the legal interests vested by the trustee under the power. A trust may subsist for a period 4138 Pa. 260 (1890), stated §424, ante. © 150 Pa. 576 (1892), stated §425, ante. 5 124 Pa, 253 (1889), stated §423, ante. [—427-429—] POWERS IN A TRUSTEE 257 far beyond that prescribed by the rule against perpetuities,’ and the chancellor might find it just as desirable to authorize a sale at a remote period during the continuance of the trust as at a period within that prescribed by the rule, making the period run from the time of the creation of the trust. It is submitted, therefore, that the circumstance that the power is subject to the control of a court of equity has nothing whatever to do with the application or non-application of the rule against perpetuities. Effect of the Act of 1853 on the Application oj the Rule to Powers in a Trustee 428. The Act of April 18, 1853,° provides, among other things, that the court may decree “the sale, mortgaging, leasing or conveyancing upon ground rent of any real estate * * held by * trustees for any public or private use or trust, * and although there may exist a power of sale but the time may not have arrived for its exercise or any preliminary act may not have been done to bring it into exercise, or the time limited for its exercise may have expired,’ etc. While no question has arisen as to the effect of this act upon the appli- cation of the rule against perpetuities, it is submitted that under its provisions the court may direct a sale by a trustee at a period which is remote, and as it may direct a sale where the time fixed for the exercise of the power has not arrived, and as that time may be fixed at a remote period, and the act makes no exception in such case, it would seem as if the trustees can sell, even though the power is in terms limited to be exercised at a period beyond that prescribed by the rule. This legislation, therefore, enables a trustee to make a sale of the trust property in cases where, if the rule be applicable to powers in a trustee, as commonly supposed, there could be no sale under the power conferred.® Summary of Pennsylvania Law 429. The question in Pennsylvania under the authorities is open.’? It is probable that owing to the provisions of the 7 See §420, ante. of the trust property, even if there is a 82, P. L. 503; Pepper & Lewis’ Digest, question as to the remoteness of the col. 4048. power of sale. ® No trustee need feel any embarrass- 10 See §426, ante. ment as to the possibility of his disposing 258 POWERS [—429-431—] Act of April 18, 1853,! the question has not arisen for decision in Pennsylvania. It is submitted that the period prescribed by the rule should begin to run from the time the trustee exercises the power of sale; that the power of the court to control the sale is utterly immaterial in considering the appli- cation of the rule against perpetuities, and that it is eminently desirable that such powers should be valid at all times during the continuance of the trust, no matter what the period of time within which they are limited to be exercised. Power of Sale in Trustees for Bond Issues 430. Property is frequently conveyed to trustees, in trust, to secure bonded indebtedness, and in such cases there is frequently inserted in the deed of trust a power of sale to be exercised, if occasion requires, for the benefit of the purchasers of the bonds. It is apprehended that the rule against per- petuities is involved in this case in exactly the same particular as in an ordinary case of a power of sale in a trust settle- ment. No question as to this has come before the Supreme Court of Pennsylvania.” As to Powers Exercisable Ajter the Termination of the Trust 431. Mr. Gray? lays down several rules as to the case where the power is to be exercised after the termination of the trust, which rules, it is submitted, are totally unnecessary and overlook the real state of affairs at that time. When the trust terminates, an absolute interest necessarily becomes vested in one or more persons. If the subject matter is real estate, and the circumstances are such that the statute of uses applies,‘ the power of the trustee falls, as the legal title is at once taken away from him by force of the statute, and the powers have nothing upon which to operate. Where the statute does not apply, the party or parties are entitled to call for a conveyance of the legal title. It remains in the trustee, if at all, by sufferance only, and the powers are at any time destructible by the parties to which the proceeds belong. Any limitations by the trustee in such case are, in 19 P. L. 503, see §428, ante. Gray, Rule Perp., 2 ed. (1906) §565. 2 There was such a power in the case of > Rule Perp., 2 ed. (1906), §506. Bancroft v. Ashhurst, 2 Grant’s Cases, 4See Chap. 6, ante, on the statute 513 (1860), but no question as to the ap-_—of_ uses. plication of the rule was raised; see 5 Gray, Rule Perp., 2 ed. (1906), §490. [—431-433—] POWERS IN A TRUSTEE 259 effect, limitations by the cestui que trust, who is the real owner, as they are made by his sufferance only. As the rule looks at the substance and not at the form the period pre- scribed by the rule begins to run from the time of the exer- cise of the power for the same reason that governs limita- tions under a general power of appointment. As to Case of a Trust of an Absolute Interest 432. If the conclusion is reached that the powers in a trustee, even though unlimited as to time, are unobjectionable in so far as the rule against perpetuities is concerned, then they are valid during the continuance of the entire trust, no matter to what remote period the trust may subsist. If, then, the Supreme Court should reach the conclusion that the trust of an absolute interest is valid or that the enjoyment or possession of an absolute estate may be postponed to a re- mote period® by the device of a trust, there should be no distinction in the application of the rule. Jf in such a case it should be felt that the powers are objectionable because exercised at such a remote period, it should be remembered that the error lies in permitting such objectionable trusts in the first place, and not in upholding the validity of the power. Power to Appoint New Trustees 433. A power to appoint new trustees, it seems, does not offend against the rule.?’ The question has not arisen in Penn- sylvania, although such powers are constantly inserted in trust settlements, and no doubt appointments under them have been made at a remote period, computing from the creation of the trust. If no sale can be made under a power in a trustee at a remote period, then no appointment of a new trustee can be made under a similar power. There is no dis- tinction between the two cases. The appointment of a new trustee necessarily either expressly or by implication vests in ®This question discussed, Chap. 22, post. 7 Gray, Rule Perp., 2 ed. (1906), §509, admits this. He falls back on his former reason that as soon as the cestui que trust calls for the legal title the trust is at an end. The reason however, would not apply to the case put in §420, where the trust may continue beyond the period prescribed by the rule. The reason as- signed by the learned author does not, therefore, explain why they are remote in one case and not in another. 260 POWERS [—433-435—] him the legal title to the trust estate. It is submitted that it is desirable to uphold the validity of these powers, and that the consideration of them further enforces the position that the period prescribed by the rule against perpetuities in all cases of a power in a trustee as to the legal title begins to run from the time of the exercise of the power. Power to Lease 434. A power in the trustee to lease presents a still stronger case ® for the non-application of the rule against perpetuities. A lease in praesenti never violates the rule at law, and the fact that .it is made by a trustee under a power can make no difference, and as there is no shifting of the equitable estate of the cestui que trust, there is no possible ground to argue that the rule applies.’ If the trustee should make a lease to begin in futuro, at a time beyond the period prescribed by the rule, the lease would, of course, be void, as the limita- tion would violate the rule at law. It may be the law that where the lessee takes with notice of the trust his lease must be surrendered by order of the court when the trust ends.” Hutchison’s Appeal 435. In Hutchison’s Appeal? the testator gave the residue of his estate in trust either to rent or to sell, as the occasion offered, and in further trust, upon receipt of the rents or the purchase money, to divide the same among the testator’s four daughters, their heirs and assigns in equal shares. In a proceeding in partition the court said that the bill would not lie, as there was a trust under the terms of the will, and as to the power to lease, the Supreme Court, in a per curiam opinion, used the following language: “It is very clear that it would be an abuse of his option to lease were >A lease is incidental to the office of trustee, and no express power to make one is necessary. 1 A lease of undue length does not call for the application of the rule against per- petuities; see §363, ante. The ques- tion is whether it is an abuse of power by the trustee, whether the lease is so long as to interfere with the proper disposition of the legal title or with the equitable estate of the cestui que trust; see Goehring’s, App., 814 Pa. 283 (1875). Lease for five years with option of renewal by lessee for five years, was held valid in Hutchison’s App., 82 Pa. 509 at 514 (1876). ? See Standard Paint Co. v. Mfg. Co. 133 Pa. 474 (1890). 3§2 Pa. 509 (1876). 4On p. 514. [—435, 436—] POWERS IN A TRUSTEE 261 he to make leases conflicting with the testator’s intent to sell and furnish such a fund for distribution among his daughters, or contrary to the policy of the law which forbids perpe- tuities.”” It is submitted that in this the court overlooked the principles already discussed, that a lease, no matter how long, does not violate the rule. The learned judge probably had in mind the thought that a lease of extraordinary length would postpone the power to sell until a remote period. This, how- ever, is a fallacy, as the property could be sold subject to the lease, and while the existence of the lease might depress the market price it could not destroy the alienability of the title or prevent the operation of the power of sale. Summary of the Law as to Powers in a Trustee as to the Legal Title 436. If a power in the trustee is so limited as to be exercisable only within the period prescribed by the rule against perpetuities it is admittedly valid,®> and no case seems to have arisen deciding the question of the application of the rule to the interests actually limited in such a case. If it is not so limited and may be exercised at a remote period the law as to the application of the rule is far from clear. In England it seems to be settled that such powers are valid, whether they are in terms limited to be exercised within the period prescribed by the rule or not.® But when the case is put where the trust may continue until a remote period the power is said to be void. The learning on the subject in the books is confusing in the extreme, and the discussion assumes the point in controversy. It is submitted that on principle the power is valid, and that the period prescribed begins to run from the time of its exercise and not from the date of the settlement in trust. The notion that powers in a trustee unlimited as to the time of their exercise violate the rule against perpetuities seems to have had its origin in the mis- taken idea that a power of appointment which may be exer- cised at a remote period is void under the rule. As already pointed out, the rule applies to the future interests limited under the power, and it is inaccurate to say that the power is void under the rule. If this point had been apprehended 5 See §415, ante. 498; Lewis, Perp., pp. 542-555 (1843). ® Gray, Rule Perp., 2 ed. (1908), §§481- 262 POWERS [—436-438—] and it had been clearly borne in mind that the interests alone are the concern of the rule against perpetuities, the difficulty on the subject would have vanished. The supposed analogy disappears completely on further examination. The interests limited under a power of appointment are judged as to their remoteness by their distance in time from the creation of the power, because under the doctrine relating to powers of appoint- ment apart from the rule against perpetuities, the limitations under the power are considered as the limitations of the donor himself. The power in a trustee stands on a different foot- ing. The settlor parted with his entire interest when he created the trust. The limitations as to the legal title made by the trustee are made by him as dominus and are remote only as respects their distance in time from the date when the trustee creates them. Powers of Revocation 437. Suppose a power is reserved to revoke the trust, declare new uses and require a reconveyance. Such powers are exceedingly common in the case of settlements inter vivos. No question has ever arisen in Pennsylvania in regard to their validity. If reserved to the grantor the interest under the exercise of the power must be valid, as the power must be exercised within the period, that is, during his life; if, however, reserved to the grantor and his heirs, it seems that the limitations thereunder would be invalid. Summary of the Chapler 438. The rule applies to interests limited under a power as well as to other future interests. The rule does not apply to the power itself.?. Since the period prescribed by the rule begins to run from the date of the creation of the interest to which it is applied,® it follows that in those cases where under other principles of the law, the interests limited under the power are considered as created by the donor of the power, the remoteness of such interests will be judged by their distance in time from the creation of the power and not from the time of its exercise.° In the case of special 7 See §386, ante. ® See §389, ante. 5 See §342, ante. [—438] SUMMARY 263 powers of appointment,’® powers in trust, and powers in a trustee to affect the equitable title,’ powers of revocation * and powers in an executor,* the interests limited under the power are interests created by the donor of the power, con- sequently the rule begins to run from the time of the creation of the power. In the case of a general power of appointment °® the limitations are considered as being made by the donee of the power, and the period prescribed by the rule, therefore, begins to run from the time of the exercise of the power. Where there is a power in a trustee as to the legal title, the law is doubtful.6 No case has been found in Pennsylvania deciding the point, and it is submitted in the preceding dis- cussion that it is a better view that the interests limited by the trustee in such a case are to be considered on the same footing as those made by the donee under a general power of appointment, and, therefore, the period prescribed by the rule will begin to run from the time of the creation of the interests by the trustee under the power.’ 10 See §389, ante. 5 See §400, ante. 1 See §403, ante. 6 See §436, ante. 2 See §412, ante. 7 Sugden, Powers, 8th ed. (1861), p. 846 3 See §437, ante. et. seq. 4 See §406, ante. (264) (265) CHAPTER 18 GIFTS TO A CLASS AND THE RULE AGAINST PERPETUITIES Preliminary discussion............ 000.0 cece eee cence neces §440 Definition of a class and a gift to a class...................4.. §441 Closing of the class General principle as to closing of a class..................5. §442 Closing of direct gifts to a class............ 0... e cece §443 Closing of future gifts toa class.......... 0... eee §444 Application of rule Application of rule against perpetuities to gifts to a class.... §445 Mr. Gray’s observation on the application of the rule........ §446 Observation of the author on the application of the rule.... §447 Special cases Gift to grandchildren of testator as a class upon a remote CONMNEEN CY sees erie cosines Pasa wire nas Paseo Oued © ae Rg Pe §448 Vested gift to the great-grandchildren of the testator........ §449 Pennsylvania cases Siddall’s: Hstate ses csuiake oe oe wee asd ad eo awew ae Dad eae s §450 Shalléross’s: Estate vid ca cesta eee eye cee anaen Oaa waawes §451 MeCullotigh: 9, Séit? si acc su. deogegrenptecaeqeeigeaiwre nesta §452 Preliminary Discussion 440. The application of the rule against perpetuities to the case of a gift to a class involves some very nice points and will repay careful study. It will be necessary to first discuss the nature of such a gift, and then examine the particulars in which the rule applies.’ Definitions of a Class and of a Gift to a Class 441. By a class is meant a number of persons who are 1 A gift to a class is to be distinguished over on a member of a class reaching a from a gift to a particular member of a certain age, as in the case of a gift for class, asin Chambers v. Wilson, 2 Watts, _testator’s children for life, and upon the 495 (1834), stated §347, ante; or a gift youngest child reaching thirty, over to 266 GIFTS TO A CLASS [—441, 442—] designated by some general description applicable to all of them.? A gift to a class is a gift to the members of the class by their general description,® which description fur- nishes the means of identification. The gift is not to the class but to persons who are or may become members there- of. Gifts to a class may be (1) present or immediate gifts, (2) future gifts, which may be either after the termination of a preceding estate or without the gift of a preceding estate.* General Principle as to the Closing of the Class 449. The class is said to be closed when all the persons who are to be members thereof have been finally ascertained, and, in the case of gifts to a class, when all the persons who are to share in the gift have been finally ascertained.’ The final ascertainment may be (1) at the time fixed by the settlor,® or (2) because there is no possibility of any other mem- ber of the class coming into existence.’ It is clear that the his grandchildren in equal shares; or a gift over on the death of the survivor of a class, as in the case of a gift for the tes- tator’s children for life, and on the death of the survivor, to his grandchildren then living, in equal shares. ? As to the distinction between a defi- nite and an indefinite class, see Chap. 26, on Charitable Gifts. This distinction does not concern us here. 3A number of persons are popularly eaid to form a class when they can be designated by some general name, as ‘children,’ ‘grandchildren,’ ‘nephews,’ but, in legal language, the question whether the gift is one to a class, depends not upon these considerations, but upon the mode of gift itself, namely, that it is a gift of an aggregate sum to a body of persons uncertain in number at the time of the gift, to be ascertained at u future time, and who are all to take in equal or in some other definite proportions, the share of each being dependent for its amount upon the ultimate number of persons.” Jarman on Wills, 6th Amer. ed. (1893) Vol. 1, p. 262. In this definition the learned author overlooks the facts (1) that the number of the persons is not necessarily uncertain at the time of the gift, and (2) that it isnot the mode of the gift but the object of the gift which distinguishes a gift to a class. ‘For a discussion of this, see §§68, 69, ante, on remainders to a class. 5 Mr. Gray, Rule Perp., 2 ed. (1906), §121a, says that the class is closed and the number determined at the period of distribution. It is submitted, however, that the time of distribution depends on the time of the closing of the class, and that the number of persons who are to take is determined at the time of the closing. Since, however, the time for distribution is generally fixed by the settlor, and that is the only evidence of the time of closing, it may be said that the period of distribution fixes the closing of the class. °E. g., in the case of a gift to the grand- children of A. living at the time of his decease, the class is closed at A.’s death; see Williamson’s Est., 143 Pa. 150 (1891). 7E. g., where there is a gift to all the grandchildren of A., the class is closed at the death of A.’s last surviving child, at which time there is no possibility of there being any more grandchildren. [—442, 443—] GIFTS TO A CLASS 267 distribution must be made at the time fixed for the members of the class to take, and that consequently any member of the class who afterward comes into existence cannot partici- pate.* In most cases the settlor fails to fix any time for the closing of the class, and the courts have laid down certain more or less arbitrary rules of construction applicable to such cases. As most of the cases which arise come under one or another of these principles of construction it will be necessary to give these principles some attention. The underlying prin- ciple is that, unless otherwise specified, the class is closed as ‘soon aS one member is entitled to participate. His right to participate and receive his share cannot be postponed in order to give the class a chance to increase, unless the settlor has expressly so designated. Closing of Direct Gifts to a Class 443. In the case of a direct gift to a class the gift vests only in those members of the class who are ascertained at the date of the gift or the death of the testator, as the case may be. The class is then closed.® A clause may, however, be added to such a direct gift postponing the time of pay- ment or enjoyment.’° If the clause has the effect of making the class close at a remote period, it will violate the rule against perpetuities. If it merely postpones the time of pay- ment of a vested gift, it violates, if it violates any rule, the rule forbidding restraints on enjoyment, and not the rule against perpetuities, as supposed by Potter, J., in Shallcross’s Estate.! It is often a difficult matter of construction to deter- mine whether there is a direct gift to a class, with a clause 8 As to how far a child en ventre sa mere paid to them when they reach thirty. is included in the gift to a class, see Mc- Knight v. Read, 1 Whart. 213 (1835); Laird’s App., 85 Pa. 339 (1877); 21 Harv. Law Rev. 360 (1908). ®. g., where there is a gift to the children of A., a living person, only those children born at the date of the gift can take; Pemberton v. Parke, 5 Binney, 601 (1813); Gray, Rule Perp., 2 ed. §121a; Darrah v. Darrah, 202 Pa. 492 (1902). 10 E. g., where there isa gift to the children of A., a living person, to be “To the children of my son C., to be divi- ded among them when the youngest shall arrive at the age of twenty-one years”; Larkin’s Est., 4 Del. Co. 340 (1880); see also Phillips’ App., 93 Pa. 45 (1880); Barclay v. Lewis 67 Pa. 316 (1871); Horner’s Est., 10 D. R. 729(1901) ; Shalleross’s Est., 200 Pa. 122 (1901). 1200 Pa. 122 (1901), stated §503, post; see also Gray, Rule Perp., 2 ed. (1906), §121b; if void is void as a restraint on enjoyment; see this subject discussed, Part IV; see also §449, post. 268 GIFTS TO A CLASS [444, 445—] of postponement, or whether there is a gift contingent upon the time of payment.’ Closing of Future Gijls to a Class 444, In the case of future gifts after a preceding particular estate the class closes at the termination of the preceding estate.2 In the case of a future gift without any preceding particular estate the class closes at the time fixed for the gift to take effect. There seems to be no room in this case for any arbitrary rule of construction. The Application of the Rule Against Perpetuilies to Gijls to a Class 445. Where all members of the class who are to take do so upon a certain contingency, at which time they are all ascertained together, and the contingency is remote, the entire gift fails.* Where the class is left open until a remote period, and there are some members who have been or will be ascertained within the limits prescribed by the rule, the law is that unless the donor has made the gifts clearly sepa- rable, so that each member of the class takes independently of every other member, they must all fall together. settled,> but the reason is not This is well so clear. 2 See Coggins’ App., 124 Pa. 10 (1889); Gray, Rule Perp., 2 ed. (1906), §372, and note. 3 Minnig v. Batdorff, 5 Pa. 503 (1847); Haskins v. Tate, 25 Pa. 249 (1855). 4Davenport v. Harris, 3 Grant, 164 (1855); Donohue v. McNichol, 61 Pa. 73 (1869) stated §348, ante; Barclay v. Lewis, 67 Pa. 316 (1871), stated §339a, ante. Gift to the heirs of A. in default of appointment by B., a living person; Brooks’ Est., 140 Pa. 84 (1891). A gift to testator’s grand-nephews and grand- nieces living at the end of ten years; Williamson’s Est., 148 Pa. 150 (1891). To the children of the testator living at the end of ten years; Forney’s Est., 161 Pa. 209 (1894). At the death of A., to be divided among their children then living; Siddall’s Est., 180 Pa. 127 (1897), stated §450, post; Johnston’s Est., 185 Pa. 179 (1898), stated §472, post; Ward’s Est., 8 D. R. 701 (1899). To the lawful heirs of A. “when the youngest living grandchild of my son A. has reached twenty-two years;” Gerber’s Est., 196 Pa. 366 (1900), stated §474 post. See also Goddard’s Est., 198 Pa. 454 (1901). 5 See Coggins’ App., 124 Pa. 10 (1889), where a gift to the grandchildren of the testator to be paid to them upon attain- ing twenty-five years was held invalid. The same will was before the court in Williamson’s Est., 12 Phila. 64 (1878); 8. v., 3 Walk. 426 (1881); see criticism by Mr. Gray, Rule Perp., 2 ed. (1906), §375a. This was a close case on the ques- tion of construction and the Supreme Court would have been amply justified in adopting a construction which would not have resulted in a violation of the rule; Gray, Rule Perp., 2 ed. (1906), §633. [446, 447—] GIFTS TO A CLASS 269 Mr. Gray’s Observation on the Application of the Rule 446. Mr. Gray °® says that the share of the one member is dependent on that of all the others, and so long as the share of one is undetermined, the shares of all are undetermined, and if the shares are left undetermined until a remote period, the whole gift is void. This reason, however, does not explain why the whole gift falls when the shares of some are undeter- mined. Furthermore, those who have vested interests are only postponed in enjoyment, and the rule against perpetuities does not affect postponement of enjoyment. The reason usually given in the books is very clearly put by Ashman, J., in the court below, in Coggins’ Appeal.’ The Author's Observation on the Application of the Rule 447. The real principle, it is suggested, is this: the inter- ests are not really inseparable, and the court can wait until the class closes. A division can then be easily effected be- tween those as to whom the interest is remote and those as to whom it is valid, and the usual disposition made of the remote interests violating the rule.* The principle may be stated thus: the exact division of the property to be made cannot be determined until all the persons intended to be benefitted have been ascertained, which cannot happen until the class is closed, and as that will occur at a remote ® Rule Perp., 2 ed. (1906), §§375 and 399. 7124 Pa. 10 at 16, (1899), the learned judge said, “ But where the gift is a unit because to a class, its validity will depend upon the eligibility of every member of that class, prospective as well as present, and possible as well as actual, to take under the rule. The reason, as given in Leake v. Robinson, 2 Mer. 362, is the diffi- culty of determining what would have been the intention of the testator if he had been advised of the existence of the rule; whether, for instance, he would have left out after-born grandchildren rather than abridge the period of vesting at twenty- five, or have postponed it until twenty- one, and so have included all who should have been born before that time; and be- cause where the gift operates by way of executory devise, the devise itself being an infringement of common law rules, and allowable only on condition that it shall not exceed established limits, the gift is wholly void if it violates that condition at all.” This reason assumes that the gift is to the class asa unit. The objec- tions to this have been pointed out; see §69, ante. § Consider in this connection the cases arising under charitable trusts, where a gift is to benevolent and charitable objects and the gift to benevolent objects is held void and that to charitable objects is held to be valid. There are some author- ities for the proposition that the court will declare a reculting trust pro tanto: see Chap. 26 on Gifts to Charities. 270 GIFTS TO A CLASS [—447, 448—] period, the court must, in order to make a proper division, wait until that period has arrived. This course is practically inconvenient. The whole gift is therefore declared void. It is not that the limitations are inseparable, but that they can- not be separated without great practical inconvenience.° Gijt to Grandchildren of Testator as a Class Upon a Remote Contingency 448. Suppose there is a gift to such of the grandchildren of the testator as reach twenty-five. It is assumed that the gift is to be construed as contingent, so that it vests in the several grandchildren when they reach twenty-five.’° The rule of construction is that the class closes as soon as one member reaches the age of twenty-five.’ Suppose further that there is at the time of the testator’s death a grandchild living over four years old, who has not reached twenty-five. It is clear that if he reaches twenty-five the class will close in time, but as he may die before that period, and a. grandchild born after the testator’s death may be the first to reach twenty-five, the class may close at a remote period, and as the gift to all is contingent until the class closes, there is a possibility that they will all be remote, and are, therefore, all void.’ Mr. Gray observes* that the gift to the grandchild four years old at the death of the testator, is good, as he must take, if at all, within the period prescribed by the rule, but there may be further payments to him or his representatives because of ® This is the same reason as that ad- vanced in §335, ante, for the principle that the rule is applied as of the date of the gift and eliminates all limitations which may possibly be remote; see Lewis, Perp., pp. 455, 456 (1843). 10 For such a case see Seibert’s App., 13 Pa. 500 (1850); where the clause was “to be paid to them as they arrive at the age of twenty-one years.” 1The gift is contingent upon reaching twenty-five: Heisse v. Markland, 2 Rawle, 274 (1830); Schuldt’s Est., 199 Pa. 58 (1901) semble. 2 Rule Perp., 2 ed. (1906), §375. Mr. Gray says that the gift to all the mem- bers of the class is void, although there are some grandchildren born at the death of the testator who, if they reached twenty-five would be entitled to share, because none of those born at testator’s death may reach twenty-five, and the whole class may, therefore, ultimately be composed of grandchildren born after the testator’s death; Gray, Rule Perp., 2 ed. (1906), §373. It is submitted, however, that the vice of the gift does not lie in the fact that those who may take are born after the testator’s death, but in the fact that they may take at a remote period. The period of their birth is immaterial; Gray, Rule Perp., 2 ed. (1906), §232. ® Rule Perp., 2 ed. (1906), §375; it is assumed that the remarks in this section relate to the case of a contingent gift, ap- parently under discussion at this point. [—448, 449—] GIFTS TO A CLASS 271 the death of some subsequently born grandchild under twenty- five, and therefore his share may be increased by payments at a period beyond that prescribed by the rule. There can, how- ever, be only one distribution of the fund. Subsequent distri- bution, as supposed by the learned author, can occur only when there are vested interests with a clause of postponement of enjoyment. The case under discussion is that of a contingent gift. The difficulty lies in the circumstance that the fund is to be distributed between parties, as to some of whom the limita- tions are in time, and as to some of whom they are remote, and as the gifts cannot be separated without waiting until a remote period, the gift to all is void. If, however, there is a grandchild twenty-five years old at the testator’s death, the class is immediately closed, and as none can participate except the grandchildren living at that time, the gift is valid as to all those grandchildren.* Vested Gift to the Great-Grandchildren of the Testator 449. Some of the principles involved in the case of a gift to a class are raised by a hypothetical case put by Mr. Gray, which has given rise to considerable discussion and which will now be noticed. Mr. Gray® supposes the case of a direct gift to the great-grandchildren of the testator to be paid to them when they reach twenty-five,® and he says that each great-grandchild, as born, takes a vested interest, and the clause of postponement is valid in order to give the class of great-grandchildren a chance to increase.’ The rule of con- struction applied here is that the class closes when the eldest great-grandchild reaches twenty-five, or if he dies before attaining that age, when he would, if living, reach twenty-five. If there are no great-grandchildren born and four years old 4Gray, Rule Perp., 2 ed. (1906), §379. 5 Rule Perp., 2 ed. (1906), §121b. °Mr. Gray, Rule Perp., 2 ed. (1906), §121b, says grandchildren. This does not raise the question as pointed out by Mr. Kales, 19 Harv. Law Rev., 598 (1906). See note to the same article by Mr. Gray on p. 604. The reason the gift to the grandchildren does not raise the point is this: all the grandchildren of the testator will necessarily be ascertained within the lives in being at the testator’s death, to wit, the life or lives of all his children, and consequently, no clause of postponement, even if valid, as to the grandchildren, can operate to introduce a number of the class at a remote period. As the testator may obviously have great-grand- children born at a remote period the cause of postponement giving the class of great-grandchildren a chance to increase may introduce an interest at a remote period. 7 Gray, Rule Perp., 2 ed. (1906), §121a. 272 GIFTS TO A CLASS [—449—] at the date of the testator’s death the class will close at a remote period. Mr. Gray says® that as the gift to the class is consequently bad, there is no reason to sustain the clause of postponement, and that it will therefore be rejected, and all the great-grandchildren, if any, in esse at the time of the testator’s death, even if under four years old, will take the whole gift. Mr. Kales'° criticises this conclusion of Mr. Gray on the grounds (1) that it makes the question of construction turn on whether the rule applies, and (2) that it makes the in- validity of the clause of postponement rest on a principle of law which has never been judicially determined,. and which, therefore, is not the subject of a valid conclusion. The ques- tion involved is this: did the testator intend to make a vested gift and include only the great-grandchildren living at the time of his decease, or did he intend to include all the great- grandchildren born before the eldest reached or would have reached, if living, twenty-five years? If he intended an imme- diate gift only to those living at his death, the clause of post- ponement of payment is void as a restraint on enjoyment, and all those great-grandchildren ascertained can unite and compel an immediate distribution of the fund. If he intended a gift to a class composed of those living and to be born before the eldest reached or would have reached, if living, twenty-five, the rule against perpetuities is involved because there is a gift to a class which includes interests which may vest at a remote period, and as there can be no separation the gift to all the members of the class falls under the rule previously laid down.’ The gift to those in esse can be sus- tained only on the theory that they alone were intended to take, and that, therefore, the clause of postponement is void apart from the rule against perpetuities.? The difficulty is 8 Rule Perp., 2 ed. (1906), §121b. Mr. Kales, 19 Harv. Law Rev. 598, second void for remoteness and to be dis- regarded and the original gift sustained, et seq. (1906), supposes that Mr. Gray means that there are two gifts, (1) a gift to the great-grandchildren living at the death of the testator, and (2) a gift to such great-grandchildren of the testator as may be born after his death and before the eld- est great-grandchildren born at the tes- tator’s death actually reaches or would have reached, had he lived, the age of twenty-five; that the first is valid and the which view, Mr. Gray, in a note to the same article, on p. 604, disclaims having entertained. 019 Harv. Law Rev. 598 et seq. (1906); 20 Harv. Law Rev. 201, (1907). 1 See §445, ante. ? See Gray, Rule Perp., 2 ed. (1906), §§638-641; Oppenheim v. Henry, 10 Hare, 441 (1853) ; Gray’s Cases on Property, Vol. 6, p. 132. [—449, 450] GIFTS TO A CLASS 273 caused by the failure to observe that if the clause of post- ponement operates only as to the time of payment, it is void, and the rule against perpetuities is not involved, and that it can have no effect to introduce other vested interests unless it is used as showing an intention to postpone the time of distribution until the period fixed. The intention on_ this point must first be ascertained and then the rule applied. Siddall’s Estate 450. In Siddall’s Estate* there was a gift in trust to pay the income to A. and B., testator’s children, during their natural lives, and at their decease, the principal to be equally divided among their children who may then be living, and the issue of any deceased child or children, whether therein named or not, as they arrived at legal age. It was argued that the clause as they arrived at legal age postponed the vesting until a remote period. The court below, in an opinion by Penrose, J., affirmed, on appeal, by the Supreme Court, said that the gift to the children and grandchildren was vested and restricted by the words at their decease and then living to those as- certained at the death of A. and B., and the clause as to payment at twenty-one operated as a postponement of enjoy- ment and did not affect the vesting.* Consequently, as there must be either a grandchild or a great-grandchild living at the death of A. and B. who would reach the required age twenty- one years after their death, the class would close in time and no grandchild or great-grandchild born after that period could participate. A grandchild or great-grandchild born ‘during the twenty-one years after the death of A. and B., would reach twenty-one more than twenty-one years after their death, and such grandchild or great-grandchild would, at that time, take a share in the fund. As, however, his share would be vested and go to his executors if he died under twenty-one, there would be no possibility of any diminution of the fund. The fund, therefore, could be divided between the grandchildren and great-grandchildren living when the first grandchild or great-grandchild reached twenty-one, or would have reached twenty-one, if he had lived. 3180 Pa. 127 (1897). apply to both classes: Phillips’ App., 93 4The twenty-one years clause would Pa. 45 (1880). 274 GIFTS TO A CLASS [451, 452] Shalicross’s Estate 451. In Shallcross’s Estate® there was a clause postponing the payment of the gift to the grandchildren of the testator until they were twenty-five. The gift vested in the whole class of grandchildren, and could not be void as to anyone. The clause of postponement violated the rule forbidding re- straints on enjoyment and not as was said by the court, the rule against perpetuities.® McCullough v. Seitz 452. In McCullough v. Seitz’ there was a gift of real estate by deed in trust for the wife and children of John during his life, and after his death, for his widow for life, and after her death to the children of John then surviving, in equal shares. The case arose on an action of trespass by a son of John, the widow being dead. The court held that he was barred by the statute of limitations. The decision was correct but the reasoning open to objection. The plaintiff had no title at all, the entire title being in the grantor and his heirs by way of resulting trust, the limitations to the children being void under the rule against perpetuities. The gift over to the children was clearly contingent upon their surviving the death of the widow. That event might happen at a remote period, because John might leave as his widow a woman born after the date of the deed. This is one of the rare cases which come before the court after the period prescribed by the rule has elapsed. 5 200 Pa. 122 (1901), stated §503, post. see §443, ante, and §503, post. ® For further observations on this case 728 Super. Ct. 458 (1905). (275) CHAPTER 19 WHERE THE FUTURE INTERESTS ARE INVALID UNDER THE RULE Preliminary discussiONi..s es. eee eke ede a yates eee ER ba §458 Where the whole gift violates the rule At law Gilt by deed uc ycacemea dh eee ie ake Bias neo ee Dees Bees §459 (GEG. by? wall! ope ati satan cease wcivcra ph ak a licen mies Saas Gee Sais §460 In equity Giit: BY eedicceas cuca gin binedid poe oodatas ele abated §461 Gite by will cin. tone waged eudh aeang Meme ea See §462 Where the valid and invalid limitations cannot be separated..... §463 Where the prior limitations are void....................00.005, §464 Where the subsequent limitations are void : PrélMNS oc ie taco We widia aa ei hh onne Wes ee alas Ge aeane wea welld §465 Where the prior valid limitations exhaust the fee............ §466 Where the preceding valid limitations do not exhaust the fee At law GIES Dy CeCdis 2 cca uees Oors i aiaod Ea aug gael addue ddenens §467 Gitt:- by Willi csccipcessestekenesadis dpe eaads mie ier §468 In equity Gilt by deed acikc8 ccs ceeded eteeu nd segeeenesees §469 Git by Will ve eves gate aes Peeeew aren ye ee SeeseSy §470 Pennsylvania cases Goggins’ Appeals nina jusnagQuiskuay Lomoneetdin wie Sehr ew beat §471 Johnston's: Mstatex.co .cenddeRGageatqktgwa peed dbaker w ened: §472 Gerber’s Hstatenie tra iaacene ease odes Mei cata leteweea bias §474 Kowntz’s Estate xise2 cp phinaunve oy SoaGuenges 4218 Remeeaen wae §475 Summary of Pennsylvania cases........-...05. 0005 e eee eee §476 276 INVALIDITY OF FUTURE INTERESTS [458-460—] Preliminary Discussion 458. It may be pointed out in the beginning that the rule applies only to future interests which are remote,’ and has no further effect than is necessary to cut out the particular offending limitation. The rule, while severe, is practical, and violates the express intention no further than is necessary. Several cases may arise: (1) where the whole gift is void; (2) where there are valid and invalid limitations which cannot be separated; (3) where the prior limitations are void; (4) where the subsequent limitations are void; and, in each case, we must consider the disposition of the property embraced under the void limitations, and the question may arise in each case as to limitations under a deed or will, legal or equitable,” and as to real estate or personal property.’ Where the Gift of the Entire Property by Deed at Law Violates the Rule 459. Where the gift by deed of the entire property at law violates the rule, the case stands as if the instrument had never been executed, and the property will remain in the grantor just as it was before, and the rule is the same whether the subject matter is real estate or personal property.* Where the Gift of the Entire Property at Law by Will Violates the Rule 460. Where the disposition is by will of a legal interest, and the entire gift violates the rule against perpetuities, the property attempted to be disposed of by the void limitation will, in the case of a specific included, as in other cases, in bequest or specific devise, be the residuary devise, if any;° 1 For a discussion of the interests to which the rule applies, see Chap. 16, Sum- mary, §382, ante. 2 Mr. Gray draws no distinction, in this connection, between gifts at law and gifts atequity. The distinction, it is submitted, is of great practical importance. * For a discussion of the cases where the limitations under powers are invalid under the rule, see §§392-394, ante. 4 No case has been found of a limitation at law where the whole gift violates the rule. An illustration will perhaps suffice: a gift to B. thirty years after the death of A. would be void. As to the possibility of a limitation of future inter- ests in personal property by deed inter vivos, see §$92, 95, ante. ® As to personal property by the com- mon law, see Gray, Rule Perp., 2 ed. (1906), §248, n. 5; Woolmer’s Est., 3 Whart., 477 (1838). As to real estate, by the provisions of the Act of June 4, 1879, P. L. 88, §2. As to the law before the Act of 1879, see Massey’s App., 88 Pa. 470 (1879). [461-463—] INVALIDITY OF FUTURE INTERESTS 277 and where the gift is of the residue or there is no residuary devise, there is an intestacy as to both real and_ personal property. Gijt oj the Entire Property by Deed of Trust Violating the Rule 461. Where there is a deed of trust in which there is only one limitation of the entire equitable estate, and that limita- tion is void, under the rule it is clear that the invalidity of the interest will destroy the whole equitable gift and produce a resulting trust to the grantor and his heirs or next of kin, according to the nature of the property. Gift of the Entire Property by Will in Trust Violating the Rule 462. Where there is a gift in trust by will, and the entire equitable limitation violates the rule, there is a resulting trust to the residuary devisee or legatee in the case of a specific bequest or specific devise, and to the heir at law or next of kin, according to the nature of the property, if there is no residuary devise or if the trust is of the residue.° The usual example of such a trust is a direction to accumulate income and pay the same, with the principal, at a remote period.’ Where Valid and Invalid Limitations Cannot be Separated 463. Where there are two or more interests, one of which is void and the other valid, and they are so limited that they cannot be separated, they will both fall together. The question of separability, however, more accurately speaking, relates to the property covered by the limitations, and the difficulty is rather in apportioning the property between the limitations than in the separation of the limitations on the face of the gift. Where the donor fails to make any indication of how the property is to be apportioned between the void and valid limitations, the court will declare the whole gift void, as it cannot say what the testator would have done if his attention 6 Equity following the law, as to which see §460, ante. It is sometimes said that there is an intestacy: this is a fallacy; see §151, ante. 7¥For an excellent illustration of such a direction, see Hillyard v. Miller, 10 Pa. 326 (1849). The subject matter was real estate, and the heir recovered in an action of ejectment on his equitable title. See Chap. 25 on Accumulations. 278 INVALIDITY OF FUTURE INTERESTS [—463-466—] had been called to the invalidity of one of the limitations,* and the rule is the same whether the interests are legal or equitable. The court should be astute to separate the limita- tions, as the rule against perpetuitics is not to be applied except where absolutely necessary.° Where the are Void Prior Limitations 464. Where, however, there is an ultimate vested interest the case is different; the preceding contingent interests, if void, are cut out and the vested interest remains. There seems to be no reason to destroy it because of the invalid preceding interests.*° Where the Subsequent Limitations are Void—Preliminary Discussion 465. Where the subsequent limitations are void we may distinguish two cases: (1) where the prior valid limitations exhaust the entire interest; (2) where the prior valid limita- tions do not exhaust the entire interest; and in the latter case there is an important distinction between a gift at law and a gift in equity by deed or by will. Furthermore, the subsequent void limitations do not carry down the preceding valid ones unless they are inseparable.’ Cases of such insepara- bility will be extremely rare. Where the Prior Valid Limitations Exhaust the Fee 466. When the prior valid limitations exhaust the fee the subsequent void limitations drop, and the case stands as if they had never been inserted in the instrument. The pre- ceding estates remain intact, and the result is the same either at law or in equity, with respect to a gift by deed inter vivos 8 For a discussion of this principle with respect to gifts to a class, see $445, ante. ® This principle was overlooked in Jobn- ston’s Est., 185 Pa. 179 (1898), for a dis- cussion of which, see §472, post. Where the testator has given fixed charges out of income and made a void disposition of the balance the limitations are clearly sep- arable, which was overlooked by the court, in Gerber’s App., 196 Pa. 366 (1900), stated §474, post. 10 Gray, Rule Perp., 2 ed. (1906), §§251- 257; dictum, Penrose, J., in Boyd’s Est., 199 Pa. 487 at 493 (1901), stated §398, ante; Chambers v. Wilson, 2 Watts, 495 (1834), stated §347, ante. 1 See remarks of Clark J., in Lawrence’s Est., 186 Pa. 354 at 365 (1890), stated §396, ante, semble. See §463, ante. [467, 468] INVALIDITY OF FUTURE INTERESTS 279 as to realty or personalty,? or a gift by will. In either case the future interests are cut out and the prior gifts remain.’ Where There is a Gijt by Deed at Law and the Preceding Valid Estates Do Not Exhaust the Fee 467. In the case of a limitation by deed inter vivos of real estate where the preceding valid limitations do not exhaust the fee, it seems very clear that there is a reversion of the undis- posed of residue.* Where there is a limitation of personal property by deed inter vivos, the case is not so clear. It is assumed, for the present, that future legal interests in personal property can be created by deed inter vivos.* There can, how- ever, be no reversion of personal property. If the future inter- ests are treated as remainders, there would be no way of getting the undisposed of residue back to the donor. If the future interest is an executory bequest, it seems that the same result would follow, and the first taker would have the whole property. No cases on this point have been found, and the question is open. It is probable, however, that the Supreme Court will find some way of getting the undisposed of residue back to the grantor. Gijt by Will Where the Preceding Valid Legal Limitations do Not Exhaust the Fee 468. If the gift is by will, at law, and the preceding valid legal limitations do not exhaust the fee, the balance of prop- erty, whether realty or personalty, attempted to be disposed of by the void limitations passes to the residuary legatee, in the case of a specific bequest or devise, and if there is no residu- No case in equity has been found in Penn- sylvania. An example will illustrate the ? If there can be no future legal inter- ests in personal property created by deed inter vivos, as to which see, §§92, 95, ante, the result is the same. The limitations are void, not because of the rule against perpetuities, but because they cannot be created in the method which has been at- tempted. 3 Tor an illustration of a common case of the application of this principle at law, see Smith v. Townsend, 32 Pa. 434 (1859). point: suppose a gift to A. in trust for X. and his heirs, and if he dies without issue toC. If dying without issue means in- definite failure of issue, the gift over is void and the whole interest remains in X. and his heirs. * No case on this point has been found. 5 For a discussion as to whether they can be created, see §$92, 95, ante. 280 INVALIDITY OF FUTURE INTERESTS [469-471—] ary devise or the gift is of a residue, there will be an intestacy.® Gift by Deed Where the Preceding Equitable Limitations do Not Exhaust the Entire Property Transferred 469. Where the gift is by way of deed of trust, and the preceding valid equitable limitations do not exhaust the entire beneficial interest, and there is a subsequent remote limitation which is destroyed by the rule, there is a resulting trust of the undisposed of residue to the donor, his heir at law or next of kin as the case may be, according to the nature of the property. The rule only operates on the limitations which are void; it does not affect the trust. Gijt by Will Where the Preceding Valid Equitable Limitations Do Not Exhaust the Entire Property Bequeathed 470. When the disposition is by will, and the preceding valid equitable limitations do not exhaust the entire beneficial interest, there is a resulting trust of the property embraced in the void limitations to the residuary legatee, in the case of a trust of a specific bequest or devise, and where the trust is of a residue or there is no residue, there will be a resulting .trust to the heir at law or next of kin, according to the nature of the property.’ Coggins’ Appeal 471. In Coggins’ Appeal® there was a gift of the residue in trust for certain life cestuis que trustent, with gifts over, which the Supreme Court held were void under the rule against perpetuities.° The auditing judge held that the property em- braced in these future interests should be distributed under the intestate laws. On appeal, the Supreme Court said that ® The law here is the same as in the case where the whole gift is void, as to which see §460, ante. In Davenport v. reversion. He probably meant a residue. 7 According to the analogy of the law, see §460, ante. It is sometimes said there Harris, 3 Grant, 164 (1855), the equitable limitations were executed by the statute of uses, and the case became one of legal limitations. Lowrie, J., said there was a is an intestacy. This is a fallacy; see §151, ante. 8124 Pa. 10 (1889). ° See §445, ante. [—471, 472—] INVALIDITY OF FUTURE INTERESTS 281 the estate must be distributed to the children having life estates, and then reinstated the decree of the auditing judge. The question as to the disposition of the property covered by the void limitation was not argued nor discussed. It: is to be remarked that the heirs of the testator were also the life ten- ants, and whichever principle was adopted, the result would be the same. This is the first case on the point which has been found and the opinion of the Supreme Court is far from clear. Johnston's Estate 472. In Johnston’s Estate’ there was a devise to trustees for seventy-five years to pay the income subject to debts and legacies, on the first of each May during the period, among the children of the testator and children of a deceased child, and descendants of a more remote degree, in equal shares, per stirpes, and, at the end of seventy-five years, to sell the land and divide the proceeds among the children then living, and the issue of a deceased child. The court below, Stewart, P. J., affirmed, on appeal, and said that the limitation after seventy- five years was contingent and remote. As to this there can be no difference of opinion. The learned judge, however, concluded that the whole gift was void and distributed the estate under the intestate law. His reasons appear to be as follows: that the only purpose which the testator had was to make an invalid gift; and his object was to control the disposition of his property beyond the period that the law allows, and for that reason, the whole scheme should fail; that it should also fail because of the circumstances that the two estates were not separable.” ‘‘That is to say, they are so related that upholding the one and avoiding the other would clearly defeat the main, if not the only, purpose of the testator in making the devise.” It is not permissible, it is submitted, to say that because there is one invalid gift, that therefore another separable valid gift is to be destroyed. 10185 Pa. 179 (1898). 11 See page 191. 2 The position that the two limitations were inseparable will not be easily ad- mitted, and it is difficult to see how the learned judge reached such a conclusion. His remarks on this subject are still more inexplicable, in view of the opening sen- tences of his opinion, on p. 183, where he considers that there are two separate and distinct estates given, the termsof seventy- five years and the remainder, and that to determine the application of the rule they must be considered separately. 282 INVALIDITY OF FUTURE INTERESTS [—472—] The conclusion of the learned judge, that the testator intended to violate the law, was, it is submitted, unwarranted. It is true that the heirs at law were the children of the testator, who were also the life tenants under the trust, and that with the remote limitations to the great-grandchildren cut out, there’ seems at first glance to be no difference between sustaining the particular estate and decreeing a resulting trust. There was actually a difference, however, because it is plain that all the beneficiaries of the trust were not the samme persons as the heirs of the testator.2 The notion that the rule applies because of the supposed illegality of the intention of the testator, has, unfortunately, worked itself into the law.’ Mr. Gray” comments on and criticises this case. He points out that the New York cases cited by the learned judge turned on the peculiar provisions of the New York revised statutes, and that Thorndyke v. Loring was a case of a gift of an accumulated income at a remote period,? and that the learned judge misunderstood those cases when he thought that they were authorities for the conclusion he reached. It seems as if this were the main source of objection to the case. The question is not whether the testator intended to violate the ? See language of the learned judge in the middle of p. 189 of the report. 1 In Goddard’s Est., 198 Pa. 454 (1901), same will before the court in Van Syckel’s Est., 9 D. R. 367 (1900); 5. v. 24 Pa. C.C. 241; Penrose, J., in the court below said by way of dictum at p. 458, “The case is radically different from Johnston’s App., 185 Pa. 179, cited on behalf of the respon- dent, where the paramount object or ‘scheme’ of the testator being the accom- plishment of a purpose transgressive of the rule against perpetuities, subordinate interests, created in furtherance of such scheme, which, standing by themselves, might have been perfectly valid, were also held to be void, as mere incidents or agencies of a frustrated purpose. Here there was no such ‘scheme’; the para- mount purpose of the donee of the power was to make provisions for her children, in accordance with what she regarded as her right, and there was no deliberate or manifest intention to transgress the rule in the disposition directed when the estate so created shall respectively cease.” It is submitted, however, that this language is unfortu- nate. The question whether the rule is vi- olated can never depend on the distinction between the deliberate or other kind of intention of the testator. The rule de stroys the intention in every case that it applies; there is no element of punishment in it because of the supposed guilty dis- position of the testator in attempting to transgress the rule. This language shows the unfortunate result of the decision in Johnston’s Est. > Rule Perp., 2 ed. (1906), §249b. 3 Similar, therefore, to the case of Hill- yard v. Miller, 10 Pa. 326 (1849), where the whole gift was void. [—472, 474—] INVALIDITY OF FUTURE INTERESTS 283 rule,* but whether the future interest created does violate the rule. Furthermore, the gift to the trustees for seventy-five years was utterly immaterial and of no weight. If the valid life estates to the children and the grandchildren extended beyond seventy-five years, as they very well might, the trustee would not have a sufficient legal title to carry out the trust and the court would direct the heirs at law to convey to the trustee such legal title as might be necessary. Since, there- fore, the direction to distribute® at the end of seventy-five years was void, the case stood just as if there were a gift in trust for the children, grandchildren, great-grandchildren, and great-great-grandchildren for the life of each. The gift would be valid as to children or grandchildren, and a resulting trust decreed pro tanto of the residue.® Gerber’s Estate 474. In Gerber’s Estate’ there was a very lengthy and involved will. The testator gave his estate in trust, with directions to pay out of the income, certain legacies, etc., some of them to charities, and the balance of the income to be accumulated and divided with the principal. He then directed that after “the death of all my grandchildren, and the youngest grandchild living of my son A. has become twenty- two years of age,” the principal ® should be divided among the lawful heirs® of his son A. in equal shares.!° The testator ‘It was argued in Moore’s Est., 198 Pa. 611 (1901), that the principle of Johnston’s Est., 185 Pa. 179 (1898), ap- plied to a case of an equitable life estate, and remainders to charities, which re- mainders were void under Act of 1855. Argument repudiated by the court. 5 Such a direction is a power enabling the trustee to create new equitable es- tates at a remote period. As to this, see §412, ante. ® See remarks of Penrose, J., in Echter- nacht’s Est., 18 Pa. C. C. 143 (1896). 7196 Pa. 366 (1900). 8 On p. 366. ® The gift here was to the heirs of A., who were ascertained at A.’s death, and the time for them to take was fixed by the arrival of the youngest grandchild of A. at the age of twenty-two. The heirs of A. all stood and fell together. The limitation to the heirs of the son was contingent because to persons unascertained and was an equitable future trust by way of remainder, and consequently need not take effect immediately upon the termination of the preceeding particular estate. If this had been a legal remainder it would not have been remote, as the heirs of A. must have been ascertained, if at all, in time to take at the death of A. They would then have had a vested interest, the enjoyment of which would have been postponed by the other charges in the will and the rule would not have applied. See §343, ante. The direction to accumulate was clearly void, see §653, post, even al- though a certain part thereof was to be paid to charities. 284 INVALIDITY OF FUTURE INTERETS [—474—] left to survive him one son, A., numerous grandchildren and great-grandchildren. The auditor concluded that the whole trust was void,' and awarded the entire estate to the trustee of the son. It does not appear from the report why there was a trustee of the son, nor what standing the trustee had in the case. In his conclusion as to the effect of the inter- est being remote the auditor involved himself in a very curious fallacy. He decided first, that the ulterior limitations were void, because remote, then, that the intervening charges were void because, he said, it would not do to permit the rule against perpetuities to be set at naught by permitting an invalid ulterior limitation to be sustained by valid inter- vening charges, which is the same thing as saying that if one fails, the other fails, which is the very question to which he was addressing himself. The rule against perpetuities only cuts out the particular limitation which violates the rule, and everything else remains. The auditor was evidently influenced by the fallacy that where there is an intention in one part of the will to violate the rule, the testator must be punished for his attempted violation of the law by having the whole settlement destroyed; a very harsh and unnecessarily severe application of the rule, and, it is submitted, totally unwar- ranted by reason or the common law and resting on the question- able decision in Johnston’s Estate.2 Was the limitation re- mote? This depends on the construction to be given to the word living. The learned auditor said that the word living, as used in the will, meant living at the time of distribution. Living might mean living at the death of the testator, in which event the time of distribution would be not later than twenty-two years after the testator’s death. It might mean living at the death of A., in which event the distribution would be not later than twenty-two years after the death of A. It is clear, therefore, that the time of distribution de- pended on the construction to be given to the word living. That period was moved forward or backward, according to the time to which the word living should be construed to refer. How then was it possible to say that the word living 1Entirely overlooking the doctrine ute against accumulations does not vio- that a resulting trust could be decreed of late the intention any more than neces- the accumulating income and the other sary. charges saved; see §643, post. The stat- 7 185 Pa. 179 (1898), stated §472, ante. [—474, 475—] INVALIDITY OF FUTURE INTERESTS 285 meant living at the time of distribution?? An intention to violate the rule is not to be presumed, and when two con- structions may be adopted the one which will prevent the application of the rule is to be preferred.* The auditor de- stroyed the entire intention of the testator when it would have been just as easy to construe the word living as mean- ing living at the time of the death of the testator. Indeed, it seems that that is the more natural construction. It may be observed, however, that the auditor arrived at his conclusion on this point with great difficulty. The entire rea- soning in this case is most unfortunate.® Kountiz’s Estate 475. In Kountz’s Estate, No. 1,° the testatrix gave the residue of her estate to her husband in trust for her children and grandchildren, and then, after conferring certain active duties, directed him to pay the income as follows: (1) to her children while they should continue to live together, in equal shares, with certain immaterial discretionary power; (2) upon the death of a child leaving children but no husband or wife, such child’s share of the income to be paid to his or her children; (3) should any child leave a husband or wife but no child, the share of the income to be paid to such husband or wife for life; (4) should any die leaving husband or wife and children, the share to be paid to the husband or 3 Tf living meant living at the death of the testator, the limitation over would not be remote if the youngest grand- child then living was one year old. It does not appear whether such was the fact or not. * Gray, Rule Perp., 2 ed. (1906), §633. >It would have been possible, in con- struing this will, to have made “and” read “‘or’’, and thus make the limitations “after the death of all my grandchildren or when the youngest grandchild living,” etc. The suggestion of the auditor, that the limitations in items 2, 5, 6, and 7 conflict with the intention that the limitation over was on the death of all the grandchildren living at the death of the testator, is hardly sustained after a careful examination of the words of the items. It appears as if the testator pro- vided for the contingency of the beneficia- ries of this particular trust dying before the arrival of the time for the final distri- bution of the estate. It does not neces- sarily follow from that that the substitut- ed children or grandchildren were to be benefitted beyond that period. If they were, the case would be the same, as they would take in time, and the fact that their estates extended into the forbidden period would be immaterial. The will is conflicting, but it is submitted that the construction suggested brings it within the rule against perpetuities and is, there- fore, to be adopted. No construction pos- sible will harmonize all the provisions of the will. 6 213 Pa. 390 (1906). 286 INVALIDITY OF FUTURE INTERESTS [—475, 476—] wife and children; (5) should any die without leaving spouse or child, such one’s share of the income and principal to go to the surviving co-heirs; (6) after the decease of the last of the immediate children, and after ten years from the date when the youngest grandchild should become of age, the princi- pal of the whole estate to be divided among the grandchildren. The court below held that each grandchild in esse at the death of the testatrix took a vested interest subject to open and let in after-born grandchildren, and that the gifts to the grand- children were not remote.’ On appeal, the Supreme Court held that the remainders to the grandchildren were contingent, basing the conclusion on the sixth clause of the will, and that the limitations to them were remote.* This is a close case on the question of construction, and although some of the reasons advanced for the contingency of the gifts are open to objection, the conclusion of the Supreme Court on this point may be accepted; the learned judge, Potter, J., however, went on to say: “This period” (the period fixed for distri- bution) “(was too remote, and the gift made to take effect at that time is void under the rule against perpetuities. That being the case, the antecedent particular estate would fail also, and the heirs at law of the testator are entitled to im- mediate possession,” citing Johnston’s Estate.° The decision is most extreme. While the point appears to have been argued by counsel for the appellant, the learned judge paid no atten- tion to the argument in his opinion. The case is plainly dis- tinguishable from even Johnston’s Estate, extreme as that case is. The particular estates were valid and the gifts over were clearly separable. Summary of the Pennsylvania Cases 476. In these cases, from Johnston’s Estate’? to Kountz’s 7 This is clear. Each grandchild must be born before or nine months after the death of the last child of the testatrix, 5 Tf contingent, the remoteness of the gifts is clear, as they will not vest until ten years after the coming of age of the and on the death of the surviving child, the interests of the grandchildren would be postponed in possession by the ten years clause which would be void, see §449, ante; and by the existing estates of any surviving husband or wife of a child, which estates would be valid, as they were vested within the period prescribed by therule. See §343, 345, ante. youngest grandchild, which latter event might be more than twenty-one years after the death of the last surviving child. ®185 Pa. 179 (1888), stated §472, ante, and Gerber’s Est., 196 Pa. 366, (1900), stated §474, ante. 10 185 Pa. 179 (1898), stated §472, ante. [—476] INVALIDITY OF FUTURE INTERESTS 287 Estate,t the court has, it is submitted, overlooked the true application of the rule against perpetuities. The rule operates to destroy the intention, but is not to be applied to any greater extent than is absolutely necessary. The court should be astute to separate all limitations which can possibly be separated, and the question whether the testator deliberately intended to violate the rule can have no proper weight what- ever. The court has, it is apprehended, made an unnecessarily harsh and severe application of the rule,? and has probably been influenced by the fallacious notion*® that the rule against per- petuities applies to a trust, whereas it applies only to the interest of each separate cestui que trust.* 1213 Pa. 390 (1906), stated §475, ante. ? The attitude of the court in these cases is in strange contrast to the line of decis- ions noted in Part II sustaining the valid- ity of the clause against alienation and the line of decisions noted Chap. 22, tend- ing to sustain the validity of the trust of afee. In those cases the court has gone to the uttermost limit in sustaining the intention of the testator to an extent which, it is submitted, is against public policy, whereas, in the cases involved in the application of the rule against perpe- tuities, the court has swung to the other extreme and disregarded the intention of the testator to a degree entirely uncalled for either by any necessities of the rule, or by any principle of public policy. 3 Discussed §375, ante. * See §374, ante. (288) (289) PART IV THE RULE FORBIDDING THE IMPOSITION OF RESTRAINTS ON ENJOYMENT Chap. 20. Preliminary Chap. 21. Postponement of Enjoyment Chap. 22. Trust of an Absolute Interest Chap. 23. Discretion (290) (291) CHAPTER 20 PRELIMINARY DISCUSSION OF THE RULE FORBIDDING THE IMPOSITION OF RESTRAINTS ON ENJOYMENT The rule discussed and stated..............0 000. cece cece e eee §485 The rule distinguished from the rule forbidding restraints on GNEMATON ps203 henna ed, Sy Siee 6a Dae auesoce Ola! 84 wanna demain Ae BS aees §486 The rule distinguished from the the rule against perpetuities.... §487 Who may invoke the application of the rule.................... §488 Form in which the attempted restraint may appear............. §489 Conditions in restraint of marriage..................00. cee eee §490 The Rule Forbidding the Imposition of Restraints on Enjoyment Discussed and Stated 485. The fundamental principles relating to the use and enjoyment of property have already been noticed,! as has also the principle of public policy? which is opposed to the cre- ation of restraints on such use. This principle of public policy finds its expression, so ‘far as gifts of property are concerned, in the rule of law which may be described as the rule for- bidding the imposition of restraints on the enjoyment of prop- erty. Everyone who is sui juris is entitled to the unfettered control and enjoyment of all property in which he has the sole, absolute interest, subject only to the rules of law in force regulating that use.* With the rules of law restricting such enjoyment, or with the stipulations which may be inserted in transfers for value having a like effect, we have no concern.‘ 1 See §8. °The incapacity of infants, lunatics, 2See §§11-14, unte; Lowrie, J., in and married women may be referred to Phila. v. Girard’s Heirs, 45 Pa. 9 at 27 another principle of law and has nothing (1863); Asbman, J., in Cooper’s Est.,9 to do with the subject herein discussed. Pa. C. C. 356 (1891). * See §§1, 8, ante. 292 RESTRAINTS ON ENJOYMENT [486, 487] The rule under discussion may be stated thus: all restraints imposed by a donor on the use and enjoyment of the prop- erty which he gives to the donee, are void. We shall con- sider later whether there are exceptions to this rule. The Rule Forbidding the Imposition of Restraints on Enjoyment Distinguished From the Rule Forbidding Restraints on Alienation 486. Restraints on use and enjoyment have nothing to do with restraints on the right of alienation. It is true that property subject to such a restriction may be less marketable and bring a smaller price. It is, nevertheless, freely alienable in the absence of any restriction to the contrary. The right of alienation is the right to transfer property to another. The restrictions on use and enjoyment may apply without aliena- tion by the donee. These several incidents of ownership must be carefully distinguished.2 As the restrictions are against the policy of the law they are to be strictly construed, and no case has been found deciding that a restraint on one incident has any effect on the other. The right of enjoyment has, however, been confused with the right of alienation. The Rule Forbidding the Creation of Restraints on Enjoyment Distinguished From the Rule Against Perpetuities 487. It is perfectly clear that since the restraint must be aimed at the enjoyment of an interest which has already taken effect, no question can arise as to the application of the rule against perpetuities. A clause aimed at a restriction on the enjoyment of an interest not yet vested, would, of course, have no effect until the interest was vested, and the clause would fall with the interest if the latter violated the rule against perpetuities. When the interest has survived the rule against perpetuities, the question then arises, if there is such a clause, as to how far it is valid. The distinction between the two rules seems perfectly plain.’ 5 See §4, ante. erected on a certain part of the property 7Scee Gray, Rule Perp., 1 ed. (1886), or an alley to be opened through the court §121,n.1. InSmith v. Townsend, 32 Pa. in which the dwelling-house was situate, 434 (1859), there was a devise of a lot, with the proviso that in the event of fail- subject to the condition that the owner ure to perform this condition, the prem- should not permit any building to be ises were to go over to the trustees of a [488, 489—] RESTRAINTS ON ENJOYMENT 293 Who May Invoke the Application of the Rule Forbidding Restraints on Enjoyment 488. Where there is a clause restraining the use and enjoy- ment the question as to its validity can be raised only by the party entitled to the interest to which the clause is attached. No one else has any concern in the matter. In this respect the rule differs from the rule against perpetuities. Where the latter rule applies it is the duty of the court to destroy the invalid interests whether anyone interested com- plains or not. This distinction is very clearly brought out by a consideration of the cases arising under the statute against accumulations.? If there is a direction to accumulate and a gift of the accumulated fund, which is dependent on the accumulations, and under the rule against perpetuities the gift is void, it is the duty of the court to prevent the accumula- tions from taking place whether the parties entitled complain or not. If, however, there is a direction to accumulate en- grafted on a vested interest, the direction violates the rule forbidding restraints on enjoyment and it is not proper for the court to stop the accumulations unless the party entitled to the income so requires. Form in Which the Atlempted Restraint May Appear 489. The attempted restraint on use and enjoyment appears in several forms, and they all express the thought common to many over-fond parents, that their offspring should be protected from themselves and the world even after reaching the age of discretion prescribed by the law. The parent seeks to prolong the infancy of his child and keep him in leading- strings long after he is a man, and in order to accomplish this provides that the donee shall not come into the control or use of his property until he has reached some age, beyond twenty-one, such, for instance, as twenty-five, twenty-eight, thirty, or the like. This is the clause postponing enjoyment and is discussed in Chapter 21. The donor may, in his endeavor charity. The court held that the limi- void within the rule forbidding the cre- tation over could only take effect as an ation of restraints on enjoyments. executory devise, and was void as such ® Dictum, Penrose, J., in Rhodes’ Est., because within the rule against perpe- 147 Pa. 227 at 231 (1892); see this case tuities. This being a gift of property, it stated in §344, ante. is apprehended that the restriction was ® See Chap. 25 on Accumulations. 294 RESTRAINTS ON ENJOYMENT [—489, 490] to protect the donee from the consequences of his own stupid- ity and folly, put the property in the hands of trustees and endeavor to restrict the participation by the donee in the benefit of the property to the income which the trustees may pay him. This proviso presents the case of a trust of an absolute interest and is discussed in Chapter 22. An attempt may also be made in the case of a trust to limit the benefit which the cestui que trust may receive to such extent only as the trustees may, in the discretion vested in them, think fit to give him. This is a clause of discretion in the trustee and is discussed in Chapter 23. Conditions in Restraint of Marriage 490. The case of a condition or clause of restraint on mar- riage depends on a somewhat different principle. The act sought to be restrained has nothing to do with the use and enjoyment of the property. The donor wishes to prevent the commission of a certain act, and in order to accomplish that purpose imposes on the gift a clause which deprives the donee of the property when the act specified takes place. The pro- priety of the restraint, from the point of view of public policy, depends, it is apprehended, on the nature of the act sought to be restrained.’® 40 For a recent case involving a con- _ brook’s Est., 213 Pa. 93 (1905). dition in restraint of marriage see Hol- (295) CHAPTER 21 POSTPONEMENT OF ENJOYMENT Preliminary discussion...............0 0c cece cece eee e en eeeee wee. §495 Kay 0s: SéateSin davda vers seca a aes eheweaa be heen we tame wea §496 McCullough v. Fenton........... 00... cece eee eee ee §497 Butler-v:. Butler. 8 enh cusirnaia daca wasn Makan we Deedes. Bb ee §498 McCall’s Appeal s.occca. caus ceria ineteoaeee eee yates ees eee des §499 Varner's: Appealisis csi tecance gta Ge Seas ewe ae me aS §500 Eberly’s Appeal........... Soba ai Aaphus- ata erate nine ems hats ait er ead tae §502 Shalleross’s; Estates ov.s2ede ssises eas seve yawns de nee ee eae ee §503 Hallowell’s Estate........... 0.2... cece cence eee eee enes §504 Summary of Pennsylvania decisions and statement of the law... §505 Gift contingent upon the arrival at a certain age.............., §506 Postponement: fOr @ Class. 6.06 ou sec cacao san cease eae ee §507 Consequences of upholding the clause of postponement.......... §508 Preliminary Discussion 495. One of the most frequent forms in which the attempt to impose a restriction on the use and enjoyment of property appears, is the clause postponing the time of payment beyond the arrival of the donee at the age of twenty-one.’ Such a clause is utterly void at common law,’ and the donee can have the property upon arriving at twenty-one, notwithstanding the direction. While this is the admitted principle of the common law, the matter is in doubt in Pennsylvania. The cases will now be discussed. 1 See §489, ante. et seq.; Restraints on Alien., 2 ed. ? Gray, Rule Perp., 2 ed. (1906), §118a, (1895), §§112a-114. 296 POSTPONEMENT OF ENJOYMENT [496-498— ] Kay v. Scates 496. In Kay v. Scates® the exact words of the will, unfor- tunately, are not given. The court expressly refused to decree a conveyance asked for by a cestui que trust who had not arrived at the age of twenty-five years. Mr. Justice Strong said,* “It is true that two of the complainants have not yet arrived at the age of twenty-five, and until then the testator has postponed their full enjoyment of the income of the property. Until then a discretion is given to the trustees to determine what amount they shall receive. The full right to a present beneficial enjoyment is not yet theirs. But when they shall reach that age, they will stand in the same position with their brother, the other complainant.”® The remarks of the judge were dicta, as the two sons who had not reached twenty-five did not ask for a conveyance. McCullough v. Fenton 497. In McCullough v. Fenton® the testator gave all his real estate to his two sons, John and Elijah, “as hereafter limited, that is to say, as soon as Elijah arrives at twenty- two years, they shall have full possession and not sooner,” with a further proviso that if John or Elijah should die with- out lawful issue before coming into possession of the land, then their share of the land should go to X., et al. Elijah died under twenty-two. It was held that he took a vested fee simple estate in the moiety of the land which was divested by his death under twenty-two without issue, and which went over to X., et al. in fee simple. This case, there- fore, is not an authority for the validity of the clause. Butler v. Butler 498. In Butler v. Butler’ there was a gift in trust to hold and invest until a son should arrive at the age of twenty- eight years. The son attained the age of twenty-one, and 3 37 Pa. 31 (1860). + At p. 39; the reporter at top of p. 32 five. There were, therefore, in this case, two provisions restraining the absolute says the age specified was twenty-six. *It seems that the discretion was not as to payment at twenty-five but as to the amount to be advanced to each cestui que trust until reaching twenty- use of the property. As to the clause of discretion, see §537, post. ® 65 Pa. 418 (1870). 79 Phila. 269 (1873), Supreme Court at Nisi Prius. [—498-502—] POSTPONEMENT OF ENJOYMENT 297 applied by bill in equity to have the trust estate transferred to him. The bill was dismissed as to the principal, Sharswood, J., saying in a very short and unsatisfactory opinion that the trust until twenty-eight was lawful and must be sustained.® This is a square decision in favor of the validity of the clause. McCall's Appeal 499. In McCall’s Appeal® there was a trust of $2,000 to pay the income to A. for life, and, upon his decease, to B. until he, B., arrived at twenty-five years, and on his arriving at twenty-five years, to pay him the whole principal with the accumulations, with a limitation over on B.’s death under twenty-five without issue. B. was thirty-one years old at the death of the testator. B. died at the age of thirty-seven, living A. A. then died, and the principal of the trust fund was claimed by the executors of B. and by the parties entitled under the limitation over upon the death of B. under twenty- five. It was held that B. took a vested estate, and that the fund should be awarded to his executors. If A. died, living B. under twenty-five, the question would have been raised as to the validity of the clause of postponement. Varner’s Appeal 500. In Varner’s Appeal’? the gift was in trust to pay the income to A. until she should arrive at the age of twenty-five years, and then convey the principal to her absolutely: The case came up on partition proceedings, A. being a minor, and the court awarded her share to her trustees and not to her personally, saying that she had not attained the age when she would be entitled to take the property out of the hands of her trustees. It does not appear, therefore, whether the court thought twenty-one was that age or whether they would sustain the trust until she reached twenty-five. Eberly’s Appeal 502. In Eberly’s Appeal! the testator bequeathed his residuary estate upon trust for his son, directing the trustee to educate the 8 See also remarks of Thayer, J., in Di- 10 87 Pa. 422 (1878). mond v. Dimond, 9 Phila. 215 (1874). 1110 Pa. 95 (1885). 9 86 Pa. 254 (1878). 298 POSTPONEMENT OF ENJOYMENT [—502-504—] son during minority; and on his arriving at majority, to pay him $500 a year until he reached twenty-five, and then, in the discretion of the trustee, if the son was competent, etc., to pay the son the principal; if not, to pay him $500 a year during his life, and upon his death to pay the principal to his heirs. The son upon reaching twenty-one applied only for the accumulations of income? and no question was raised as to the validity of the clause postponing payment of the principal until twenty-five. Shallcross’s Estate 503. In Shallcross’s Estate* the testatrix gave one-half of her residuary estate in trust for the minor children of a son, naming them, until they should respectively arrive at lawful age, and, by a codicil, directed that the property should be held in trust until they should severally arrive at twenty-five years. It appears from the opinion of Potter, J., in the Su- preme Court, that one of the children died at the age of twenty-two, and that her share of the estate was claimed by her next of kin under the intestate laws. The decree of the court below awarding this share to them was affirmed on ap- peal. If this was all there was in the case the remarks of the court as to postponement of enjoyment were dicta, as, apart from the clause, the interest was vested, and upon death under the age prescribed the legacy is to be paid to the personal representatives. Mr. Justice Potter said that the subsequent provision of the codicil postponing enjoyment until twenty-five was void as contrary to the rule against perpetu- ities, and then said that the desire of the testator to post- pone payment until attaining twenty-five was against the rule of public policy forbidding restraints on the use or disposition of property in which no one but the beneficiary has any interest, a confusion of the two rules totally unnecessary but often made. Hallowell’s Estate 504. In Hallowell’s Estate * the testator gave what the court 2 See §663, post, as to this point. 4200 Pa. 122 (1901). 3 This case amounted to a limitation 5 See Middleton’s Est., 212 Pa. 119 over to the heirs of the son after the trus- (1905). tee refused to exercise the discretion in § 33 Pa. C. C. 596 (1906), s.c. 16D. R. favor of the son as to the principal, as to 17. which see §537, post. [—504, 505—] POSTPONEMENT OF ENJOYMENT 299 construed to be a direct gift of one hundred dollars, with a postponement of the time of payment to twenty-five years. The legatee having reached the age of twenty-one, but not the age of twenty-five, petitioned for an order on the executor to forthwith pay over the legacy. The court made the order prayed for. Lamorelle, J., delivered the opinion and cited Shallcross’s Estate,’ without observing that the remarks in that case were dicta. The case of Butler v. Butler * apparently was not called to the attention of the court. This case is in strict conformity with the common law principle, and is prob- ably the only case in Pennsylvania, excepting Butler v. Butler, squarely deciding the point. Pennsylvania Law as to Validity of Clause of Postponement 505. It appears from these cases that the law in Pennsyl- vania is in considerable doubt. The validity of the clause of postponement beyond twenty-one is strongly supported by the dictum in Kay v. Scates,? and by the express decision in Butler v. Butler,’° and Varner’s Appeal™ is doubtful. McCul- lough v. Fenton,’ McCall’s Appeal? and Eberly’s Appeal? can all be explained on other grounds and none of them support the validity of the clause. In a number of other cases cited in the note the clause was present, but no question as to its validity was raised, and it seems to have been acquiesced in as valid. The dictum in Shallcross’s Appeal® is directly in accordance with the common law and is supported by an earlier dictum.* The point is squarely ruled in favor of the 7200 Pa. 122 (1901), stated §503, ante. 8 9 Phila. 269 (1873), stated §498, ante. ® 37 Pa. 31 (1860), stated §496, ante. 10 9 Phila. 269 (1873), stated §498, ante. 11§7 Pa. 422 (1878), stated §500, ante. 165 Pa. 418 (1870), stated §497, ante. 2 86 Pa. 254 (1878), stated §499, ante. 3110 Pa. 95 (1885), stated §502, ante. 4In Doebler’s App., 64 Pa. 9 (1870), there was a proviso postponing the pos- session by the son until twenty-two. The son had passed twenty-two so the point was not raised for decision. In Quin’s Est., 144 Pa. 444 (1891), there was a di- rection to distribute at twenty-five end at thirty; there was a clause as to twenty-five and thirty years in Handy’s Est., 167 Pa. 552 (1895); in Markle’s Est., 187 Pa. 639 (1898), there was a trust to pay the principal to the bene- ficiaries on arriving at the age of forty years. For « case of uw direction to accumulate until twenty-three, see Vastine’s Est., 190 Pa. 443 (1889). 5 200 Pa. 122 (1901), stated §503, ante. ® Lowrie, J., in Phila. v. Girard’s Heirs, 45 Pa. 9 at 27 (1863), citing with approv- al those cases where a vested legacy was given an infant, with a trust for accu- mulation until he should reach twenty- five or other over-age period, and in which it was held that such direction was void for all beyond lawful age, as repugnant to the interests given. 300 POSTPONEMENT OF ENJOYMENT = [—505-507—] common law principle for the first time in Hallowell’s Estate.’ In this condition of the authorities, particularly in view of the earlier decisions, it is impossible to venture any definite statement as to the law. On principle the clause is unquestionably void. Gijt Over Contingent Upon Arrival at a Certain Age 506. If the gift is contingent upon the arrival of the donee or a third person at the required age the rule does not apply. The proviso in such case is not a postponement of the enjoy- ment by the donee of his interest because he has no interest until the condition precedent has been fulfilled.* It is often a difficult question of construction to determine whether there is a vested or a contingent gift.° A proviso divesting the estate upon the arrival of the donee or a third person at a certain age is valid. In like manner, the testator may make a legacy payable at a certain time in the future, and if the gift is contingent, on the arrival of the time it is valid, pro- viding it does not violate the rule against perpetuities, even though the devisee reaches twenty-one before the time fixed.’ This is the same as the case of a gift of the whole property upon arriving at a certain age. Such cases are rare, except when the subject matter is personal property. Postponement for a Class 507. The donee must have the sole interest in the property in order that he may disregard the clause of postponement. It is a principle of the common law that any clause of post- ponement is valid when the clause is in favor of another interest. It may be that this idea was introduced into the law by the peculiar doctrines which governed the vested remainder. A vested remainder is an interest vested in _prae- 733 Pa. C. C. 596 (1906); s.c. 16 D. R. 17, stated §504, ante 8 For example, a gift to A. when B., a living person, shall arrive at the age of twenty-five; item 5, of will in Conrow’s App., 3 Penny. 356 at 357 (1883). ® The provisions of the will and codicil in Hallowell’s Est., 33 Pa. C. C. R. 596 (1906), s. c. 16 D. R. 17, illustrate this question of construction. 10 For example, a gift to A. in fee, and when B.,a living person, shall arrive at twenty-five years, to X. in fee. To A. until he shall arrive at twenty-five years, then to C. and his heirs. 1 Hemphill v. Hurford, 3 W. & S. 216 (1842). [—507, 508] POSTPONEMENT OF ENJOYMENT 301 senti, but with the right of enjoyment postponed until the termination of the preceding estate. The common case of a remainder to a class is another instance of the application of this principle. The gift to each member of the class is post- poned in enjoyment until the class closes, which postponement is valid, as the class may increase, and thus other interests may be introduced.” Consequences of Upholding the Validity Clause of Postponement 508. If the Supreme Court should ignore the dictum in Shallcross’s Estate, and revert to the law laid down in Butler v. Butler,* several questions will arise. For how long is the clause of postponement valid? Will the court adopt the period prescribed by the rule against perpetuities, and, if they do, from what time will the period begin to run,—from the time of the creation of the interest, or from the time of the arrival of the donee at twenty-one, or from the time fixed for the payment? This involves the same question discussed at another point.® ? For a consideration of this doctrine in 3200 Pa. 122 (1903), stated §503, ante. connection with the application of the 49 Phila. 269 (1873), stated §498, ante. rule against perpetuities, see §449, ante. 5 See §526, post. (302) (303) CHAPTER 22 TRUST OF AN ABSOLUTE INTEREST Preliminary discussion...........0 00.00 eee c eee eee ence nee aes §515 General. ‘principles... sscyedes agave canes ev ense caves aera? §516 Law in Pennsylvania Preliminary discussion............. 0.0000 c cece eee cece een aes §517 Boies” Hs tateses aia vig actianls suiantieae ian mean Salles kee wee danas §518 Horebs's!: Hstates va es ia diate 0458 cneeh ten ddaacuns 4-da daub Ua egoon sdk §519 Hrant2 =O. Racers cuito ashy. peswa tee ie an Ga ar Swetalseeun §520 King's: Mstates adic ss2cn sacs an eightoaworwn seule Meaat that the testator had explicitly disclaimed the intention of giving the estate to the children by declaring that they could enjoy the interest only and in no way dimin- ish the principal, and the fact that there was no limitation over of the principal was insufficient to control the quantum of the estate in the cestui que trust.* The learned judge then relied on the fallacy that the creation of a trust furnished a basis for an inference of an intention to cut down the abso- 4 On the ground, as stated by the learned judge in the Supreme Court, at p. 300, that the trust was dry or executed. This lan- guage is pertinent only in considering the application or non-application of the stat- ute of uses. Unfortunately the report is silent as to the nature of the subject matter of the trust. The right of the cestui que trust to have the legal title does not depend on the fact that the trust is dry, but on the fact that he has an abso- lute interest, and when he has that, the activity of the trust is immaterial. See the language of the learned judge on pp. 301 and 303. 5 This was too plain forcomment. The question was whether the intention could be carried out. 6 The learned judge said, at p. 3038, “We concede the rule invoked by the ap- pellants that a gift of the income of an estate with no limitation over of the prin- cipal is an absolute gift of the property or fund itself. Its application, however, in any particular instance, necessarily de- pends upon the fact whether the testator has employed language in » subsequent part of his will which renders the rule in- operative. Such is the case here.” This statement begs the question at issue, be- cause the point is that the rule applies where there is no gift over of the principal and its application cannot be evaded by any intention of the testator that it shall not apply, but only by some words limit- ing the principal over. Its non-application, therefore, cannot depend upon whether the testator has employed language in the subsequent part of his will which renders the rule inoperative, unless that language amounts to a limitation over of the prin- cipal, and that there is no such limitation is the premise on which the learned judge founds his reasoning. 310 lute estate,’ and also on the closes an intention to create a TRUST OF AN ABSOLUTE INTEREST [—522—] notion that such a trust dis- spendthrift trust.* It is appre- 7 This notion, it is believed, has eprung from a misunderstanding of a well-settled principle of construction, which, however, is to be applied to a state of affairs other than that presented by the creation of a trust. The principle in question is well stated in Jarman, Wills, 6th Amer. ed. (1893,) Vol. I, Chap. 15, p. 473, as follows: “Gf a testator in one part of his will gives to a person an estate of inheritance in lands or an absolute interest in person- alty, and in subsequent passages unequiv- ocally shows that he means the devise or legatee to take a life interest only, the prior gift is restricted accordingly.” This is the passage quoted by Mr. Justice Strong in Sheets’ Est., 52 Pa. 257 at 263 (1866). What the doctrine means is this: on the whole will it appears that the tes- tator did not intend to give a fee, because his intention to give a fee, although dis- closed at one point, is counteracted by a subsequently disclosed intention to give a less estate, and therefore, on the whole will, it must be said that a less estate only is devised. The rule has reference only to a case where there is a repugnancy or inconsistency in the provisions of the will. No such repugnancy is presented by the creation of a trust; Agnew, J., in Ivory v. Burns, 56 Pa. 300 at 304 (1867), said, “A trust is not contradictory to the estate, but » mere qualification of its use, and only establishes a new and consistent re- lation but does not cut down the fee sim- ple which was granted.” See also lan- guage of Clark, J., in Shalters v. Ladd, 141 Pa. 349 at 357 (1891); Bellas’s Est., 176 Pa. 221 (1896). Jeremy’s Est., 178 Pa. 477 (1896). The first trace of this fallacy which has been found is in Nevins’s Est., 192 Pa. 258 (1899). In that case the testatrix gave real and personal property in trust, with separate provisions as to the real estate and personal property. The provision as to real estate was ambiguous. As to the personal property, there was a plain life estate. The court said, in an opinion by Mitchell, J., that the limitation of the interest in personal property to a life estate indicated an intention that the interest in the real estate should also be a life estate, and that, therefore, the Act of 1833 did not apply, there being other words in the will which indicated an in- tention to pass an estate less than a fee. The learned judge, in delivering the opinion of the court at p. 261, said, “The first notable observation on this clause is that there is no direct gift at all to the de- visee, but only a devise in trust for her. While not in itself conclusive, this sug- gests at once an intent not to give the fee, else why interpose a trust? The most ignorant property-owner knows the dif- ference between owning a house himself and having the use of it under a trust, and if this testatrix meant to give the full ownership in fee, there is no purpose dis- closed in her will which should have pre- vented the easiest and most natural way of doing it by direct gift.” There is, it is true, a practical difference between an estate in trust and an estate at law, which practical difference lies in the necessity, on the part of the cestui que trust, of deal- ing with the trustee. The difference, how- ever, does not lie in the quantum of the estate. Perhaps the learned judge had in mind the thought that a trust would of itself be a bar to the cestui que trust’s ob- taining complete possession of the prop- erty when he had a fee simple estate, or, in other words, that a trust of a fee was valid. The same estates may be created in equity as at law. There is no differ- ence in the quantum of the estate between legal and equitable limitations. It is difficult, therefore, to see how there can be any inference drawn as to the quantum of the estate from the circumstance that the limitation is equitable instead of legal. 8 As to this point, see §276, ante. [522, 523—] TRUST OF AN ABSOLUTE INTEREST 311 hended that the real point in the case was this: did the testator intend to give a life estate to the children for whom he created the trust, or did he intend to give a fee and make a trust of that fee for life? It is submitted that the plain import of the words was that the children should have an absolute estate, and that the direction that they should enjoy the income only was utterly void as a restraint on that estate. The only escape from the dilemma was the conclusion that the children took life estates. Did they take life estates? It appeared that the testator left other children. If, therefore, these particular children only took life estates, there would be a resulting trust of the principal after their death to the heir at law or next of kin, which would result necessarily in in- creasing the share of the other children. As the testator plainly indicated that all his children should share equally, it is submitted that a construction giving these children a life estate does far more violence to the intention of the testator than would a construction giving them their shares absolutely. This case follows closely the principle laid down in Krebs’s Estate,® sustaining a trust of an absolute interest against the will of the cestui que trust.’ Spring’s Estate 523. In Spring’s Estate’ the testatrix gave a part of the residue of her estate to the children of a deceased daughter, naming them, their heirs and assigns forever, subject to cer- tain conditions; then followed a proviso appointing a trustee as to these shares; the trustee to have the sole control to collect the income and pay thereout, at her discretion, to the beneficiaries, such sums as she might think necessary, with power in the trustee to terminate the trust as to any one or all of the beneficiaries, at such time as she might think it to the best interest of the beneficiaries or their heirs, with no limitation over of the principal. One of the grand- children of the decedent, having attained the age of twenty- one, presented a petition to have the trusts of the will declared ®184 Pa, 222 (1898), stated §519, ante. 1216 Pa. 529 (1907). As to the ques- 10 There was a petition for a citation in tion of accumulations in this case, eee the same estate, the nature of whichis not §677, post. stated, in Shower’s Est., 30 Pa. C. C. 601 (1904), in which, apparently, w similar question was raised. 312 TRUST OF AN ABSOLUTE INTEREST [—523, 524—] at an end. The Supreme Court held that the petition should be dismissed. The decision was clearly correct, as there were several cestuis que trustent, and the trust could not be ter- minated unless all united in the application. This ground of decision was overlooked by the Supreme Court, and Mr. Justice Elkin, in delivering the opinion, rested the case on grounds which tend to sustain the proposition that the cestui que trust cannot terminate a trust of property in which he alone has an absolute interest. The learned judge said that it was the un- questioned law of the state that a benefactor has power to restrict the enjoyment of his bounty through the medium of a trustee during the life of a beneficiary, citing Rife v. Geyer.’ Law in Pennsylvania as to the Validity of a Trust of an Absolute Interest 524. It appears, therefore, that the overwhelming weight of authority sustains the proposition that where the cestui que trust is the only person interested and is entitled to the entire property he can terminate any trust thereof which may have been created.* There appears to have been a vague notion to the contrary cropping out in some of the cases as far back as 1853,° and culminating in the dictum in Boies’ Estate. In Krebs’s Estate’ it was first decided that a trust of an absolute interest was valid as against the cestui que trust. In this case it is to be observed that the Supreme Court affirmed the opinion of the court below without discussion, and that the learned judge of the court below was unable to cite any authority in favor of the proposition which he laid down. Frantz v. Race,® King’s Estate® and Spring’s Estate,’° although tending to suport the principle laid down in Krebs’s Estate, can all be explained on other grounds. Shower’s Estate,"! however, reaffirms the In doctrine of Krebs’s Estate. 259 Pa. 393 (1868). This case not in point, as it only decides that a clause against involuntary alienation prevents the operation of the statute of uses; see 8131, ante. If the learned judge meant to say that a trust of a life estate could be created, he was correct, but his language gives the impression that an absolute gift may be tied up for the life of the first taker, for which proposition the case cited is not an authority. The proposition is sus- tained by Krebs’s Est., 184 Pa. 222(1898), stated §519, ante; see also Calhoun’s Est., 34 Pa. C. C., 555 (1907), accord. 4 See §517, ante. 5 See §518, u. 8, ante. 6177 Pa. 190 (1896), stated §518, ante. 7184 Pa. 222 (1898), stated §519, ante. 8 205 Pa. 150 (1903), stated §520, ante. © 210 Pa. 435 (1904), stated §521, ante. 10 216 Pa. 529 (1907), stated $523, ante. 11911 Pa. 297 (1905), stated §522, ante. [—524-526—] TRUST OF AN ABSOLUTE INTEREST 313 none of these cases did the Supreme Court notice the earlier authorities in Pennsylvania and the court has obviously been influenced by an undue weight given to the self-evident propo- sition that a man may do with his own property anything which is lawful,’ and also by the fallacy that putting an estate in trust indicates an intention to cut down the fee.2 How- ever objectionable on principle, it must be concluded under these cases that it is the law in Pennsylvania that a donor may fetter an absolute gift with a trust, with the question open as to the period of time during which the trust may subsist. It is perhaps not too much to hope that the Supreme Court will overrule these unfortunate decisions and return to the sounder doctrine of the common law. The Real Question Involved 525. It is of no importance that the settlor intended to create a trust of a fee, nor is it material that he vested active duties in the trustees. There is no room for controversy in these cases that such was the intention of the donor; the specific question is whether his intent can prevail as against the principle of law. The question is not whether the donor intended to create a valid trust,‘ but whether the trust which he has created is valid; not whether the donor can create a trust of an absolute interest, but whether the trust of an absolute interest which he has created can remain as against the objection of the cestui que trust. The preliminary ques- tion is one of construction; it is necessary to determine what is the nature of the estate which is given to the cestui que trust, and it is important to remember that he can take only a fee, a life estate or an estate for years, and the court cannot by any course of reasoning give the gift any other effect. Consequences of Upholding the Trust of an Absolute Interest 526. If the court means to adhere to the doctrine that a trust of an absolute interest is valid as against the cestui que trust, the further question will arise: for how long will 1 Elkin, J., in Spring’s Est., 216 Pa. 529 3 Confer §§243, 254, ante. at 533 (1907). For a discusssion of this 4See remarks of Hanna, P. J., in proposition, see §2, ante. Wright’s Est., 28 Pa. C. C. 540 at 541 2 For a discussion of this fallacy, see (1903). §522, n. 7, ante. 314 TRUST OF AN ABSOLUTE INTEREST [—526] the trust be upheld?® Will a period similar to that pre- scribed by the rule against perpetuities be adopted? If so, from what time will the prescribed period commence to run? These are questions of no small difficulty, and their solution will require litigation, which the court can easily save the people of the commonwealth by adhering to the safe path of the common law, and overruling Krebs’s Estate’ and Shower’s Estate ® at the first opportunity. ®See 19 Harv. Law Rev. 598 at 603 7184 Pa. 222 (1898), stated $519, ante. (1906). 8 211 Pa. 297 (1905), stated §522, ante. (315) CHAPTER 23 DISCRETION Preliminary discussion............0 00.0.0 cece eee eee eee eves §530 Definition of legal discretion...............0 0000 c cece cece eee ee §531 Definition of an absolute discretion...............00 0.0 cece e eee §532 Distinction between discretion as a condition precedent and dis- cretion as to a vested interest.............0.00 cece cee eeeeeee §533 Legal discretion as to principal Preliminary discussion............. 0.000: ec cee ce eee eee eves §534 Erisman v. Directors of the Poor................00.c0eeeee §535 Baeder’s Estate. cific aaus ws haodwda«acaeanied An edne we evans §536 Absolute discretion as to principal Preliminary” discussion o-.006 sss auesu ad Se ays Ginko ier Wes §537 Marshall's: Estate ssi sce xa ae av oins mati fue tian cad Be pba §538 Discretion where cestui que trust has entire interest............. §539 Discretion as to income Preliminary discussion............0. 0.0 ccc cece e cece cece nes §540 Donohue v. MecNichol............ 000.000 e cece cece eens §542 Keyser; Mitchell iiss coguves ndings senate pe BEE RG oe See §543 Hay: 05< Price gcc oe'ex gvuws ae da ee peer eee ewes Meee ak eet §544 Summary and statement of the law....................005 §545 Preliminary Discussion 530. A trustee is subject to the control of the chancellor in the exercise of the power which he _ possesses, whether inherent or special.! A discretion, as we have seen,” leaves the doing of the act to the personal judgment of the trustee, and to that extent liberates him from the control of the court. 1 See §153, ante, et seq., for a discussion 2 See §158, ante. of powers in a trustee. 316 DISCRETION [—530-533—] Discretionary powers as to the legal title have no effect on the interest of the cestui que trust. They fall when the trust ter- minates and are of no importance in the present discussion.* Where, however, the discretion is as to the doing of an act affecting the equitable interest, a different question presents itself. If the exercise of the discretion involves the substitu- tion of another equitable interest, it seems unobjectionable except in so far as the rule against perpetuities is concerned.* If no one else can have any benefit under the discretion, its exercise may be a restraint on the equitable estate of the cestui que trust, and void at his instance as violating the rule forbidding restraints on enjoyment. This is the particular point to be examined in this chapter. The matter has, how- ever, been very little discussed by the text writers, and there is a great dearth of authority on the subject. Legal Discretion 531. The discretion is said to be legal when the trustee is authorized to exercise the discretion if certain specified cir- cumstances exist. The court will judge whether the facts are in existence, and if they are, the trustee will be compelled to exercise the discretion. If the facts do not exist the chan- cellor ordinarily will not interfere. Absolute Discretion 532. An absolute discretion is said to exist when the doing of something with respect to the trust property is left to the sole discretion of the trustee, without reference to any extrin- sic circumstances. In such case the discretion cannot be inter- fered with unless its exercise amounts to a restraint on the use and enjoyment by the cestui que trust of his equitable estate. Distinclion Between Discretion as a Condition Precedent and Discretion as to a Vested Interest 533. One further distinction remains to be noticed: the exercise of the discretion may be a condition precedent to the 3 See §§415-436, ante, for a discussion 4 For the application of the rule against of these powers and the application of the perpetuities, see §§411-413, ante. rule against perpetuities. [—533-535—] DISCRETION 317 vesting of the interest or it may be a discretion exercisable as to an interest already vested. In the first case the validity of the interest taking effect undex the discretion is determined by the application of the rule against perpetuities.® In the second case the donee of the interest may or may not be able to interfere with the exercise of the discretion, according to whether the rule forbidding restraints on enjoyment applies or not. Legal Discretion as to Principal 534. Legal discretion with reference to principal usually appears in the form of a clause giving the trustee discretion to make advances out of the principal to the life tenant if certain extrinsic circumstances exist. While such a clause is of fre- quent occurrence,® cases in which any question as to the force and effect of the discretion is involved are rare. Since the principal belongs to the remainderman, the failure of the trustee to exercise the discretion in favor of the life cestui que trust does not violate the rule forbidding restraints on enjoy- ment. The discretion simply involves a change of equitable beneficiaries. The life tenant must make out a case showing that the necessity exists if he wishes to compel the exercise of the discretion by the trustee. Erisman v. Directors of the Poor 635. In Erisman v. Directors of the Poor’ a testator gave a portion of the residue of his estate in. trust for the use of Lydia, a married woman, directing the trustee to hold the same in trust during her life and from time to time to “apply the interest arising thereby for the purchasing and payment of such necessaries of life as he may think right and proper, but such trustees shall only be allowed to apply any principal if urgent necessity should require, and in no case shall be allowed to pay any debts contracted by said Lydia or her husband,” and after her death to divide what remains among the chil- dren of Lydia. Lydia was declared a lunatic, and an action was brought by the Directors of the Poor against the trustees 5 For a discussion of this point, see Clark’s Est., 134 Pa. 140 (1890); Yetter’s §§411-413, ante. Est., 160 Pa. 506 (1894); Stiles v. Bank, 6 For instances of the clause, see Goche- 33 Super. Ct. 57 (1907); Jones’s Est., 28 nauer v. Froelich, 8 Watts, 19 (1839); Pa. C. C., 293 (1903), s. c. 12 D. R. 113. Eberly’s App., 110 Pa. 95, (1885), 747 Pa. 509 (1864). 318 DISCRETION [—535, 536] to recover the money they had paid out for her support in the Pennsylvania Hospital. It was held that they could re- cover out of principal and income. Thompson, J., in the Supreme Court,® said, “The objection that this dispenses with the discretion of the trustee has no merit. His discretion is but a legal one, and whenever the law determines that a proper case has arisen in which the trustee’s discretion should have been exercised in a particular way, he will be constrained to act in accordance therewith.’® Baeder’s Estate 536. In Baeder’s Estate’® the testator divided his estate into as many shares as he had children, and as to the shares of the sons he directed his trustees to pay each of them five thousand dollars on attaining the age of twenty-one years, -and, on attaining the age of twenty-five, to advance an amount equal to one-half the son’s share, the power to be exercised as the trustee should deem proper, “looking to the habits, conditions and circumstances of my said sons _respec- tively.” The residue was to be held by the trustees, the income to be paid to the sons respectively, without liabilty, etc., and, upon the death of the sons, the share to be paid to their chil- dren, and in default of children, to pass under the will as if the sons had died before the testator. One of the sons passed the age of twenty-five without the half of his share having been advanced to him, and died, and a claim was made by his executors to have this one-half paid to them. The Supreme Court, in an opinion by Mitchell, J., held that the executor was entitled to the one-half of the share, because there was an absolute gift of the one-half to the son, with a clause giving the trustee discretion to withhold payment and add to the residue upon certain conditions, and as the trustees had not exercised that discretion affirmatively in the lifetime of the son, they could not do so now, the opportunity to judge of the circumstances having passed, as the son was dead. It is submitted, however, that since there was a gift over of the principal on the death of the son, the discretion was to be exercised against the remaindermen, and, therefore, until it was exercised the son took nothing. 8 At p. 514. Geiger’s Est., 24 Pa. C. C. 238 (1900), ® Dictum in Stewart v. Madden, 153 Pa. .c.9D.R. 457, accord. 445 at 448 (1893), stated §663, post; 10190 Pa. 606 (1899). (537, 538—] DISCRETION 319 Preliminary Discussion of Absolute Discretion as to Principal 537. An absolute discretion as to principal generally takes the same form as legal discretion, that is, a clause giving the trustee discretion to make advances out of the principal to the life tenants.” If the discretion is not exercised in such case, the money which should otherwise have been paid goes over to those entitled in remainder, and it is not necessary, where such disposition appears from the whole course of the settle- ment, for the settlor to expressly direct the trustee to add the sum which he did not pay to the life cestui que trust to principal, for it is already there.’ Since the discretion is absolute in this case it will not ordinarily be controlled by the court, and the life cestui que trust has no remedy if the trustee declines to exercise the discretion in his favor.’ Marshall's Estate 538. In Marshall’s Estate* the testator gave his estate to his executors in trust for the benefit of his children, making them all equal at twenty-one, and should any of them die without issue their interest should go to the survivors or heirs of his deceased children, with a clause giving the trustees power to give or withhold the corpus as they thought for the best interests of the children. An account of ‘the trustees being filed, the court below said that one of the questions presented was as to the duration of the trust under the will. It is presumed, although the report does not so state, that one of the children applied to have it terminated. On appeal, the Supreme Court held that the trust was active and did not terminate when the youngest child reached twenty-one. The court based the decision on the ground that as the trustees 11 For an example of such a discretion, see Ogden’s Est., 211 Pa. 247 (1905). 1 For a case where a trustee exercised his discretion and made advances out of the principal to the life tenant, see Beau- mont’s Est., 195 Pa. 1 (1900); the case arose on an attempt by those entitled in remainder to surcharge the trustee with advances he had made; see also Brubaker v. Huber, 13 Pa. C. C. 78 (1893), s. c. 2 D. R. 703; 10 Lanc. L. R. 99. 2? There may be an absolute discretion to divide the principal among the mem- bers of the class, and in such a case no one of the class can compel the exercise in his favor; McAllister’s Est., 15 D. R. 430 (1906). And if the absolute discretion is to apportion the principal, no one in remainder can compel the exercise of the discretion ; Barker’s Est., 159 Pa. 518 (1894), stated §239, ante. 3147 Pa. 77 (1892). This is the same will as was before the court in Marshall’s Est., 1388 Pa. 260 (1890). 320 [—538, 539—] DISCRETION had not exercised their discretionary powers to terminate the trust, it must still continue to be active at law. However, as there was a limitation over of the principal, in the event of the death of the child without issue, to the heirs or children, the decision may be sustained on the ground that in the event of the non-exercise of the discretion, the share in the principal would go over to a third person. The court said that the effect of the will was to give the children life estates only, with discretionary powers in the trustee to end the trust sooner. The language of the court is not altogether clear, and lends countenance to the view that a trust of an absolute interest with discretion is valid.‘ Where the Cestui Que Trust Has the Entire Interest 539. A discretion, whether legal or absolute, as to property in which the cestui que trust has the entire interest, is void on principle as a restraint on the use and enjoyment of the property. No case exactly involving this point appears to have come before the Supreme Court. The usual case of this re- straint is that of a trust of an absolute interest, which is discussed in another chapter,> and the question as to discre- tion comes up in the shape of a clause giving the trustee dis- cretion to terminate the trust. If a trust of an absolute interest cannot remain against the objection of the cestui que trust,’ a fortiori a discretion in the trustee to terminate the trust will be void. In several cases the cestui que trust was permitted to terminate the trust, notwithstanding the discre- tion.® The point has not come before the court since the decisions in the recent cases apparently supporting the validity of a trust of an absolute interest.! In Millard’s Appeal,’ where there was a discretion in the trustee as to the payment of the principal to the cestui que trust, it was held that the trustee was liable to the administrator of the cestui que trust for the balance of the principal not paid to the latter in his lifetime. 4 For a further discussion of this point, see §524, ante. 5 See Chap. 22. ® See §413, ante, for the application of the rule against perpetuities. 7 For a discussion of this, see §524, ante. 8 Penna. Co. v. Price, 7 Phila. 465(1870) ; Willard v. Davis, 3 Penny. 86 (1882), sem- ble, for a case where the trustee termi- nated the trust under the discretion, see Mackrell v. Walker, 172 Pa. 154 (1895), stated §247, ante. 1 See §524, ante. 2 87 Pa. 457 (1878). [540—] DISCRETION 321 No case has been found raising the question of how far the cestui que trust can compel the exercise of the discretion in his favor. Preliminary Discussion of Discretion as to Income 540. The distinction between discretion as to income and discretion as to principal is this: where there is a discretion as to principal, there is no necessity to give the estate to any- one else upon the failure of an exercise of the discretion, for the exercise of the discretion takes the property away from the remainderman and gives it to the life tenant or some one else, and the failure to exercise the discretion leaves the property where it was. In the case of income, however, if the discre- tion is exercised against the life cestui que trust, there is no one else entitled to the income embraced in the discretion, unless there is an express gift thereof, if the discretion is exer- cised, to some one else. The trustee cannot keep it himself, and he cannot add it to the principal, because that would involve an accumulation.* The court must therefore either declare a result- ing trust of the property which is not paid to the life cestui que trust, or compel the trustee to apply it to the latter. It is appre- hended that in this case the exercise of the discretion will be a restraint on use and enjoyment by the cestui que trust, and he, therefore, can have the assistance of a court of equity to compel the trustee, notwithstanding the words of discretion, to pay the income to him.* Whenever, however, there is a gift over to some one else other than the remainderman, in the event of the exercise of the discretion, there is no restraint on the use and enjoyment by the cestui que trust of his equitable estate; the exercise of the discretion destroys his estate in whole or in part. In these cases there is a material dis- tinction between legal and absolute discretion. Where the discretion is legal, the cestui que trust can, on proof of the extrinsic circumstances, have the assistance of the chancellor. Where the discretion is absolute, he has no standing at all. No Pennsylvania case on this point has been found.® There are a number of cases in which there was a trust with an 3 See discussion of accumulation under 5 For an illustration of a legal discre- express discretion, §§671-678, post. tion to apportion income, see Smith’s Est., *Confer Gray, Restraints on Alien., 27 Super. Ct. 494 (1905). 2 ed. (1895), §§116-121. 322 DISCRETION [—540, 542] absolute discretion in the trustee as to income.* But few cases have been found in which the effect of the discretion on the interest of the cestui que trust has been passed on. These cases will now be noticed.’ Donohue v. McNichol 542. In Donohue v. McNichol® there was a gift in trust to pay a son, John, for life “such sum or sums of money as my said executor may deem proper, always allowing, however, my said son John a sufficient sum to support him respectably; and if my said son John becomes a sober, industrious man, it is my will and desire that he should receive the rents, issues and profits of all my real estate during his natural life,’ with limitations over at the death of John. John being dead and no question as to the life estate being before them, the court said, by way of dictum, in an opinion by Williams, J.,° that “It is clear that under the clause making provision for his support, the son took no interest or estate whatever in the real and personal property devised and bequeathed to the executor; and the amount he was to receive out of the personal property and net income of the real estate for his support was left to the discretion of the executor, subject to the restriction that it should be ‘a sum sufficient to support him respectably.’” This is a case of a legal discretion. The dictum should per- haps be referred to as showing the origin of the notion that the life cestui que trust has no interest when there is an abso- lute discretion in the trustee. This notion has arisen from a failure to observe the difficulty which is present in all these cases. There is a contradiction in the terms of the trust. There is, first, a gift of the life estate, and then a discretion which may defeat the life estate. Since no one else is inter- ested, the contradictory terms of settlement must be reconciled or one or the other must give way. It is apprehended that it is far better and more consistent with the design of the testator to enforce the life estate and ignore the discretion. The attempt to give effect to both is like an effort to blow hot and cold with the same breath. °R. g., Still v. Spear, 45 Pa. 168 » somewhat different footing and is (1863). valid. 7 Discretion as to income while the 861 Pa. 73 (1869). cestui que trust is a minor stands on ® At p. 77. [543] DISCRETION 323 Keyser v. Mitchell 543. In Keyser v. Mitchell’? the trust was “to pay the * * * income or so much thereof as the trustees may think proper and expedient, under all the circumstances of the case, to and for the maintenance and support of my son Charles during all the term of his natural life, with the intent and pur- pose that the said trustees may either pay the said income or such portion thereof as he may think proper into the hands of my said son, or disburse the same in such way as, to the said trustees, may seem best, for his comfortable support and maintenance, such payments and disbursements to be at all times at the sole and absolute discretion of the trustees.” It seems, although the report is obscure on this point, that Charles had only a life estate, and the principal went over. A judg- ment creditor of Charles sought to attach the income in the hands of the trustee. The court below held that the income was not liable to attachment, which, on appeal, was affirmed. Thompson, C. J.," in delivering the opinion of the court, said: “Tt was no doubt intended by the testator that a comfortable maintenance should be provided from the trust estate for her son, but that was to be in both amount and mode ‘at the sole and absolute discretion of the trustee.’ This is an express condition of a trust, and until that discretion has been exer- cised the cestui que trust has nothing. Hill on Trustees, 494- 495. In such case chancery will not interfere to control the trustees’ discretion.”” The passages quoted, however, hardly sus- tain the learned Chief Justice’s remarks. So long as there is no direction to pay to anyone else the discretion seems to be void as against the cestui que trust. The learned judge also said:' ‘“‘We cannot but regard this form of trust to be as effectual in guarding a trust and its income against the prod- igality of its beneficiary as would be a positive exclusion of creditors in the will of the donor.” Thisis a strong decision against the right of the cestui que trust to compel the exercise of the discretion in his favor.’ at 459 (1878); referred to by Woodward, J., in Huber’s App., 80 Pa., 348 at 358 10 67 Pa. 473 (1871). 1 At p. 477. 1 At p. 477. 2 The case has been approved by Haw- kins, P. J., in Krebs’s Est., 184 Pa. 222 at 225 (1898); stated §519, ante; Paxson, J., in Millard’s App., 87 Pa. 457 (1876) ,where the learned judge said:‘‘The extent and character of a devisee’s estate depend on the qualities stamped on it and the powers conferred over it by the tes- tator, and not alone in the parties in whom 324 DISCRETION [544, 545—] Hay v. Price 544, In Hay v. Price® Henry H. ‘Price conveyed all his property in trust, and inserted in the trust deed a provision that the trustee “will apply so much of said property, in- cluding the rents, issues and profits and the interest arising from said investments, according to his best judgment, for the proper care, comfortable support, maintenance and reason- able happiness of him, the said Henry Hamilton Price, during the whole period of natural life of him,” etc., followed by a clause prohibiting voluntary and involuntary alienation. The discretion applied both to the income and the principal, and there was a gift over of the principal remaining at the death of the grantor to the persons entitled after the death of Henry under the intestate laws. The trustee was garnisheed under a judgment against Henry. It did not appear whether the judgment was recovered on a debt contracted before or after the date of the deed. The court, in an opinion by Willson, P. J., held that the creditor could recover. The learned judge based the decision on Mackason’s Appeal,* and the provisions of the Statute of 13 Elizabeth. Of course, if the Statute of 13 Elizabeth applied, the whole settlement was void, and no question as to the discretion arose. If the Statute of 13 Elizabeth did not apply, the creditor could re- cover only on the ground that the discretion was void as against the cestui que trust and could be compelled by him, and, therefore, the creditor could, if the cestui que trust re- fused to act himself, compel the exercise of the discretion and recover the amount of his judgment. Statement of the Law as to Absolute Discretion as to Income 545. No statement can be ventured as to how far the ces- the title is formally vested.”” While the exact connection of the last phrase with what goes before is not clear, it is con- ceived that if the learned judge has been rightly understood, he has misapprehend- ed the point. The extent of the qualities of and power to be exercised with refer- .ence to an estate are established by law, and the estate which may be created is fur- ther limited and specified. The question as to which one of the estates the donee is to take is answered by the words of the gift. The question us to what he may do with that estate is answered by the law, and that law further says that any at- tempt by the donor to interfere with those legal incidents is void. See also remarks of Penrose, J., in Barker’s Est., 159 Pa. 518 at 525 (1894). 3 32 Pa. C. C., 197 (1906), s. ce. 15 D. R. 144, 4 42 Pa. 330 (1862). See §278, n. 7, ante. [—545] DISCRETION 325 tui que trust can compel the exercise of the absolute discre- tion in his favor, in those cases where there is an absolute dis- cretion as to the income, with no gift over to anyone else in the event of the exercise of the discretion. No Pennsylvania case has been found raising the question between the trustee and the cestui que trust. Where the rights of creditors are involved the court seems inclined to sustain the discretion. The doctrine that the discretion is valid against the cestui que trust cannot be accepted as thoroughly established until the court has sustained the exercise of the discretion against the cestui que trust and decided what disposition is to be made of the income retained by the trustee. (326) (327) PART V SPECIAL TOPICS Chap. 24. Married Women’s Trusts Chap. 25. Accumulations Chap. 26. Gifts to Charities (328) (329) CHAPTER 24 MARRIED WOMEN’S TRUSTS Preliminary discussion............ 00.000 cece cececeeeeeeenenes §554 Origin and definition Common law and marriage settlements...................... §555 Settlement by a third person..............0..0000 cece eee ee §556 Methods of creation in Pennsylvania..................0.0005. §557 The estate which may be subject to the trust............... §558 General definition of married women’s trustS................. §559 Language necessary to create General. principles.....4..64. i000 peu see se eerie uaensedeemermes §560 The notion that the Act of 1848 changed the law The: notion ‘stated sy: sacks cx wencsatsedeesuhaaees Bex eet §562 History of the notion............0.... 0... e eee eee §563 Objection to the notion...................... eee eee §564 Murray 0. LOWY Gi si.cc4 gate eee eee ee ed eg tek ck eons $565 The view that the Act of 1848 did not change the law.. §566 Statement of Pennsylvania law as to language necessary to CLCALC s toa 0s Se ShG Ses ewe wee aR eed eee es is we eae EAS §568 (Note collecting the authorities since the Act of 1848) Circumstances under which the law will give effect to the trust General statement of the circumstances necessary.........-.5 §570 Pennsylvania cases on the circumstances necessary to the validity of the clause............. cece evan aiteeelae iaeees §571 (330) Circumstances must exist at the time of making the gift.... §572 Contemplation by donor when the gift is made by third person Preliminary discussion.............. 0.0 0eeeeee eee cere §573 MeBridé: 0. ‘Stn ythisi i cacc caine ced ee onde tee Ree esas Bae §574 ‘Wells:-0,:(MeCalli 2 Gin cnet Gieaa du he Gs wa ee eY §575 Springer v. Arundel.......... 0.000000 cece eee eee eee §576 Statement of Pennsylvania law as to contemplation by GOnOR seca bie vate ea ea Rates Rees eee eee Sw §577 Objections to the doctrine that the donor must con- template the marriage..................0.0 cess eee §578 Executory trusts and contemplation by donor.......... §579 Clause of sole and separate use invalid on second marriage... §581 Where the sole and separate use clause cannot take effect and the trust is valid on other grounds................ §582 Effect of the clause Preliminary discusslon...... 020.000 sbeccse swt caeeee ea easeess §587 Power of the woman to deal with the equitable title The clause is a restraint on voluntary alienation Preliminary discussion................ 00 cece eee eee eee §588 Newlin: v.. Newitt. cc ccs vag koa e Valea 6 be buen a ee §589 Lancaster v.: Dolatie as sins unease ito den tie eal en welsh Reo Vs §590 (Note on Pennsylvania law as to voluntary alienation ) Mr. Gray’s remarks on power of alienation............ §591 Where the power to alienate is specially conferred..... §592 (Note collecting Pennsylvania cases on express power ) The clause is a restraint on involuntary alienation Preliminary discussion............ 2.0.0.0 cscs eee §593 Hay’s Estates: sexe seeews tas vedo se yese ee sereg ee sae es §594 Involuntary alienation when the trust is created by woman, herself secic04. ceca tote el acemiangcduee si iialeerauceas §595 Clause against anticipation Historical and general discussion.....................006. §596 Kirie’s:' “Hstat@ss.12s4yuies enna ise celindaaeme ye Shaw vedi §597 Rights and power of husband in the sole and separate use His power of control and liability for his debts.............. §599 (554, 555—] PRELIMINARY DISCUSSION 331 The right of the husband in the equitable title Real estate English chancery doctrine.............0.0 0.00 0cccceeeee §600 Pennsylvania law... 2.2.6... cece cece cece eee §601 Personal property........... 00.000 cece cee ceeeeeeveeeee. §602 Where the estate of the woman is subject to an executory CEVISE seen ioelm ihn enews emmy mye en ls A oon I §603 Summary of the law as to the rights of the husband..... §604 Author’s observations on the origin of the peculiar Pennsylvania doctrines relating to married women’s trusts Preliminary discussion..............000cce cc ceeeceeeeeeeuaes §605 Smithy Ot: StaPpcis; opens Seas peg e beats e- ae Gnotete Ee aees te §606 Hameérsléy 9, SMiths ac. scvseseceise cheies Cer agav delet asmdh cae s §607 Reasons assigned by the Supreme Court..................... §608 Preliminary Discussion 664. A trust for a married woman, sometimes called a sole and separate use,’ is, in the respects which will be noticed, a well-established exception to the rule forbidding the creation of restraints on alienation and the rule forbidding the imposition of restraints on use and enjoyment, but is not an exception to the rule against perpetuities. A trust for a married woman is peculiarly a relation under the protection of the court of chancery, and our discussion will be confined solely to equity. There are a number of special doctrines affecting the sole and separate use which obtain in Pennsylvania, and therefore it has been found necessary to devote a separate chapter to the consideration of the subject. Common Law and Marriage Settlements—Origin and Definition 555. At common law the husband acquired all his wife’s 1The phrase sole and separate use is, accurately speaking, applicable only in the case where there are no active duties and there is, therefore, a technical use. As to the application of the statute to such a case, see §129, ante. Since, how- ever, the sole and separate use is not exe- cuted by the statute of uses, there is prac- tically no distinction between that and an active trust, and, therefore, the terms sole and separate use and married woman’s trust are used interchangeably. 332 MARRIED WOMEN’S TRUSTS [—555] choses in action, which he reduced to possession during cover- ture, and became absolutely entitled to all her personal prop- erty and chattels real. He also acquired a qualified interest in all her freehold estates, which, if he had heritable issue by her, ripened into a joint estate for the lives of himself and _ his wife. He was also entitled, on her decease, to administer to all her personal estate. The law vested these rights in him in compensation for his liabilities for all his wife’s debts, and for the maintenance of the family. The practical result of this was that a woman’s property was often swept away after the marriage by the improvidence or creditors of her husband. Marriage settlements were invented in order to preserve the wife’s property from these common law incidents. These were agreements by which the woman, in contemplation of marriage, contracted with her intending husband that her property, in whole or in part, should be vested in trustees, to be enjoyed by her during marriage as her sole and separate property. These contracts were valid and enforced by the chancellor, the par- ties not being married, and the consideration good, the intend- ing husband waiving his rights in the woman’s property, and the woman conveying to the trustee.* Postnuptial settle- ments with a similar object came into use and were of like validity.® standing to set it aside during his life, be- cause she has no rights which are infringed 3 These common law incidents of the property of a married woman have been almost completely removed in Pennsyl- vania by the Acts of April 11, 1848, P. L. 536, §6; April 3, 1872, P. L. 35; June 3, 1887, P. L. 332; June 8, 1893, P. L. 344; May 25, 1897, P. L. 83, commonly known as the married woman’s property acts. * Perry on Trusts, 5th ed. (1899), Vol. 2, §625; see language of Gibson, C. J., in McKennan 2. Phillips, 6 Wharton, 571 at 576 (1828). 514 necessarily followed from these principles that a settlement, legal or equi- table, made by a woman on the eve of her marriage, without the consent of her in- tended husband, could be set aside by him at his pleasure; Duncan’s App., 43 Pa. 67 (1862); Robinson v. Buck, 71 Pa. 386 (1872). Where, however, the husband makes sucha settlement, his wife has no Coleman’s Est., 193 Pa. 605 (1899); Pot- ter v. The Trust Co., 199 Pa. 366 (1901). Where, however, she claims after his death, she can assert her dower right under the intestate law, as against the deed; Warner’s Est., 207 Pa. 580 (1904); dictum, Willson, J., in Potter v. Trust Co., 199 Pa. 366 (1901). Since under the married woman’s property acts, §555 n. 3, ante, the husband is deprived of his rights in his wife’s property during her life, and as his right to set aside her deed during that time was based upon the fact that it was in fraud of these rights, there seems to be no reason at the present time why he should have any greater rights than she has to his deed. This, however, is probably not the law; see Belt v. Ferguson, 3 Grant’s Cases, 289 (1859). [556, 557—] ORIGIN AND DEFINITION 333 Seitlements by Third Persons 556. When a third person settled property in trust for a married woman, free from the control of the husband, the case was different. The husband’s consent was absent, and it was argued with much force that such settlements were invalid as infringing the marital rights and they were accordingly for a long time held invalid. Without very much discussion, how- ever, their validity was finally sustained ® on the ground that it was competent for the donor in such a case to annex to the gift such terms as he saw fit and alter the form of trans- mission of the property so that the trustee should hold it for the separate use of the wife. This is the form in which a married woman’s trust is usually thought of in modern times. Methods of Creation in Pennsylvania 557. A sole and separate use may be created in Pennsyl- vania in any one of three ways: a prenuptial settlement,’ a postnuptial settlement,* and a settlement by a. third per- ® Harvey v. Harvey, 1 P. W. 125 (1710); Perry, Trusts, 5 ed. (1899) Vol. 2., §646. 7 Prenuptial settlement; Towers v. Hagner, 3 Whart. 48 (1837); Rogers v. Smith, 4 Pa. 93 (1846); Pratt v. McCaw- ley, 20 Pa. 264 (1853); Whichcote v. Lyle, 28 Pa. 73 (1857); Withington’s App., 32 Pa. 419 (1859); Renziehausen v. Keyser, 48 Pa. 351 (1864); Hughes-Hallett v. Hughes-Hallett, 152 Pa. 590 (1893). Hus- band may covenant with his intended wife that she shall have certain powers as to her property; Barnes, Lessee, v, Hart, 1 Yeates, 221 (1793); see also Gacken- bach v. Brouse, 4 W. & 8. 546 (1842); Birkbeck’s Est., 215 Pa. 323 (1906). A will executed by the woman before mar- “riage was held valid as antenuptial settle- ment in Lant’s App., 95 Pa. 279 (1880). To be distinguished from a case of ante- nuptial settlement, whereby the husband and wife relinquished their respective rights in each other’s estates; for case of which see Warner’s Est., 207 Pa. 580 (1904). And from a _ postnuptial agreement, to live apart and relinquish all claims to each other’s estate; for exam- ple of which see McKennan »v. Phillips, 6 Whart. 571 (1828). 8 Postnuptial settlement: Wife’s prop- erty, Zane v. Kennedy, 73 Pa. 182 (1873); Harris v. McElroy, 45 Pa. 216 (1863). For a case where a husband conveyed all his interest in his wife’s estate in trust, see Dorrance v. Scott, 3 Whart., 309 (1837). Of husband’s life estate in wife’s land, Duffy v. Insurance Co. 8 W. & S. 413 (1844); Campbell’s App., 80 Pa. 298 (1876); Lehr v. Beaver, 8 W. & S. 102 (1844). Thus, where land is devised to be sold and the share of the devisee to be to her sole and separate use, she may elect to take the land instead of the money, and join in an amicable partition, and the use will attach to the land: Holliday v. Hively, 198 Pa. 335 (1901); or she may direct that the money due her from a decedent’s es- tate shall be invested in real estate to her sole and separate use, her husband as- senting: Jourdan v. Dean, 175 Pa. 599 (1896); syllabus in this case inaccurate as it omits the element of the husband’s con- 334 MARRIED WOMEN’S TRUSTS [—557-559—] son.” The first and second are comparatively rare, and the third is the most extensively employed. In Pennsylvania, however, the law in all three cases is the same, in so far as the sole and separate use is concerned. The Estate Which May be Subject to the Trust 558. It was at first supposed that a separate use could only exist for life. The law is otherwise in Pennsylvania and the estate subject to the trust may be for life,” or an abso- lute interest in real or personal property.* It could also be created upon an estate tail, but as such an estate is now abolished * this point is practically obsolete. It can no doubt be created upon a term of years.’ The quantum of the estate is only of importance in determining the disposition of the property after the death of the woman, or in ascertaining her rights when the trust terminates before her death. General Definition of a Married Woman’s Trust 559. A married woman’s trust, therefore, is a trust in which sent found as a fact. Thus, where the husband used her money in the purchase of real estate under circumstances which raised a trust in her, he cannot by a sub- sequent declaration impose on the title a Bole and separate use without her con- sent: Griffith v. Eisenberg, 215 Pa. 182 (1906). Settlement by wife and husband of moneys in the hands of guardian, to the separate use of the wife: McMullin v. Beatty, 56 Pa. 389 (1867). Conveyance by husband and wife to a third person in trust for the sole and separate use of the wife, to be reconveyed to her in fee simple, does not create a sole and separate use, the conveyance being accomplished: Warden v. Lyons, 118 Pa. 396 (1888). A valid sole and separate use cannot be created by the exercise of a power: Yarnall’s App., 70 Pa. 335 (1872). Whether the trust would be good if the beneficiaries were capable of receiving a sole and separate use at the date of the instrument creating the power has never been actually de- cided, although such seems to be the necessary implication from the cases, see §579, post. ® For examples of settlement by third persons, see Hays’ Est., 184 Pa. 386 (1898); Lewis v. Bryce, 187 Pa. 362 (1898); Scott v. Bryan, 194 Pa. 362 (1899). 10 Except as to the question of how far there is a liability for the debts of the woman where she creates the trust her- self; as to which see §595, post. As to the distinction on principle between the first two and the third, see §§581, 605, post. 1 First decided in 1844 in England, that a fee could be made subject to a sole and separate use; Gray, Restraints on Alien., 2 ed. (1895), §125. ? Robins v. Quinliven, 79 Pa. 333 (1875) ;Lewis v. Bryce, 187 Pa. 362 (1898); Souder’s Est., 203 Pa. 293 (1902). 2 Cochran v. O’Hern, 4 W. & S. 95 (1842); Shonk v. Brown, 61 Pa. 320 (1869) ; Wilbert’s Est., 166 Pa. 113 (1895); Jourdan v. Dean, 175 Pa. 599 (1896); Shields v. McAuley, 205 Pa. 45 (1903). 4 See §23, ante. 5 No case on this point has been found. [—559, 560—] LANGUAGE NECESSARY TO CREATE 335 the equitable interest of the cestui que trust is not subject to the debts or control of her husband, and differs from any other trust in which a married woman happens to be the cestui que trust only in that the rights of the husband are expressly excluded. This is one of the few cases in which the maxim that equity’ follows the law does not apply. The chancellors relieved this estate in equity, when so provided by the donor, from the debts and control of the husband, although at common law, such result would not follow, even if a provision to that effect had been inserted in the gift.’?_ In Pennsylvania, how- ever, equity has gone further than in England, and has annexed to the estate of the cestui que trust an exemption from volun- tary or involuntary alienation.® General Principles as to the Language Necessary to Create the Sole and Separate Use 560. It is important, as a matter of practice, to know what language is sufficient to create the trust, or, as stated another way, what is the form of the clause. The common law on this point was perfectly clear and well settled. The creation of the trust was a matter of intention on the part of the settlor. No particular words were necessary, and anything which indicated an intention to exclude the rights of the husband was sufficient.? 6 Thus, where there is no such exclusion, the husband was entitled, before the Act of 1848, to recover his wife’s income from the trustees; Torbert v. Twining, 1 Yeates, 432 (1795); see also Sharpless’s Est., 151 Pa. 214 (1892), and Evans v. Knorr, 4 Rawle, 67 (1838). 7 The statement will often be found in the books that the separate estate of a married woman was invented by the courts of equity. This, it is believed, is inaccurate. The courts did not invent the estate; they first enforced the pre- nuptial settlements, and then by analogy sustained gifts by a third person. If any- body invented the estate it was the law- yers who originated the marriage settle- ments. 8 See this subject discussed, $587, et seq., post. 29 7In the following cases, before the pas- sage of the Act of 1848, the words indicated were held to create a valid sole and separate use: A testator devised a certain part of his real estate to trustees to raise thereout the sum of two thousand dollars, the same to beinvested and the interest thereof paid annually to his daughter, Edith Speak- man, whose receipts should be their suffi- cient discharge, for her separate use and benefit, whether sole or married, for and during the term of her natural life, and after the death of Edith, the principal to be divided among her children: Newlin v. Newlin, 1S. & R. 275 (1815). Gift of a fund in trust to pay the interest to A., the wife of B., for life, remainder to her children: Tyson’s App., 10 Pa. 220 (1849); overruled by Eshbach’s Est., 197 Pa. 153 (1900). ‘In trust for the sole use and benefit of my granddaughter, Maria Francis”: Hamersley v. Smith, 4 Whart. 125 (1839), dictum. ‘For her own and sole use forever”: Cochran v. O’Hern, 336 MARRIED WOMEN’S TRUSTS [—560—] It was also the law that it was not necessary to name a trus- tee whether the subject matter was real estate or personal property.” It was not necessary to vest any particular active duties in the trustee in the case of real estate, as equity 4W. &S8. 95 (1842). “To be for her and her family’s use during her life’: Heck v. Clippenger, 5 Pa. 385 (1847); it was held here that the husband was not in legal contemplation a member of the wife’s family and, therefore, the words of the trust excluded him; and the only way to exclude him effectually was to construe the gift as a sole and separate use. To a married woman “for her own use’: Jamison v. Brady, 6 S. & R. 466 (1821). Bond by husband to trustee to use of his wife: Fisher v. Filbert, 6 Pa. 61 (1847). “To her own proper use’: Snyder v. Snyder, 10 Pa. 423 (1849), dictum. ‘For the sole and separate use of my daughter Ellen Kuhn, for and during the term of her natural life, and that free and clear of any debts, contracts, liabilities or en- gagements of her husband, and in every respect as if she were a feme sole, and in- dependent of her present or any future coverture; so that she, the said Ellen Kuhn, may in her own person and right, take, receive, and enjoy, expend and dis- pose of the rents, issues, and profits of the real estate, and the dividends, interest and income of the personal estate, at her sole will and pleasure as aforesaid, during her natural life’: Kuhn v. Newman, 26 Pa. 227 (1856). “The estate which I have bequeathed to my said daughters, R. and M., shall not be liable to the debts, nor subject to the control of their respect- tive husbands”: Keating v. McAdoo, 180 Pa. 5 (1897); will dated 1843 In these cases arising before the Act of 1848, it was held that no sole and separate use was created: “In trust for the use, benefit, and behoof of my daughter,” a married woman: ' Torbert v. Twining, 1 Yeates, 432 (1795). ‘‘In trust for her, the said A.”: Evans v. Knorr, 4 Rawle, 67 (1833). 10 Scott v. Bryan, 194 Pa. 41 (1899); Holliday v. Hively, 198 Pa. 335 (1901), the cestui que trust was co-executor of the will. Clark, J., in Shalters v. Ladd, 141 Pa. 349 at 357 (1891); Sharswood, J., in Reiff & Umstead’s App., 60 Pa. 361 at 364 (1869). In Gormley’s Est., 154 Pa. 878 (1893), the court awarded the fund, consisting of personalty, directly to the woman herself. The only question raised as to this was whether she should be required to give security, and the court said that as she was a trustee for herself, no security would be required. In these cases no trustee was appointed, and the trust was sustained: Shonkv. Brown, 61 Pa. 320 (1869); Wright v. Brown, 44 Pa, 224 (1863). If no trustee is named the court will, to prevent the trust from failing, constitute the husband, Heath v. Knapp, 4 Pa. 228 (1846), or a third per- son, Varner’s App., 80 Pa. 140 (1875); Wilbert’s Est., 166 Pa. 113 (1895), a trus- tee. It is sometimes said that in con- struing the terms of the settlement the court will consider the naming or failure to name a trustee as a circumstance bear- ing on the intention of the testator to cre- ate a sole and separate use. It is believed, however, that this is a fallacy. If the above statement of the law is correct, this notion is without any weight, for if the naming of a trustee is of no moment then it is hard to see how the court can say that, from the absence of something which is immaterial, any deduction can be drawn as to whether the sole and sep- arate use is created. The creation of such a use is a question of intention, and that intention is indicated by the use of the words excluding the right of the hus- band. Nothing further need be inquired into. For an example of the application of this fallacy, see Chadwick v. Stroud, 27 Pa. C. C., 393 (1902). [—560-563—] LANGUAGE NECESSARY TO CREATE 337 favored married women, and the intention of the settlor to protect the woman from the husband made the trust active and consequently the statute of uses did not apply. Notion That the Act of 1848 Changed the Law as to the Language Necessary io Create the Sole and Separate Use 562. The Supreme Court of Pennsylvania found little diffi- culty in applying these principles until the passage of the Act of April 11, 1848.2 That act, which was intended to remove some of the disabilities under which married women labored at common law, has produced an abundant crop of litigation, and the Supreme Court have not yet, after more than sixty years, settled on any canon of construction. The result is that the law is in a most embarrassing state of confusion. It has been supposed that the Act of 1848 created a separate estate in a married woman, similar to the equitable estate which was known before the act, and that although it was competent for anyone to create a married woman’s trust, as before, it was necessary to impose active duties and to name a trustee; that mere words of sole and separate use or words excluding the rights of the husband were not sufficient, for the reason that a conveyance or devise without these words would, under the act, create the same estate as if such words were used, and, therefore, they were mere surplusage. In some of the cases decided under this view, the circumstance that the words of separate use were in a codicil or in a subsequent part of the will, was laid hold of as additional evidence of the inten- tion of the testator not to create a married woman’s trust.’ History of the Notion That the Act of 1848 Changed the Law as to the Language Necessary to Create the Sole and Separate Use 563. The notion that the Act of 1848 changed the law was first introduced in the case of Haines v. Ellis, was doubted in subsequent cases, and finally distinctly overruled and dis- 1See §129, ante, on the application of sary to create rarely arises in the case of the statute of uses to the sole and a prenuptial or postnuptial settlement. separate use. This may be owing to the circumstance 2 Pp. L. 536, §6; see §555, ante, n. 3. that in the case of a settlement inter vivos 3 It may be observed at this point that more care is taken as to the language used. the controversy over the language neces- 424 Pa. 253 (1855). 338 MARRIED WOMEN’S TRUSTS [—563, 564—] credited in the case of MacConnell v. Lindsay,’ and the only cases since reverting to the position of Haines v. Ellis are the cases of Murray v. Lowrie® and Chadwick v. Stroud.’ It will therefore be necessary to examine the notion and ascer- tain what foundation it has in reason. The objections to the notion will be stated, and then the case of Murray v. Lowrie commented on at length. Objections to the Notion That the Act of 1848 Changed the Law as to the Language Necessary to Create the Sole and Separale Use 564. (1) The Act of 1848 does not create the same estate as that which existed in the court of chancery. The legal estate, under the Act of 1848, is an estate as to which the powers of the woman are almost unlimited. She has no powers over the separate use in equity in Pennsylvania except those granted.* (2) The most important thing accomplished by the creation of the equitable estate was the interposition of a trustee between the woman and her husband to protect her from his influence. The Act of 1848 contains no such protection,’ and a law which leaves to a married woman the free and uncon- rolled disposition of her separate estate is absolutely no pro- tection so far as her husband is concerned.’° (3) The argument that because the conveyance without the words sole and separate use would convey an estate free from the husband’s control, therefore, tne words are surplusage and merely a repetition of the donor’s intention, begs the question, which is, what did the donor intend by the words? It may also be said that the donor must 5131 Pa. 476 (1889). ® 208 Pa. 1 (1904). 727 Pa. C. C. 393 (1902). 8 See §587, et seq., post. She may mortgage her legal separate estate, Hafey v. Carey, 73 Pa. 431 (1873), and she may estate. As such application is solely in her discretion. the act affords her no pro- tection from her husband. 19 « Ail experience proves that the high- est protection of the wife against her hus- band is in her disability in her want of will her separate estate under the Act of 1848. She cannot mortgage or sell her equitable separate estate unless expressly authorized. *She may, it is true, under the provis- ions of the Act of April 25, 1850, P. L. 569, §11, apply for the appointment of a trus- tee for her husband for her legal separate power to yield to his solicitations or give way to her sympathies: Strong, J., in Wright v. Brown, 44 Pa. 224 at 239 (1863). The Act of 1848 protected the wife’s prop- perty from her husband’s control, but did not protect the wife herself from that control. (—564, 565—] LANGUAGE NECESSARY TO CREATE 339 be presumed to make the gift with a knowledge of the existing law, and must, therefore, know that without the words of separate use the woman will take her estate free from the control of her husband. The words added, therefore, must have some significance, and what other significance can they have than that the donor intended that the wife should not be subject to her husband’s control with respect to her separate estate, and subject to that control she certainly is unless protected by a court of chancery. (4) The notion that the Act of 1848 changed the law seems to proceed upon the theory that the act created a separate estate, because the words sole and separate use are used in the body of the act. The real effect of the act, it is believed, was to remove from the legal title of a married woman certain restrictions and liabilities which had existed at common law.’ The notion that the absence of a trustee or the absence of active duties is material overlooks a principle of equity settled by nearly one hundred years of repeated decisions.” The language of Strong, J., in Wright v. Brown,* is very clear: ‘‘Certainly, however, unless the Act of 1848 caused a change, a deed to a married woman for her separate use does create a trust, though no trustee be named, and it is restrictive of the wife’s power to sell or mortgage. On that subject silence is prohibition, and it is plain that the Act of 1848 has no reference to the form or effect of a deed or will. It touches only the effect of the marriage relation. It does not undeitake to say that what was a trust before its passage is a trust no longer, or to make that a legal estate which was before merely equitable.” Murray v. Lowrie 565. In Murray v. Lowrie* the testator gave a fee simple estate to his daughter, and by a codicil directed as follows: “Tt is my will and | hereby direct that any and all interests my said daughters or either of them may take in my estate 1 It also had a similar effect upon the equitable estate of a married woman, which was created without words of sole and separate use, in which she was merely an ordinary cestui que trust. In such case, before the act, her interest was lia- ble for her husband’s debts. Under the act it isnot. The Acts of 1848, 1887, etc., however, do not affect the power of + woman over her equitable separate estate where there is no sole and separate use clause: Agnew, C. J., in Page’s Est., 75 Pa. 87 at 94 (1874); Mitchell, J., in Stein- metz’s Est., 168 Pa. 175 at 178 (1895). 2 §8129, 560, ante. 344 Pa, 224 at 240 (1863). 4208 Pa. 1 (1904). 340 MARRIED WOMEN’S TRUSTS [—565—] shall inure to them free from any and all liabilities of the debts of any husband either of them may now have or here- after take and likewise free from the control of such husband.” The court in an opinion by Brown, J., held that the daughter had an estate in fee simple which she could convey free from the trust, as the words in the codicil were not sufficient to create a sole and separate use. The court supported the decis- ion on several grounds which will be taken up separately. (1) That the words of the codicil excluding the right of the hus- band were mere surplusage and only reiterated the legal effect of the Act of 1848, there being no trust created. The objec- tion to this is that it goes back to the fallacy of Haines v. Ellis® and entirely ignores the well-considered decisions in MacConnell v. Lindsay *® and Holliday v. Hively,’ which over- ruled Haines v. Ellis. The learned judge distinguished Keat- ing v. McAdoo® and Lewis v. Bryce *® on the ground that the remarks of the court in those cases as to the sole and separate use were dicta. That is correct, but the dicta were in accordance with the decisions in MacConnell v. Lindsay and Holli- day v. Hively, neither cf which cases were distinguished by the court. The learned judge also said, “If his (testator’s) in- tention to lessen the absolute estate to a separate use and to deprive his daughter of the power of alienation could be gathered from other portions of his will, we might hold that the words in the codicil are appropriate and sufficient for that purpose. But no such intention appears, and the words, standing alone, have no other effect than to repeat the testa- tor’s intention to give his daughter a seventh interest in his estate, to her, ‘her heirs and assigns forever.’’’° It is submit- 5 24 Pa. 253 (1855). ®131 Pa. 476 (1890). 7198 Pa. 335 (1901). It is to be ob- served that the same judge who delivered the opinion in Murray v. Lowrie delivered the opinion in Holliday v. Hively, and it is probably impossible to reconcile the opinions in the two cases. 8180 Pa. 5 (1897). 9187 Pa. 362 (1898). 10 This language is difficult to under- stand, as a'separate use estate may be created as well of a fee as of a life estate; see §558, ante. It is hard to see how the estate can be lessened by a separate use trust. The reporter understood the lan- guage evidently in a totally improper sense, for in the syllabus he reported the case as deciding that the fee simple es- tate was not cut down to a separate use trust by the codicil. If a fee simple es- tate is granted it may be subject to a sole and separate use, but to say that it is cut down is far from accurate. It is believed that the learned judge misunder- stood the opinion of the court in Keating v. McAdoo, 180 Pa. 5 (1897). There was in that case a question, first, as to what estate the devisee took, whether for life or in fee, and to arrive at the answer {[—565, 566] LANGUAGE NECESSARY TO CREATE 341 ted, however, that it is just as reasonable to infer that the testator made his will having in mind the law under the Act of 1848, which is that the legal estate of a married woman is free from the debts and control of her husband, and that therefore the particular words were put in with the specific pur- pose of protecting her from the control of her husband. It is immaterial, also, whether the testator intended to give his daughter the power of alienation or not, for the intention of the testator to deprive her of that power is of no weight, as the incapacity to alienate flows from the separate use without any expression to that effect. It may further be observed that the testator might easily have conferred the power of aliena- tion, and, at the time same, have created a sole and separate use. This case leaves the law in great uncertainty.’ View That the Act of 1848 Did Not Change the Law as to the Language Necessary to Create 566. The cther view is that the Act of 1848 did not change the rules of construction that had theretofore ob- tained; that the same words would raise a separate use after the act as before, the construction of such words being well- settled rules of property, and that the equitable and legal separate estates exist side by side, each independent and exclu- sive of the other. It is believed that this view is sustained by reason and the weight of authority.’ to that question the court considered the limitations in the will and said that the MacConnell +. Lindsay, 131 Pa. 476 (1889), at 491: ‘But if it be true es we subsequent words of limitation were not such as to cut down the fee to a life estate, and then, in a subsequent paragraph, went on to say that the words of separate use were, under the terms of the will, to be confined to the personal estate, and were not applicable to the real estate. It is submitted, therefore, that it is a mis- understanding of the case of Keating v. McAdoo to suppose that it decided that a fee simple estate could be cut down because of a superimposed trust for the separate use of the beneficiary. 1 See §587, post. 2 See Chadwick v. Stroud, 27 Pa. C. C. 393 (1902), accord. 3 See remarks of Mr. Justice Clark in have already shown that these acts relate only to estates created by and existing under the law, and have no reference what- ever to the separate equitable estate of a married woman, we cannot see how the language of these acts can in any way be applied in the construction of instruments which, under the numerous decisions of this court, have been held to create a sep- arate estate recognized only in equity. We cannot say that what was a trust be- fore is a trust no longer, or make that a legal estate which, according to a well- established rule of property, has always heretofore been held to be an equitable separate estate only.” At 492: “It is im- material that no trustee was appointed, 342 MARRIED WOMEN’S TRUSTS [568—] Law as to the Language Necessary to Create the Sole and Separate Use 568. The following proposition may be ventured: any words which indicate an intention to exclude the rights of the hus- band are sufficient to create a sole and separate use; and the failure to name a trustce or absence of active duties is im- material. The Acts of 1848, 1887, 1893 and 1897 simply remove certain common law disabilities which attached to the married woman’s legal title, and do net affect the question, which proposition is rendered doubtful only by the case of Murray v. Lowrie,* which doubt is to the effect that the ap- pointment of a trustee and the naming of active duties are necessary in order to distinguish the trust from the estate existing under the Act of 1848.° We have discussed the form for equity will supply a trustee, nor is it of any consequence that no active duties were imposed, for the creation and ex- istence of a separate use is, in equity, sufficient to support the trust against the effect of the statute of uses. No partic- ular words have ever been held essential or indispensable for this purpose; it is enough that the expression of the con- veyance should be such as to clearly in- dicate the intention of the donor.” 4208 Pa. 1 (1904), and Chadwick v. Stroud, 27 Pa. C. C. 393 (1902). 5 In these cases arising since the Act of 1848, decided without reference to the act, it was held that there was no sole and separate use: Conveyance to a trustee in trust for A. during her natural life and at her de- cease to her heirs in fee, share and share alike, and in the meantime to allow and permit her to receive for her own use the rents and issues thereof, subject to the taxes and costs of executing said trust; Carson v. Fuhs, 131 Pa.256 (1889), dictum; Jamison v. Brady, 68. & R. 466 (1821), contra. Share of A. to be held in trust, to be invested and the interest paid to A. for life and at her death to her daughter C.; Sharpless’ Est., 151 Pa. 214 (1892). Gift of residue to daughter absolutely in fee simple, “and it is my will that the said (daughter) shall take and hold the property hereby given to her, free from the control of her present or future husband, and without any liability for any debts, liabilities or engagements of such husband, but wholly for her own use and benefit, and subject to her own control;”” MacCon- nell v. Wright, 150 Pa. 275 (1892); extreme case decided upon extrinsic facts as to the propriety of the admission, of which there is grave doubt; overruling MacConnell v. Lindsay, 131 Pa. 476, (1889); arising on the same will. “ For the use of the said Isabella, wife of the said Stewart, to allow her to receive to her own use the rents and issues;” Carson v. Fuls, 131 Pa. 256 (1889). In the following cases arising since the Act of 1848 the words indicated were held sujficient to create a valid sole and separate use: “It is also my will that the property hereby bequeathed to my said four nieces for their sole and separate use, shall be free from all liabilities, for the debts and contracts or other engagements of any husband or husbands, each or any of them has, or may at any future time have;’”’ Wright v. Brown, 44 Pa. 224 (1863). “To my daughter Ann, the wife of C., and I will and bequeath one share to the sole and separate use of her and her lawful heirs, so that my daughter Ann cannot sell or convey the same, but to descend to [—5638—] her lawful heirs, and so that the said real property cannot be taken, sold or rented or leased from her, or her heirs, to pay any judgment or demand that may be against her said husband;”’ Shonk v. Brown, 61 Pa. 320 (1869). “Free, clear and dis- charged from any estate, claim or con- trol of her present or any future husband;”’ dictum in Robins v. Quinliven, 79 Pa. 333 (1875). “For her sole and separate use, and so that her husband shall not have any control over or use of the same, her heirs and assigns forever; Varner’s App., 80 Pa. 140 (1875). ‘Interest to be paid to her only or her power of attorney, whether married or single, during her life;” dict- um of auditor in Keene’s Est., 81 Pa. 133 (1876); see also Hartley’s Est., 13 Phila. 392 (1880). ‘As the separate estate of the said A.;’”’ Richardson v. Aiken, 104 Pa. 567 (1883); dictum. ‘That no one of the husbands or wives of the aforesaid children shall have any interest in or con- trol over the property hereby bequeathed, but that the shares of my said children shall belong to them separately and ex- clusively, whose receipts therefor shall be taken as a full discharge; Bailey »v. Allegheny National Bank, 104 Pa. 425 (1883). “Not to be in any wise liable for any existing debts or contracts * * * entered into either by my said daughter or her present husband or any husband she may have;” Shanty’s Est., 7 Pa. C. C. 199 (1888). A devise to the testator’s son, in trust for his daughter, to permit her to occupy and enjoy the same for her separate use, and not to be under the control or subject to the debts of her husband during her nat- ural life, and at her death to descend to the issue of her body; question sroge dur- ing continuance of trust; People’s Bank v. Denig, 131 Pa. 241 (1889). Devise was to the daughter in fee, she “to take and hold the property hereby given to her free from the control of her present or any future husband, and without any lia- bility for any debts, liabilities or engage- ments of such husband, but wholly for LANGUAGE NECESSARY TO CREATE 343 her own use and benefit, and subject to her own control;”’ MacConnell v. Lindsay, 131 Pa. 476 (1889); the same will came be- fore the Court in the case of MacConnell v. Wright, 150 Pa. 275 (1892), and it was there held, in the light of the extrinsic evi- dence embodied in the case stated and the other language of the will, that there was no separate use created and that in MacConnell v. Lindsay the court only had before it the question as to the effect of the Act of 1848. Since the words of the will were clear the admission of the extrinsic evidence was _ indefensible. There appears, however, to have been no objection to it, and on this point the case may be considered as overruled; see §273, n. 7, ante. Another ground of decision was, that since by the other parts of the will the daughter took a fee simple with power to sell, in the words of the court, “the in- tention of the testatrix to create a sep- arate use may be more than doubted.” As a fee simple estate may be made sub- ject to a sole and separate use, see §558, ante, the reasoning of tke court on this point is far from conclusive. Too much can hardly be said in criticism of this case. It is indefensible on any ground, and the court seemed to feel, from the language on p. 282, that the decision would not be acceptable to the profession. See also dictum in Shalters v. Ladd, 141 Pa. 349 (1891), same will in Shalters v. Ladd, 163 Pa. 509 (1894). “To have and to hold the said premises with the appurtenances to her sole and separate use, free from the interference or control of her husband, and to her heirs and as- signs forever; Hays v. Leonard, 155 Pa. 474 (1883), see Forney’s Est., 161 Pa. 209 (1894). ‘The shares to my said daugh- ters to be for their own sole and separate use free from any claim of any present or future husband;” Wilbert’s Est., 166 Pa. 113 (1895). “It is, however, my will, (should my children agree to a division of my estate after the death of my wife), that the separate portions of my daugh- 344 ters shall be separately secured to them and to their use beyond the dictation of the husband of either of them;” Stein- metz’s Est., 168 Pa. 171 (1895). “For the sole and separate use of; Jourdan »v. Dean, 175 Pa. 599 (1896); see also dictum in Noble’s Est., 182 Pa. 188 (1897). “The shares of my said daughters shall be for their sole and separate use, and shall be paid into their own hands respectively, upon their own sole receipt therefor;” Hays’ Est., 184 Pa. 386 (1898). “For life, under the condition that they shall hold the same exclusively and free from all control of their husbands or any one of them;” Lewis v. Bryce, 187 Pa. 362 (1898), dictum. To A., wife of B., ‘as her own separate estate;” Scott v. Bryan, 194 Pa. 41 (1899). A devise of real estate to executors, with power to sell, and a devise of part of the proceeds to her daughter “for her sole and separate use independently of her present or any future husband”; Holliday v. Hively, 198 Pa. 335 (1901). This case also decides that the Act of 1893 does not affect the ques- tion. Acts June 3, 1887, P. L. 332, and June 8, 1893, P. L. 344, do not contain “sole and separate use.” “Unto my daughter B., into her hands, and for her sole and separate use, and on her separate receipt, or to her order in writing, signed by herself, and in the presence of, and signed by one or more respectable witness or witnesses, so that and to the end and intent that the said interest, nor any part thereof, shall in any wise be subject to or liable for the debts, powers, control or interference of her said husband, or any other husband she may hereafter have or take;’’ Souder’s Est., 203 Pa. 293 (1902). “To be held and used by her free from the control of her husband, and as her sepa- rate estate;” Shields v. McAuley, 205 Pa. 45 (1903). “It is my will and desire that it (the entire estate) be divided between my children, share and share alike, with the condition that the shares flowing to my daughters shall be protected as their separate estate, free from any claim that MARRIED WOMEN’S TRUSTS [—568--] their said husbands may have or make, and the fee simple to their children;” Samson’s Est., 22 Super. Ct., 93 (1903), 26 Pa. C. C. 405. In the following cases the words were held insufficient to create a sole and separate use, the court, under the influence of the Act of 1848, applying all or part of the reason- ing outlined in §562, ante. In Haines v. Ellis, 24 Pa. 253 (1855), it was decided that a conveyance of real estate for a con- sideration to a married woman in fee, ‘to and for the only sole, separate and proper use and behoof of herself,” etc., vested in her a fee simple estate; that as the Act of 1848 gave married women a separate legal estate, the conveyance gave her the same title she would have taken had not the words “of separate use’’ been inserted. They were, therefore, surplus- age, and the married woman could freely dispose of her estate, provided only that her husband joined in. ‘The share of my daughters shall be held by them re- spectively in trust to take the income and appropriate the same respectively, for their own sole and separate use for their lives; Reiff & Umsteads’ App., 60 Pa. 361 (1869). In Ringe v. Kellner, 99 Pa. 460 (1882), the testator provided as follows: “ All my real and personal estate, after the decease of my wife and after debts and funeral expenses are paid, shall be equally divided among my four chil- dren, or their children, in case they them- selves are dead. It is also my will that my daughters shall have and hold their share of the inheritance in their own name and shall not let it be controlled by their respective husbands, and the husband shall not inherit it unless there be no child living. I want the estate to be settled up within one year after the last of us is dead, but will leave to my heirs to de- termine whether they will sell the real estate within that time or settle it among themselves another way, as, for instance, one may take one property and another one another, and pay over the difference.” This case may be distin- [—568, 570—] WHEN VALID 345 of the clause necessary to create the sole and separate use. It is now in order to consider the circumstances which must exist in order that the clause may take effect. Circumstances Requisite to the Validity of the Sole and Separate Use Clause 570. The circumstances requisite to the validity of the sole and separate use are as follows: (1) the cestui que trust must be a woman;® (2) she must be married or in contem- plation” of marriage at the time of the creation of the trust, whether created by the woman herself or by a third person; (3) when the gift is made by a third person, the marriage must likewise be in the contemplation of the donor at the time ® of making the gift; (4) if the marriage relation is terminated, the necessary circumstances have disappeared, the clause has no further effect, and the woman can proceed just as if the clause had never been inserted. The law on this guished by the fact that the testator there declared that the daughters should hold the property in their own name. The court construed that as meaning that they should be seised of the legal title. It is plain, however, that the testator wrote his will without the advice of counsel, and it is, therefore, hard to see how the court could infer that he meant to have technical meaning attached to his words. This construction, however, may be accepted in order to distinguish the case from the subsequent authorities. In Murray v. Lowrie, 208 Pa. 1 (1904), stated §565, ante, the testator devised an estate in fee to his daughters, and then by codicil to his will directed that the interest of his daughters should inure to them “free from any and all liabilities of the debts of any husband either of them may now have or hereafter take, and likewise free from the control of such husband.” In Chadwick v. Stroud, 27 Pa. C. C. 393 (1902), testator devised certain property to his daughters in fee, they to hold the same to and for their own sole, separate and exclusive use and benefit, without being in any way or manner liable to the debts or engagements, control or inter- ference of their present or any future husbands. The learned judge, Sulzberger, P. J., however, relied on Ringe-v. Kellner, 99 Pa. 460 (1882), in which, it is to be noted, he was of counsel against the va- lidity of the sole and separate use, and took no notice of the reasoning in MacConnell v. Lindsay, supra. ®It hardly seems necessary, were it not for the fact that the question had been raised, to say that such a trust can be created only for a woman; Neal’s Est., 13 D. R. 699 (1903). The clause exclud- ing the husband has no meaning where the cestui que trust isa man. A sole and separate use clause will frequently be found inserted in spendthrift trusts where the cestui que trust is a man, for what reason does not clearly appear; see Pen- rose, J., in Bouvier’s Est., 28 Pa. C. C. 266 at 267 (1903). 7 The auditing judge in Hildeburn’s Est., 8 Pa. C. C. 369 at 370 (1890), spoke of a legal contemplation of marriage. What the difference is between that and any other contemplation of marriage, the learned judge does not state. 8 See §573, et seq., post, for a further discussion of this point. 346 MARRIED WOMEN’S TRUSTS [—570, 571—] point is too well settled to be disturbed. It is believed, how- ever, to be unsound.® The particular in which the law fails to meet the wants of the community is in the requirement that the woman must be mayried or in contemplation of mar- riage at the time of the creation of the trust. This principle deprives fathers and mothers of the ability to protect their young unmarried daughters from future husbands, and that such protection is eminently desirable is past all question.’ Pennsylvania Cases on the Circumstances Necessary to the Validity of the Sole and Separate Use 6571. Where the subject matter was real estate, the interest being in fee, (a) the cestui que trust was permitted to deal with the property as her own as to third persons;' (b) a decree was entered in favor of the cestui que trust in pro- ceedings by her against the trustee for a conveyance of the legal title? Where the subject matter was personal property, and the woman had an absolute interest, (a) she was ®See §§605-608, post, discussing the principles involved. 10 The expression common in the books is that the trust falls or comes to an end, and, in cases of real estate, the phrase is not an inaccurate description of the oper- ation of the statute of uses. See §129, ante. The implication from the ex- pression is that the trust ends whether the cestui que trust is willing or not. It is submitted that, in the cases of personal property and active trusts of real estate, this is incorrect. In such cases, when the sole and separate use clause has no longer any reason for its existence, the cestui que trust can, if she is so minded, termin- ate the trust, but until she does so the legal title remains in the trustee and the trust continues; see Tucker’s App., 75 Pa. 354 (1874). 1 (1) After the death of husband: Smith v. Starr, 3 Whart. 62, (1838); McKee v. McKinley, 33 Pa. 92 (1859); Steacy v. Rice, 27 Pa. 75 (1856). (2) After divorce: no case. In People’s Bank v. Denig, 131 Pa. 241 (1889), it was held that desertion by the husband did not terminate the trust. (3) Because not married or in con- templation of marriage at the time of the creation of the trust: McBride v. Smyth, 54 Pa. 245 (1867). Hetrick v. Addams, 12 W. N. C. 367 (1882). For further dis- cussion of the principle involved in these cases, sec §129, ante, on the application of the statute of uses to the sole and separate use. ? (1) After death of husband: Tucker’s App., 75 Pa. 354 (1874); Dodson v. Ball, 60 Pa. 492 (1869); Nice’s App., 50 Pa. 143 (1865). (2) After divorce: no case found. (3) Because not married or in contemplation of marriage at the time of the creation of the trust: Bevan’s Est., 15 Phila. 615 (1882); Kuhn v. Newman, 26 Pa. 227 (1856), executed by statute; no conveyance decreed, same will in Whichcote v. Lyle, 28 Pa. 73 (1857). Og- den’s App., 70 Pa. 501 (1872); The Phila. Trust Co’s. App., 93 Pa. 209 (1880), estate tail; Kay v. Scates, 31 Pa. 316: (1860) ; Harris’s Est., 3 Phila. 326 (1859). {[—571, 572—] WHEN VALID 347 allowed to deal with it as to third persons;? (b) the trustee was directed to transfer the property to the cestui que trust. In some cases the nature of the property did not appear from the report, but was generally a residue, and probably consisted of both kinds: (a) the cestui que trust was permitted to deal with the property as to third persons;® (b) a decree was entered in her favor in proceedings to have the legal title transferred.® Circumstances Afust Exist at the Time the Gift is Made 572. The circumstances requisite to the taking effect of the sole and separate use clause must exist at the time the gift is made. The application of this principle is so plain when the settlement is made by the woman herself, or when made by a third person by deed, that no question as to these cases has ever arisen. Suppose the gift is made by will by a third per- 3 (1) After death of husband: Hamer- sley v. Smith, 4 Whart. 126 (1839). (2) After divorce: no case found. (3) Be- cause not married or in contemplation of marriage at the time of the creation of the trust: no case found. ‘ (1) After death of husband: Harrison v. Brolaskey, 20 Pa. 299 (1853); Bush’s App., 33 Pa. 85 (1859); Hepburn’s App., 65 Pa. 468 (1870); Pickering v. Coates, 10 Phila. 65 (1873). (2) After divorce: Koenig’s App., 57 Pa. 352 (1868), doubt- ful if sole and separate use was created in this case; Simonds’ Est., 201 Pa. 413 (1902); Lee’s Est., 207 Pa. 218 (1903). (3) Because not married or in contem- plation of marriage at the time of the cre- ation of the trust: Harris’ Est., 3 Phila. 326 (1859); Ogden’s App., 70 Pa. 501 (1872); Pickering v. Coates, 10 Phila. 65 (1873); Gamble’s Est., 13 Phila. 198 (1878); Hughes’ Est., 7 W. N. C., 539 (1879); Snyder’s App., 92 Pa. 504 (1880); Quin’s Est., 144 Pa. 444 (1891). (4) Because engagement to marry was broken off: Cozens’ Est., 29 Pa. C. C. R. 462 (1904), s. c. 18 D. R. 49. Penrose, J., said, ‘‘The trust for separate use became inoperative in consequence of the ter- mination of the engagement to marry, in contemplation of which it was made.’ The remarks were dicta, and the learned judge leaves it open to doubt as to whether he thought of the engagement to marry or the marriage as being in contemplation. 5 (1) After death of husband: no case found. (2) After divorce: no case found. (3) Because not married or in contem- plation of marriage at the time of the cre- ation of the trust: Howard v. Law, 15 Phila. 341 (1882). ® (1) After the death of the husband: Williams’ App., 2nd will, 83 Pa. 377 (1877). (2) After divorce: Kelly’s Est., 16 Phila. 273 (1883), report not clear, can- not be told what the case was. (3) Be- cause not married or in contemplation of marriage at the time of the creation of the trust: Megargee v. Naglee, 64 Pa. 216 (1870); Yarnall’s App., 70 Pa. 335 (1872); Biddle’s Est., 15 Pa. C. C. 401 (1894), report obscure. When her interest is for life only she cannot have a convey- ance of the legal title or deal with the property as owner, even if no valid sole and separate use, as she is not entitled to the principal in any event; see §160, ante. 348 MARRIED WOMEN’S TRUSTS [—572-574—] son and the circumstances do not exist at the date of the will but occur afterward, and before the death of the testator. The correct principle, it is submitted, is that the validity of the clause is to be tested by the circumstances existing when the settlement will take effect, that is, at the death of the testator. This appears to have been the law until 1883. The Supreme Court in that year laid down a new rule, and it is now the law that the requisite circumstances must exist at the date of the will.’ Preliminary Discussion as to Contemplation by the Donor 573. Where the gift is made by a third party, the marriage must be in contemplation of the donor at the time of the creation of the trust. This doctrine has very little foundation in reason, and seems to have been assumed as the law without any discussion. In the cases occurring prior to 1867, it was said that the cestui que trust must be married or in contemplation of marriage, but no case has been found prior to that date in which it was decided that the contem- plation meant contemplation by the donor when the settlement was made by a third person. The history of the doctrine is illustrated by the following cases. McBride v. Smyth 574. In McBride v. Smyth® the testator died in 1847; his will was dated 1846; the cestui que trust was nineteen years old at the time of his death, and the date of her marriage does not appear in the report. It was held, with very little discussion, that there was no sole and separate use created. 7In Neale’s App., 104 Pa. 214 (1883), the court said that the Act of June 4, 1879, P. L. 88, providing that the will should speak as of the testator’s death, does not give vitality to a previous abortive at- tempt to tie up an estate in s manner wholly beyond the power of the testator to do. It is submitted, however, that this is a misapprehension of the principle involved. It is not a question of power, but a question of whether the circum- stances obstruct the exercise of the power, and that question is to be determined as of the time when the will goes into effect. This decision seems to have met with dis- approval; see remarks of Penrose, J., in Hildeburn’s Est., 8 Pa. C. C. 369 (1890). The point was again raised in Quin’s Est., 144 Pa. 444 (1891), but the Supreme Court, in an elaborate opinion by Mr. Jus- tice Clark, affirmed Neale’s App., and the law on this point may therefore be con- sidered as settled beyond a doubt. 554 Pa. 245 (1867). [—574-576— ] WHEN VALID 349 Strong, J., said,® “it is here too well established to be disturbed by anything else than a legislative enactment, that a separate use for a woman cannot be created unless she is covert or unless in immediate contemplation of her marriage.’ The learned judge does not say anything about contemplation by the donor and the two cases he cites contain no reference to the doctrine. Wells v. McCall 575. In Wells v. McCall’® the testator republished his will in 1864 and died in 1868. The beneficiary married one month later. On a bill for partition subsequently filed by her against the trustees and the other cestui que trust under the will, the trustees set up in their answer that the testator knew of the proposed marriage, which was postponed because the cestui que trust did not want to leave him; that she was actually engaged at the date of the will, and that the provisions of the trust were made in contemplation of the marriage. The bill was heard at nisi prius on bill and answer by Williams, J., who dismissed the bill, which decree was affirmed by the Supreme Court on appeal. The court said, in an opinion by Agnew, J., which was necessary for the decision of the case, that the contemplated marriage need not appear in the instrument cre- ating the trust. The learned judge, however, delivered himself of the following dictum: ‘‘The creation of the trust constitutes the evidence of the fact being in the contemplation of the donor or devisor, and when this is followed within a reason- able time by consummation of the marriage, it concludes the proof.” Springer v. Arundel 576. In Springer v. Arundel! the will was dated twenty- three days before the death of the testatrix, and the cestui que trust married on the third day after the testatrix’s death. The case arose on an action of ejectment by the trustees under ® At p. 250. 1064 Pa. 207 (1870). 1 At p. 215; it is worthy of comment that the learned judge drew his inferences as to the necessity of the marriage appear- ing on the face of the instrument creating the trust from cases where the settlement was by the woman herself on the eve of an intended marriage. The learned judge also said, at p. 214, that a contem- plated marriage discloses itself. An actual marriage does, but a contemplated mar- riage is a matter frequently known only to the contracting parties, and can hardly be said to disclose itself. See remarks of Penrose, J., on this case in Hildeburn’s Est., 8 Pa. C. C. 369 at 373 (1890). 164 Pa. 218 (1870). 350 MARRIED WOMEN’S TRUSTS [—576, 577] the will, against one claiming under a deed executed by the cestui que trust and her husband. Held, that the deed was void, as the cestui que trust had only a life estate, and also because the trust was a sole and separate use. As to this point, Agnew, J., said by way of dictum: “As remarked in Wells v. McCall the creation of the trust constitutes the evidence of the fact of the marriage being in the contemplation of the de- visor, and this being followed in so short a time by the con- summation of the marriage, concludes the proof.’” Pennsylvania Law as to Contemplation by the Donor 577. It thus appears that the doctrine as to contem- plation by the donor was not even mentioned in the case of McBride v. Smyth,? that it appeared by way of dictum in Wells v. McCall,* in which case the fact of the contemplation by the testator was set up in the answer, and that in the case of Springer v. Arundel® the court followed the dictum in Wells v. McCall without any question or discussion, and that the doc- trine has been assumed as law ever since upon the authority of these cases. If the marriage takes place soon enough after the date of the will, there is a presumption that the donor knew of the contemplated marriage. If the marriage takes place long enough after the date of the will there is no presumption that the donor knew of the contemplated marriage. The Su- preme Court has never decided exactly what length of time will constitute the dividing line between the two presumptions.° 2In Eastwick’s Est., 13 Phila. 350 (1880), Penrose, J., said that a limitation over in the event of death without issue indicated that the marriage of the cestui que trust was in the mind of the testatrix. As such limitations are present in almost every settlement the inference is perhaps not very strong. 354 Pa. 245 (1867); stated §574, ante. 464 Pa. 207 (1870); stated $575, ante. 5 64 Pa. 218 (1870); stated §576, ante. ®In the following cases the court held that the time which had elapsed from the date of the will was too long for the pre- sumption to arise, and that there was no trust: twenty-five years, Pickering v. Coates, 10 Phila. 65 (1873); five years, House v. Spear, 1 W. N. C. 34 (1874); seven years, Ogden’s App., 70 Pa. 501 (1872); contra, dictum in Page’s Est., 75 Pa. 87 (1874); six years, Hetrick v. Addams, 12 W. N. C. 367 (1882); twelve years, Bevan’s Est., 15 Phila. 615 (1882); eight years, Neale’s App., 104 Pa. 214 (1883), c. q. t. ten years old at date of will; twenty years, Kuntzleman’s Est., 136 Pa. 142 (1890), c. q. t. five years old at date of will. In the following cases no time was stated, and it was held that there was no trust: Bristor v. Tasker, 135, Pa. 110 (1890); dictum, in Boyd’s Est., No. 1, 199 Pa. 487 (1901); Wolfinger v. Fell, 195 Pa. 12 (1900). The age, therefore, of the beneficiary, or the fact that the marriage took place before or after the death of the testator is immaterial. (578, 579—] WHEN VALID 301 Objections to the Doctrine That the Donor Must Contemplate the Marriage 578. A sole and separate use is an exception to the rule forbidding restraints on alienation, and the whole object of the Supreme Court in enforcing the doctrine as to contemplation by the donor is to confine that exception within the smallest limits. What can be said in defence of a doctrine which makes the application or non-application of a principle of public policy depend on what was in the mind of a man who is now deceased, and this is what it comes to in the case of wills. The rules which have been laid down by the Supreme Court are merely artificial presumptions to assist in covering up the practical im- possibility of carrying out the doctrine. Suppose a young woman is engaged to be married and is suddenly bereft of the parent to whom she is about to disclose her engagement. That parent leaves a will dated one year before his death, creating a sole and separate use for his daughter. The daughter marries six months after her father’s death, and although the donor had no knowledge of the engagement, there is, under this pre- sumption, a valid sole and separate use. Suppose, on the other hand, a young woman has disclosed her intended marriage to her father, and he dies having created a sole and separate use by will. The marriage is delayed, for one cause or another, for six or more years after the father’s death. The sole and separate use is void under the presumption, and the young woman is likely to have her property swept away by the improvidence and debts of her husband, yet, in this case, the donor knew of the marriage at the time of the creation of the trust. It may be answered that these presumptions may be overthrown by evidence. The evidence is difficult to produce, and no case has been found in which it has been produced. Furthermore, what is contemplation by the donor? How far must the preliminaries between the young people have progressed before the donor can be said to be in sufficient contemplation? A keen-eyed parent may contemplate a specific marriage long before the young woman herself has awakened to the situation. Executory Trusts and Contemplation by the Donor 579. Where the settlor provides by his will that the sole and separate use shall take effect at some time in the future, is the validity of the clause to be considered with reference to 302 MARRIED WOMEN’S TRUSTS [—579, 581—] the circumstances which may happen to exist at that time or those which exist at the date of the will? This question was raised in Snyder’s Appeal.* Judge Penrose, in the court below, took the ground that the trust was executory, and that there- fore the trustees of the will would have power to complete the trusts at the time fixed, and create a sole and separate use, the requisite circumstances being present at the time. On appeal, the Supreme Court reversed, Mr. Justice Sterrett saying that the case was ruled by McBride v. Smyth.® The learned judge also said: ‘There is practically no distinction between the cases unless we hold that the testator could confer a power upon his executors as trustees, which, according to all our cases, he himself did not possess. If we were to so hold, it would be difficult to forsee the results to which it would lead.” It is submitted that the results can easily be foreseen. Any estate taking effect under such power would be governed by the rule against perpetuities, and the rule forbidding restraints on aliena- tion. The decision, however, is a logical result of the principle that the donor must contemplate the requisite circumstances. If these circumstances may or may not exist at some uncertain time in the future after the decease of the donor, they can- not be contemplated by him. Clause of Sole and Separate Use Invalid Upon Second Marriage 581. If a sole and separate use clause attached to an equi- table interest is invalid against a woman who is unmarried at the time of the creation of the trust, it is a fortiori’? invalid against a woman upon her second marriage. In considering 892 Pa. 504 (1880). ° 54 Pa. 245 (1867); stated §574, ante. 10 Accordingly, in the following cases it was held that the clause was invalid upon second marriage: Hamersley v. Smith, 4 Whart. 126 (1839); Freyvogle v. Hughes, 56 Pa. 228 (1867); Rea v. Cassel, 13 Phila. 159 (1879); Snyder v. Snyder, 10 Pa. 423 (1849), contra. A reason for this was given by Mr. Chief Justice Agnew in Wells v. McCall, 64 Pa. 207, quoted by Mr. Jus- tice Clark in Quin’s Est., 144. Pa. 444 at 456 (1891), as follows: “ But 2 second mar- riage is evidently a thing not in immediate contemplation, being cut off from view by the uncertainties of u first marriage, the death of the husband, and an inten- tion to marry a second time.” This phrase is far from clear. The learned judge probably meant by uncertainties the fact that the first marriage might not terminate. The clause is, however, cap- able of another construction, and he does not make clear in what connection he con- siders the intention to marry a second time,—whether that is to be entertained during the first marriage or not until after- ward. How a second marriage could be shut off from view during the first mar- riage by an intention to marry a second [—581, 582] WHEN VALID 353 this question, however, the court has overlooked the material distinction between a trust created by the woman herself and a trust created by a third person.” Where the Sole and Separate Use Clause Cannot Take Effect but the Trust is Valid on Other Grounds 582. Since the sole and separate use differs from other trusts in which the cestui que trust is a woman, only because of the clause excluding the husband, it follows that when the circum- stances under which the clause is valid are absent, the case is to be considered as if the clause had been omitted from the instrument, and the cestui que trust will not be entitled to the legal title if there are other elements of a valid trust. time the learned judge does not inform us. Criticism on this point may seem hypercritical, but it is useful as showing the illogical manner in which the Supreme Court has considered this question, and the superficiality of the reasons which have been assigned. There are some ex- pressions, however, which support the view that a trust for a married woman would revive upon second marriage. Thus, in Dunn’s App., 85 Pa. 94 (1877), there was a deed of trust by a woman and her hus- band, to the sole and separate use of the woman. The court held, the woman being dead and having been divorced from her husband a month before she died, that the trust was an active one for her life, and that the trustees were to carry it out under the deed of trust. Mr. Chief Justice Agnew said that she clearly indicated her intention to protect herself against her own acts, as well as those of her present or any future husband. The trust for coverture only falls at the death of the first husband, but this she intended to be carried over to any future husband; and in connection with the provision against her own debts, she disclosed a plain intention to make the trust for life and not for coverture only. The trust in this case having been created by the woman herself would undoubtedly be in- valid against a second husband; see §605, post. See also remarks of the court in Forney’s Est., 161 Pa. 209 at 212 (1894), citing Dunn’s App., supra; Hanna, P. J.,in Wright’s Est., 28 Pa. C. C. 540 at 541 (1903). It is quite common, however to find in Pennsylvania set- tlements, a clause as to ‘‘present or any future husband.” Such a phrase seems to be utterly useless. 11 See §605, post. 1 Harris v. McElroy, 45 Pa. 216 (1863); Yarnall’s App., 70 Pa. 335 (1872); Robins v. Quinliven, 79 Pa. 333(1875) ; Williams’s App., 1st will; 83 Pa. 377 (1877); For- ney’s Est., 161 Pa. 209 (1894); Seitzing- er’s Est., 170 Pa. 500 (1895) ; Noble’s Est., 182 Pa. 188 (1897); Boyd’s Est., No. 1, 199 Pa. 487 (1901), dictum; Denis’s Est., 201 Pa. 616 (1902); see Biddle’s Est., 15 Pa. C. C. 401 (1894). It is important to notice in this connection that a distinc- tion may be drawn between the case where the sole and separate use is of a life estate and where it is of fee simple. In the former case the invalidity of the sole and separate use clause will not enable the cestui que trust to terminate the trust; Earp’s App., 75 Pa. 119 (1874); Ash’s App., 80 Pa. 497 (1876); whereas, in the case of a fee, the termination of a sepa- rate use will always entitle the cestui que trust to call for a conveyance; Dodson v. Ball, 60 Pa. 492 (1869); Megargee v. Naglee, 64, Pa. 216 (1870). See, however §524, ante, on a trust of an absolute interest. 354 MARRIED WOMEN’S TRUSTS (587, 588—] Preliminary Discussion as to the Effect of the Clause 587. We have now considered the form of the clause which defines a sole and separate use, and ascertained the circum- stances which must exist in order that the clause may take effect. It now remains to consider, all these elements being present, what the effect of the clause is, or, as it is some- times stated, the incidents of the trust. We shall discuss the subject, first, as to the woman cestui que trust and then as to her husband. As to the woman cestui que trust, we shall consider (1) her power to deal with the equitable title; (2) the liability of the same for her debts;? (3) the clause against anticipation. As to the husband of the woman cestui que trust, we shall consider (1) his power of control over the equitable title; (2) its liability for his debts, and (3) his rights after the death of the cestui que trust. Preliminary Discussion as to the Effect of the Clause on Voluntary Alienation 688. A restraint on voluntary alienation when attached to a sole and separate use clause is valid whether the in- terest is absolute? or for life.* It is an exception to the general rule, and as such is supported on the principle of public policy having in view the protection of married women. It was for a long time uncertain whether the restraint must be ex- pressly inserted in the trust. If the legal title to the wife’s property was vested in a trustee, the husband’s rights at law were effectually excluded. If the trustee were directed to hold the estate solely for the benefit of the wife, without the in- terference of her husband, he could, in equity, recognize no one but the wife as the owner, as the chancellor enforced the trust according to the wish of the donor. Therefore, as to her equitable separate estate, the wife was in the same position as a feme sole. The only effect of the marriage was to subject her title to the husband’s control, and, therefore, when freed from that control she should, on principle, have all powers which were not expressly denied her in the instrument creating the trust. The obvious danger to the married woman, 2That is the question that will be %Gray, Restraints on Alien., 2 ed. viewed from the standpoint of the dis- (1895), §269, et seq. tinction between voluntary and involun- 4Gray, Restraints on Alien., 2 ed. tary alienation. (1895), §§140-142. [—588-590—] POWER OF THE CESTUI QUE TRUST 355 in thus leaving her in the unfettered control of her separate estate, and consequently exposed to the rapacity, extortion and influ- ence of her husband, was apparent to the early chancellors, and they sought to obviate the danger by reading into the settlement terms of restraint which the donor had not sufficient foresight to insert therein. This conflict between principle and expediency, was long and greatly unsettled the law, and differ- ent views were held by some of the most learned chancellors.® In Pennsylvania it is the law that the woman cestui que trust has only those powers over her sole and separate estate which are granted in the instrument creating the trust. The Pennsylvania cases will now be examined. Newlin v. Newlin 589. In Newlin v. Newlin® the testator created a sole and separate use for his daughter Edith. A suit was brought against the executors of the will upon a bond, and the ques- tion at the trial was, whether the husband of Edith was a competent witness. In order to remove his interest, there was offered a release which he and his wife had executed to the trustee of the will. It was held that by the release he be- came competent and that a feme covert had as to her separate use all the powers of a feme sole, and could make such dis- position thereof as she pleased.’ Lancaster v. Dolan 590. In Lancaster v. Dolan® Tacy Prior, a single woman, executed a deed, in which she covenanted to pay for the use of her mother one-half of the rents of certain premises, of 5 For a full and able discussion of the whole subject and review of the cases, the on him by will, and, if he rejects it, he is without interest. There is no reason why reader is referred to the cases of Meth- odist Church v. Jaques, 3 John. Ch. N. Y., (1817), and Ewing v. Smith, 3 Desaussure’s Reports 417, (1811), S. C. 618. & R. 275 (1815). 7It is to be observed that the cestui que trust released her interest, and there is a material distinction, as pointed out by Mr. Justice Lowrie, in the case of Haus v. Palmer, 21 Pa. 296 at 299 (1853), be- tween a release and an assignment; that is, no one is bound to accept a benefit thrown this rule should not extend to the case of a married woman. Gibson, C. J., in Lanc- aster v. Dolan, 1 Rawle, 231 at 247 (1829), says that this case was hastily determined upon an exception to the evidence. Mr. Binney says, The Leaders of the Old Bar of Philadelphia, Law Association Centennial, p. 113, that “he (Gibson) never made a greater mistake unless when he overruled the authority.” 81 Rawle, 231 (1829). 356 MARRIED WOMEN’S TRUSTS [—590—] which she, Tacy, was the owner. Subsequently the mother and daughter united in a deed of the same real estate to trustees, in trust, one-half for the use of the mother for life,° remainder to Tacy under the uses thereinafter declared, and as to the other one-half, and the remainder after the death of the mother, for the use of Tacy for life; and in case she should marry, free from the claim of her husband with a general power of appointment and with remainders over in the events which did not happen. Tacy subsequently married Edward Rogers,!? and she and Edward executed a mortgage upon a portion of the premises comprised in the said deed of trust. A judgment was obtained on the mortgage, and the property sold at sheriff’s sale to Israel Lancaster, who brought ejectment against the. tenants of Edward and Tacy. The court held there could be no recovery, on the ground (1) that the cestui que trust had no power to convey her equitable separate estate;? (2) that there was a sufficient prohibition of alienation? in the deed. The remarks of the learned judge as to the power ® No question arose as to the trusts for the mother. They are therefore omitted. It seems as if the mother were still living at the time of bringing the ejectment. If that is so, it is clear that in no event could there be a recovery of more than one-half; see Ingersoll, arguendo, on p. 237. The Supreme Court held that the con- veyance in trust was not void, under the Statute of 27 Elizabeth, Chap. 4, as re- gards the interest limited to the mother, and that her estate was therefore un- affected by the mortgage. 10Jt does not appear that Edward Rogers ever joined in the deed or gave his assent to it or that Tacy was in contem- plation of marriage when she executed the settlement. There is a presumption, from the language of the deed, that she” was not in contemplation of marriage. The mortgage joined in by the husband might possibly have been treated as a ratification. This still leaves open the question as to contemplation of marriage. ? Gibson, C. J., said at p. 247: “Nothing in the law is more to be deprecated than those decisions in which the right of the cestui que trust to dispose of his estate has been recognized.” Further at p. 248: “notwithstanding the case of Newlin v. Newlin, 1. 8. & R. 275 (1815), * * * that the English decisions are so float- ing and contradictory as to leave us at liberty to adopt the true principle of these settlements; that instead of holding the wife to be a feme sole to all intents as regards her separate estate, she ought to be deemed so only to the extent of the power clearly given in the convey- ance; and that instead of maintaining that she has an absolute right of disposi- tion unless she is expressly restrained, the converse of the proposition ought to be established—that she has no power but what is expressly given.” 3 Gibson, C. J., said at p. 248: “Here the trust is expressed to be for the ‘ per- sonal support and comfort of the said Tacy,’ a clause far more clearly indicat- ing an intent to prevent alienation by anticipation than any to be found in the cases in which the exception prevailed, and the estate of Mrs. Rogers would therefore be unaffected by a rigid apphi cation even of the English cases.” [—590—] POWER OF THE CESTUI QUE TRUST 357 of the married woman to convey were dicta, since he found a sufficient prohibition of alienation in the deed. This is the leading case* in Pennsylvania, and the dictum of Chief Justice Gibson has been followed ever since. The cases are collected in the note.® ‘This case is criticized by Mr. Binney in The Leaders of the Old Bar of Phila- delphia, Law Association Centennial, p. 114, commented on by Penrose, J., in Gamble’s Est., 13 Phila. 198 (1878). Mr. Binney said, ‘‘It has taken more than one Act of Assembly to patch the hole in the law that was made by Lancaster v. Dolan, and it is not well patched yet.” As that case is still the law in Pennsylvania on nearly all the points involved, one is at a loss to know what the Acts of Assembly are. Mr. Binney also said, supra p. 113, that the decision ‘‘swept away every ves- tige of authority from a married woman during coverture to alienate or pledge her separate trust estate,”’ which, it is appre- hended, is a rather broad understanding of the decision. 5In the following cases the Supreme Court has passed on the question of the powers of a feme covert cestui que trust as to her equitable separate estate, and reached the result indicated. The learned reader will observe that in many of these cases, where the question of the power of the cestui que trust was raised, the re- marks of the court were dicta, as the at- tempted disposition was of the legal title, to which the married woman as cestui que trust, even without the sole and separate use clause, would be incapacitated. The question of the power of the feme covert cestui que trust to dispose of her equitable interest cannot arise until she has made an attempted disposition thereof. The feme covert cestui que trust cannot convey: Rogers v. Smith, 4 Pa. 93 (1846); Haines v. Ellis, 24 Pa. 253 (1855), semble; Mc- Mullin v. Beatty, 56 Pa. 389 (1867), dicta; Jones’s, App., 57 Pa. 369 (1868), dicta; Shonk v. Brown, 61 Pa. 320 (1869), dicta; Springer v. Arundel, 64 Pa. 218 (1870), dicta; Ringe v. Kellner, 99 Pa. 460 (1882) ; MacConnell v. Lindsay, 131 Pa. 476 (1889), dicta; Scott v. Bryan, 194 Pa. 41 (1899), semble; Shields v. McAuley, 205 Pa. 45 (1903). In Lewis v. Bryce, 187 Pa. 362 (1898), the proposed conveyance was of an interest in fee, but the cestui que trust had only a life estate. This appears to be the main ground of the decision. Where she does convey during the existence of the trust, which conveyance is void, and after the death of her husband, the trust having terminated, accepts payment of part of the purchase money, such accept- ance works on ratification and redelivery of the deed, and she is estopped from as- serting title against the grantee: Jourdan v. Dean, 175 Pa. 599 (1896); s. c. Miller v. Dean, 199 Pa. 637 (1901). As to power to will: A married woman had no power to make a will at common law. This right was first conferred in Pennsylvania by Act of April 11, 1848, §7, P. L. 536, superseded by Act of June 8, 1893, §5, P. L. 344. The power was formerly secured to a married woman by inserting in the settlement a power of ap- pointment under which she could practi- cally make a will of her separate estate. Prior to that act she had no power to make a will, not because of the nature of the equitable estate, but because of her own incapacity. In these cases, prior to the Act of 1848, the question turned on whether the terms of the instrument cre- ating the trust were sufficient to give her a power of appointment; “subject to her order alone,’’ does not give power to will: Stahl v. Crouse, 1 Pa. 111 (1845); Thomas v. Folwell, 2 Whart. 11 (1836). In Asay v. Hoover, 5 Pa. 21 (1846), same settle- ment as was before the Court in Hoover v. Samaritan Society, 4 Whart. 445 (1839), there was a deed of trust to the separate use of A. for life, with power of appoint- ment by will, and limitations over in de- fault of appointment, with power in A. 358 to revoke the uses, and then to convey and mortgage. A. revoked, madea mort- gage, made a will, and then died. Held, that the will was good and so was the mortgage as the latter did not exhaust the power. The mortgage was an appoint- ment of the fee at law and a full exercise of the power, but as equity considers the mortgage merely as security for the debt, the equity of redemption remained after the execution of the mortgage and con- sequently a further power of appointment, which she could duly exercise by will, sub- ject to the payment of the mortgage debt. Since the Act of 1848: No case has been found since the Act of 1848 raising the question of the power of the married woman cestui que trust to will her sepa- rate estate, except Steinmetz’s Est., 168 Pa. 175 (1895). In that case it was argued that she had power to will where the estate was a fee, because the marriage relation ceased with her death, and the will took effect then, and there was no occasion to prolong the restraint on alien- ation beyond that time. It was held, however, that the will was void as there was no power to make it expressly con- ferred. The student will observe that Lancaster v. Dolan did not raise the ques- tion of the power of the cestui que trust to will. At that time a married woman could not make a will because of her common law incapacity; such power as she had existed only in equity under the terms of the instrument creating the trust. No case could arise calling for the applica- tion of the principle in the case of Lancas- ter v. Dolan, to the case of a will until after the Act of 1848, when the married woman was given power to make a will. The increase of her common law power should not, on principle, make any differ- ence as to the rule which had theretofore obtained in equity, as to the nature of the estate created by a settlement to her sole and separate use. The practical result is the same, but it is worth while, in the in- terests of clear thinking, to observe the distinction in the development of the rule MARRIED WOMEN’S TRUSTS [—590] as to the power to will and the ruleas to the other powers which she might exercise as to her separate estate.’ She cannot mortgage: Cochran v. O’Hern, 4 W. & S. 95 (1842); Wilson v. McCullough, 19 Pa. 77 (1852), words of settlement not given, doubtful if there was a sole and separate use;s. c. McCullough v. Wilson, 21 Pa. 436 (1853); Wright v. Brown, 44 Pa. 224 (1863), probably a mortgage of her own interest; see page 227. In Maurer’s App., 86 Pa. 380 (1878), there was a pow- er in the trustee to mortgage and exercise thereof. The cestti que trust, upon a mistaken idea that the trust was revoc- able, executed a deed of revocation, and then made a mortgage, part of the pro- ceeds of which were used to pay the bal- ance due on the mortgage by the trustee. Held, that to that extent the second mort- gage was valid. People’s Bank v. Denig, 131 Pa. 241 (1889); Hays v. Leonard, 155 Pa. 474 (1893) ; Holliday v. Hively, 198 Pa. 335 (1901). She has no power to assent to the revocation of the trust: Twining’s App. 97 Pa. 36 (1881). She may not make a marriage settlement thereof: Hughes- Hallett v. Hughes-Hallett, 152 Pa. 590 (1893). She may not assign the income in the hands of the trustee: Shanty’s Est., 7 Pa. C.C. 199 (1888); dictum in Dunton’s Est., 18 Phila. 145 (1887). Decision contra in Hayes’ Est., 32 Pitts. L. J., 375, (1885), may be disregarded as totally opposed to reason and authority, and as a decision of a court of inferior jurisdiction. In Smith v. Broadhead’s Executors, 4 Dall. 115 (1792), the court did not decide whether a feme covert under a deed of set- tlement of a separate use, with power to make a will could, by directing her execu- tors to pay her debts, make her estate lia- ble for a bond executed by her in her life- time to pay a debt of her husband. She may, however, give or lend the income to her husband as well as to any other person unless restrained by the terms of the trust: Towers v. Hagner, 3 Whart. 48 (1837). And when she has power to mortgage, she may dispose of the proceeds to her [591, 592] POWER OF THE CESTUI QUE TRUST 359 Mr. Gray’s Remarks on Power of Alienation 591. Mr. Gray* says that where the estate is in fee the incapacity to alienate lasts only during the life of the cestui que trust; that it is an incapacity only to assign the income, and that consequently she should be able during coverture to transfer the principal subject to her right to receive the income. This point has never been raised in Pennsylvania. Where Power of Alienation is Specially Conjerred—Express Powers 592. The feme covert cestui que trust has the power granted in the instrument creating the trust. The question whether she has a given power or not is a question of construction. The cases are collected in a note under the different powers which usually arise.’ husband if she chooses; Hoover v. Samaritan Society, 4 Whart. 445 (1839). She may join in an act changing the trus- tees; Heath v. Knapp, 4 Pa. 228 (1846). ® Restraints on Alien., 2 ed. (1895), §126. 7 Power to will: The cases prior to the Act of 1848 turning on the extent of the power conferred by the deed have al- ready been noticed. The question now is, does the settlement give her power to do that in equity which she can do at law, whereas, the question formerly was whether the settlement gave her power to do that in equity which she could not do at law. In Drusadow v. Wilde, 63 Pa. 170 (1869), certain prem- ises were conveyed in trust for the sole and separate use of A., her heirs and assigns forever * * * and upon the further trust that the said A., or such person as she should appoint, should take and receive the rents, issues and profits thereof forever. A. during the coverture devised the premises by will and died. Held, that she had power to make a will under the above clause. Mr. Justice Sharswood said, at p. 172, “We think that the deed of trust vests in her general power of appointment within the rule laid down in Lanc- aster v. Dolan, 1 Rawle, 231, and that the will in question was an effectual exercise of that power,’ the learned judge proceeding upon the theory that as the power was to dispose of the income forever, it necessarily carried the power to dispose of the principal. In Dunn’s App., 85 Pa. 94 (1877), where the woman and her husband united in a con- veyance upon a separate use trust for the wife for life, with power of appointment, it was held that a will made by her six years before she made the deed of trust was not an exercise of the power of ap- pointment. For a case of an express power to will and exercise thereof see Rush v. Lewis, 21 Pa. 72 (1853). Power to convey: Power to will does not give power to convey; dictum in Rogers v. Smith, 4 Pa. 93 (1846) at 98. Where under the settlement the trustee has power to sell as directed by the cestui que trusta sale by the latter with the joinder of her husband in the manner directed is a good appointment and the trustee will be direct- ed to convey accordingly; McFadden »v. Drake, 79 Pa. 473 (1875). In Coryell v. Dunton, 7 Pa. 530 (1848), there was a power in the cestui que trust to revoke and appoint new uses by deed, and it was 360 MARRIED WOMEN’S TRUSTS [593—] General Principles as to Liability jor Involuntary Alienation 593. The separate equitable estate of a married woman is not liable to involuntary alienation.® The reason given by Ashman, J., in Hartley’s Estate,? it is submitted, does not touch the real point in the case. The exemption from invol- held that a conveyance by her and her husband, though not referring to the power, passed the estate. For a case of power to appoint by deed and exercise thereof, see Scott v. Bryan, 194 Pa. 41 (1899). Power to mortgage: Power to execute a deed does not give the power to execute a bond and mortgage; Dorrance v. Scott, 3 Wh. 309 (1838). Direction to the trus- tee to pay the income to the use, etc., and disposal of the cestui que trust, does not give her power to mortgage the corpus; Cochran v. O’Hern, 4 W. & 8. 95 (1842). In Bailey v. Allegheny Nat’l Bank, 104 Pa. 425 (1883), there was a gift in trust ‘‘that no one of the husbands, etc. of my chil- dren shall have any interest in * * * the property bequeathed, but that the shares of my said children shall belong to them separately and exclusively, whose receipts therefor shall be taken as a full discharge.” It was held, without any discussion, that a sole and separate use was created, and that the words quoted gave a married cestui que trust power to mortgage, on the ground, in the court below, that a gen- eral power of disposition was given by implication by the use of the words “‘sep- arately and exclusively,” citing Chrisman v. Wagoner, 9 Pa. 473 (1848). The mort- gage here was of all her right, title and interest and probably referred to her equi- table interest, and therefore squarely raises the point. See remarks of Brown, J., on this case in Holliday v. Hively, 198 Pa. 335 (1901), at 342. Power to revoke: In the case of Chris- man v. Wagoner, 9 Pa. 473 (1848), there was a power to appoint by will, with a limitation over if the cestui que trust died without having withdrawn and without making an appointment or disposition thereof, and held that the cestui que trust had power to withdraw the principal of the fund during coverture. In Withing- ton’s App., 32 Pa. 419 (1859), real estate was conveyed to the separate use of the wife on the eve of marriage, with power in her to appoint by will if she died before her husband. There was a covenant in the deed, which was signed by her husband, that the hus- band would not oppose any revocation of the trust by the wife, either by deed or will. Held, that the language of this cov- enant did not increase the powers pre- viously given to the wife and, therefore, a revocation executed by her by deed in- her lifetime was void. 5In Wallace v. Coston, 9 Watts, 137 (1839), an action was brought against the feme covert to recover for necessaries fur- nished, as the plaintiff alleged, on the faith of the pledge of her separate equitable es- tate. While there was a doubt whether she had pledged her separate estate, the court said that she had no power to as- sign her separate estate since she had no express power under the deed of trust and judgment was given against the plaintiff. It seems, however, that the plaintiff could have recovered anyhow, and the only question was whether he could satisfy his judgment out of the separate estate. See also Crowe v. Lippincott, 38 Pitts. L. J. O. 8. 433 (1891). °13 Phila. 392 (1880). ‘Creditors do not lend to a married woman credit upon the assumption that she is the owner of property in her own right, but content themselves to trusting to the solvency of her husband. They cannot, therefore, be injured by the upholding of a trust for her benefit which ties up no property upon which they can fasten a liability.” [—593, 594] LIABILITY OF THE CESTUI QUE TRUST 361 untary alienation flows from the nature of the estate itself, and is allowed on grounds of public policy. The state of mind of the creditor of a married woman has nothing to do with the case. Hays’s Estate 594, In Hays’s Estate '® the reasoning of the court is very unsatisfactory. The words of the trust were, “for their sole and separate use, and shall be paid into their own hands respectively upon their own sole and separate receipt therefor.” The accrued income in the hands of the trustees was attached under a judgment against one of the cestuis que trustent. The court below dismissed the claim of the creditor and its decision was affirmed by the Supreme Court on appeal, in an opinion by Mestrezat, J. As far as can be gathered the court denied the validity of the attachment on the ground that as, under the terms of the trust, it was the duty of the trustee to pay the income into the hands of the cestui que trust, he had not fulfilled his obligations until that was done, and, therefore, no third party could interfere with him in the performance of his duty. The learned judge said," “To hold that the duty of the trustee ceases when he has possession of the income, ignores one of the duties clearly and distinctly imposed on him by the terms of the trust.” The court, it is submitted, went too far. The trust being a sole and separate use was, without the words “into their own hands respectively upon their separate receipt,” exempt from the debts of the cestui que trust... And to base the decision on that ground leaves it open to acute counsel to suggest that the exemption of the income in a married woman’s trust from the debts of the cestui que trust depends upon such a clause. Until the Supreme Court has had an oppor- tunity to consider this question again, it would, perhaps, be safer to insert this clause in married women’s settlements.’ 10 201 Pa. 391 (1902). 1 At p. 396. 1The unfortunate nature of this lan- guage has been illustrated by the neces- sity the Superior Court felt in Kunkel v. Kemper, 32 Super. Ct. 360 at 364 (1907), of pointing out that the language was to be limited to the facts of the case. *It is believed that the court in this case was misled by the argument of the counsel for the appellant. There was no clause against anticipation in the will, and it was totally unnecessary to base the decision on any question of construction as to whether the language of the testator imposed such a restriction on the cestui que trust. The creation of a sole and sep- arate use was sufficient. 362 MARRIED WOMEN’S TRUSTS (595, 596—] Effect of the Clause as to Involuntary Alienation When the Trust is Created by the Woman Herselj 595. Does the clause protect the equitable estate from lia- bility for the debts of the woman when she creates the trust herself? In Stewart v. Madden‘ the court expressly refused to pass on the question as unnecessary to the decision of the case, and the point is therefore open in Pennsylvania.’ In Ghormley v. Smith® an unmarried woman not in contempla- tion of marriage made a settlement to her sole and separate use, and it was held that the trust was no protection from her creditors during a subsequent marriage, as the sole and separate use clause was void in the beginning.” The case presented was that of an ordinary trust and consequently liable for the debts of the settlor.® Clause Against Anticipation 596. The clause against anticipation was first invented by Lord Thurlow® and grew into favor as a means of restraining the uncontrolled power of a feme covert over her separate estate, which power !° seemed to be the necessary consequence of freeing her property from her husband’s control. The clause, as originally worded, was ‘‘and not by anticipation,” the effect of which was to prevent the feme cestui que trust from dis- posing of her equitable estate. The clause, although frequently inserted, is entirely unnecessary in Pennsylvania,® as the feme cestui que trust has no powers except those granted in the instrument creating the trust. It is a vain thing to forbid text writers do not state. 3 See §557, ante, as to the methods of creating a sole and separate use and §593, ante, that there is no liability for debts when created by a third person. 4153 Pa. 445 (1893). 5 See Gray, Restraints on Alien., 2 ed. (1895), §§226, 268a. 6139 Pa. 584 (1891). 7See §570, ante, as to circumstances requisite for the trust to take effect. 8 See §278, ante, as to a settlor creating such a trust for himself. %Lewin on Trusts, 8th ed. (1888), Vol. 2, p. 781. 10 See §588, ante. 1 Lewin on Trusts, 8 ed. (1888), Vol. 2, p. 781. Just why it had that effect the She could not, under the clause, ask for income before it was due her. An assignment by her gave the assignee power to collect the fu- ture income, and the assignment was prob- ably, for this reason, considered as an in- direct anticipation. For a discussion of the clause from the English point of view, see the opinion of the court below in the case of Dubs v. Dubs, 31 Pa. 149 at 152 (1858). See Gray, Restraints on Alien., 2 ed. (1895), §270, and cases cited. 3 See the opinion in Crowe v. Lippin- cott, 38 Pitts. Law Journal, 433 O. S. (1891), Ferguson, J., in Shanty’s Est., 7 Pa. C. C. 199 at 200 (1888). 4 See §588, ante. [—596-599] POWER OF THE HUSBAND 363 her to do that which she has no power to do. The doctrine discussed by Mr. Gray,® that the clause against anticipation is to be disregarded when it violates the rule against perpetuities, is inapplicable in Pennsylvania, as a married woman’s trust can- not be created except for a living person, and the clause against anticipation, therefore, can never violate the rule.® King’s Estate 597. In King’s Estate’ there was an attempt to create a sole and separate use which failed. There was also inserted in the settlement a clause against anticipation. The trustee advanced income to the cestui que trust before it had been paid to him, and, in consequence, as there was an overpay- ment, was compelled at the audit to claim a credit for that amount, to which state of affairs the clause against anticipa- tion could have no application. The credit was allowed. Strangely enough, however, the attention of the court seems to have been chiefly directed to the clause against anticipation, no question as to which was properly before them. On appeal, the decree was affirmed by the Supreme Court, Green, J., saying:® ‘‘The cestui que trust has actually received the pay- ments made in perfect good faith by the trustee, and she was as much in fault in violating the clause against anticipation as the trustee was in making payments. She has therefore no equity to be heard against her own wrongdoing.’ Effect of the Clause of Sole and Separate Use on the Power and Control of the Husband 599. The effect of the sole and separate use clause in free- ing the estate of the married woman cestui que trust from the control and debts of her husband is so clear that it has apparently never been questioned.’ > Restraints on Alien., 2 ed. (1895), §§272-272¢. ® As to the clause against anticipation in spendthrift trusts, see §280, ante, Gray, Restraints on“Alien., 2 ed. (1895), §272g. 7147 Pa. 410 (1892). 8 At p. 414. °These remarks, which were plainly dicta, are totally opposed tothe lawin Eng- land, where the cases areclear that the trus- tee cannot take refuge in the connivance of thecestui que trust in evading theclause ; Gray, Restraints on Alien., 2 ed. (1895), §271, and cases cited. See language of Woodward, J., in Lowrie’s App., 1 Grant’s Cases, 373 at 376 (1856). 10 Not liable for judgment for joint tort of husband and wife: Pullen v. Rianhard, 1 Whart. 514 (1836). Not liable for hus- band’s debts even when in actual posses- 364 MARRIED WOMEN’S TRUSTS [600, 601—] English Chancery Doctrine as to Right of the Husband in the Sole and Separate Use When the Subject Matter is Real Estate 600. It was at first decided in England that the husband had no estate as tenant by the curtesy in lands which were held to the sole and separate use of his wife in fee." When the question was first raised in Pennsylvania the early Eng- lish principle was followed, and the husband denied his estate as tenant by the curtesy. Pennsylvania Law as to Right of the Husband in the Sole and Separate Use Where the Subject Mailer is Real Estate 601. The law in Pennsylvania is now well settled the other way, and the husband is entitled to his estate as tenant by the curtesy in lands which are held to the sole and sepa- rate use of his wife in fee.* There are two reasons for the sion of the husband and wife: Yardley v. Raub, 5 Whart. 117 (1840). The prin- ciple would be different when he carries on the trade with the separate property or his possession is inconsistent with the deed of trust: Sergeant, J., in Yardley v. Raub, 5 Whart. 117 at 124 (1840). Real estate, the legal title to which was vested in the husband and wife, to the sole and separate use of the wife, not liable fordebts of the husband: Lichty v. Hager, 13 Pa. 565 (1850). Trustees under such a settle- ment justified in refusing to pay any part of the trust funds to the husband on the wife’s order: Lowrie’s App., 1 Grant’s Cases, 373 (1856). If she has power to mortgage she may make a mortgage for the benefit of her husband: Hoover v. Samaritan Society, 4 Whart. 445 (1839). 1 Lewin, Trusts, 8 ed. (1888) Vol. 2, p. 735, and cases cited. Opinion of Rogers, J., in Cochran v. O’Hern, 4 W. & 8. 95 (1842). The doctrine was based upon two grounds: (1) on want of seisin in the wife during coverture, the legal estate being in the trustees; (2) on the intention of the donor that the rights of the husband should be excluded. After much fluctuation the rule was settled the other way, and the husband became entitled. Lewin, ubi supra, p. 735. 2 Cochran v. O’Hern, 4 W. & S. 95(1842) ; Stokes v. McKibbin, 13 Pa. 267 (1850), Gibson, C. J., at p. 268 making the question turn entirely on the intention of the donor; Rigler v. Cloud, 14 Pa. 361 (1850), going on the ground of intention as disclosed in the settlement. The clause was as follows: “not to be in any way liable to the future control, debts or liabilities of her present or any future husband.” Ash v. Ash, 1 Phila. 176 (1851); Freyvogle v. Hughes, 56 Pa. 228 (1867),semble. It will be observed that this is another case where equity does not follow the law. 3In Dubs v. Dubs, 31 Pa. 149 (1858), the woman was not in contemplation of marriage when the trust was created. The court below said that there was u sole and separate use, and the husband was not entitled to curtesy therein, re- lying on the English doctrine. Reversed, on appeal, the Supreme Court not noticing that there was no sole and separate use under the Pennsylvania law. Ege v. Medlar, 82 Pa. 86 (1876), going on the ground that the question was one of in- tention, but that no intention to exclude was to be found in the settlement. Rank v. Rank, 120 Pa. 191 (1888); Carson v. Fuhs, 131 Pa. 256 (1889), dictum; John- son v. Fritz, 44 Pa. 449 (1863), right recog- [—601] POWER OF THE HUSBAND 365 law which now exists in Pennsylvania as to the right of the husband to his estate by the curtesy: (1) that on the maxim that equity follows the law, statutory provisions as to the devolution of the woman’s legal estate, and the rights of her husband therein, must apply equally to the devolution of ber equitable estate;* (2) that the donor cannot create a fee and remove therefrom any of the legal incidents thereof. He can- not impose inconsistent conditions.® The result of this change of doctrine is that equity now follows the law. The Act of April 11, 1848,° applies as well to the devolution of the sepa- rate equitable estate of the married woman as to her legal estate, and the rights of the husband in each case, after the death of the wife, are the same. It is sometimes said that the exclusion of the right of the husband depends on the intention of the donor as expressed in the settlement.” This is a survival of the English doctrine,* and it is submitted that this statement of the law is a fallacy.? The right as tenant by the curtesy attaches to the fee. It is a question of inten- tion whether the testator created a fee or a life estate, but that question having been determined the statutory right attaches, and no intention, no matter how strongly expressed, can exclude it. The question is whether the statute applies to a certain set of circumstances. It is a question of intention whether the donor creates one set of circumstances or another. It might possibly be said, therefore, that he indicated his intention as to whether the statute should apply by creating or not creating the circumstances to which the statute was appli- cable. To attribute such logical foresight to the donor is entirely out of the question, and unless the phrase is used in such a sense it is misleading and _ incorrect. nized but husband estopped; court said that evidence that husband was estopped ought to have been received. Jourdan v. Dean, 175 Pa. 599 (1896), dictum. If she has merely a life estate, he, of course, takes nothing; Schafer v. Eneu, 54 Pa. 304 (1867). Dictum, Clark, J., Shalters ». Ladd, 141 Pa. 349 at 359 (1891). For a case where the husband asserted his right in the case of an ordinary trust, see Mor- ton’s Estate, 24 Super. Ct. 246 (1904). * Traces of this reason are to be found in Dubs v. Dubs, 31 Pa. 149 (1858), dictum. 5 Traces of this reason are to be found in Rank v. Rank, 120 Pa. 191 (1888). See Lewin, Trusts, 8 ed. (1888), Vol. 2, p. 735. ® P. L. 536, §9, as to personal estate, and §10 as to real estate. 7 See Pepper & Lewis’s Digest of Decis- ions, Title ‘“‘Curtesy,” Vol. IV, col. 6135. 5 See §600, ante. %See remarks of Lowrie, C. J., in Thornton’s Ex. v. Krepps, 37 Pa. 391 at 393 (1860). Thissame fallacy noted §119, ante, with respect to the application of the statute of uses. 366 MARRIED WOMEN’S TRUSTS [602-605—] Right of the Husband in the Sole and Separate Use When the Subject Matter is Personal Property 602. As to personal property it seems to have been settled without any discussion that the husband is entitled to his rights under the Act of 1848 in all personal property held absolutely to the sole and separate use of his wife, and any provision to the contrary in the settlement is of no effect.” Right of the Husband Where the Estate of the Wije is Subject to an Executory Devise 603. No case has been found as to the right of the husband to his estate as tenant by the curtesy in the case of the sole and separate use of real estate subject to an executory devise. In the case, however, of Thornton’s Executors v. Krepps,! it was decided that the husband was entitled to his estate as tenant by the curtesy in a legal fee vested in his wife, although subject to an executory devise in the event of death without issue. Where there is an absolute gift of personal property subject to an executory bequest the right of the hus- band is defeated by the happening of the event upon which the executory bequest is to take effect.” Summary oj the Law 604. It may, therefore, be said that the husband is entitled to his estate as tenant by the curtesy and his rights under the intestate laws in real and personal estate held for the separate use of his wife, and in which she has an absolute interest, with the question open as to the effect of an executory desire or bequest. The Author's Observations on the Peculiar Pennsylvania Doctrines Relating to the Sole and Separate Use 605. While the law as to contemplation of marriage is well settled, it may not be out of place to examine the reasons 10 Faries’ App., 23 Pa. 29 (1854); Van Rensselaer v. Dunkin, 24 Pa. 252 (1855); s. c. sub nom Sill’s App., 1 Grant’s Cases, 235; Talbot v. Calvert, 24 Pa. 327 (1855); Page’s Est., 75 Pa. 87 (1874). It is doubtful whether there was a sole and separate use created in thiscase, al- though the court assumed that there was one. 137 Pa. 391 (1860). ? Gormley’s Est., 154 Pa. 378 (1893). The court said that the gift over was a contingent remainder, as to which see §100, ante. [—605] ORIGIN OF PENNSYLVANIA DOCTRINE 367 upon which it is founded. Where a woman contracts with her husband on the eve of marriage for the enjoyment of her estate to her sole and separate use, it is plain that the arrange- ment is valid only for that particular marriage, is terminable by the woman upon subsequent discoverture; and is invalid as against a subsequent husband, for it is clear that a man who marries a widow cannot be deprived of his marital rights be- cause of a settlement which she may have made with a previous husband,® and it is also plain that such a settlement is valid only when made in contemplation of a particular marriage, for the consent * of the intended husband is necessary. Where, how- ever, the sole and separate use is created by a third person the case is different. All that the woman receives is an equitable separate estate which, when it comes into her hands, is held free from the control of her husband. While, therefore, she may, so long as she remains single and if she has the entire interest, put an end to the trust, as it is a restraint upon her power of free alienation, yet so long as she does not termi- nate it the trust remains, and so long as it remains it must remain in its entirety. When, therefore, she marries with the trust in force, the husband takes her with the estate as she had it, and her power to terminate ceases during the marriage for the reason that she has thus voluntarily brought herself within the incapacity contemplated by the trust, and there is no more reason for holding the trust invalid in such a case than there is a trust newly created while she is married. It seems, therefore, as if the doctrine as to contemplation of marriage by the donor and the doctrine that the trust is ter- minable upon discoverture and does not revive upon a second marriage, were borrowed from the first method of creating a trust, and were then applied indiscriminately to all cases of a sole and separate use. This confusion appears to have crept into the Pennsylvania law under a misapprehension as to some early dicta and without the question ever having been argued or discussed. The cases are as follows: 3 See Freyvogle v. Hughes, 56 Pa. 228 (1867); see §590, n. 10, ante ‘If the married woman’s property acts have divested the rights of the husband during coverture, it is difficult to see why the feme sole cannot make a settlement to her sole and separate use which will be valid during the marriage against a future husband. The invalidity as to such a husband before the acts depended on the fact that it deprived him of his marital rights during her lifetime, and since it no longer does so, as he has no rights, why has he any standing to complain? See Belt v. Ferguson, 3 Grant’s Cases, 289 (1859), where, however,the point was notdiscussed. 368 MARRIED WOMEN’S TRUSTS (606, 607—] Smith v. Siarr 606. In Smith v. Starr® the husband was dead and the widow had agreed to convey. The court said that the con- tinuance of the trust after the death of the husband was a void restraint on her power of disposition of the fee; that the deed was an act of disposition by her. The subject matter being real estate, there is room to argue that the statute executed the use.® Rogers, J., said, speaking of the doctrine that a trust could not be created for a feme sole unless she was in immediate contemplation of marriage, ‘“‘But this doc- trine would impose an unreasonable restriction upon the power of parents to provide for the future support of their daughters, and is not, as I conceive the law, as applicable to this state.’’” Hamersley v. Smith. 607. In the case of Hamersley v. Smith® the fund con- sisted of personal property, and the cestui que trust became discovert and married again. Gibson, C. J., in his opinion, after referring to the fact that an agreement for a separate use lasted only during the particular marriage because founded on the consent of the husband, came to the conclusion that the same rule applied to the case at hand, without, it is believed, clearly apprehending that the case before him was a gift from a third person.® is also submitted that the 5 3 Whart. 62 (1838). 6 See §129, ante. 7 At p. 66. This remark of the learned judge was misunderstood by Agnew, J., in Wells v. McCall, 64 Pa. 207 at 213 (1870), where he said, “But on all hands it is ad- mitted that the entire freedom of disposi- tion would impose anunreasonable restric- tion upon the power of a parent (or indeed any other benefactor) to provide for the fu- ture support of a daughter. And Rogers, J., says precisely this in Smith v. Starr.” Freedom of disposition in this sentence must mean freedom on the part of the cestui que trust, otherwise it is nonsense, and if it means freedom on the part of the donor it is not much better, as he can restrain or not, as he thinks best. 8 4 Whart. 125 (1839). ® Another instance of this confusion is furnished by the decree in Ash’s App., 80 Pa. 497 (1876). In that case an unmar- ried woman executed a deed of trust of her property in April, 1856. She married in April, 1857. In 1873 she and her hus- band filed a bill against the trustees, under the deed, to have the trust terminated. The bill set out that the plaintiff was not contemplating marriage when she execut- ed the deed. The answer of the trustees admitted that fact. Paxson, J., in the court below, considered this admission as of no weight, citing Wells v. McCall, 64 Pa. 207 (1870), §482, ante, without observ- ing that that was a case of a settlement by athird person. On appeal, the Supreme Court affirmed, placing the decision, how- ever, on the ground that the trust was ac- [—607, 608—] ORIGIN OF PENNSYLVANIA DOCTRINE 369 learned judge misunderstood the case of Massey v. Parker.’ He said that that case decided that the gift of a separate use to an unmarried woman was impracticable. On the con- trary, the case simply decided that the clause against antici- pation attached to a married woman’s trust could be disregarded by her when she was not married. Since in England she has all the powers which are not denied her, it is apparent that in that jurisdiction to disregard the clause against anticipation does not destroy the trust. In Pennsyl- vania, however, where she has only those powers given to her in the instrument creating the trust, it is a far cry from the decision in Massey v. Parker to say that merely because the woman becomes discovert the whole trust falls to the ground. The learned judge also relied on the case of Smith v. Starr, overlooking the fact that that was a use of real estate executed by the statute of uses. Reasons Assigned by the Supreme Court 608. A number of reasons have been assigned by the Su- preme Court for this doctrine. (1) ‘‘Perhaps a reason for the fall of this kind of trust is that the donor having ex- pressed coverture as its purpose, no other intent is presumed.’* tive and the remainders legal, and there- fore the cestui que trust was not entitled to the legal title. Fj 10 Massey v. Parker 2 M. & K. 174(1834). The dictum in this case is very obscurely worded, but seems to go only to the point that # restraint upon alienation is invalid as against the subsequently taken husband of the cestui que trust. The court said that as the woman while sole could disregard the restraint, there can be no reason why she could not give it to her husband by the act of marriage. It may also be gathered from the opinion of Lord Cottenham in Tullet v. Arm- strong, 4 Myl. & Cr. 377 at 399, 400 (1840), 8. c;1 Beav. 1 (1838),that the point really involved in the dictum of Massey v. Parker was that the restraint against anticipation was invalid only during subsequent cover- ture. In Tullet v. Armstrong a testator gave property to trustees in trust for his wife for life, with the remainder tc M. A. T., then a feme sole, without anticipation and free from the control of her husband. M. A. T. was un- married on the date of the death of the testator, but married in the life- time of the widow. Held, that the separate use clause and restraint against alienation became effective at her marriage, the Master of the Rolls, Lord Langdale, pointing out on p. 29 the dictum in the case of Massey v. Parker. 1 Agnew, C. J., in Earp’s App., 75 Pa. 119 at 125 (1874). The learned judge probably had in mind the operation of the statute of uses. See §129, ante. Con- trast this language with that of the same judge in Wells v. McCall, 64 Pa. 207 at 213, where he evidently makes the trust fall because it is itself a restraint on alienation, which restraint can only be imposed so long as the necessity exists. 370 MARRIED WOMEN’S TRUSTS [—608] (2) That when the marriage is known, the donor has the data upon which to base an intelligent judgment as to the propriety of creating the trust.? This reason, it is submitted, loses its force when it is remembered that the trust has for its object the protection of the woman against the uncertain- ties which attend every marriage, however auspicious. (3) That as the sole and separate estate is one in which the cestui que trust has no powers except those granted, it is necessary to restrict the persons for whom such an estate may be created, for if the estate could be settled upon every single woman, the free alienation of property and the transmission of title would thereby be most seriously embarrassed. This reason, however, is of no weight when assigned in a jurisdiction like Pennsylvania, where, if anywhere, the restrictions upon aliena- tion which may be created are allowed to the greatest extent, and is inconsistent with that assigned by Mr. Chief Justice Gibson.* ? Sterrett, J., in Snyder’s App., 92 Pa. 504 at 509 (1880). 3 Clark, J.,in Quin’s Est., 144 Pa. 444 at 455 (1891). 4 There appears to be no discussion in the books at the time the doctrine was es- tablished as to the reason why the woman should be married or in contemplation of marriage except in the opinion of Smyser, P.J., in the court below, in Dubs ». Dubs, 31 Pa. 149 at 151 (1858). In that case the Supreme Court seemed to think that the other view was the English view, and, for that reason alone, viewed it with disfavor. (371) CHAPTER 25 ACCUMULATIONS PRELIMINARY DISCUSSION Accumulations defined and analyzed......................... §615 Implied directions to accumulate Preliminary discussion of implied directions.............. 3616 Rule of construction applicable to disposition of income on gifts of personal property....................200002000. $617 JATITUITIES oe eee aes ae Wns oe eee Se Was eee eh ay Bee aber EE $618 Express directions to accumulate Express directions defined and analyzed.................. §619 Contingent gift depending on the accumulation, how limited §620 Direction to accumulate subsidiary to vested gift, how iM Ce dguinoewets. aca acon saan NMR aM Deen nahn eke a §621 * Reason for separate discussion of accumulations.............. §622 Tue STATUTE AGAINST ACCUMULATIONS The statute in general The statute against accumulations........................ §623 General distinction between English and Pennsylvania acts §624 The Pennsylvania act examined in general................ $625 The act considered in connection with the rule forbidding restraints on alienation............. 0.0... e eee ee eee $626 The act considered in connection with the rule against per- PCCUILIES sons ease RARER pa P Naas Mi RARE an heralire §627 The act considered in connection with the rule forbidding restraints on enjoyment........... 6.66 eee cece §628 Cases on accumulations before the act.................... §629 Directions to accumulate which are valid under the act Preliminary Gis@ussion ¢. cs cc. gee esto ee eles eee ieee §630 Brown: 0. Williamson ges os «1In Reimer’s Est., 159 Pa. 212 (1893), there was a direction to accumulate to build a monument, as to which no ques- tion was raised. As a gift for a mon- ument is a valid charitable use, under the Act of May 26, 1891, P. L. 119, see §§787, 788, post, there seems to be no objection to the direction to accumulate. ® Stevens’s Est., 164 Pa. 209 (1894). 7 DeRenne’s Est., 12 W.N.C. 94 (1882), semble; dictum, Penrose, J.,in McBride’s Est., 152 Pa. 192 at 196 (1893); in this case the contingency on which the gift was to take effect did not happen. § Lennig’s Est., 154 Pa. 209 (1893). ° For a case involving such 2 question of construction, see Biddle’s App., 99 Pa. 525 (1882), s. ¢. 12 W. N.C. 231, reversing Derbyshire’s Est., 11 W. N.C. 22 (1881). In Franklin’s Est., 150 Pa. 437 (1892), the personal representatives of the decedent sought to enforce a resulting trust in their favor arising from an alleged void direc- tion to accumulate contained in the will of Benjamin Franklin. It was decided in the court below, 27 W. N.C. 545 (1891), that the personal representatives could not recover, Penrose, J., placing the decision on the ground that there was a vested gift for a charitable purpose, with a superadded direction to accumulate, in [—653-655-—] THE STATUTE AGAINST ACCUMULATIONS 399 ally is of indefinite duration and the interest is generally vested absolutely in the charity, most cases of direction to accum- ulate will be of the latter class. Contingent Gift of an Accumulated Fund to a Charity 654. If there was a contingent gift of the accumulated fund to a charity which violated the rule against perpetuities, it was void before the act,° and is still void notwithstanding the proviso.'. Where there is a direction to accumulate a cer- tain sum, the court will take judicial notice of the fact that the income is sufficient to produce the required sum within the period prescribed by the rule against perpetuities.? Young v. The Church 655. In Young v. The Church? the testator gave certain bonds in trust to pay certain annuities out of the interest, some of them for charities, with direction to invest the sur- plus income, if any, for the benefit of the trust, with the further proviso that if the income should be insufficient to pay all of the annuities, they should be reduced proportion- which case the next of kin had no stand- ing to the income, even if the direction were void. This was affirmed by the Supreme Court on appeal, although the de- cision was placed on other grounds. The next of kin then brought a bill in the Com- mon Pleas, The Apprentices’ Fund Case, 13 Pa. C. C. 241 (1893), to enforce the re- sulting trust, and the court in an opinion by Arnold, J., dismissed the bill. It is not clear from his opinion whether he considered the gift vested or contingent. In Hillyard v. Miller, 10 Pa. 326 (1849), there was a direction to loan out the income to deserving young farmers and if it so happened that the income should accumulate beyond the applica- tions for loans, then to apply the same toward building an asylum. It was held that the direction to accumulate was void; that the first gift was not a charity, and the expenditure of income for that pur- pose was therefore void, and that the sec- ond gift failed because it violated the rule against perpetuities and there was therefore a resulting trust. 1 Rogers’s Est., 18 Phila. 99 (1886). The true bearing of the proviso, it is sub- mitted, was overlooked by Stewart, J., in the court below, in Young v. The Church, 200 Pa. 332 at 334 (1901), stated §655, post, where he said, “‘ Were it not for the Act of May 9, 1889, P. L. 173, and the first proviso of the Act of April 15, 1853, P. L. 503, §9, I should unhesitatingly say that the trust created (in the case at bar) violated both the rule against perpetuities and the statute against accumulations. But this act and this proviso stand in the way.” ? Penrose, J., in Lennig’s Est., 154 Pa. 209 at 215 (1893). In Curran’s App., 4 Penny. 331 (1884) s. c. 15 Phila. 84, it would have required a period longer than that prescribed by the rule against per- petuities to have accumulated the sum specified. No notice was taken of this point, and the case was decided on other grounds. 3200 Pa. 332 (1901). 400 ACCUMULATIONS [—655, 656] ately, the bonds or proceeds thereof to be eventually used for such purpose as might thereafter be directed. The testator died without making any such direction. In a case stated in the Common Pleas, in which the next of kin were plaintifis and one of the charity annuitants was a defendant, the court below entered judgment for the defendant, which, on appeal, was affirmed by the Supreme Court without an opinion. The gift to the charity was plainly valid. The remarks of the learned judge, Stewart, J., in the court below, on the question of accumu- lations, were clearly dicta, as no question as to that part of the will was properly before the court until those entitled applied for an order on the trustee to pay over the accumulated in- come. If the next of kin or residuary devisees in this case had applied to the court to have the surplus income paid to them, as well as a resulting trust decreed of the bonds after the expiration of the annuities to the individuals, there seems to be no reason why they should not have succeeded. Vested Gijt lo a Charity 656. Where there is a vested gift to a charity, and a direc- tion to accumulate the income engrafted thereon, it is not altogether clear whether the direction to accumulate is void.* No Pennsylvania case has been found deciding the question.° A similar direction in the case of a gift vested in an individual is probably void.® There is, it is apprehended, no reason for any distinction in the case of a charity. It seems, however, that no one but the charity can take advantage of the invalidity of the direction to accumulate.” 4Mr. Gray, Rule Perp., 2 ed. (1906), §679, seems to think that the direction is valid and he cites Biddle’s App., 99 Pa. 525 (1882), as an authority for this po- sition. That case, it is submitted, turned on a question of construction, and decided that the testator intended a gift of the accumulated fund at a future period, and does not, therefore, raise the point. See $653, ik 4, u. 9, ante. 5 There is a dictum by Lowrie, J., in Phila. v. Girard, 45 Pa. 9 at 27 (1863), that the direction would be void; see also Curran’s App., 4 Penny. 331 (1884), s. c. 15 Phila. 84, and Franklin’s Est., 27 W. N. C. 545 (1891), semble; Penrose, J., in the latter case, at 548, quoting from Gray, Rule Perp., 1 ed. (1886), §678, said that if the direction to accumulate is too remote, etc. In the 2nd edition, (1906), the learned author has changed this language to “if the direction to ac- cumulate is invalid,’ which is more ac- curate, as the direction to accumulate cannot possibly violate the rule against perpetuities if the gift to which it is at- tached is vested, and is invalid, if at all, as a restraint on enjoyment. ® See $621, ante. 7 Gray, Rule Perp., 2 ed. (1906), $678; see $696, post. [657—]| THE STATUTE AGAINST ACCUMULATIONS 401 Act Limiting Amount to be Held by Charitable Corporation 657. The total amount of property which a religious, chari- table, scientific, literary or beneficial association may hold, is specifically limited by certain legislative provisions. In the ab- sence of any evidence to the contrary, the presumption probably is, that the gift in question would not increase the holdings of the charity beyond the amount limited by law. And if there is a gift to such a corporation of an excessive amount, or an amount which, combined with that which the charity already has, would exceed the amount prescribed, the gift is valid, but the excess is to be disposed of under the Act of April 26, 1855, and the heir at law or next of kin have no claim to the excess in any event. This legislation has nothing to do ® Act of April 26, 1855, §§8 and 12, P. L.328. The provisions of the act are as follows: §12. ‘That to avert the evil of an indefinite increase of the property in mortmain and perpetuity, it shall not be lawful for any religious, charitable, liter- ary or scientific society, association or corporation, present or future, to accumu- late income into capital or invested estate, so as that the clear annual value thereof, aS regards future acquisitions with those now held, shall exceed the limitation here- inbefore contained, and as regards acquisi- tions now held by or for any such body, shall not exceed said annual amount, ex- cept as the property now held does orbeing made more productive may exceed such amount, but all such clear income, after such amount of capital or invested estate shall be attained, shall be expended an- nually in and for the purposes, uses and trusts upon and for which the property producing it is held; and if there be not objects within the intent of such purposes, uses and trusts sufficient to exhaust such income, it shall be the duty of such body or association holding such property to apply to the legislature for authority to expend the income thereof upon such practicable objects as shall most nearly conform to the intent of the uses and trust upon which such property is held, and in default thereof, such income as shall not be so expended in execution of its trust, shall be paid into the treasury of the commonwealth: Provided, That this section shall not be taken as intended to apply to any corporation or trust, if any there be, placed by contract beyond such legislative requisition.” §8 provides that the clear annual value shall not ex- ceed $5,000. By the Act of April 22, 1889, §1, P. L. 42, any literary, religious, charitable or beneficial society, congre- gation or corporation may hold property to the clear annual value of $30,000, and by the Act of June 6, 1893, $1, P. L. 324, any religious, educational, literary, scien- tific or charitable corporation may ob- tain the consent of the Court of Common Pleas to an increase in the amount of their holdings. The act of 1855 is limited in its scope and seems to be directed towards prohibiting the associations mentioned from increasing the corpus of their es- tates by accumulating the income thereof. No case on the point has been found, and the act is probably of rare application, as most charitable organizations use up each year’s income in the purpose of the charity, and commonly find it neces- sary to callon their friends to make up a deficit. ®§10, P. L. 328. See Curran’s App., 4 Penny. 331 (1884), s. cv. 15 Phila. 84, semble. 402 ACCUMULATIONS with the directions to accumulate income which we are discuss- ing, but it seems proper to refer to it in order to clearly point out it’s non-application to the subject in hand. Accumulations in the Interest of Judicious Management 658. The doctrine under which an accumulation in the interest of judicious management is permitted, is to be con- fined to very narrow limits. The trustee must pay the charges on the trust, and he is not required to make advances out of his own pocket for such purpose. For reasons, therefore, of business convenience, he may consider each year’s income as a whole, and retain such part thereof as may reasonably be expected to be necessary to meet impending charges. Any payment to the cestui que trust during the year is a payment on account, and no income can really be said to be due until an account for the year has been stated, and the balance actually due has been ascertained.’ If, at the end of the year, the trustee requires money for the next year, he may retain a balance for that purpose.” The limits of this doctrine may be stated thus: he may retain income to meet impending regular charges against the trust but not to fulfill his ideas of what is to the interest of the cestui que trust, and any direction in the settlement of the trust requiring him to make any special accumulation will be void. So also, and it is con- ceived for like reasons, the income may be accumulated for the first year after the testator’s death. 1 The time of payment, whether yearly, quarterly, or monthly, may be regulated by the provisions of the trust. Where there is no such provision the usual cus- tom is to pay quarterly, or as arranged between the trustee and the cestui que trust. Such direction, however, involves an accumulation pro tanto. For the case of a direction to pay the income annually, see Penrose’s App., 102 Pa. 448 (1883). The validity of these directions has never been questioned in Pennsylvania, and it is not likely that any direction for the term of one year or less would be dis- turbed. See remarks of the auditor in the court below in Hibbs’ Est., 143 Pa. 217 at 220 (1891); see this case stated §664, post. ? This is the true explanation of Mitch- eson’s Hst., 5 Pa. C.C. 99 (1888); same will as was before the court in 11 W. N. C. 547 (1882); Penrose, J., at 104, 105, said that the trustees could retain the surplus of $549.46, as that amount was necessary to carry out the legitimate purposes of the trust. It appears that the accountants claimed the balance for the expenses incident to the trust for the ensuing year. The remarks in the case were dicta, as no one entitled to the accumulations appeared before the court. *In Williamson’s Est., 143 Pa. 150 (1891), the testator directed his executors, who were different from his trustees, to hand over the residue of his estate to his trustees, in trust, to accumulate the in- (661, 662] IN THE INTEREST OF JUDICIOUS MANAGEMENT 403 Preliminary Discussion of the Misunderstanding oj the Doctrine of Accumulations in the Interest of Judicious ALlanagement 661. The doctrine under which the trustee may accumulate income in the interest of judicious management * has, it is ap- prehended, been misunderstood by the court and been carried beyond all proper bounds. The cases are as follows. AMcKee’s Appeal 662. The first trace of this misunderstanding is to be found in McKee’s Appeal. On the point of the accumulations, the court said, Gordon, J.,° ‘‘But since his (testator’s) death, there have been large accumulations arising from rents, issues and profits, accumulations which exceed the original estate and the necessities of the trust, and the serious question is, what dis- position shall be made of them?” That is all there is in the case as to the doctrine. As the accumulations were all distrib- uted, the remark as to the necessities of the trust was a dictum.’ come for ten years thereafter, and then to dispose thereof as therein provided, a direction admitted to be void. Upon the filing of the executors’ account one year after his death, the balance of the income for the year in the hands of his executors was claimed by the trustees. The court below made an elaborate argu- ment to show the distinction between principal and income, and that the income could not fall into the residuary estate, because if it did there would be an accu- mulation for one year, which was void, and therefore the income accumulated during the year should be paid to the next of kin. On appeal, the Supreme Court re- versed and in an opinion by Mr. Justice Green, after considering all the provisions of the will, concluded with the remark, at p- 166: ‘That trustee never did and never could accumulate that portion of the income whichaccrued during the first year, and hence the statute of 1853 has not been, and cannot be transgressed, so far as tha year’s income is concerned.” That point, however, was not before the court; the trustee had not attempted to accumulate income; it was simply asking to have the income accumulated during the first year awarded to it as directed by the testator. Mr. Gray, Rule Perp., 2 ed. (1906), §676a, calls attention to the cases arising in Eng- land of a direction that personal property and its accumulated income shall be in- vested in land or that land and the accu- mulated rents shall be sold and the pro- ceeds invested in personalty; and says that in such case the courts allow the accumulation for one year. He further says, ‘‘Whether this rule be one of con- struction or convenience so-called, may be doubtful, but it is well settled and prevents such provisions raising any question of remoteness.” Such trusts are not of frequent occurrence in Penn- sylvania. The law is probably the same. 4 Discussed $658, ante. 596 Pa. 277 (1880). At p. 284. 77his case deals with the question of the distribution of the accumulations. See §686, post. 404 ACCUMULATIONS (663, 664—] Eberly’s Appeal 663. In Eberly’s Appeal® the testator gave the residue of his estate in trust to pay an annuity, provide for the educa- tion of his son during minority, and, upon the son’s reaching majority, to pay him $500, and a like sum annually until the son was twenty-five years old, when the corpus should be paid to him if the trustee saw fit or if, upon proof and order of the Orphans’ Court of Cumberland County, it should appear that he was a sober and well-doing man. If it should not- be paid to the son, it was to continue to be held in trust, and the income of $500 per annum paid him for life, and at his death the prin- cipal to his heirs. The son, on reaching twenty-three, applied to have the accumulations, which it appeared were in the hands of the trustee, paid to him. There seemed to be evidence that the son was not a fit person to take charge of the estate. It also appeared that the accumulations had been attached by various creditors of the son, and that the annuitant was dead. The court in an opinion by Sterrett, J., said that the accumulation of $5,000 in the hands of the trustee was rea- sonable and necessary to the proper administration of the trust in order to keep up the annuity, entirely overlooking the fact that the annuitant was dead. The learned judge was also in- fluenced by the consideration that the subject matter was real estate, as he said that the accumulated income might be neces- sary to provide for a failure of crops or the destruction of the farm buildings by fire. How the use of the income for the latter purpose could be anything but an accumulation, it is difficult to see. The accumulation was of the income of a residue, and payable to the next of kin or heir at law. It appeared that the son was the only issue of the deceased, and would, therefore, be entitled to the accumulations as heir at law. It is not clear how the son claimed and it is, therefore, diffi- ~ cult to determine the exact value of the case as a precedent. Hibbs’ Eslate 664. In Hibbs’ Estate® the auditor in the court below found as a fact that it was not necessary to keep any sum on hand for the purposes of the trust, the subject matter being 8110 Pa. 95 (1885). "143 Pa. 217 (1891). See this case stated §674, post. [—664, 665—] IN THE INTEREST OF JUDICIOUS MANAGEMENT 405 investments in mortgages and judgment liens, and decided that the accumulations of income amounting to $5,000 should be paid to the son. On appeal, the Supreme Court reversed the decree of the Orphans’ Court affirming the auditor’s report,!° Sterrett, J., saying that where there were two classes of accumu- lations, onc where the manifest purpose of the testator was to add the accumulations permanently to the estate, which was void, and the other where the accumulations were intended to be temporary and in the interest of judicious management, which was valid; that the record did not show that the amount set apart, $5,000, was unreasonable; and that as the accumulation was temporary, and in the interest of judicious management, it was valid. The court ignored the fact found in the court below, that there was no necessity for the contingent fund, and that the will directed the income to be invested for the benefit of the son, and made no reference whatever to the purpose of judicious management. The action of the court in reversing the question of fact found by the auditor, in the absence of clear error, is open to serious objection." McIntosh’s Estate 665. In MclIntosh’s Estate’ the testator gave one-half of the rents of certain real estate in trust for A., ‘‘and if he continue sober and industrious, the rents shall be given him as before, but if he be not sober and industrious, said rents shall not be given to him but shall remain and accumulate in the hands of the above-named trustees.”” There was no dis- position of the accumulations, except incidentally as implied in the disposition of the principal. The court below” said, “The accumulations, if any, will be simply temporary and in the interest of judicious management. Hibbs’ Estate, 143 Pa. 217.” The question was not argued, and from the rather otscure report of the case it does not appear what exceptions 10 The report of the auditor on p. 220 main in the hands of the executor as a is a very clear statement of the correct principle of law. Contrast language of Gordon, J., in Schwartz’s App., 119 Pa. 337 at 349 (1888): ‘The principle on which the court based its order is undoubtedly sound, and whilst it is true that these accumu- lations might have been allowed to re- contingent fund, yet as it does not fol- low that any fund was needed for the use of the estate, we must concede something to the sound discretion of the court below.” 1158 Pa. 528 (1893). 2 On p. 537. 406 ACCUMULATIONS [—665-667—]| were carried to the Supreme Court. It further appears from the statement by the auditing judge® of the questions involved, that no question as to the accumulation was before the court. Howell’s Estate 666. In Howell’s Estate* the annuitant was dead, and it appeared that there was income in the hands of the trustees arising out of the fund which had been set apart for the annuity under the terms of the will, and that the sole question before the court was as to the distribution of this sum. Any discussion, therefore, as to the propriety of the accumulations was out of place, being an opinion on what the court would have done had an application been made in the lifetime of the widow to have the accumulations stopped.® King’s Estate 667. In King’s Estate® the testator gave one-third part of the residue of his estate in trust for his son Alexander for life, the income to be paid him without liability for debts, and upon the son’s death the principal to go to his children, the son to receive an income not exceeding $5,000 per annum, and any excess of that amount to be invested for the benefit and increase of the respective shares in the principal. By a codicil, the testator revoked the bequest to the son, and gave that interest to the wife and children of the son during the life of the son, in payments not to exceed $5,000 per annum. An account being filed, it appeared that there were accumula- tions of income over and above the amount directed to be paid by the will. On the question of accumulations the court below, Hawkins, P. J., said, in an opinion’ which was affirmed on appeal by the Supreme Court, ‘The accumulations in this case are so largely in excess of the allowance fixed in the 3 On p. 532. W. N.C. 144, 40 L. I. 466. In such 4180 Pa. 515 (1897). 5 Where there is a specific sum set apart to meet an annuity, the question as to the amount necessary is to be determined in the discretion of the court, and the residuary legatees have no standing to complain if the amount may produce more than the income specified: Mul- len’s Est., 16 Phila. 306 (1883), s. ec. 14 case, however, if at the end of any year there is an excess of income over the amount necessary to meet the annuity, there seems to be no reason why the residuary legatees should not be entitled to receive the excess. ®210 Pa. 435 (1904). 7 At p. 439. [—667, 668—] IN THE INTEREST OF JUDICIOUS MANAGEMENT 407 will, and the contingent fund proper to judicious management of the trust, that they fall within the prohibition of the stat- ute. In view of the character of this estate, $10,000 would for the present provide an ample contingent fund. And as the balance of the accumulations was intended for the benefit of the children, distribution should be made to them. There is nothing on the face of this will to justify the additional suggestion made at the argument of the exceptions that the primary purpose in the creation of the trust was accumulation. The natural and obvious purpose was the protection of the testator’s son and his family from his improvidence, and the provision for accumulation was simply incidental. But even concede that accumulation was part of the scheme, it does not follow that that relating to the maintenance of the family must fail. It is the policy of the law to carry out the testa- mentary intention so far as it is possible; Forney’s Estate, . 161 Pa. 209; and the validity of the trust to this extent is clear and should therefore be carried out.” This case goes a long way. The question does not seem to have received much attention or argument. Discussion of the So-called Doctrine of Accumulation in the Interest of Judicious Management 668. Various reasons have been advanced in support of the propriety of allowing accumulations in the interest of judi- clous management. These reasons will now be examined. One reason assigned is that such accumulations are temporary and not within the statute, as they do not inevitably tend to cap- italization and are not so intended; tliat the purpose of the statute is to prevent permanent accumulations, and not to in- terfere with judicious management.* The evil aimed at, how- ever, by the statute, is just what might happen in this case. Suppose the cestui que trust should die or the trust terminate, leaving the trustee with an accumulated income on hand. The trustee could not retain that accumulation; he must pay it to some one, and as to that person, whoever might be decided to be entitled, there would be an accumulation which would be in violation of the statute. This seems too plain for argument. ® Traces of this reason are to befound 515, Fell, J., at 520 (1891); Lafferty’s in Hibbs’ Est., 143 Pa. 217, Sterrett, Est., 20 Pa. C. C. 632, Ashman, J., at 633 J., at 225 (1891); Howell’s Est., 180 Pa. (1898). 408 ACCUMULATIONS [(—668—] The reason given, therefore, amounts to this: the case in hand does not necessarily produce the evil aimed at by the statute, that is, it may or may not be within its terms; therefore, it is an exception. Yet, in Eberly’s Appeal,® the court said that one of the reasons why they permitted the accumulation was that the income might be necessary for rebuilding the trust property if destroyed by fire,!° a use which would be just as much a capitalization of the accumulation as if it were added to the principal and distributed as such. It may be doubted, there- fore, if this reason is sufficient to justify the court in reaching a conclusion in the teeth of an act of legislature. Another reason given in some of the cases‘ is that such an emergency fund or temporary accumulation is necessary in a trust de- signed as a provision for sickness, marriage, and a hundred other possibilities. It is difficult to see, however, how the court can read into a trust, in which there is no mention of any such possibility, any intention on the part of the settlor to provide for such contingencies. While it may be desirable as a prudent measure for any one to have on hand an emer- gency fund for such cases, it is going a little too far for the court to construct such an intention In cases where no such in- tention is to be found. Even if there were such a direction as to the income in the case of a life tenant, it would be open to the same objection as would any other discretionary with- holding of the income.” The learned reader will observe that in some of the cases which have been discussed there was a gift of a residue subject to an annuity, and the court seems to have been influenced by the thought that the annuitant should receive his income without diminution in each year, and therefore there was a reason to sanction an accumulation to meet deficiencies in a subsequent year. It is submitted, however, that in this respect the court has not given sufficient attention to the ordinary rule of construction, that the defi- ciency in the annuity is not to be made up out of the subse- 110 Pa. 95 (1885), stated §663, (1898), citing Eberly’s App., 110 Pa. 95, ante. The obvious thing to do in such a case is to take out a policy of fire insur- ance. 1 Sterrett, J., in Hibbs’ Est., 143 Pa. 217 at 225 (1891); Ashman, J., in Lafferty’s Est., 20 Pa. C. C. 632 at 633 Hibbs’ Est., 143 Pa. 217, Schwartz’s App., 119 Pa. 337. Eberly’s App. was a case of a fixed annuity; Hibbs’ Est. has been discussed supra, and in Schwarta’s App. the direction to accu- mulate was held to be void. * See §§540, 545, ante. [—668, 669—] IN THE INTEREST OF JUDICIOUS MANAGEMENT 409 quent year’s income, unless there is some expression to that effect in the settlement,? and in no case does there seem to be room to imply a direction to accumulate.* Law in Pennsylvania as lo Accumulations in the Interest of Judicious Afanagement 668. It is clear that the trustce may accumulate the income within reasonable bounds for one year, to provide for the necessary charges and expenses of the trust,> and when prop- erly analyzed it will appear that the case is not that of an accumulation at all. It was fixst hinted in the dicta in McKee’s Appeal® that an accumulation was permissible for the benefit of the cestui que trust. In Eberly’s Appeal,’ where the sub- ject matter was real estate, the court laid down by way of dictum, the doctrine that an accumulation was proper in order to provide for an annuity out of the residue.* This was fol- lowed by Hibbs’ Estate,® where, however, the court ignored the circumstance that the subject matter of the trust was per- sonal property, to which the doctrine as laid down in Eberly’s Appeal had no application, and overruled the well-considered report of the auditor in the court below. The doctrine again appeared in McIntosh’s Lstate,’° and in the recent case cf King’s Estate’ the court directed a large sum to be retained in the interests of judicious management, without it clearly appearing what necessity there was for the accumulation. The remarks in Howell’s Estate? were dicta, as were also the remarks cited in the note.* In this condition of the authori- 3 See §618, ante. 4In Thouron’s Est., 11 W. N. C. 285 (1882), where there was a bequest of a residue in trust to pay certain annuities, and, upon the death of the annuitants to pay the annuities to the children of a son, it was held that on the death of one of the annuitants, the income theretofore paid to said annuitant should be awarded to the other residuary legatees in equal shares and not to be accumulated. In Rhodes’ Est., 147 Pa. 227 (1892), where there was a direction to pay certain annuities and a contingent gift of the residue of the prin- cipal after the death of the annuitants, Penrose, J., on p. 231, said that the sur- plus income, after paying annuities, could not be accumulated under the provisions of the act, and must be distributed under the intestate laws. The point was not argued nor was it noticed by the reporter in the syllabus. 5 See §658, ante. °96 Pa. 277 (1880), stated §662, ante. 7110 Pa. 95 (1885), stated §663, ante. 5 For a discussion of this point, see §618, ante. ® 143 Pa. 217 (1891), stated §664, ante. 10 158 Pa. 528 (1893), stated §665, ante. 1210 Pa. 435 (1904), stated $667, ante. 2180 Pa. 515 (1897), stated §666, ante. * Gordon, J., in Schwartz’s App., 119 Pa. 337 at 349 (1888); Penrose, J., in Mayer’s Est., 29 Pa. C. C. 527 at 528 410 ACCUMULATIONS [—669, 671—] ties no statement can be ventured as to the law. It is appre- hended though that the court has misunderstood the doctrine of an accumulation in the interest of judicious management, and has apparently given countenance to the doctrine that income can be accumulated for the benefit, real or supposed, of the cestui que trust. As no limits have been laid down to such accumulations, and there is nothing in the statute which authorizes the exception, it is submitted that these cases, in so far as they countenance an accumulation for more than a period of one year, and except for the business necessities of the trust,’ are unsupported by any legal principle. Preliminary Discussion of Accumulations in Pursuance oj an Express Discretion 671. If the discretion is to accumulate the income and dis- pose of the accumulation, the exercise of the discretion will be a condition precedent, and the case will be that of a gift of the accumulated fund. Such a discretion is, it is appre- hended, void under the statute, except where the discretion is to be exercised as to the income of a minor, in which case the discretion would be superfluous, as accumulation is incident- al to the income of a minor under the policy of the law, and the trustee cannot exercise his discretion against an order of the court directing a suitable allowance out of the income for support and maintenance. Where there is a vested gift of the income or a vested gift of the accumulated fund, and a discretion to accumulate engrafted thereon, it is apparent that the discretion is void under the general rule of public policy preventing restraints on enjoyment.® There is no dis- tinction on principle between a discretion to accumulate in such case, and a direction to accumulate. The trustee cannot ex- ercise the discretion and add the accumulations to the principal, because the whole income belongs to the life cestui que trust.® He cannot refuse to pay the income to the life cestui que trust because such refusal is a void restraint on the latter’s right of enjoyment. These principles are plain and would not (1904), s. vc. 13 D. R. 277; Penrose, J., tate, any discretion to accumulate the in Ferguson’s Est., 35 Pa. C. C. 466 at income of the life estate is a void direc- 469 (1908). tion engrafted on the gift and to be dis- 4 Discussed §658, ante. regarded and the income awarded to the 5 See Chap. 23, ante, on Discretion. life tenant; see §621, ante. “Tf there is a present gift of a life es- [—671, 672] IN PURSUANCE OF EXPRESS DISCRETION 411 require any special discussion were it not for the fact that the Supreme Court has, in a number of cases, given countenance to the doctrine that an accumulation under an express discre- tion is valid. These cases will now be discussed and the validity of the doctrine examined. Huber’s Appeal 672. In Wuber’s Appeal’ there was a gift of a share in the residue to a son, Jacob, with a clause as to the life estate as follows: ‘‘or at the option of my said executors, I authorize them to appropriate and apply the same for the support and maintenance of my said son Jacob as they may see fit and proper, and so that the samme or any part thereof shall not be liable or subject to his disposal, order, debts, control or engagements, and in case of his decease then to appropriate and apply the same for the support, maintenance and education of his child or children.” The court said that Jacob took a life estate, and held that upon his death his administrator was not entitled to the accumulated income in the hands of the trustees which had not been applied for Jacob’s use, but that it went with the principal. This, of course, means that Jacob in his lifetime could not have compelled the exer- cise of the discretion; and that the direction to accumulate was valid. The will was dated 1825, and the testator died in 1851; consequently, the act did not apply.’ This is the first case in Pennsylvania in which the question of a discretion to accumulate income has arisen. Under the construction of the will adopted by the court, which was that the accumulations were to be added to principal, the discretion was not a restraint on enjoyment, as upon the exercise of the discretion the ac- cumulations went over to those entitled in remainder. It seems, from the dissenting opinion of Agnew, C. J.,° that the chief ground of controversy was over the question of construction as to what was the intention of the testator concerning the accumulations ’° 780 Pa. 348 (1876). § This point seems to have escaped ob- servation, as the case has been cited as an authority for the validity of a discre- tionary power to accumulate since the act: Mercur, J., in Barger’s App., 100 Pa. 239 at 248 (1882); see, however, re- marks of Penrose, J., in Grim’s Est., 12 W.N. C. 354 at 356 (1882). * On p. 359. Yor a similar case where, although there was a clause against involuntary alienation, the court thought it necessary to rest the decision also on the clause of 412 ACCUMULATIONS (673—] Barger’s Appeal 673. In Barger’s Appeal” the testator by item 5 gave his estate to his wife, in trust to pay herself one-third of the income during her widowhood, and the ether two-thirds for the use of his children in equal shares. The testator further empowered his trustee to divide his estate at the end of seven years or later among his children and, in her discretion, to retain the whole or any part of each child’s proportion until such distribution, and to incorporate the part retained therein; and further diected that no interest in the estate should pass to any child until the time for division, except as provided in item 5, relating to income. An account of the trustee under the will was before the court, the seven years not having expired. One of the children, a son, was deceased, and his share in the income accruing since his death was claimed (1) by his administrator, (2) by a mortgagee of his interest. The court below, Penrose, J., said‘ considering the word “proportion” as meaning income,’ that the discretion of accumulating the income was void as regards those children who were not minors, and also void as to the direction to capitalize as to those who were minors. On appeal to the Supreme Court, the Act of 1853 was not mentioned either by the court or counsel? Mercur, J., in the Supreme Court said that the pro- vision as to the income was not in conflict with the statute against perpetuities; that the son took no interest therein, and consequently neither his administrator nor assignee could claim the income. If, however, the son took a vested interest in the principal, as he undoubtedly did, he must, in like manner, be discretion in order to defeat the creditor of the cestui que trust, see Brubaker v. Huber, 13 Pa. C. C. 78 (1893). 1100 Pa. 239 (1882); s.c. 12 W. N.C. 341. 1100 Pa. at p. 243. > There is some room to doubt whether the court correctly construed the will. The position of the clause as to retaining the proportion, and the exception in that clause as to item 5, which item relates to income, together with the circumstance that in the clause relating to income the discretion of the trustee is expressly lim- ited to minority, forcibly point to the conclusion that the word proportion re- ferred to principal and not to income. The court should not be astute to read a direction to accumulate into the will. See McBride’s Est., 152 Pa. 192 (1893); Gray, Rule Perp., 2 ed. (1906), $633; Wahl’s Est., 26 W. N. C. 249, Penrose, J., at 251 (1890); Derbyshire’s Est., 11 W. N.C. 22 (1881). * Unless by the reference to the statute against perpetuities, by Mercur, J., at the bottom of p. 248, understood by the re- porter in paragraph 5 of the syllabus as turning on the statute against accumu- lations. See as to this $327, ante. [—673, 674—] IN PURSUANCE OF EXPRESS DISCRETION 413 entitled to the income thereon unless it is expressly given to some one else. There was no gift of the income to anyone else, merely a discretion to retain it and add it to the capital. This discretion was clearly void as being in direct conflict with the statute against accumulations. The learned judge further said,* “When the income arising from any share was so re- tained, it became part of the principal, and did not vest until the share of which it formed a part was allotted.” What this is but an accumulation it is difficult to see, and how it can be reconciled with the provisions of the act is still more difficult.* Hibbs’ Estate 674. In Hibbs’ Estate* the testator created a spendthrift trust for a son, Spencer, for life, the trustee to pay over what portion of the income he should deem necessary; ‘‘the balance, if any, to be invested for the son’s benefit,” the principal of the estate, at the death of the son, to be paid as the trustee might by his will appoint. The account of the trustee was filed during the life of Spencer, who was of age, and who claimed the income accumulated in the hands of the trustee. The court below awarded the accumulations to the son. As the learned judge in the court below, Swartz, P. J., well said,” ‘““The entire income is for Spencer; the manner of its enjoyment alone is limited.” On appeal, the Supreme Court reversed, Sterrett, J.,° saying ‘‘The power vested in this trustee, to withhold and invest part of the income, must be so con- strued, if possible, as to make it operative. It does not in terms nor by necessary implication require permanent accumulations. As already seen, the whole income arising during the trust must be used for Spencer’s benefit. In common prudence a contingent fund should be provided in anticipation of decrease of income, sickness, and the like; and the natural inference is that the discretion was vested in the trustee with this view. The accu- mulation was to be temporary, and in the interest of judicious 4 At p. 248. 5 See remarks of Mr. Gray, Rule Perp., 2 ed. (1906), §722. This case understood by Penrose, J., in Grim’s Est., 12 W. N. C. 354 at 356 (1882), as deciding that a provision giving the trustee discretionary power to withhold the income from adult children of the testator, and at the end of a term of years capitalize it, was not in contravention of the statute against accumulations. 6143 Pa. 217 (1891). 7 At. p. 222. S At p. 225. 414 ACCUMULATIONS [—674, 675—-] management. The record does not show that the amount, already set apart, is unreasonable in the circumstances, and we cannot assume that the trustee has abused his discre- tion.” The learned judge contradicts himself. How can the power to withhold be made operative, and, at the same time, a construction be adopted which will require the whole income to be used for the benefit of the life tenant? If it is withheld and invested, it is not used for his benefit. Sharp’s Estate 675. In Sharp’s Estate® there was a gift of the residue in trust for two grandchildren and their heirs, the trustee to pay them the income annually, the trust to continue during the life of the father of the cestui que trust, and, at his death, the principal to be divided among them in shares to be determined by the disposition the father should make of his property. By a codicil the interest of R., a grandchild, was given to another trustee, specified in trust, to hold the estate during the life of R., and to pay R. “out of the same, $30 a month during his natural life;’ and more, if R., in the judgment of the trustee, should need it for his maintenance and support, and upon the death of R., in trust to pay his widow, if he left one, $10 a month while she remained his widow, with further provisions as to the distribution of the principal and remainders over to other grandchildren. The court held that there was an accumulation directed under the codicil, as to the income of R., which direction was void, and that therefore the entire income should be distributed to him. The judge in the court below, Rhone, P. J.,1° said, ‘The accumulation of one-half of the income, as provided in the first codicil, is void, and R. takes the same for life, as provided in the original will.” The learned judge evidently proceeded on the theory that the accumulation was directed out of the income of a life estate and, therefore, was void, and that the accumulations were to be paid to the life tenant as they amounted to an illegal restraint on use and enjoyment. This case overrules Barger’s Appeal’ and the two cases cannot stand © 155 Pa. 289 (1893). life of his widow. This is probably a ” At p. 298. misapprehension of the statute. 'The court said that the direction to 7100 Pa. 239, (1882), s.c. 12 W.N.C. accumulate was void in toto, as it was 341, stated $673, ante. to continue during the life of R. and the [—675, 676—] IN PURSUANCE OF EXPRESS DISCRETION 415 together. Sharp’s Estate, however, seems to have been over- looked in the later cases.” Lafferty’s Estate 676. In Laflerty’s Estate* it appeared from the statement of the auditing judge that the testator gave his residuary estate to his executors, to hold until the youngest of his grand- children living at the death of his last surviving child should attain full age, in trust, to pay each of his children (naming them) and, by a codicil, the children of a deceased daughter, an annuity of $2,000 from the date of his death, to be in- creased or diminished as the income should be more or less than the sum needed, to be free from the debts of the annui- tants and, by the codicil, as to the children of the deceased daughter he provided that no guardian or other person should interfere with the discretion of the executor in applying the income to the needs of the children, and that the executors might “withhold the income of the said children, or any of them, who are not so placed as to benefit by its application and their use.”* The testator died in 1885. A daughter of the deceased daughter, having attained the age of twenty-one years, claimed to have the accumulated income of the share coming to her by the codicil, paid to her absolutely. The court held that she was not entitled to the accumulation. The auditing judge, Ashman, J., came to the conclusion that the discretion to accumulate was valid,®° basing his decision partly * Confer, White’s Est., Buckley’s App., 163 Pa. 402 (1894), and 8 D. R. 33 (1898), where there was » gift of a specific sum in trust, with direction to the trustees to pay the income thereof, or so much as in their discretion they should think fit, to A. until he should arrive at twenty-five, and it was held that so much of the in- come as they did not pay to A. was to be paid to the residuary legatees. 320 Pa. C. C. 632 (1898); see 19 Pa. C. C. 127 (1896), case arising on the same will. ‘The word ‘‘and” probably should be “to”. The phrase does not make sense as it stands. In a previous case arising under the same will, Lafferty’s Est., 19 Pa. C. C. 127 (1896), where income which had accumulated in the hands of the trustee had been paid to the guardian of « minor cestui que trust, the court held, on a petition by the trustee to open and correct the former adjudication, that the decree had been inadvertently made, and that the money should be paid back to the petitioner, as under the terms of the trust full discretion was vested in the trustee as to the income and prin- cipal, and all the rights of the cestui que trust could be adjusted upon their arriving at majority. °The attention of the learned judge was apparently not directed to the clause in the will which directed that the annui- ties should be increased or diminished according as the income was greater or 416 ACCUMULATIONS [—676—] on the doctrine of accumulations in the interests of judicious management.® The learned judge also said,’ “Besides, a direc- tion to accumulate cannot be implied where the whole income can be used by the trustee at any moment in his absolute discretion. This test has been applied in numerous decisions. In Mifflin’s App., 121 Pa. 205, the indestructibility of the limited estate was held to be essential to definition of a per- petuity; and in Wahl’s Est., 26 W. N. C. 249, where the donee could demand the rents as they fell due, it was held that a discretion to invest the rents was not void. See also Cooper’s Est., 150 Pa. 576; Rhodes’ Est., 147 Pa. 227; Wil- liams’s Est., 8 W. N. C. 310.” Upon this it is to be observed that it is perfectly true that a direction to accumulate is inconsistent with a discretionary power to accumulate. This inconsistency, however, does not solve the problem, as the objection is to the accumulations which take place under the discretion. It is submitted that the learned judge misappre- hended the authorities he cited. The power of anyone to destroy a future interest or to demand the rents as they fall due is a necessary consequence of the invalidity of the limi- tation or the invalidity of the direction to invest, and not the invalidity the result of the power to destroy. The court in banc, Penrose, J., said, in a very short and unsatisfactory opinion, that, since the testator declared the discretion of the trustees with regard to the income was not to be interfered with, the court had no right to say that that discretion was to be confined to the period of minority and, therefore, even though the petitioner was twenty-one years old, she could not receive the accumulations. It is submitted that this reasoning does not at all apply to the real point at issue in the case. The decision is plainly inconsistent with Sharp’s Estate,*® which does not seem to have been called to the attention of the court. Unfortunately, the case was not appealed. The dis- cretion was, it is submitted, void as against the cestui que trust.° There was a clause against alienation and the learned judge was evidently influenced by that fact. To uphold the validity of such a clause, objectionable as it is, is one thing; less. It seems clear that this clause was ® For a discussion of this, sce $668, material, and had it been duly considered, ante. there would have been no reason to di- 7 At p. 633. rect an accumulation at all after the cestui 8155 Pa. 289 (1893). que trust became of age. See §545, ante. [—676-678—] IN PURSUANCE OF EXPRESS DISCRETION 417 to say that the trustee can accumulate income in defiance of the statute because of the presence of the clause, is another thing.”® Spring’s Estate 677. In Spring’s Estate’ the testatrix gave one-third of the residue of her estate in trust, with power in the trustee to pay such portion of the income to the beneficiary as, in his discretion, he might think necessary. The remarks of the court, Elkin, J., as to the accumulations were dicta, as it ap- peared that all the income due the cestui que trust had been voluntarily paid by the trustee to the beneficiary, who sought to have the trust terminated.’ Summary of the Cases as to Discretion to Accumulate 678. Huber’s Appeal? appears to be the first case in Penn- sylvania involving a discretion to accumulate income. That case arose before the act, and the discretion to accumulate was plainly valid, as the court construed the will to mean that the accumulations were to be added to principal, if not paid to the life tenant. In Barger’s Appeal* the Supreme Court, apparently under the influence of Huber’s Appeal, and without noticing that the case was not in point, overruled the very well-considered opinion of the court below and_ sus- tained a discretion to accumulate in the very teeth of the act, without taking the trouble even to refer to its provisions. In Hibbs’ Estate* the Supreme Court again reversed the better opinion in the court below, and followed the ruling laid down in Barger’s Appeal. In Hibbs’ Estate the trustee had dis- cretion to fix the amount which the life tenant should receive, and was expressly directed to accumulate the balance, and the direction to accumulate was upheld. In Sharp’s Estate,* where the exact interest of the cestui que trust life tenant was fixed by the will, and he was to have more only in the discretion of the trustee, and there was no direction to accumu- late, the court read one into the will, and then said that it was void, and distributed the whole income to the life tenant. It is submitted that Sharp’s Estate overrules Hibbs’ Estate. 10 See §649, ante, as to the application * 80 Pa. 348 (1876), stated §672, ante. of the statute to spendthrift trusts. 3100 Pa. 239 (1882), §673, ante. 11 216 Pa. 529 (1907). 1143 Pa. 217 (1891), §674, ante. 1 As to this point see §§523, 525, ante. 5155 Pa. 289 (1893), see §675, ante. 418 ACCUMULATIONS [—678, 679—] The decision in Sharp’s Estate was sound, as there was no direction to pay the income to any one else if the discretion was exercised against the son. Consequently, no one else had any interest in the life estate, and the discretion was a re- straint’ on the absolute enjoyment by the cestui que trust of his life estate. Lafferty’s Estate,® which seems to be the clearest on the point of discretion, is a county court case, in which Sharp’s Estate was not called to the attention of the court, and in which the opinion of the court seems to place the decision on other grounds. In Spring’s Estate’ the re- marks were dicta. It is therefore submitted that the author- ities cannot be said to be clear as to the validity of a dis- cretion to accumulate the income of a vested gift. The only strong case in its support is Lafferty’s Estate. The case of such a discretion seems plainly within the provisions of the statute as construed in Washington’s Estate,* and no one has yet been able to suggest any good reason why the statute does not apply.® It has been said that a direction to accu- mulate cannot be implied where the whole income can be used by the trustee at any moment in his absolute discretion.’° This is perfectly true, but it is no reason why the statute does not apply to an accumulation under an express discre- tion. It is, however, difficult to see the distinction, in so far as the statute is concerned, between an accumulation where the trustee is directed to accumulate, and an accumu- lation where the trustee may or may not accumulate, as he sees fit, but does, in point of fact, accumulate. Preliminary Discussion of the Distribution of Income Where the Direction to Accumulate is Void 679. The act provides that the rents, issues, interests, etc., so directed to be accumulated, contrary to the provisions of the act, shall go to and be received by such persons as would have been entitled thereto if such accumulation had not been directed.' 690 Pa. C. C. 632 (1898), §676, ante. 7216 Pa. 529 (1907), §677, ante. 875 Pa. 102 (1874), stated $632, ante. 9See dictum, Penrose, J., in Mayer’s act. Gordon, J., in Grim’s App., 109 Pa. 391 at 397 (1885), and Schwartz, P. J., in the court below in Schwartz’s App., 119 Pa. 337 at 342 (1888), said that the act Est., 29 Pa. ©. C. 527 at 528 (1904). 10 Ashman, J., in Lafferty’s Est., 20 Pa. C. C. 632 at 633 (1898). 1 See §623, ante, for the provisions of the meant that the accumulations should go under the intestate law. Penrose, J., in the court below, in Martin’s Est., 185 Pa. 51 at 53 (1898), said that the act does [—-679-681—] DISTRIBUTION OF ACCUMULATIONS 419 As has been observed,’ although the act applies to implied as well as express directions to accumulate this proviso only ap- pears to cover cases of an express direction. No distinction has ever been taken in practice as to this point. Distinction Between a Contingent Gijt of the Accumulated Fund and a Gift With Subsidiary Direction to Accumulale 680. The distinction between a contingent gift of an ac- cumulated fund and a gift of the income with a direction to accumulate subsidiary thereto is of vital importance in this connection and, at the risk of some repetition, will be again referred to. The first presents a case calling for the applica- tion of the rule against perpetuities and the second for the application of the rule forbidding restraints on enjoyment. The distinction between the two cases is clear: in the first, the income is not presently payable to any one under the terms of the trust, but simply directed to be accumulated and _ paid over when accumulated to the person designated. The direc- tion to accumulate being void, the gift of the accumulations cannot take effect, the whole disposition of the income fails, and it stands as undisposed of property. In the other case, the income is presently payable under the terms of the trust to some one, and the direction to accumulate being void, the income is still to be paid as provided.’ In the first case, when the direction to accumulate is struck out, the gift falls with it, as it is dependent on the direction to accumulate. In the second the gift remains after the direction to accu- mulate is removed. Question of Construction Involved 681. There is an extremely difficult question of construction involved in the distinction between the two cases. Of course, not mean that the liberated income shall go under the intestate law; that when it is distributed under the intestate law it is because there is no one entitled under the provisions of the will. The lat- ter view is probably correct. ? Smith on Executory Interests, §738e. 4 See §619, ante. 5 Two examples will illustrate the dis- tinction: suppose a gift to A. in trust to accumulate the income for thirty years, and at the expiration of that period, to pay the accumulations to B. and his heirs; this is a contingent gift to B. Suppose a gift to A. in trust to pay the income to X. for life, and after his death, the prin- cipal to B. and his heirs, with direction to accumulate such part of the income as the trustees shall think best, and pay the accumulations to X. once in every five years; this is a vested gift in X. 420 ACCUMULATIONS [—681, 682—] if there is a vested gift of the income, there can be no gift of the accumulations of that income to a third person. The two are inconsistent and cannot stand together. There may be a gift of the share of the income or a specific part, and a direction to accumulate the balance. Here there are two gifts of the income, and there is no inconsistency. Suppose, however, as frequently happens, the testator gives a fund in trust to pay the income to a son for life, and after his death to distribute the principal among the children of X. then liv- ing, with a direction or discretion in the trustee to accumu- late a portion of the income and add it to the principal. In so far as there is a gift of the accumulations to a third person, the party entitled to the principal, it comes within the first class. In so far as it is a direction engrafted on the vested gift of the income to the son, it is a direction of the second class. It cannot be both, for the two are absolutely incon- sistent. It is often a difficult and sometimes impossible matter to tell which the testator intended.® Slille’s Appeal 682. In Stille’s Appeal’ a testatrix gave one-fifth part of the residue of her estate in trust to be divided into two por- tions—one for each of two granddaughters, to collect the inter- est and accumulations until each granddaughter arrived at the age of twenty-one years or married, and then to hold the portion with the accumulations, and pay the income thereof to the sole and separate use of such granddaughter for life, and after her death for the use of her children. Each of the granddaughters arrived at the age of twenty-one, and petitioned for the payment to them of the income in the hands of the trustees which had accumulated during their minority. The petition was granted. The Supreme Court, in a very short and unsatisfactory opinion, affirmed the decree of the court below without clearly indicating upon what grounds they based the decision. ‘There was a preliminary question of construc- tion to which the court did not give sufficient attention to ® As stated by Lord Chancellor Chelms- direction to accumulate, or did he mean ford in Oddie v. Brown, 4 DeGex-Jones, that the gift of the residue should be de- 179 at 184 (1859), ‘‘Did he (the testator) | pendent on the previous accumulations?” then by the words which he has used in- 74 W. N.C. 42 (1877); 11 Phila. 31 dicate his intention to give the residue (1875); see 1 W. N. C. 249 (1875). to the persons named, with a subsidiary [—682, 683—] DISTRIBUTION OF ACCUMULATIONS 421 make the opinion clear. Did the gift of the corpus at twenty- one carry with it the intervening income, and give the grand- daughters vested equitable interests with the time of payment deferred until twenty-one, or did they take nothing until twenty- one, with no disposition of the intervening income? Dwight, J., in the court below, said that under the will the income clearly did not belong to the minor; therefore, the direction to accumulate was void, not being a direction to accumulate the income of a minor. Then, when he came to consider the question of distribution of the accumulations, he involved him- self in a curious fallacy.* He said that under the decision in Washington’s Estate® the accumulations belonged to the minor, entirely overlooking the fact that the minor was en- titled to the accumulations in that case because there was a direction to accumulate his income, whereas, in the case at bar, the learned judge had just concluded that the direction was void because the income did not belong to the minor.’° The same question of construction has arisen in several other cases which are referred to in the note.’ Inaccuracy of the Statement That the Accumulation is Void 683. One further inaccuracy of expression should be pointed out. It is frequently said that the accumulations are unlawful or void.2 On the contrary it is the direction to accumulate 5 The same fallacy appears to be the basis of the decision in Farnum’s Est., 191 Pa. 75 (1899). There was a direction similar to the one in Farnum’s Est., in Boyd’s Est., No. 1, 199 Pa. 487 (1901), but no question was raised as to its validity. °75 Pa. 102 (1874), stated $632, ante. 10 Mr. Justice Trunkey said in Carson’s App., 99 Pa. 325 at 329 (1882), that this case was decided without argument. On the contrary, the arguments of counsel as given in the report are ample and very much more to the principle involved in the decision than is the opinion of the court. Counsel at p. 328 said, without hearing argument, which statement seems to be the more accurate of the two. 1 Jn Penrose’s App., 102 Pa. 448 (1883), the testatrix created a trust of the resi- due of her estate, and directed that the income should be paid to her granddaugh- ter after she should arrive at the age of twenty-one years, and after her death the principal should be divided among certain persons named. The granddaugh- ter was eight years old at the time of the testatrix’s death, and upon attaining her majority the trustees filed their account, from which it appeared that there was in- come accumulated since the death of the testatrix. Held, that the accumulations should be paid to the granddaughter and not form a part of the corpus of the estate. The decedent was a woman, re- ferred to by Mercur, J., a8 a man; see opening lines of opinion at p. 449; see also Ward’s Est., 138 W. N.C. 282 (1883). 2 Dwight, J., in Stille’s App., 11 Phila. 31 at 33 (1875); by the reporter in the 422 ACCUMULATIONS [—683-685—] which is void. There may or may not be an accumulation. The party entitled to the income may apply to the court in anticipation of any action under the void direction. The order of the court then decreeing the direction void will prevent any accumulation. If an accumulation actually takes place, which frequently happens, and the question is as to the disposition of the sum, it is inaccurate to speak of the accumulation as a void accumulation. The accumulation is an actual existing fact, and cannot be said to be void in any sense of the word. Furthermore, the accumulations can only exist, if they exist at all, because the party entitled, the direction being void, does not apply for them. Since, therefore, they occur by the voluntary act of the owner, it is difficult to see how they can be said to be unlawful. He can receive the accumula- tions because the direction is unlawful. We are now prepared to consider the law relating to distribution of income embraced under the void direction to accumulate, and will consider two cases: (a) a contingent gift of the accumulated fund; (b) 4 vested gift of the income with direction to accumulate en- grafted thereon. Preliminary Discussion of Distribution Where There is a Contingent Gijt of the Accumulated Income 684. Where there is a void direction to accumulate and a contingent gift of the accumulated fund, we must, in con- sidering what disposition is to be made of the income em- braced in the void direction, distinguish three cases: (1) « direction to accumulate the income of a specific bequest; (2) a direction to accumulate the income of the residue; and (3) a direction to accumulate the rents of real estate specifically devised. Income of Specific Bequest 685. In the case of personal property, where the income to be accumulated arises out of a specific bequest and the direc- tion to accumulate is void, the income of the bequest should on principle result to the residuary Iegatee® If there is no first paragraph of the syllabus in Martin’s Est., 185 Pa. 51 (1898); Green, J., in Farnum’s Ert., 191 Pa. 75 at 82 (1899). 3 Gray, Rule Perp., 2 ed. (1906), §§704, 718; see dictum of Penrose, J., in Mec- Bride’s Est., 152 Pa. 192 at 195 (1893); Matter of Sergeant. 11 Phila. 8 (1875); see White’s Est., Buekley’s App., 163 Pa. 402 (1894), and case arising on the same will, 8). R. 33 (1898); Weinmann’s Est., 223 Pa. 508 (1909). In Howell’s Est., 180 Pa. 515 (1893), involving the same {[{—685-687—] DISTRIBUTION OF ACCUMULATIONS 423 residue, the income goes to the next of kin under the intestate law, or by way of resulting trust, according to whether the limitation is at law or in equity. Income of Residue 686. If the income of a residue or part of a residue is directed to be accumulated and the direction is void, the income released by the statute goes by way of resulting trust * to the heir at law or next of kin, according to the nature of the property. Where, however, there is a gift of the residue in trust for life, with vested remainders over, and there is a void direction to accumulate the income of the life estate, the accumulations are to be paid to the vested remainderman.® If the remainders were contingent, the rule would probably be otherwise, and the accumulations distributed to the heir at law or next of kin. Devise of Real Estate Not Part of Residuary Estate 687. In the case of a specific devise of real estate not forming part of the residuary estate, where there is a direc- will as was before the court in Howell’s Est., 5 W. N. C. 430 (1878), as to which see §690, n. 9, post, there was a gift in trust of the sum necessary to produceacer- tain income for the wife of the testator for life, with a limitation over at her decease of part of the fund, and the remainder thereof to such of the testator’s nephews and nieces as would be living at her de- cease. The residuary estate was left in trust for a grandchild for life. The wife was dead, and the fund set aside had produced a surplus of income. The court below held that the accumulations fell into the residuary estate. On appeal, the Supreme Court, in an opinion by Mr. Jus- tice Fell, affirmed, saying, however, that the right to surplus income vested in the testator’s grandchild, citing as authority Rhodes’ Est., 147 Pa. 227, and the opin- ion of Penrose, J., therein, entirely over- looking the fact that Rhodes’ Est., was a case of an accumulated income of a resi- due, which plainly went to the heir at law or next of kin, and that the case under discussion was a case of accumulated in- come of a specific bequest. 4 See §151, ante. 5 Mellon’s Est., 16 Phila. 323 (1884), s. c. sub. nom. Gowen’s App., 106 Pa. 288 (1884); Rhodes’ Est., 147 Pa. 227 at 231 (1892); Martin’s Est., 185 Pa. 51 (1898); Edwards’s Est., 190 Pa. 177 (1899); Mayer’s Est., 29 Pa. C. C. 527 (1904), s. ¢. 13 D. R. 277. In McKee’s App., 96 Pa. 277 (1880), where the same person was the residuary legatee and entitled under the intestate law, the court below said that it did not make any difference how he took. In Grim’s App., 109 Pa. 391 (1885), the decision of the court below refusing to award the income to the resi- duary legatee, was affirmed. Scott, on Accumulations, §172, understands the case aS awarding it to the residuary legatee. ® King’s Est., 210 Pa. 435 (1904) 424 ACCUMULATIONS [—687, 688} tion to accumulate, which is void, the income out of which the accumulation is directed goes by way of resulting trust to the residuary devisee, if any, and, if none, to the heir at law or next of kin.’ In Schwartz’s Appeal,* where there was a specific devise of real estate in trust to pay a monthly allowance to the testator’s wife, and to invest the balance of the income, if any, etc., with no express disposition thereof, which direction to accumulate the court held was void, the accumulations were distributed under the intestate law, the judge of the court below, Schwartz, P. J., saying that, under the act of 1853, the income was to be distributed as in the case of intestacy. The Supreme Court affirmed the decision on appeal. There were so many other points in the case that this one seems to have been lost sight of. The result reached seems to be clearly objectionable.® As to Acceleration 688. The statute against accumulations is a positive com- mand of law, defeating intention. The intention must first be ascertained, and then, if when so ascertained it violates the act, the transgressive part must be cut out of the trust absolutely and entirely. Consequently, where there is a gift of an accumulated fund, the vesting of the gift being depen- dent on the accumulations or some other event, and the direc- tion to accumulate is void, the accumulations can never be lawfully accomplished, and the gift of the accumulated fund fails utterly, or, as it is said, it is not the effect of the stat- ute to accelerate the gift. The act cannot destroy the gift and accelerate it at the same time.! 7 See §§151, 460, ante. 8119 Pa. 337 (1888). ®In Mitcheson’s Est., 11 W. N. C. 547 (1882), it appeared that the parties en- titled could take either as residuary lega- tees or under the intestate laws. 1 Dictum, Penrose, J., in Grim’s Est., 12 W.N.C. 354 at 356 (1882), quoting Theo- bald on Wills, ed. of 1881, pp. 447 and 448; dictum, Penrose, J., in Mitcheson’s Est., 11 W.N. C. 547 at 548 (1882), where he said, ‘The question has not here- tofore been decided in this state, but it is safe to assume that the doctrine of the English cases will not be departed from.’”’ Penrose, J., in Mellon’s Est., 16 Phila. 323 at 326 (1884); Gray, Rule Perp., 2 ed. (1906), §694, and cases cited; Martin’s Est., 185 Pa. 51 (1898); see also remarks of Penrose, J., in Ferguson’s Est., 223 Pa. 530 at 533 (1909). The two obscure cases of Potter’s Est., 36 L. I. 460 (1879), and Myer’s Est., 42 L. I. 5 (1885), may, be considered as overruled, in so far as they are in conflict with the principle laid down in the text. (689, 691] DISTRIBUTION OF ACCUMULATIONS 425 Preliminary Discussion of Distribution Where the Direclion to Accunuilate is Subsidiary to the Gift of the Income 689. Where there is a vested indefeasible gift of the income and a direction to accumulate engrafted thereon the direction is void. The case stands as if it had never been Inserted, and the owner of the income may require that the income be paid to him as it accrues, or as it is said, he may stop the accumu- lations.” Mr. Gray says that such direction being destructible by the person entitled, the accumulations resulting in conse- quence of such a direction are not obnoxious to the Thellusson Act* or the rule against perpetuities. The interest in the in- come is vested, and the direction to accumulate is an interfer- ence with the vested interest, and as such, is void, if at all, as a restraint on the enjoyment of an absolute interest in prop- erty.“ The direction to accumulate is destructible because it is invalid. Destructibility is the consequence of the invalidity, and not the cause.® Vested Gift of an Accumulated Fund 691. Where, although there is a direction to accumulate, there is a vested gift of the accumulations, even though post- poned in time of enjoyment,® the court will construe the limi- tation as a present vested gift of the income with a direction to accumulate engrafted thereon, in which case the direction to accumulate is void, and the party entitled to the income can stop the accumulations and have the income paid over to him as it accrues.’ ? Rule Perp., 2 ed. (1906), §672. to mean a direction to pay him the income 3 Rule Perp., 2 ed. (1906), §692. * See §§$545, 621, ante. >In the following cases the direction to accumulate was subsidiary to the gift of the income and, the direction being void, the income was payable to the cestui que trust; Sharp’s Est., 155 Pa. 289 (1893), stated §675, ante; Young’s Est., 16 D. R. 541 (1907). 6° Thus, « direction to accumulate and pay the accumulations to A., a living per- son, or a direction to pay A. a certain sum out ofincome. Either would be construed until a certain sum should be received. 7 Gray, Rule Perp., 2 ed. (1906), §672. The learned author says that the direction is an illegal restraint on alienation. It is submitted that the direction is an illegal restraint onenjoyment. It is to be distin- guished from the case of a gift of the income to a person until a certain event, as, until she should receive her share of the proceeds of certain real estate directed to be sold, which is not a case of a direc- tion to accumulate at all; Brisben’s App., 70 Pa. 405 (1872). 426 ACCUMULATIONS [692--694— | Direction to Accumulate a Certain Sum 692. The same principle applies to another class of cases, namely, where there is a direction to pay a certain sum to a particular person as soon as sufficient interest is accumulated for the purpose. Mr. Gray says® that the direction is valid, as the legatee has a vested interest which gives him, if he chooses to exercise it, the right to demand the income as it falls due. The very fact, however, that he can stop the accum- ulation, shows that the direction is invalid. The case is no other than that of a direction to accumulate. This is simply a principle of construction; the courts have said that the tes- tator meant to give the income absolutely, and have con- strued the gift as that of a vested interest, with a direction to accumulate as subsidiary thereto. Wahl’s Estate 693. In Wahl’s Estate® there was a bequest of $500 to D. so soon as there was sufficient interest accumulated for that purpose; “but if my executor finds that the money can be used to the advantage of said D., then he is to pay it to D., but if D. should die in the meantime, the said legacy to become part of my estate.” Held, that D. had a vested interest which gave him the right to demand the income as it fell due, which was not affected by the gift over in the case of his death before payment. It appeared at the audit that the executor had paid D. the $500 and interest thereon, and exceptions by the heirs at law to these payments were dismissed. Rogers’s Estate 694. In Rogers’s Estate’® the testator, inter alia, made a specific devise of a lot to three grandchildren, and then directed his executors to accumulate the income until the sum of $10,000 should be realized, whereupon that sum was to be spent, upon certain contingencies which might be remote, in build- ing a house upon the lot devised to the three grandchildren. The residuary estate was given to testator’s daughters and daughter-in-law, and the whole estate was subject to certain annuities. The testator further directed that when all these 8 Rule Perp., 2 ed. (1906), §672. C. 309. 996 W. N. C. 249 (1890), 5. c. 8 Pa. C. 10179 Pa. 602 (1897). [694-696] DISTRIBUTION OF ACCUMULATIONS 427 instructions were carried out, the surplus should be divided among his daughters and daughter-in-law. Upon the filing of the executor’s account it appeared that the three grandchildren were under age, and the executors had on hand a fund com- posed of the net income since the death of the testator. At the then income of the estate, the $10,000 would be accu- mulated within five years after the testator’s death. From the statement of the counsel for the appellee, it would appear that. the lot devised to the grandchildren was unproductive. If this was so, the accumulations were of income from the residu- ary estate, and the case presented is that of a direction to accumulate income of a residue until a specified sum is real- ized, and then pay that sum to a particular person. The court below, in an opinion by Over, J., affirmed on appcal by the Supreme Court, construed the gift as a vested gift to the grandson, with direction to accumulate engrafted thereon, and, as the donees were minors, awarded the accumulations to the trustees until the former came of age. Preliminary Discussion of Distribution of Income Iinbraced in a Void Direction to Accumulate For a Charity 695. A direction to accumulate for a charity is not within the provisions of the statute against accumulations,’ consc- quently, the income where the direction is void is not dis- tributable under the proviso relating to distribution of income where the direction to accumulate is subject to the act.2 Two cases may arise: first, where there is a vested gift to the charity with a direction to accumulate engrafted thereon; second, where there is a contingent gift of the accumulated fund to a charity. Distribution Where There is a Vested Gift to the Chariiy 696. If there is a vested gift to the charity, with a super- added direction to accumulate the income, it is probable that the direction to accumulate is void, and that the charity can stop the accumulations and receive the income as it falls duc.’ 1 See 8653, et seq., ante. *See $656, ante, for a discussion of 2 As to which see §679, et seq., ante. this point. 428 ACCUMULATIONS [697] Conlingent Gijt of the Accumulated Fund 697. It is not clear what the law is as to the distribution of income in the case of a void contingent gift of the accumu- lated fund to a charity. In the case of Hillyard v. Miller,‘ where there was a direction to accumulate for charitable pur- poses violating the rule against perpetuities, the court held there was a resulting trust to the heir at law, as the gift was to be considered as if the void direction had never been in- serted. In the case of Curran’s Appeal, where there was a direction to accumulate a sum of money which would not have been realized until a remote period, the court said that the gift was preserved by the provisions of the Act of April 26, 1855,° and that the next of kin were not entitled to enforce a resulting trust. The provisions of this section are discussed more at length in the ensuing part of the treatise relating to the doctrine of cy pres. It is there suggested 7 that the doctrine of cy pres does not apply except where there is a vested gift to a charity. If this is sound, Curran’s Appeal is likely to be overruled; if it is not, the law prob- ably is the same with respect to a contingent gift of the accumulated fund as it is where there is a vested gift of the fund with a superadded direction to accumulate. As no other cases have been found no statement can be ventured as to the law. 410 Pa. 326 (1849). of May 23, 1895, P. L. 114, for the pro- ° 4 Penny. 331, see pp. 339, 340 (1884). vision of which act, see §735, ante. ®$10 P. L. 328, re-enacted by the Act 7 See §777, post. (429) CHAPTER 26 GIFTS TO CHARITIES Preliminary discussion... 0.006.000 0 00 ccc cee eee tee eee §715 Charitable objects defined Preliminary discussion .........0.000.0 00000 e eee eee ee y716 Definition by Mr. Justice Gray .......0. 0000.00 cece eee eee 8717 Not possible to define a charitable object................00.- §718 (Note on charitable objects in Pennsylvania) Indefinite and definite objects, and the application of the rule against perpetuities, ete. Indefinite objects Preliminary diseussion.........0000 0000000 eee eee eee eee $720 Definition of an indefinite class........ 0.0... cee eee eee §721 Gift at law to an indefinite charitable class General principles..... 06.0.6 cece eee nee eee ae §722 Gift’ at law to unincorporated associations............. §723 Gift in trust for indefinite objects..............6. 0. cece §724 Application of the rule forbidding restraints on alienation.. §725 Application of the rule against perpetuities............... 8726 Application of the rule forbidding restraints on enjoyment §727 Definite objects DCHHTHON cca aes tated 44 einsie RUA a wade Lae a nee §728 Application of the rule forbidding restraints on alienation. . §729 Application of the rule against perpetuities............... §730 Application of the rule forbidding restraints on enjoyment §731 Mr. Gray’s observations on the application of the rule against perpetuities to gifts to charitable objects................--- §732 Gift to a charity upon a remote contingency after a gift to another -chartbysiss0 sa eeewd cree edees Sees ey ecies Ae $733 Summary of the law as to the exceptional nature of a chari- fable ill: geass Sa oe caath Pee OES eu Baume §734 Pennsylvania legislation relating to gifts to charities Acts of 1855 and 1895........... 000 cece eect eee 8735 Statute of frauds: 2.46 ag be eet es ened aw ened Menai da tases §736 Gift to a charity must be made within one month of death of donor §737 Exemption from taxation............ 0:0 ce esse eee eee ee ees §738 Trusts for charities Preliminary discussion.........0.0.0000 0c cence seen entree eens §739 Statute of 43 Elizabeth in Pennsylvania...........+++.+++++ §740 Perpetuity of a charitable trust..........0.0. 0s cence eee eee §741 Non-user and diversion............0000 cece cet e eee nents §742 Necessity of naming a trustee in creating a charitable trust.. §745 Discretion in the trustee Preliminary discussion..........0000 0c eee eee n eee eee §74 Inherent discretion Preliminary discussion............. 00.000 c eee eens §745 Acts of 1855 and 1895 have no effect on...........-- $746 Express discretion Preliminary discussion............0 000 e eee eee eee eens §747 Express discretion; charitable objects designated........ §748 Express discretion; no objects designated; charitable intent disclosed Preliminary discussion...................006. ae §749 McCurdy’s: Appedlesaccyatinde oseio dia dieses cassie @e §750 Fonikels: Hstateiss ics. vaesie se oela be sewee Sears oe §751 Murphy’s Estate...............0.0.0000. cavities we §752 Casey's; Tistate iio scious Weenie aw ae cees ceed Gta oe ae §753 Dulles’s Estate.................. he G dudia aia hatte tost §754 Summary and statement of Pennsylvania law as to express discretion.......... 0.00. cece eee eee eee eee §755 Survival of discretion........... set se Grea erat seca aia tema a rtrd 756 Change “of ‘tristeeS:.¢:uaccesema sca Una head Seve able ges Beets §757 Sales of trust ‘property: (s+ sigiesdiwiney eowdege ues genae saw ee. 758 Restraint on sale by donor............... cece eee eee eee §759 Leases by trustees of a charitable trust..................... §760 Cy pres Preliminary discussion and definition........................ §761 Reasons for the doctrine of cy pres....-........00.c seve eee §762 Doctrine confused with discretion.................0...00000, §763 Common instances of application of the doctrine.............. §764 Doctrine criticised........66 6. ccc k cece eee eee e cee eenees §765 The doctrine of cy pres in Pennsylvania Preliminary discussion and history....................0. .. §766 Griffitts: 0) Cope x occ es< cased se baw gaa ev whe nd yc hada §767 Neéwell’s: Appeal... ccsiccseecie coeds owen ds euies Ghouls eae $768 Pennsylvania legislation...............0 0.0... c cece eee eee §769 In re Petition of Trustees of Lower Dublin Academy... §770 Commonwealth v. Pauline Home.....................00.. 8771 [715—] 431 MIMICS State si niahascedn Saa ted ad. dae pS ealenceerant ieee, 8772 Cushman v. The Church..........0.0000 000 cece cece cease, §773 Harman v. Romberger.............0.. 000 .cccceecueeeecucs 774 Who may invoke the application of the doctrine.......... 8775 Doctrine in Pennsylvania probably applies to trusts created Dydeed i iss. cam cies a agence ack ira ee ai tion anaalen §776 Law in Pennsylvania as to the doctrine of cy pres....... 8777 Charitable corporations Preliminary discussion........... 00.0000 cee c ec ee cence eeeeees §782 Gift to a charitable corporation forbidden by statutes of mort- ANAT sacs cisd tite «ited encased ited e is wid wane aoa EAS Bee le Meee §783 Foreign charitable corporations Gift of ‘real estates :ussiace8sesad beigeuce cesaee ceeded §784 Gift of personal property............0. 00000 c ec ee eee eeee §785 Gift to a corporation not in esse...........0 00.0 cece eee eee §786 Trusts for tombs and monuments ETO CTLOD x mii tnd ena Ree Saw ete eee Pee eo ea os RRA 8787 REDAITS ics trihet te Sits uae crtlae Grt ew heey Maton nda reas vii eer: §788 Trusts to SAY MASSES........ 200. e cece cen neue eenneees §789 Trusts for schoolhouses .............00000 00sec cece eee e ee eeaees §790 Religious trusts); ius wake tease be RGe Hoe Rice Web PAee Bown ace §791 Determinable charitable gifts Aa LW ish ide Sead et rare tra oie 2 Aon tees fates en we acca eae aa §792 By way" tof: trusti weiss ove wuwebe vedere eas givadecahs cauaciee een §793 Preliminary Discussion 716. A gift to a charity, for reasons which have already been pointed out,’ does not call for the application of those principles of public policy which find their expression in the three rules of law which we have been discussing.? As it is desirable, for many reasons, to sustain the validity of charita- ble gifts, and the strict application of these rules would invali- date the greater number of such dispositions, an exception has been allowed in order that the charitable impulses of the com- munity may have reasonable opportunity to assert themselves. The exception, therefore, is only allowed from the necessity of the case, and is to be carried no further than the occasion 1 See §13, ante. alienation, and the rule forbidding the * The rule against perpetuities, the rule imposition of restraints on use and en- forbidding the creation of restraints on joyment. 432 GIFTS TO CHARITIES [—715-717—] requires. As, however, the law on the subject is somewhat intricate, and there are a number of special principles involved, it has been found necessary to devote a separate chapter to the discussion. We shall first examine the nature of a charita- ble object and then point out the particulars in which the rules against perpetuities, etc., apply. Preliminary Discussion of the Nature of a Charitable Object 716. A consideration of the reason why gifts for charitable objects are allowed as exceptions to the principles of public policy which we have discussed, will be helpful in forming a correct idea of a charitable object.*? This principle of public policy is against the settlement of property for the benefit of an individual or his descendants. Therefore, a gift, which is altruistic, considered from the standpoint of the donor, toward the community at large, is charitable. The character of the object is the material point. And the notion that the motive of the donor is material has long since been exploded. There is a difficulty which springs from a looseness in the use of the word charity. A thing is said to be a charity, such as an act of charity, the giving of something to the poor, and, so also, an institution or a fund producing income for charity is said to be a charity. The word, it will be observed, is used in two different senses, one as meaning the giving, the other as the thing given. It is also used as meaning the object of the gift, and the latter is, it is apprehended, the proper legal meaning and is the sense in which it is used in this treatise. Definition by Mr. Justice Gray 717. Many attempts have been made to define a charitable object. The best perhaps is that by Mr. Justice Gray * which is as follows: ‘‘A charity, in the legal sense, may be more fully defined as a gift to be applied, consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of edu- cation or religion, by relieving their bodies from disease, suffer- ing or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works, 3 See $13, ante, for a discussion of this 4In Jackson v. Phillips, 14 Allen, 539 point. at 556 (1867). [—717, 718—] CHARITABLE OBJECT DEFINED 433 or otherwise lessening the burdens of government. It is im- material whether the purpose is called charitable in the gift itself, if it is so described as to show that it is charitable in its nature.” A gift to a charity is distinguishable solely by the character of the object, and may possibly be in violation of some rule of law,® as, for instance, the rule against per- petuities, and yet be charitable. That part, therefore, of the learned judge’s definition which requires that the gift be con- sistent with existing laws, seems to be inaccurate. Further- more, the gift may be to a definite charitable corporation. The definition, therefore, appears to be too narrow in so far as it is confined to indefinite objects. Not Possible to Define a Charitable Object 718. It is impossible to accurately define a charitable object. The court cannot bind itself by defining a charity, for if it did so, there would be danger, on the one hand, of unduly limiting the altruistic impulses of the community or, on the other hand, of affording an opportunity for dispositions violating those principles of public policy ® which find their expression in the three rules of law which we are considering.” A num- ber of cases have been collected in the note,® illustrating some * Perry, Trusts, 5 ed. (1899), Vol. 2, 142 (1888); Church’s Petition, 166 Pa. §715. 43 (1895). For Protestant Episcopal ® See §§11-13, ante. 7The rule against perpetuities, the rule forbidding the creation of restraints against alienation, and the rule forbidding the imposition of restraintson enjoyment. ® In the following cases, the objects indi- cated were held charitable: Reuicious: To the support of the Gospel among the colored people of the cities of Pittsburg and Allegheny: Pul- press v. Church, 48 Pa. 204 (1864). For Methodist camp-meeting: Saxton v. Mit- chell, 78 Pa. 479 (1875). For religious congregations, churches, and meeting- houses: App v. Congregation, 6 Pa. 201 (1847); Beaver v. Filson, 8 Pa. 327 (1848); Griffitts v. Cope, 17 Pa. 96 (1851); Keiper’s App. 124 Pa. 193 (1889) (Church); Fidelity Ins. Co.’s App., 99 Pa. 443 (1882); Brown v. Church, 23 Pa. 495 (1854); Latshaw’s App., 122 Pa. Church: Nicholson v. Daniel, 152 Pa. 461, (1893). For public use schoolhouse, meeting-house and graveyard: Trustees v. Sturgeon, 9 Pa. 321 (1848). School- house and house of public worship: Mc- Kissick v. Pickle, 16 Pa. 140 (1851). Par- sonage and burial ground: Supplee v. Hansell, 17 Pa. 384 (1851). For grave- yard: Pearson v. Hartman, 100 Pa. 84 (1882). A devise of real estate to a church in trust to devote the income to keeping testator’s family lot ina grave- yard in order, and to distribute the bal- ance, within specified limits as to amounts, to home or foreign missions for the spread of Christianity, and the residue among the needy poor of the vicinity, as the trustees and their successors may think best: Nau- man v. Weidman, 182 Pa. 263 (1897). For foreign missionary work: Presbyterian Board v. Culp, 151 Pa. 467 (1892). To the 434 Franciscan Brothers of Altoona, Pa.: Hod- nett’s Est., 154 Pa. 485 (1893). A corpo- ration was organized under the Act of April 29, 1874, P. L. 73, ‘for the purpose of uniting the persons so to be incorpo- rated socially, for the improvement of their intellectual and moral condition, by the dissemination of scientific truths, by means of literature, music, lecture and debate.” 1t appeared that the corpo- ration had no capital stock and trans- acted no secular business. Its meetings were held on Sunday, and it was wholly dependent upon voluntary contributions of its members. One member testified that the league was opposed to all isms, and that its object was the investigation of truth. A witness testified that he had heard, on a Sunday evening, a lecture against the Christian religion, and that a discussion, in the same spirit followed the lecture. Held, that a devise or be- quest to such an organization was given for a religious use within the meaning of the Act of 1855: Knight’s Est., 159 Pa. 500 (1894). For the support of clergy- men of a particular denomination: Trus- tees v. Sturgeon, 9 Pa. 321 (1848). For the education of clergymen of a partic- ular denomination: Young v. The Church, 200 Pa. 332 (1901). In Ease oF THE Pusuic: commissioners for « courthouse and jail: Seebold v. Shitler, 34 Pa. 133 (1859). Fora college and library: Miller v. Porter, 53 Pa. 292 (1866). Memorial hospital: Hospital v. Penna. Co., 158 Pa. 441 (1893). For improvement of a town: Thomas v. Elmaker, 1 Pars. 98 (1844). Public park: Long’s Est., 204 Pa.60 (1902). Inre Trustees for Kane Boro. Park, 177 Pa. 638 (1896), semble. Planting and renewing shade trees; to endow a professorship of fine arts; to- wards the erection and support of an agricultural college: Cresson’s App., 30 Pa. 437(1858). To protect citizens of Afri- can descent in the enjoyment of their civil rights, and to prevent discrimination against them: Lewis’ Hst., 152 Pa. 477 To county GIFTS TO CHARITIES (=7i8—] (1893). To the Monthly Meeting of the Friends of Philadelphia, to be applied as a fund for the distribution of good books among the poor people in the back part of Pennsylvania, or to the support of an institution or free school: Pickering v. Shotwell, 10 Pa. 23 (1848). “Gifts in a will of $500,000, for the erection of a memorial monument or arch in a public park, $50,000, for the construction of a children’s playhouse and grounds, and the residue of the estate in trust to ap- ply the income thereof to the mainte- nance and preservation of such struct- ures and grounds forever * * * and it is immaterial that the testator has directed that a bronze statue of him- self with his name underneath in large letters shall be placed upon the memor- ial, and that a mural tablet shall be placed in the playhouse with an inscription to the effect that the house was erected by the testator and his wife in memory of their son:’ Smith’s Est., 181 Pa. 109 (1897). For a case of a curious and in- volved bequest to the Theological Semi- nary of Princeton, N. J., characterized by counsel as an uncertain, visionary and obscure, unreasonable, tyrannous, un- constitutional and incapable of rational interpretation. Where the court held that the trustee could take, the trust not being annexed to the vesting of the legal title, and did not pass on the question whether the trust was unlawful, see Newell’s App., 24 Pa. 197 (1855). Testator gave cer- tain legacies to three charitable corpo- rations, with directions that if the bene- ficiaries at any time supported the cause of prohibition, the legacy should become forfeit and be paid to the Free Library of Philadelphia. The three corporations declined to take the gifts with the an- nexed condition, and in the contest between the Free Library and_ the residuary legatee, the court awarded the fund to the Free Library: White’s Est., 174 Pa. 642 (1896). To build a monument to George Washington: So- ciety of the Cincinnati’s App., 154 Pa. (—718—] 621 (1893). In Daly’s Est., 208 Pa. 58 (1904), it was decided that the fact that the charity depended in part upon the contribution of others was immaterial. In that case the beneficiaries were ex- pected to contribute something for the support of the charity. The court is not confined to the objects enumerated in the preamble of the Statute of 43 Eliz.; Wit- man v. Lex, 175. & R. 88 (1827). For Epucation AnD Lipraries: For the education of young students in the ministry of a particular congregation: Witman v. Lex, 17 S. & R. 88 (1827). For sectarian religious school: Price v. Maxwell, 28 Pa. 23 (1857). For an academy of learning: City v. Bicknell, 35 Pa. 123 (1860). Perpetual charity for the education of poor orphans: Brown v. Hummel, 6 Pa. 86 (1847). For a free li- brary which may be established in the city of Philadelphia: Pepper’s Est., 154 Pa. 331 (1893). For the Philadelphia Library: Williams’s App., 73 Pa. 249 (1873). For such a case see Seebold v. Shitler, 34 Pa. 133 (1859); see dictum in Kerlin v. Campbell, 15 Pa. 500 at 506 (1850). ® Hill, Trusices, Bispham’s ed. (1867), p. 708; Morrison v. Beirer, 2 W. & 8. 81 (1841). [740, 741—] CHARITABLE TRUSTS 451 Statule of 43 Elizabeth in Pennsylvania 740. The Statute of 43 Elizabeth is not in force in Penn- sylvania, and it appears from the abstract given by Boyle ® that the provisions of the act relate entirely to the adminis- tration and reformation of charitable foundations. It is clear, therefore, that nothing in the act has any bearing on the validity ofa charitable trust as an exception to the three rules of law under discussion. And as a charitable trust differs from other trusts only in so far as itis an exception to these rules, it is apprehended that the remarks frequently found in the books in Pennsylvania, where the court is considering the validity of the charitable trust, that the statute has been assumed as part of the common law,’° are not only inconsistent with the report of the judges that the statute is not in force, but totally unnecessary so far as the validity of a trust for a charity in Pennsylvania is concerned. As to Perpetuity of a Charitable Trust 741. In so far as a trust for charitable objects is an excep- tion to the rule against perpetuities, the rule forbidding the creation of restraints on alienation, and the rule forbidding the imposition of restraints on enjoyment, it may be said to be per- petual. It would be more accurate to say that it is indefinite in duration. Strictly speaking, it can never be known whether it will last forever. That part, therefore, of the Act of 1895? which provides that a charitable trust shall not fail by reason of being given in perpetuity, is merely declaratory of the exist- ing law. Although the trust for a charity may be perpetual, it is not necessarily so.” The donor may provide for a payment of income to a charitable object for a specified time only, and 7 Report of the judges, 3 Binney, 595 at 621 (1808). 8 See Perry, Trusts, 5 ed. (1899), Vol. 1, $692, n. 2. 9 The rule against perpetuities, the rule forbidding the creation of restraints on alienation, and the rule forbidding the imposition of restraints on enjoyment. 10 Gibson, C. J., in Pickering v. Shot- well, 10 Pa. 23 at 26 (1848); Sergeant, J., in Zimmerman v. Anders, 6 W. «& S. 218 at 221 (1843); Lewis, C. J., in Price v. Maxwell, 28 Pa. 23 at 35 (1857); Hill on Trustees, Bispham’s Ed., (1867), 704, note. See the more accurate state- ments of Gibson, C. J., in Witman v. Lex, 17S. & R. 88 at 91 (1827), and Mitchell, C. J., in Dulles’s Est., .218 Pa. 162 (1907). 1p_L, 114, re-enacting §10 of the Act of April 26, 1855. * See language of Bell, J., in Wright v. Linn, 9 Pa. 433 at 436 (1848). 452 GIFTS TO CHARITIES [—741-743—] the length of time that the income is to be paid to the charity is to be determined from the provisions of the settlement.’ Non-User and Diversion 742, Where the trust is indefinite, a non-user is merely a temporary maladministration of the trust, and the court, on its attention being called to the matter, will make the proper directions as to the disposition of the fund; and no advantage thereof can be taken by the donor or his heirs, as the non- user does not exist in contemplation of law. A trust for a charity, therefore, is not defeated by non-user or diversion.* The question of what is diversion lies very near to the question of what is the proper exercise of discretion. Where the non-user or diversion is because the application cannot be made to the original objects, the case will come under the doctrine of cy pres® or else the chancellor will decree a re- sulting trust. Where the trust is for a public purpose, and there is a subsequent change in the framework of the govern- ment, it is often an extremely difficult matter to determine the proper application of the fund.® Not Necessary to Name a Trustee in Creating a Charitable Trust 743. There is no more necessity of naming a trustee in creating a charitable trust than in the case of any other trust. The maxim that equity will not allow a trust to fail for want of a trustee is of equal application here, and the appointment of a trustee in such case is an exercise of the ordinary juris- diction of a court of equity.’ A controversy may arise as to 3-'Thus, a gift of a certain sum for the poor of a certain congregation annually for ten years: Witman v. Lex, 178. & R. 88 (1827). The limitation in Young v. Church, 200 Pa. 332 (1901), probably presented such a case. This point, how- ever, was not involved in the discussion; see this case stated, §655, ante. 4 Wright v. Linn, 9 Pa. 433 (1848); Kerlin v. Campbell, 15 Pa. 500 (1850). 5 Discussed §§762-781, post. ®See Stallman’s App., 38 Pa. 200 (1861); Brookville Boro. v. Startzell, 207 Pa. 347 (1901); Act March 5, 1903, P. L. 9; $790, post, on trusts for school- houses. 7 Perry, Trusts, 2 ed. (1889), Vol. 2, §722. So much of the Act of April 26, 1855, §10, P. L. 328, re-enacted by Act of May 23, 1895, P. L. 114, see §735, ante, as provides that no disposition of prop- erty for a charitable use shall fail for want of a trustee, but it shall be the duty of the court having jurisdiction to supply one, is merely declaratory of the existing law. See County of Lawrence v. Leonard, 83 Pa. 206 (1876); Trim’s Est., 168 Pa. 395 (1895). Where no trustee of a fund for [—743] CHARITABLE TRUSTS 453 who is the trustee under the terms of the will which, however, is purely a question of construction.* The paragraph in the sylla- bus to the case of Pickering v. Shotwell,® which is as follows: “Though the objects of a charity are uncertain, a devise will not fail for want of a trustee capable of taking, if the dis- cretionary power of selection is vested anywhere,” is probably erroneous. In the first part of his opinion in that case Mr. Chief Justice Gibson said that a charitable use would not fail for want of a trustee, which is clearly the law but entirely unnecessary to the decision of the case, as there was a trustee mentioned and capable of taking. In the latter part of his opinion he said that whenever a general or vague purpose was disclosed, the English chancellor would uphold the bequest but apply the fund to a charity of the same kind or as near thereto as could be ascertained (probably meaning the doctrine of cy pres) and then said: “the worst that could befall such a bequest as this in his court would be an arbitrary disposition of the fund, which we have never attempted, but we certainly will not let a charitable bequest fail where there is a discre- tion or an option given to the trustee, and if he cannot apply it to all the contemplated objects, it will be sufficient if he can apply it to any of them.” The reporter patched these re- marks together and produced the remarkable statement of the law in the syllabus, from which the only inference that can be drawn is that equity will not appoint a trustee where none is named unless there is a discretionary power of selection vested in the trustee. a public schoolhouse is appointed, the management will fall on the school direc- tors under the common schoo! law; Klin- kener v. School Directors, 11 Pa. 444 (1849); Pott v. School Directors, 42 Pa. 132 (1862). The dictum of Sharswood, J., in Zeisweiss v. James, 63 Pa. 465 at 469 (1870), em- bodied in paragraph 9 of the syllabus, that ‘Where there is no competent trustee named or he dies or resigns and no provision is made by the testator for the continuance of the trust, the charity must fail,” is hardly accurate, since a court of equity will appoint a trustee whenever necessary whether one is named or not. For a discussion of the appli- cation of the statute of uses to a trust for a charity, see §130, ante. 5 See Long’s Est., 204 Pa. 60 (1902). 910 Pa. 23 (1848). In this case there was a devise to the Monthly Meeting of Friends of Philadelphia, to be applied for the distribution of books, etc. The trust was attacked by the residuary legatees on the ground that the devise was void for want of certainty, and that the Monthly Meeting was unable by law to take as trustee. The court held, in an opinion by Gibson, C. J., that the gift would be sustained notwithstanding the uncertainty as to the trustee, that the trust was not open to any objection on the ground of uncertainty, being a trust for a charity. ; 454 GIFTS TO CHARITIES (744, 745—] Preliminary Discussion of Discretion in the Trustee 744. The principles regulating the subject of discretion in the trustee of a charitable trust are the same as those appli- cable to an ordinary trust save in the case where there is an exception to the rule against perpetuities or the rule forbidding restraints on alienation or enjoyment.’? The law, however, has been thought to be peculiar in some other respects in the case where there is a trust for a charity, and it has, therefore, been found necessary to discuss the cases at some length. The atten- tion of the learned reader will be directed solely to discretion in connection with the equitable estate, and the discussion will be distributed under the classification of inherent discretion and express discretion which has been previously adopted. Preliminary Discussion of Inherent Discretion 745. The discretion inherent in a trustee has already been discussed." This so-called discretion is really nothing more than the exercise of the powers he possesses as legal owner, in obedience to the duty cast upon him by the terms of the trust. The trustee’s discretion is, in fact, larger in the case of a trust for indefinite charitable objects than in any ordinary trust, but is none the less inherent. Thus, in the case of a trust for the poor, the trustee is under greater necessity for the exercise of his judgment than in the case of a trust for the grandchildren of the testator.2 It is apprehended that it was this inherent discretion which Chief Justice Gibson had in mind in his remarks in Witman v. Lex.2 In that case the learned judge examined the question of the jurisdiction of the court in Pennsylvania in the case of a trust for a charity, and decided that the court had the necessary power to supervise the execution of charitable trusts, and that therefore such a system of trusts could be built up in Pennsylvania. He said that it is immaterial how uncertain the objects of the trust may be, provided there is a discretionary power vested any- where* over the application of the testator’s bounty to those See §734, ante, for tions. 1 See §§154, 158, ante. 2 For cases of inherent discretion, see Pulpress ». Church, 48 Pa. 204 (1864); Jacoby’s Est., 34 Super. Ct. 355 (1907), case obscure and badly reported; Soci- the excep- ety of the Cincinnati’s App., 154 Pa. 621 (1893). 5178. & R. 88 at 92 (1827); this was the first case of a charitable trust in Pennsylvania. ‘The meaning of “anywhere” in this connection is somewhat vague. [—745, 746—] CHARITABLE TRUSTS 455 objects. The learned judge probably had in mind the distinc- tion hetween a gift at law to a charity, the administration of which would then have been beyond the power of the courts in Pennsylvania, and a gift in trust to a charity. This rather loose statement is perhaps to be expected in a jurisdiction where the distinction between law and equity was not clearly appre- hended. The remark has been frequently quoted since, but seems to have been understood as meaning that there must be an express discretion vested in the trustee® It is not that there is a discretion reposed, but that there is a trust created. The creation of the trust necessarily creates the discretion. The Acts of 1855 and 1895 Have no Effect on Inherent Discretion 746. This inherent discretion exists because of the existence of the trust, and .can, therefore, be exercised by any trustee whether appointed or not. There is no particular personal confidence as is said to exist when there is an express dis- cretion. The provisions, therefore, of the Act of May 26, 1895,° providing that the trust shall not fail by reason of depending upon the discretion of the last trustee, seem to be intended to cover the case where an express discretion is conferred.’ In several cases arising before the Act of 1855 there was no express discretion vested in the trustee, and the trust was nevertheless sustained. The language, therefore, of Sharswood, J., in Mann v. Mullin,? where he said that a discretion was necessary before the act, and that this provision of the act was intended to provide a remedy for the case where the set- tlor had omitted to vest such discretion in the trustee or trustees, may be disregarded unless understood as confined to 5 Rogers, J., in Beaver v. Filson, 8 Pa. at 166 (1907) 327 at 335 (1848); Strong, J., in Domestic and Foreign Miss. Soc.’s App., 30 Pa. 425 at 435 (1858); Agnew, J., in McLain v. School Directors, 51 Pa. 196 at 199 (1865) ; Sharswood, J., in Zeisweiss v. James, 63 Pa. 465 at 468 (1870); Bittinger, J., in the court below in Croxall’s Est., 162 Pa. 579 at 581 (1894); Ashman, J., in Kinike’s Est., 155 Pa. 101 at 102 (1893); by the court below in Murphy’s Est., 184 Pa. 310 at 312 (1898); and by Mit- chell, C. J., in Dulles’s Est., 218 Pa. 162 6p, L. 114; re-enacting §10 of the Act of April 26, 1855; see §735, ante. 7 As to which, see §748, et seq., post. 8 Witman v. Lex, 17S. & R. 88 (1827); Beaver v. Filson, 8 Pa. 327 (1848); Pickering v. Shotwell, 10 Pa. 23 (1848); Pulpress v. Church, 48 Pa. 204 (1864); McLain v. School Directors, 51 Pa. 196 (1865); Zeisweiss v. James, 63 Pa. 465 (1870); County of Lawrence v. Leonard 83 Pa. 206 (1876). 584 Pa. 297 at 300 (1877). 456 GIFTS TO CHARITIES [—746-748—] inherent discretion. The remarks of the same judge in Zeisweiss v. James" are open to a similar objection. Preliminary Discussion of Express Discrelion 747. xpress discretion is where the doing of some act with respect to the trust is expressly left to the personal judgment of the trustee, and may be of two kinds: (1) where there is a specific designation of charitable objects, and an express dis- cretion reposed in the trustee as to the method of carrying out the trust; (2) where no specific objects are designated at all but the trustee has discretion as to the objects to which the trust property is to be applied and there is a general charitable purpose disclosed. Express Discretion as to Application to Specifically Designated Charitable Objects 748. An express discretion as to application to specifically designated charitable objects may arise when the trustee is authorized or directed to apply the fund to one or the other of two classes of objects,’ and in such case the discretion is absolute and the trustee is the sole judge of its exercise. Many cases of so-called express discretion are merely directions as to the minor details or method of carrying out the trust, and may in fact limit the trustee’s power instead of enlarging it. A striking example of this is furnished in the case of Wil- liams’s Appeal. The testator wished to erect a library in Philadelphia and provided that his trustee should have dis- cretion as to the place of erecting the library building? If the trust had been merely to found a library in Philadelphia, nobody would have doubted that the trustee would have had power and discretion to select the lot, and the controversy in the case would probably not have arisen.* The trustee may also have discretion vested in him to make the application if 1063 Pa. 465 at 468 (1870); see these remarks quoted §743, n. 7, ante. Thus, for distribution of books or for the support of a free school: Picker- ing v. Shotwell, 10 Pa. 23 (1848). 173 Pa. 249 (1873); see also Elkin’s Est., 30 Pa. C. C. 49 (1904), ». v. 138 D. R. 211; even without the elaborate pro- visions in the will in this case the court would have had no power to control the discretion except in the case of fraud or abuse. * See p. 254. % For other cases of such discretion, see Ingle’s Est., 76 Pa. 430 (1874); Bain- bridge’s App., 97 Pa. 482 (1881); Lewis’s Est., 152 Pa. 477 (1893); Society of the Cincinnati’s App., 154 Pa. 621 (1893). [—748, 749—] CHARITABLE TRUSTS 457 certain extrinsic facts exist. In these cases, upon proof of the facts, the trustee will be compelled to make the application.‘ This is a case of legal discretion as to application to charitable objects? Preliminary Discussion of Express Discretion Where no Objects are Designated bul a Charitable Intent Disclosed 749. The fundamental idea in a trust is that the trustee is under a duty, which duty must be particularly specified. Now, if a trust is created so that it is clear that the trustce is under a duty and no objects are designated, the law says that as the donor did not intend the trustee to take bene- ficially, there must be a resulting trust to the heir at law or next of kin; and since there are no objects specified, the court cannot undertake to select a cestui que trust or permit the trustee to make selection for himself. Now, suppose the trustee has discretion as to the duty he has to perform; that is, the donor leaves it to him personally to select the cestui que trust. If the discretion may be exercised so as to create limitations violating the rule against perpetuities, the case should be the same as if the remote limitations had been made by the donor, and there would be a resulting trust accordingly.® Suppose, however, the discretion must be exercised within the period prescribed by the rule against perpetuities, and the trustee has exercised the discretion and made appointments which are within the rule. Can the persons designated take the trust property as against the heir at law or next of kin? Can the trustee in such a case by the exercise of the dis- cretion prevent a resulting trust? Suppose he does not exer- cise the discretion. The question which arises then is this: can he be compelled to make a selection of beneficiaries, and if so, how can a decree be made against him? If he cannot be compelled to exercise the discretion, what disposition is to be made of the trust property? In the case of Morice v. The Bishop of Durham’ property was bequeathed to the Bishop upon trust to dispose of the ultimate residue to such objects of benevolence and morality as the Bishop of Durham in his 4 Fidelity Ins. Co.’s App., 99 Pa. 443 ® For a discussion of the application of (1882); Seagrave’s App., 125 Pa. 362 the rule against perpetuities, see §§411- (1889). 413, ante. 5 For a definition of legal discretion, see 710 Vesey, 521 (1805). $531, ante. 458 GIFTS TO CHARITIES [—749—] own discretion should most approve of. The court decreed a resulting trust to the next of kin, although the Bishop was willing to exercise his discretion and make an appointment to proper objects. The opinion of the court proceeded upon the theory that since the objects designated were not charitable, the principle applied that in every trust there must be a definite cestui que trust, that since there was no such cestui que trust, the trust was void and there must be a resulting trust accordingly. This is the leading case on the subject, it has been génerally followed in England and the United States, and has given rise to much learned discussion.’ Mr. Ames ® takes the ground that in Morice v. The Bishop of Dur- ham the court should have permitted the Bishop to carry out the trust, as he was willing to do; that it was no more unjust to have enriched the Bishop at the expense of the next of kin, than to enrich testator’s next of kin at the expense of the charity, there being no intention disclosed to benefit the next of kin; that therefore, in such case, as the trust was not contrary to law, its execution should be left to the voluntary action of the trustee, even though it could not be enforced were the trustee unwilling to perform; and that the next of kin could proceed if the trustee failed to make a proper applica- tion under the discretion. Mr. Gray ‘'® takes the ground that the decision in Morice y. The Bishop of Durham was entirely consistent with legal principle, that the trust consisted of a revocable mandate, and the power of revocation became vested in the next of kin who were entitled to take the property away from the Bishop, even though he was willing to apply it to a charitable use. In the case where the trustee has dis- cretion to appoint among the members of a class, as among the grandchildren of the testator, the law is plain that no grandchild can compel the exercise of the discretion in his favor, but that if the trustee refuses to exercise the discre- 8 There is a dictum of Gibson, C. J., without giving any reason, in Witman v. Lex, 178. & R. 88 at 93 (1827), that the decision in Morice v. The Bishop of Durham would not be followed in Penn- sylvania. A case of such discretion was first presented in the Appeal of the Chil- dren’s Hospital, 10 W. N. C. 313 (1881), but the case went off on another point. The law has now been settled in Penn- sylvania in accordance with the dictum of Chief Justice Gibson, by the cases next discussed, §§750-754, post. ®The failure of the Tilden Trust, 5 Harv. Law Rev. 389-401 (1892). © Gifts for a Non-charitable Purpose, 15 Harv. Law Rev. 509 (1902). [—749] CHARITABLE TRUSTS 459 tion, any one of the class entitled can proceed against the trustee, and the court will order an equal distribution among all. Now, if there are no cestuis que trustent specified, and the trustee has discretion, he can appoint to any one. The cestuis que trustent, therefore, arc a class composed of all persons in the world and all possible objects. No one of them can proceed to compel the exercise of the discretion in his favor, but any one can proceed to compel the exercise of the discretion. If such application is made the court cannot direct an equal distribution among all the possible objects for several reasons: first, because the property of the trust will be insuffi- cient to go around, and, secondly, because of the enormous practical difficulties in ascertaining who all the cestuis que trustent are, and in transmitting the property to them. The court, therefore, for practical reasons, cannot compel the exer- cise of the discretion in such a case. If, however, there is sufficient language in the trust to indicate a general charitable intent, and to restrict the class of objects to charities, the result will be different. If any charity should apply to the court to compel an exercise of the discretion, the court can direct the trustee to make a distribution, because under the doctrine of cy pres, it can, although the trust property would be insufficient to benefit all parties, and it would be impossible to ascertain all existing charities, make an order applying to certain designated charities. It may therefore be concluded upon principle that there is no valid objection in any case, whether the objects are specified as charitable or not, to the trustee actually exercising his discretion and making the appointment, subject to the rule against perpetuities. When it comes to compelling the exercise of the discretion, the court can make an order only in the case where the objects designated are charitable. If they are not charitable and the trustee fails to exercise the discretion, he has committed a breach of trust, and as he cannot take beneficially, there will be a resulting trust to the heir at law or next of kin.’ If the trustee makes a valid exercise of the discretion, he will defeat the claim of the heir at law or next of kin. We shall now examine the Pennsylvania decisions relating to the case where there is an express discretion, with no specific objects designated, and a general charitable intent disclosed. 1See §151, ante, on resulting trusts. 460 GIFTS TO CHARITIES [750, 751] AMf{cCurdy’s Appeal 750. In McCurdy’s Appeal? a testator bequeathed his re- siduary estate to his executors “to be devoted and given by them to such institutions or uses as they, in their best judg- ment, may consider the most compatible with the views and instructions which I have given them,” expressly providing that none of his property should pass under the intestate laws. The executors exercised their discretion according to the instruc- tions of the testator, and appropriated a portion of the residue to certain charities, and the balance to themselves. This was done in writing under seal, and after the death of one of the executors, the account of the other was filed. The validity of the appointment to the charity appears to have been admitted by all parties, although apparently sustained on the basis of the appointment being made in pursuance of the instructions from the testator. The controversy appears to have been between the executors and the next of kin over the attempted appropriation by the executors to themselves. It was held that the next of kin were entitled to the balance, notwithstanding the clause in the will. This was a clear case of a resulting trust. The language of Mitchell, J., where he said that the balance was not covered by the will, is open to serious objection.’ Kinike’s Estate 751. In Kinike’s Estate* the testator gave the residue of his estate to his executors ‘‘to distribute the same among such charitable institutions and in such proportions as they, in their discretion, deem proper.”” The executors designated the charities, and the decree of the court awarding the residue to these charities, was sustained, Judge Ashman, in the court below, distinguishing the case from Morice v. The Bishop of Durham, on the ground that the volition of the trustees was expressly restrained to charitable institutions.° 2124 Pa. 99 (1889). cher’s Est., 201 Pa. 612 (1902); DeSilver’s 3 At p. 114 of the report; see §151, ante, on resulting trusts. 4155 Pa. 101 (1893). > A similar result was reached in the following cases, where the discretion was confined to charitable objects: Schlei- Est., 32 Pa. C. C. 407 (1905); case obscurely reported in the county court report; for the terms of the will see report of the case on another branch in 211 Pa. 459 (1905); see McCloskey’s Est., 15 D. R. 428 (1906). [752-754—] CHARITABLE TRUSTS 461 Murphy's Estate 752. In Murphy’s Estate ® the testator directed as follows: “The balance of my estate, after the payment of the above legacies and the collateral inheritance tax on them, to be divided among such benevolent, charitable and religious insti- tutions and associations as shall be selected by my executors or their successors.” The surviving executor filed an account showing a distribution under the discretion to certain charities. Exceptions by the next of kin were dismissed. The action of the court below was affirmed, on appeal, without an opinion. The judge in the court below went on the ground that the word benevolent meant charitable.’ This case is in direct conflict with Morice v. The Bishop of Durham,* and may be considered as overruling that case so far as the law in Penn- sylvania is concerned. Casey’s Estate 753. In Casey’s Estate® the words of the trust were the same as in Murphy’s Fstate.° The gift was to a Philadelphia trust company, in trust, to pay to a New York corporation, to be distributed by the corporation for such charitable, bene- ficial and religious purposes as the session of said church should from time to time order and direct. It seems as though, even if the trust were void, the proceedings should have been against the foreign corporation, which was the real trustee, that held upon the void trust. In so far as the Philadelphia trust company was concerned, the cestui que trust was a definite foreign charitable corporation, as to which there could be no question. Dulles’s Estate 754. In Dulles’s Estate’ the testatrix provided that in the events which happened her executors should have full power to distribute the residue of her estate among such religious, charitable and benevolent objects as they should think proper. The question came up on an appeal from the decree of the 6184 Pa. 310 (1898). and a resulting trust decreed as to the 7 As to this point in the case see the benevolent. discussion in Perry, Trusts, 5th ed. (1899), 510 Vesey, 521 (1805). Vol. 2, §712, n. 2. The court did not 928 Pa. C.C. 81 (1902), s.¢. 12D. R.15. observe that the estate could have been 1 184 Pa. 310 (1898), stated §752, ante. divided into three parts, and the gifts 1218 Pa. 162 (1907). to charitable and religious held good, 462 GIFTS TO CHARITIES [—754, 755—] Orphans’ Court on the executors’ account. The case is badly reported, and it does not appear who the appellees were or what the adjudication of the court below was. It appears from the report of the case in the lower court” that the estate was awarded to the next of kin, and that the executors appealed from that decision, claiming to have the estate awarded to them under the terms of the trust. The Supreme Court reversed the Orphans’ Court, and the estate was awarded to the executors. This case is on all fours with Murphy’s Estate ° and would be well decided under the authority of that case without further discussion. Mitchell, C. J., in the Supreme Court, however, thought it necessary to go on and sustain the validity of the trust upon general grounds. It is to be ob- served that in this case the executors had made no appoint- ment to the charities, and the decision, therefore, is authority for the proposition that where the objects designated are charitable, it is not necessary for the trustees to exercise the discretion in order to defeat the right of the next of kin. If, in such case, the trustees refused to exercise the discretion, the court could, under the cy pres doctrine, compel the application to proper charitable objects. Pennsylvania Law as to Express Discretion where no Objects are Designated and there is a General Charitable Intent Disclosed 755. It may, therefore, be said, in view of these cases, that it is the law in Pennsylvania that where the trustee has exer- cised the discretion, the charitable objects which he has desig- nated can take the property as against the next of kin or heir at law,* and that if the trustees have completely exercised the discretion, and in the exercise have failed to dispose of all the trust property, there will be a resulting trust of that undis- posed of residue;*® and that even if the trustees have failed to exercise the discretion where the objects designated are charitable, the court will refuse to decree a resulting trust.° No Pennsylvania case has been found presenting the question of how far the trustee can exercise his discretion, where the objects are not confined to charities, and what disposition is 715 D. R. 518 (1906). > McCurdy’s App., 124 Pa. 99 (1889), 3184 Pa. 310 (1898), stated §752, ante. stated §750, ante. 4Murphy’s Est., 184 Pa. 310 (1898); ®*Dulles’s Est., 218 Pa. 162 (1907), stated $752, ante. stated §754, ante. (—755-757—] CHARITABLE TRUSTS 463 to be made of the property in such case when the trustee fails to exercise his discretion. These two questions probably lie somewhat outside the scope of the present discussion. It may be remarked, however, that the reasoning of Mitchell, C. J., in Dulles’s Estate,’ goes a long way towards sustaining the right of the trustee to exercise his discretion in such a case, and giving the next of kin a right to enforce a resulting trust only in the case where the trustee refuses to exercise his discretion,® or in exercising it violates the rule against perpetuities. As to Survival of Discretion 766. It was formerly the law that where the express dis- cretion amounted to a personal confidence it could be exer- cised only by the trustee appointed in the settlement, and expired when he ceased to hold the office of trustee.° Under this principle, it frequently happened that directions given by the testator could not be carried out, owing to the death of the trustee. This inconvenience has been remedied by the provisions of the Acts of 1855 and 1895,’ which provide that no disposition of property for any religious, charitable, literary or scientific use shall fail by reason of the objects depending upon the discretion of a last trustee. Accordingly, in several cases since the passage of the Act of 1855, the substituted trustee has been permitted to exercise the discretion.’ Change of Trustees of a Charitable Trust 757. A court of equity has power to dismiss trustees and appoint new ones, and this power extends over the trustees of a charitable trust. The legislature, however, has no power under the constitution to summarily remove the trustees of a private charity. Such trustees are said to have vested rights in the management of the trust of which they cannot be deprived except by due process of law.” Where, however, the 7218 Pa. 162 (1907), stated §754, ante. 8 This is the same result reached by Mr. Ames in the article previously referred to in 5 Harv. Law Rev. 389-401 (1892). ® Perry, Trusts, 5 ed. (1899), Vol. 2, §721; Hill, Trustees, Bispham’s ed. (1867), p. 765; App., Children’s Hosp., 10 W. N. C. 313 (1881), see §158, ante. 1 See §735, ante. !Murphy’s Est., 184 Pa. 310 (1898), stated §752, ante; Stevens’s Est., 200 Pa. 318 (1901); DeSilver’s Est., 211 Pa. 459 (1905), s. c. 32 Pa. C. C. 407 (1905), on another branch. ? Brown v. Hummel, 6 Pa. 86 (1847). A464 GIFTS TO CHARITIES [—757, 758—] charity is for a public use, the legislature has power to direct a change of trustees.’ Sale of Property Held Under a Charitable Trust 758. The chancellor had the power to make a decree order- ing a sale of the property or a change of investment.* There are several cases in Pennsylvania in which such a sale was authorized, and they can be sustained only upon the principle of equity referred to, although in some of them the court sought to justify the decision by other reasons which will not bear examination.® The case is now provided for by the Act of April 18, 1853,° and the trustees of a charitable trust can easily dispose of the trust property under the provisions of the act.”. The proceeds of the sale, however, are to be held upon 3 For acts relating to public schools, see §790, post. 4 See authorities cited in Hill, Trustees, Bispham’s ed. (1867), 720; Gray, Rule Perp., 2 ed. (1906), §590, u.; Perry on Trusts, 5 ed. (1899), Vol. 2, §737. “I do not doubt the existence of this power in the court; the trustees have the power to sell at law, they can convey the legal estate; and it is only a court of equity that can recall the property; and if that court should sanction a sale it would be bound to protect the purchaser:” Sir James Wigram in Attorney-General v. Mayor of Newark, 1 Hare, 400; see Nau- man v. Weidman, 182 Pa. 263 (1897). 5 Griffitts v. Cope, 17 Pa. 96 (1851); Barr v. Weld, 24 Pa. 84 (1854); Brendle v. Congregation, 33 Pa. 415 (1859); See- bold v. Shitler, 34 Pa. 1383 (1859). In Saxton v. Mitchell, 78 Pa. 479 (1875), the testator who died in 1857 provided as to a certain tract of twenty acres of land, as follows: “ * * * which I hereby reserve forever for the use of the members of the Methodist Episcopal Church to hold their camp-meetings on.” An attempt was made to sell the land under the Act of 1853. The court held that the act did not apply, and a special act of the legislature was passed in 1871. The case came up on an application of the parties authorized under the special act for the appointment of a trustee and an order of sale. The court held that this act was unconstitutional and dismissed the application, and said that the legal title to the lot of ground vested in the testator’s heirs, subject to an easement in favor of the camp-meetings; that this was a per- petual right, and that the heirs could make any use of the ground they saw fit, so that it did not interfere with the camp- meeting. The court arrived at this con- struction of the will largely because of the fact that they inferred that the tes- tator knew that camp-meetings were temporary affairs, lasting only a few weeks each year, and that therefore the balance of the use of the land descended to the heirs. This is a very curious case. There was nothing to prevent the heirs from selling the land themselves, and the purchasers would take subject to the right of the Methodist Church. ®P.L. 503. 7 For a case of sale under this act and discussion thereof, see Burton’s App., 57 Pa. 213 (1868). For other cases of sales under the act see Stallman’s App., 38 Pa. 200 (1861); and Fisher’s App., 162 Pa. 232 (1894), where Mr. Justice Wil- liams placed the power exercised before the Act of 1853 solely on such acts of [—758, 759—] CHARITABLE TRUSTS 465 the same trusts, as the act does not authorize a diversion to other purposes. It has been intimated, by way of dictum, that the method of sale prescribed by the Act of 1853 is exclusive, and that the courts have no further power to authorize any sale under their inherent equity jurisdiction.® How Far can the Donor Prevent the Sale by a Proviso in the Trust Setilement ? 759. It seems clear, on principle, that any restraint on alienation imposed on the legal title of property given in trust for charity is null and void. The court cannot permit its jurisdiction either under the Act of 1853 or in the exer- cise of its original chancery jurisdiction to be ousted by any proviso of the donor. In Fisher’s Appeal® the testatrix inserted in her will a provision that no part of the property devised in trust ‘“‘shall be sold or disposed of, encumbered or applied to any use or purpose than as” (mentioning the char- ity). A decree directing the sale under the Price Act was affirmed by the Supreme Court, on appeal, Williams, J., placing the decision on the ground that the phrase only meant that the trustees should not divert the land to any other use, and as the proceeds would be used for the same charity, the sale could not be said to be for any other use. He concluded with the following dictum: “Nothing short of a plain, unequivocal direction that no part of the land shall be parted with for any purpose whatever ought to be held sufficient to restrain the managers from doing that which the interests of the charity under their control require of them.’ If by this he meant a sale by the managers, the dictum is authority for the proposition that a provision in the trust settlement which legislature as might be procured, passed _bert’s App., 110 Pa. 496 (1885). The in the exercise of the power of the state as visitor of all charitable institutions, thus ignoring the cases where the power has been exercised without an act. Church’s Pet., 139 Pa. 61 (1896); Church’s Pet., 166 Pa. 43 (1895); Funck’s Est., 16 Super. Ct., 484 (1901); Corr’s Est., 29 Pa. C. C. 276 (1903); see the vague case of Church v. Gray, 198 Pa. 321 (1901). For a case where a sale was set aside because not made on petition by parties interested, see Gum- jurisdiction of the Orphans’ Court in the case of a testamentary trust and sale under the Price Act, is conclusive on the Common Pleas: Mercer Home »v. Fisher, 162 Pa. 239 (1894). 8 Mitchell, J., in Nauman v. Weidman, 182 Pa. 263 at 266 (1897); see, however, the ambiguous case of Evangel. Luth. Church v. Township, 35 Pa. C. C. 348 (1908). 9162 Pa. 232 (1894). 466 GIFTS TO CHARITIES [—759-761—] restrains a sale is valid. No other Pennsylvania case has been found, and the law, therefore, is in doubt.'° Lease by Trustee of a Charitable Trust 760. The question of the power of the trustees of a chari- table trust to make a lease has not come up for decision in Pennsylvania. A lease for 999 years by a trustee of a chari- table trust was before the court in Griffin v. Fellows ? and the Providence ‘Trustees’ Appeal,? and the validity thereof was sustained. Preliminary Discussion and Definition of Cy Pres 761. The chancellor acts in personam, and directs the party having the legal title to deal with it or convey it, as the cir- cumstances of the case require; that is, in such manner as to prevent an unjust enrichment of one party at the expense of another. Where there is an express trust, justice requires that the trustee be directed to act for the benefit of the per- sons designated by the provisions of the gift, whenever those persons can be ascertained and the provisions carried out; but if the provisions cannot. be carried out, or if the beneficiaries cannot be ascertained, the chancellor may act in one of three ways: (1) he may permit the trustee to keep the property, which is obviously unjust, as it was never intended that the trustee should take beneficially, and naturally such a course is rarely followed; (2) he may direct the trustee to hold it for the benefit of the next of kin or heir at law, according to the nature of the property; this is in accordance with the doctrine of resulting trust, and is the disposition which is usually made;* (3) he may supply new beneficiaries in place of those who cannot be ascertained or who cannot take, and direct the performance of the trust accordingly. The chancellor justifies his action in making such a disposition of the case under the doctrine of cy pres,’ which may be defined as the doctrine that where an intention is disclosed which cannot 10 Except the decision that the original _Hill, Trustees, Bispham’s ed. (1867), pp. settlor has no standing to object to the 720, 721. , sale; see Church’s Pet., 166 Pa. 43 (1895) ; 2814 Pa. 114 (18738). confer Part II on restraints on aliena- 32 Walker, 37 (1885). tion. 4 See §151, ante. 1 For a discussion of the subject, see 5° Cy pres or as nearly as possible. {—761—] CY PRES 467 be carried out, the court will direct a disposition which is as near as possible to the one originally intended. Several other definitions of cy pres are added in the note.® This doctrine, which is of general application in a court of chancery, is most commonly applied in cases of charitable trusts which, by rea- son of the uncertainty of the objects and the indefiniteness of the duration of the trust, are more liable to fail because of unforeseen circumstances. The cy pres doctrine concerns itself solely with justifying the court in supplying new bene- ficiaries for those designated. It has nothing to do, therefore, with the question of an appointment of a trustee or the ques- tion as to who is to act as trustee. It does not ascertain the intention of the testator; it presupposes an intent which has failed or cannot be ascertained.’ The doctrine of cy pres is purely equitable and is not applicable except where there is an express trust declared; consequently when there is a direct gift by will at law which cannot take effect, the property embraced in the gift will fall into the residue, if any, and if there is no residuary devise there will be an intestacy.’ If 8“ Where a gift is made to a trustee for a charitable purpose, the general nature of which is pointed out, and which is lawful and valid at the time of the death of the testator, and no intention is ex- pressed to limit it to a particular institu- tion or mode of application; and after- wards, either by change of circumstances the scheme of the testator becomes im- practicable, or by change of law becomes illegal, the fund, having once vested in the charity, does not go to the heirs at law as a resulting trust, but is to be ap- plied by the court of chancery, in the ex- ercise of its jurisdiction in equity, as near the testator’s particular directions as possible, to carry out his general chari- table intent:” Bispham, Equity, 7th ed. (1905), p. 198. “The meaning of the doctrine of cy pres, as received by us, is, that when a definite function or duty is to be performed, and it cannot be done in exact conformity with the scheme of the person or persons who have provided for it, it must be performed with as close approximation to that scheme as reason- ably practicable; and 30, of course, it must be enforced. It is the doctrine of approximation, and it is not at all con- fined to the administration of charities, but is equally applicable to all devises and contracts wherein the future is pro- vided for, and it is an essential element of equity jurisprudence:” Lowrie, C. J., in City of Phila. v. Girard’s Heirs, 45 Pa. 9 at 28 (1863). 7Mr. Perry, Trusts, 5 ed. (1899), Vol. 2, §723, says: “‘Cy pres as applied to judicial acts is a rule of construction and not of administration.” It is submitted that the learned author is inerror in this position. The doctrine isa rule justifying the court in carrying out the trust. 8 Houston’s Est., 28 Pa. C. C. 285 (1903), s. c. 12 D. R. 121, 19 Mont. 151. The decedent, who died in 1845, gave $500 to the Penna. Anti-Slavery Soc. The fund was awarded to the next of kin upon an account filed in 1903, the society having ceased to exist. Query: whether this case should not have been disposed of under the doctrine suggested in Com- monwealth v. Pauline Home, 141 Pa. 537 (1891), stated §771, post. 468 GIFTS TO CHARITIES [—761-763—] the gift is by deed inter vivos the property will remain in the grantor, just as it was before. Reasons for the Doctrine of Cy Pres 762. It has been stated by a learned author® that this doctrine, in its application to charities, originated in the fact that in medieval times charitable dispositions were made use of so largely to allay the superstitious fears of the donor and purchase his peace with heaven that the chancellor in dealing with cases where the donor was dead very naturally took the ground that if the charitable use designated failed, another one should be raised, as it would not do to defeat the gift of the deceased, for which he had, it was to be hoped, received his consideration.'° The doctrine thus originating, was carried over into modern times, for reasons the learned author was not able to discover, after the superstitious notion in which it had originated had passed away." As a charitable use was gener- ally indefinite, the cases where the trust could not take effect usually arose after a long period of years, because circum- stances had so changed that the trust could not be carried out. Jt was in these cases impracticable and frequently impossible to ascertain who were the representatives of the testator. The chancellor, therefore, took hold of the cy pres doctrine as the most convenient way out of the difficulty, as it justified him in substituting new beneficiaries. Furthermore, as the testator showed by his attempted charitable disposition that he did not intend to benefit the heir at law or next of kin, there is no injustice in not giving the property to them. And as the trustee cannot take beneficially, there seems to be no reason why the chancellor should not substitute a new beneficiary instead of decreeing a resulting trust.’ Cy Pres Doctrine Has Been Confused with Discretion 763. The cy pres doctrine has been confused with the subject of discretion.” The doctrine, however, can be applied only ® Illustrations of the Origin of Cy Pres, See remarks of Lord Chief Justice 8 Harv. Law Rev. 69 (1894), by Mr. Jos. Wilmot in Attorney-Gencral ». Down- Willard. ing, 1 Wilmot, Notes 1, 33, (1767). 10 Originally the doctrine was only ap- 1 See §724, ante. plicable to the case of a trust created by *See §158, ante, on discretion in a will. This distinction probably does not __ trustee. exist in Pennsylvania. See §776, post. {[—763, 764] CY PRES 469 when there is a trust created,’ but so long as the notion that a trust must be created is expressed by the statement that there must be a discretion,* the common remark will be found that the cy pres doctrine is only to be adopted in the case where there is a discretion lodged somewhere in the disposi- tion of the charitable gift.’ It is apprehended that it is not necessary to confer any discretion in the creation of a trust in order that the cy pres doctrine may be applied. The appli- cation of the doctrine does not depend in any way upon the presence or absence of an express discretion. Common Instances of the Application of the Doctrine of Cy Pres 764. The most common instance of the application of the doctrine of cy pres occurs in the case of a gift for an indefinite class. Strangely enough, the operation of the doctrine in these cases is rarely noticed. Suppose there is a gift in trust to feed the poor of the city of Philadelphia; it is plain that under the strict rules of the trust all the poor in the city of Phila- delphia have an equal right to be fed, and the trustee, if his conduct were governed by the strict provisions of the settle- ment, would be required to proceed and feed all the poor persons. All the poor persons cannot be ascertained, and the trust property would be insufficient to feed them all in any ordinary case. The trust, therefore, is a practical impossibility, according to its strict terms. The court will, however, under the doctrine of cy pres, permit the trustee to feed as many of the poor people as will be provided for by the funds he has in hand; that is to say, where all the objects designated cannot be benefitted, the court will direct an application to as many of those designated as possible.® 3 See §761, ante. meant vested. 4 See this subject discussed, §§745, 746, ante. 5 Gibson, C. J., in Pickering v. Shotwell, 10 Pa. 23 at 28 (1848); Ashman, J., in Houston’s Est., 28 Pa. C. C. 285 (1903). The addition by Ashman, J., that the cy pres doctrine was to be applied only when the object itself is permanent, is probably a slip of the pen, for if the object is permanent no occasion can ever arise for the application of the cy pres doctrine unless the object is illegal; see §777, post. The learned judge may have ® Another common instance occurs in the case of a trust for a schoolhouse which has been transferred under the common school legislation to the public school directors, as to which see §790, post. See also cases of express discre- tion where no objects are designated and there is a general charitable intent dis- closed; §749, ante. It is also said that the court will under the cy pres doctrine construe a gift to a charity upon a remote contingency as a present vested gift whenever possible: see Frank- 470 GIFTS TO CHARITIES [765, 766—] The Doctrine of Cy Pres Criticised 765. The doctrine of cy pres has been much discussed and very severely criticised as being unsuitable to American institu- tions. The court of chancery, it must be remembered, was presided over by the chancellor, who was the keeper of the king’s conscience, and combined with his judicial duties many duties of state and of an executive nature, besides presiding in the House of Lords. The king as parens patriae had power of supervision over eleemosynary corporations, and his power in this respect was almost unlimited. The authority of the king in this particular was generally exercised through the lord chan- cellor, and the cases of such exercise were reported with the other judicial proceedings of the court, from which confusion in the reports the distinction between the two kinds of juris- diction now known as the judicial and prerogative cy pres was not always borne in mind, and the judicial cy pres was fre- quently supposed to have greater application than properly be- longed to it.’ Preliminary Discussion and History of the Doctrine of Cy Pres in Pennsylvania 766. The doctrine of cy pres seems to have been viewed with particular aversion in the early history of the state. It was characterized by Gibson, C. J.,° in the following language: “The doctrine of cy pres is too grossly revolting to the public sense of justice to be tolerated in a country where there is no ecclesiastical establishment.”® The reasons for that aversion lin’s Est., 150 Pa. 437 (1892), and the language of Penrose, J., in the court be- low, in 27 W. N. C. 545 (1891). See also gifts to corporations not in esse, §786, post. And see Act of May 26, 1876, P. L. 211 §1, as to which, see §769, post. 7 Perry, Trusts, 5 ed. (1899), Vol. 2, §§718, 719. 8In Methodist Church v. Remington, 1 Watts, 219 at 227 (1832); Mr. Perry in his treatise on Trusts, 5 ed. (1899), Vol. 1, §729, n. 1, says that this was a case calling for the exercise of the pre- rogative power; on the question of citizen- ship, the law has been changed. The remarks of the judge as to cy pres were dicta, as the case arose as to a trust created by deed, which was not subject to the application of the cy pres doctrine at that time. ® See also remarks of the same judge in Witman v. Lex, 17 S. & R. 88 at 93 (1827), as follows: “ * * * It may safely be suggested, however, that in many particulars the relief which we shall be able to afford through the me- dium of common law forms, will neces- sarily fall short of that which would be administered by a chancellor. Indeed no one would desire to see the doctrine of cy pres carried to the extravagant length that it was formerly, or witness [—766, 767—] CY PRES 471 are perhaps more suitable for discussion in an historical trea- tise than in a book on law. One reason may be noticed with propriety: in a new and poor community, such as Pennsyl- vania then was, no case would arise where a charitable trust had existed for many years, and every case involved a con- flict between representatives of the donor in esse and the dis- cretion of the court. There was, therefore, a natural repugnance felt to the application of the cy pres doctrine, and the court leaned toward the implication of a resulting trust. As, how- ever, the community became more settled, and charitable foun- dations became ancient, the usefulness and practical justice of the cy pres doctrine became more generally recognized. The Act of May 23, 1895,"° and the Act of May 26, 1876,‘ seem to have caused a change in the judicial attitude. The doctrine is now admitted cautiously and with qualifications. It is a reasonable doctrine,? and is part of the common law power of the state,? although the remarks of Gibson, C. J., in Metho- dist Church v. Remington,* are quoted with approval by Ash- man, J., in Houston’s Estate.* There is a great dearth of authority in Pennsylvania on the subject of cy pres, and the law is somewhat obscure. The subject will perhaps be best understood by discussing the cases and statutes in chronological order. Griffitls v. Cope 767. In Griffitts v. Cope ® the testator had in 1747 devised to trustees to be nominated, in fee, a lot of ground upon which to build a meeting-house if the members of a certain meeting should agree to build a meeting-house there, but not otherwise. The meeting-house was built and used as such for nearly one hundred years. The meeting was subsequently abandoned, and a new meeting-house built at another place, and the old meeting-house rented for mercantile purposes. The heirs of the original testator brought ejectment and claimed the exercise of an arbitrary discretion in giving effect to a general intention to leave a sum of money to charitable pur- poses, to be designated thereafter by disposing it to such charities as the court chooses to direct. No such discretion would be exercised by this court.” 10 p, L. 114, re-enacting the 10th Sec. of the Act of April 26, (1855), P. L. 328; see §769, post, and §735, ante. 1P, L. 211, §1; see $769, post. ? Dictum, Lowrie, J., in City of Phila. v. Girard Heirs, 45 Pa. 9 at 25 (1863). 3 Noyes, P. J., in Trim’s Est., 168 Pa. 395 at 397 (1895). 41 Watts, 219 at 227 (1832). 528 Pa. C. C. 285 (1903), s. v. 12 D. R. 121, 19 Montg. 151. 617 Pa. 96 (1851). 472 GIFTS TO CHARITIES [+767, 768—] to recover because the trust had been abandoned by the donee. The meeting had sold the property, and the vendee refused to take, because of a defect in the title. It seems, although not so stated in the report, that the proceedings were for the purpose of settling the doubt raised by the vendee. Judgment was given for the defendant. The sale of the land and use of the proceeds for even another meeting-house would clearly involve a change in the specified object of the donor. This case is a recognition, although no reference is made in the opinion, of the doctrine of cy pres as against a resulting trust. The language of Lewis, J.,’ is significant. The learned judge said: ‘‘it seems unreasonable to suppose that, a devisor ever means that his heirs shall get back the land in such cases, except when he says so; or that, amidst the rapidly changing opinions of society, he means that his opinions shall be imbibed by others just as he left them, and shall forever withstand the changes necessarily incident to the progress of society; or that he means that no change in the number, cir- cumstances, and habits of the people, shall ever justify any sort of conversion of the gift. It would seem contrary to public policy to favor a construction that would give to a man, who died a hundred or a thousand years ago, the control of land that ought to be controlled by the present generation. Such an intention ought to be expressed, not implied.”’ We see the doctrine of cy pres beginning to creep in, although not so recognized by the court. Newell’s Appeal 768. In Newell’s Appeal® there was a bequest of $2,500 to the Theological Seminary at Princeton, N. J., upon trusts which were attacked as insensible, unlawful and void. A controversy arose on the adjudication of the account of the executors of the will, and the fund was claimed by the Seminary and _ re- siduary legatees. The Supreme Court, Woodward, J., declined to pass on the question of the validity of the trust, saying that the directions were subsequent to the vesting of the legacy, and consequently the Seminary was entitled to the fund, and that if the limitations were void, the legacy would be vested in the Seminary clear of the conditions, and the question whether she was bound to perform conditions subse- 717 Pa. 99. 824 Pa. 197 (1855). [—768, 769—] CY PRES 473 quent should be determined when she was sued for forfeiture. If, however, the trust was void, there would be a resulting trust, and, as all parties were in court, it seems that there was jurisdiction to determine the matter. The decree awarding to the Seminary amounts to an application of the doctrine of cy pres. Legislation in Pennsylvania Affecting the Doctrine of Cy Pres 768. The Act of May 23, 1895,° provides that no disposition of property for any religious, charitable, literary or scientific use shall fail by reason of the objects ceasing or being given in excess of the annual value limited in the act; but it shall be the duty of the proper court to carry into effect the inten- tion so far as the same can be ascertained, and carried into effect consistently with law or equity, with the further pro- vision that if the objects are not ascertainable or have ceascd to exist, or are in excess of the annual value limited by law, such disposition, so far as exceeding the power of the courts to determine the same by rules of law or equity, shall be taken to have been made subject to the disposition of the legislature in manner as nearly conformable with the intent of the settlor as practicable; or otherwise, to accrue to the public treasury for public use.’? The Act of May 26, 1876,’ provides as follows: “Whenever any estate, real or personal, shall be vested in trustees, by gift or devise, for the purpose of apply- ing the income arising therefrom for the benefit, support or maintenance of a designated class of persons, which said class of persons shall become extinct, so that there shall be no one to derive any benefit from the said income, if there be no heirs to claim said fund, it shall and may be lawful for the said trustee or trustees having charge of the said estate, to apply, by petition, to the court of common pleas of the county in which they, or a majority of them reside, for authority to apply the said income to the benefit, support or mainte- nance of some other class or classes of persons similarly situated, as near as may be, to those for whose benefit, support or maintenance the trust was originally created; and thereupon the said court of common pleas, after proper examination into the statements set forth in the petition, and being satisfied 9P, L. 114, re-enacting the 10th Sec. 1 Wor the text of the act, see §735, ante. of the Act of April 26, 1855, P. L. 328. 'P.L, 211, $1. 474 GIFTS TO CHARITIES [—769-771—] as to the correctness of the same, may have power to order and decree that thenceforth the trustees shall apply the said income to the benefit, support or maintenance of the new class or classes of persons mentioned in the said petition.” This act has only been referred to twice since its passage.” The language of these acts seems to furnish ample legislative sanction for the courts to apply the doctrine of cy pres. In Re Petition of Trustees of Lower Dublin Academy 3 770. In re Petition of Trustees of the Lower Dublin Academy there was a trust of a lot of ground for a school under an agreement by the heirs of the decedent. On petition of the trustees the court directed the appropriation of the income, there being no further necessity for a school owing to the establishment of a public school system, to the support of a library in the same vicinity. In the above case the court referred to a previous case, apparently not reported, where they directed the distribution of the proceeds of the sale of land held in trust for a Protestant school, among the Protes- tant churches of the neighborhood. This is a clear case of the application of the doctrine of cy pres. Commonwealth v. Pauline Home 771. In Commonwealth v. Pauline Home,’ a charitable cor- poration for the maintenance of a home for poor children in the Twenty-second Ward, was dissolved. The court awarded the proceeds of the sale of the trust property to the Chil- dren’s Aid Society, in trust, for (1) the care of poor children not otherwise properly provided for, within the Twenty-second Ward of Philadelphia, who otherwise would presumably be sent to the almshouse; (2) to the care of such children from Philadelphia County; (3) to the care of such children from Pennsylvania, giving preference to those living nearest Phila- delphia County. The Master, to whom the case was referred in the court below, and whose opinion was affirmed on appeal to the Supreme Court, placed the decision on the 10th Section of the Act of April 26, 1855,° and the application of the doc- * By Noyes, P. J., in the court below 19 Montg. 151. in Trim’s Est., 168 Pa. 395 at 397 (1895) ; 38 W. N.C. 564 (1880). Ashman, J., in Houston’s Est., 28 Pa. 4141 Pa. 537 (1891). C. C. 285 at 286 (1908), s.¢. 12 D. R. 121 5 Pp, L. 328, [—771-774—] CY PRES 475 trine of cy pres. The Supreme Court declined to pass on the question of the weight to be given the wishes of the contrib- utors, and in a very short and unsatisfactory per curiam opinion, said that the matter was very much in the discretion of the court below, and that they would not reverse unless for clear abuse. Smith's Estate 772. In Sinith’s Estate ® the court below said, by way of dictum, that where there was a trust to erect a playground and memorial arch in a public park, the court could apply the gilt cy pres if the assent of the public authorities could not be had. Cushman v. The Church 773. In Cushman v. The Church’ the plaintiff, with others, contributed money to build a memorial church to certain per- sons upon a certain piece of ground. A church society was formed and incorporated, and the church built soon afterward. The church authorities then proposed to build a new church at another place, as a memorial to another person, and tear down the old one which had been built. The plaintiff filed a bill in equity to restrain the trustees in their action, and the demurrer of the church to the bill was overruled. The court intimated that the trustees might, on application to the court, obtain leave to sell the church property and invest in a new one under the same trust. The bill was remitted for further proceedings, and the preliminary injunction reinstated. There was no occasion for the application of the doctrine of cy pres. The action of the church authorities in attempting to divert the property to another use was very properly restrained. Harman v. Romberger 774. In Harman v. Romberger® the heirs of a testatrix, who died in 1900, brought ejectrsent against the trustees under the will, claiming that a charitable use was declared which ceased to exist, and that, therefore, the property should go to the heirs at law. Curiously enough, both court and counsel overlooked the Act of 1895, and discussed the case as if turn- ing on the Act of 1885.° The court decided that there could 6181 Pa. 109 (1897). $34 Pa. C. C. 593 (1908). 7162 Pa. 280 (1894). ® See §735, ante. 476 GIFTS TO CHARITIES [—774-777—] be no recovery, as the act only referred to the case where the charity ceased to exist at the death of the testatrix; that as there was no clause of re-entry in the deed, the heirs could not get the title. It appeared that the charitable use existed at the death of the testatrix.!° Who May Invoke the Application of the Doctrine of Cy Pres 775. It is provided by the Act of May 23, 1895," that pro- ceedings may be instituted under the act by leave of the attorney-general of the commonwealth, on the relation of any institution, association or corporation not for profit, or individ- ual desirous of carrying the charitable trust into effect.” The law on this point seems very clear, and requires no further comment. Doctrine in Pennsylvania Probably Applies to Trusts Created by Deed 776. The doctrine of cy pres applied only to gifts by will.* It seems, however, if the doctrine of cy pres was established in Pennsylvania by the Act of May 23, 1895,” that this distinction no longer exists, as that act applies equally to gifts by deed and will. There have been a number of cases since the Act of 1855 in Pennsylvania, in which the cy pres doctrine has ' been applied to gifts by deed,®? without the question being raised. It ‘may therefore be said that the distinction no longer exists in Pennsylvania law. Pennsylvania Law as to Doctrine of Cy Pres 717. The provisions of the acts relating to cy pres* are so 19 See also dictum of Hawkins, P. J., in Daly’s Est., 208 Pa. 58 at 66 (1904). up L,. 114, re-enacting §10 of the Act of April 26, 1855, P. L. 328. 12 For a case of such proceedings, see Commonwealth v. Pauline Home, 141 Pa. 537 (1891). Tor a case of a proceed- ing by the donor of the trust in the case of a deed, see Wright v. Trust Co., ap- parently not reported, C. P. No. 4, Phila. County, Dec. Term, 1895, No. 1242, in equity. Case of a proceeding by the trustees, see In re Petition of the Trus- tees of Lower Dublin Academy, 8 W. N. C. 564 (1880) 1In Methodist Church v. Remington, 1 Watts, 219 (1832), Gibson, C. J., at 227 discussed the cy pres doctrine as ap- plicable to a trust created by deed inter vivos. *p. L. 114, re-enacting §10, Act of April 26, 1855, P. L. 328. > Commonwealth v. Pauline Home, 141 Pa. 537 (1891); Petition of the Trustees of Lower Dublin Academy, 8 W. N. C. 564 (1880); Wright v. The Trust Co., apparently not reported, C. P. 4, Phila. County, Dec. Term, 1895, No. 1242. 4 See §769, ante. [—777—] CY PRES 477 obscure and the authorities are so meagre that no definite conclusion can be drawn as to the law. As, however, the state grows older and wealthier and charitable foundations increase, the doctrine will undoubtedly be more frequently dis- cussed and applied. But little can be done now except to indicate a few general principles. The doctrine is perhaps, in its nature incapable of being reduced to exact limits, and if it were so reduced its usefulness would be considerably dimin- ished. It has been said that the cy pres doctrine now exists in Pennsylvania in all its branches.® There is nothing in the Acts of 1855 or 1895 to support this statement, and it has been expressly decided that the doctrine does not apply to a gift at law.® It has also been said that the doctrine only applies where a discretion is lodged somewhere in the disposi- tion of the charitable gift or where the object itself of the gift is permanent.’ It has also been said that the doctrine does not apply where the charity has ceased to exist at the testator’s death,* on the ground that the act does not apply to the case where the gift shall become void. Yet, on the other hand, it has been observed that the doctrine does not apply when the gift is unlawful because made within thirty days of the donor’s death. The true principle, it is apprehended, is this: where there is a vested gift in trust for a charity, and at any subsequent time, for any reason, it appears that the property embraced in the trust cannot be applied to the pur- poses originally designated, the court will, under the doctrine of cy pres, direct an application to other charitable objects as near as possible to those which were specifically indicated. Where, however, there is a gift in trust which cannot take effect because of the application of the rule against perpe- tuities,!° the doctrine of cy pres cannot be applied, because there has never been a complete gift to a charitable object. In this case, therefore, the court will always decree a resulting trust to the residuary devisce, heir at law or next of kin, according to the circumstances.! | Where the gift is at law, the doctrine 5 Bispham, Equity, 7 ed. (1905), p. berger, 34 Pa. C. C. 593 at 595, 596 (1908). 200, n. 7. ® Penrose, J., in Alter’s Est., 4 Pa. C. 8 Houston’s Est., 28 Pa. C. C. 285 C. 558 (1887). (1903), 8. v. 12 D. R. 121, 19 Montg. 151. 10 For a discussion of when the rule 7 Ashman, J., in Houston’s Est., 28 applies, see §§726, 730, ante. Pa. C. C. 285 (1903), s. ¢. 12 D. R. 121, 1See §151, ante, on resulting trusts, 19 Montg. 151. and §460, n. 5, ante. 8 McCarrell, J.. in Harman v. Rom- 478 GIFTS TO CHARITIES [—777-783—] of cy pres is inapplicable except in the case of a present gift to the members of an indefinite charitable class.? Where the gift is in trust for a definite charitable corporation, and the corporation dissolves or ceases to exist, there is no reason why the court should not, if the gift survives the rule against per- petuities, apply the doctrine of cy pres and direct a disposition of the fund accordingly.* Preliminary Discussion of Gifts to Charitable Corporaticns 782. All gifts to specific charitable corporations may be considered as gifts to definite charitable objects. Such a gift may be made in two ways, directly or in trust; thus, a legacy to the Old Men’s Home, or a legacy to B. in trust for the Old Men’s Home. In the first case, the gift will imme- diately vest in the corporation; in the second place, the trust will remain in the hands of the trustees specified, and the home will receive the income. Where there is a direct gift at law, it is sometimes said that there is an implied trust, the corporation being the trustee for the purposes of the institu- tion. This, however, is an unnecessary fiction. The charter of the corporation and the laws applicable thereto effectually fix the control and destiny of the fund, and there is no occasion to have recourse to any doctrine of trust. This fiction has served its purpose in the development of the law and can now be discarded. It was probably introduced in the early history of the state in order to support gifts which it was erroneously supposed would otherwise be void. A direct gift to a charitable corporation which is not remote is always valid except for the statutes of mortmain. It may have been sup- posed that the invalidity of the gift to a charitable corpora- tion rested on the same ground as the invalidity of a gift at law to indefinite objects, and that it was consequently neces- sary to imply a trust in order to sustain the gift. Gift to Charitable Corporations Forbidden by Statutes of Mortmain 783. Gifts to charitable corporations were forbidden in Eng- land by the statutes of mortmain. The judges in their note at the end of the report on the English statutes in force in Penn- 2 For a discussion of such gifts, see *> Commonwealth v. Pauline Home, 141 §§722, 723, ante. Pa. 537 (1891), stated §771, ante. [—783, 784—] CHARITABLE CORPORATIONS 479 sylvania,® speaking of the statutes of mortmain, said: “They are so far in force, that all conveyances, either by deed or will of lands, tenements, or hereditaments, made to a body corpor- ate, or for the use of a body corporate, are void, unless sanc- tioned by charter or Act of Assembly. So also are all such conveyances void, made either to an individual, or to any num- ber of persons associated but not incorporated, if the said con- veyances are for uses or purposes of a superstitious nature, and not calculated to promote objects of charity or utility.” A charitable corporation is also limited in the amount of property which it may hold.* A detailed discussion of the subject seems to fall under the law of private corporations. A few matters, however, may be noticed as peculiar to charitable gifts.’ Gijis of Real Estate to a Foreign Charitable Corporation 784. In Thompson v. Swoope® it was decided that a for- eign charitable corporation could take land in Pennsylvania by devise. This was altered by the Act of April 26, 1855,° which provided that no corporation other than such as should have been incorporated under the laws of this state, should thereafter acquire and hold any real estate in Pennsylvania directly or by or through any trustee.’° By the Act of June °3 Binney, 595 at 625 (1808). 8 See §657, ante, as to domestic corpo- rations, and §785, post, as to foreign cor- porations. “The trustees of a charitable trust: Brown v. Hummel, 6 Pa. 86 (1847), or the persons interested: Gumbert’s App., 110 Pa. 496 (1885), Stevens’s Est., 200 Pa. 318 (1901), may incorporate themselves: City v. Bicknell, 35 Pa. 123 (1860), and receive the fund from the trustees under the will: Stevens’ Est., 200 Pa. 318 (1901). 524 Pa. 474 (1855). SP. L. 328, §5. 10 For a case of a devise to w foreign corporation void under this act, see Fra- zier v. St. Luke’s Church, 147 Pa. 256 (1892); in that case, the testator devised certain ground rents directly to a chari- table corporation. It appeared that there was no corporation by that name, but that there was a New York corporation of nearly the same name. The will was dated April 9, 1863, and it was argued that the New York corporation could not take because at the time the will went into effect the foreign corporation could not take the gift, under §5 of the Act of April 26, 1855, P. L. 328. The court appointed a trustee to take the title and hold in trust for the New York corporation. In a case stated between the trustees and the owner of the ground rent, for the arrearages of ground rent, the court gave judgment for the plaintiff, which on appeal, was affirmed. The case was not within the Act of June 8, 1891, P. L. 211, because that act was not retrospective. This decision in effect ratified the act of the court in ap- pointing a trustee. The trust as declared was illegal at the date of the death of the testator. In order, however, that it might not fail the court appointed a trustee who could take the legal title. 480 GIFTS TO CHARITIES [—784-786—] 8, 1891,’ it was provided that a corporation chartered under the laws of any state in the United States, may take and hold real estate devised for charitable or religious purposes, provided that such real estate be sold within five years from the time the right of possession shall accrue.’ Gift of Personal Property to a Foreign Charitable Corporation 785. A gift of personalty to a foreign charitable corpora- tion is good.* It seems that although domestic charitable cor- porations are limited in the value of property which they may hold,> no such limit is placed on the holdings of foreign charitable corporations.® Gijt to a Corporation Not in Esse 786. Where there is a gift to a charitable corporation not in esse the gift cannot take effect immediately because there is no one to take. The court will not consider the formation of the corporation a condition precedent to the vesting of the gift, but will, under the doctrine of cy pres,’ direct the trustee to hold the fund until the corporation shall have been formed.*® The dictum of Sharswood, C. J.,° where he said, ‘“We must conclude then that this remainder, limited to a corporation thereafter to be created, was void, because there was no devisee competent to take at the time, and the possibility that there might be such a corporation during the particular estate for life was too remote,” may, in so far as it was applicable to a charitable corporation, be considered as disregarded in the 1p, L. 211. ? No case has arisen under this act as to the effect of the clause directing the real estate to be sold within five years. See Act of March 21, 1907, P. L. 21. 4Domestic and Foreign Missionary Society’s App., 30 Pa. 425 (1858); Newell’s App., 24 Pa. 197 (1855). Point not discussed or argued. 5 See §657, ante. 6 See remarks of Lowrie, J., in Thomp- son v. Swoope, 24 Pa. 474 at 482 (1855). 7 Gray, Rule Perp., 2 ed. (1906), §§607, 608. 8See Zimmerman v. Anders, 6 W. & 8. 218 (1848), which was a case of a gift of real estate to an unincorporated associ- ation which subsequently became incor- porated; Witman v. Lex, 17S. & R. 88 at 92 (1827); Act of April 26, 1855, §10, P. L. 328, re-enacted by Act of May 23, 1895, P. L. 114; Lewis’s Est., 152 Pa. 477 (1893); Fisher’s App., 162 Pa. 232 (1894); Daly’s Est., 208 Pa. 58 (1904). In Stevens’s Est., 164 Pa. 209 (1894), s. ¢. 200 Pa. 318 (1901) the trustee was direc- ted to procure a charter. ®In Zeisweiss v. James, 63 Pa. 465 at 468, (1870). The learned judge inac- curately states the period prescribed by the rule against perpetuities, as to which see §328, anle; confer §422, u. 2, ante. [—786-788—] TRUSTS FOR TOMBS AND MONUMENTS 481 later cases.’° If the formation of a corporation were considered a condition precedent, the gift would be remote and void, as the corporation might not be formed within the period pre- scribed by the rule against perpetuities.' In this respect, there- fore, the remarks of Ferguson, J., in Pepper’s Estate,? are open to objection. The learned judge said that although a corporation might not be formed within the time prescribed by the rule against perpetuities, yet a gift to a charity was an exception, and that in such case the court would allow the fund to be transferred to a corporation constituted within a reasonable time afterward.* A gift to a definite charitable corporation is clearly within the rule against perpetuities.*| The gift is upheld under the cy pres doctrine, and not as jan exception to the rule against perpetuities. Trusts for the Erection of Tombs and Afonuments 787. “A monument to the deceased or for his grave is esteemed a part of his funeral expenses.’ A trust for such a purpose is, therefore, valid.© No case has been found in Penn- sylvania extending this rule to the erection of the monument to a person other than the deceased.’ It is doubtful how far a trust for the erection of a monument comes within the provisions of the Act of May 26, 1891.° Trusts jor the Repair of Tombs and Monuments 788. ‘‘Trusts for the perpetual repair of tombs and monu- 10 See Gray, Rule Perp., 2 ed. (1906), §626, and n. 4, for discussion of this case. 1Gray, Rule Perp., 2 ed. (1906), §605. 7154 Pa. 331 at 336 (1893). 3 Exceptions being filed, the court in banc, Hanna, P. J., said that the case was provided for by the Act of May 9, 1889, P. L. 173 (see Act of May 23, 1895, P. L. 114, re-enacting Act of April 10, 1855) and on appeal, the Supreme Court affirmed, without discussing the point atall. Itis very difficult to see how the case can be brought within the acts of assembly except in so far as these acts establish the doctrine of cy pres. 4 See §730, ante. 5 Gray, 15 Harv. Law Rev. 515 (1902). °McGlinsey’s App., 14 S. & R. 64 (1826); see Porter’s Est., 77 Pa.‘ 43 (1874), in which it was held that a’gift for such a purpose was not charitable, and, therefore, valid, even though con- tained in a will made within one month of the testator’s death. As to this, see §737, ante. The amount to be expended by the executor, when no amount is specified, is to be determined by the court, according to the circumstances of the case: Ingles’s Est., 76 Pa. 430 (1874); Bain- bridge’s App., 97 Pa. 482 (1881). 7 As to this, see Gray, 15 Harv. Law Rev. 515 (1902). 8p. L. 119; referred to in §788, post. 482 GIFTS TO CHARITIES [—788-790—] ments were originally held to be charitable; bad, if they con- travened the mortmain act; but otherwise good.’”’® The later English doctrine was that such a trust was invalid, and such was the law in Pennsylvania.!° The old English doctrine was restored in Pennsylvania by the Act of May 26, 1891. Such trusts are exempt from the payment of collateral inheritance tax by the Act of March 5, 1903.7 Trusis For Saying Masses 789. A trust for saying masses was void in England as a superstitious use,> but is valid in Pennsylvania as a charitable gift.* Trusts jor Schoolhouses 790. There were a number of cases in the early history of the state, before the public school system had been estab- lished, of trusts for the erecton of schoolhouses for the use of the neighborhood. One neighbor would give the lot of ground, and he and the others, or the others without him, would subscribe the money to build the schoolhouse. The neighbors would then employ a teacher to manage the school, and the ones who took charge of the school were called the employers. The form, therefore, in which the conveyance in trust was generally expressed was, ‘“‘to the employers of a certain school, to hold for a schoolhouse,’ etc.* By various acts of assembly the trustees of these schools were authorized to convey the trust property to the school directors established ° Gray, 15 Harv. Law Rev. 517 (1892), and cases cited. 10 Trustees v. Wells, 5 Pa. C. C. 92 (1888). 1p. L. 119. The act reads as follows: “Sec. 1. Be it enacted, etc., that no dis- position of property hereafter made for the maintenance or care of any cemetery, churchyard or other place for the burial of the dead, or of any portion thereof, or grave therein, or monuments or other erections on or about the same, shall fail by reason of such disposition having been made in perpetuity, but said disposition shall be held to be made for a charitable use.” The following cases have arisen since the act: Smith’s Est., 181 Pa. 109 (1897); Nauman »v. Weidman, 182 Pa. 263 (1897); Brabson’s Est., 16 D. R. 669 (1907). ? Pp. L. 12. See opinion of the Deputy Attorney-General, Graveyard Taxation, 30 Pa. C. C. 369 (1904); confer Long’s Est., 22 Super. Ct. 370 (1903). 3Gray, 15 Harv. Law Rev. p. 518 (1902). 4Rhymer’s App., 93 Pa. 142 (1880); Seibert’s App., 18 W. N. C. 276 (1886), 8. c. 3 Sadler’s Cases, 412; O’Donnell’s Est., 209 Pa. 63 (1904); Dougherty’s Est., 5 W.N. C. 556 (1878). 5 Morrison v. Beirer, 2 W.& 8. 81 (1841); Kirk v. King, 3 Pa. 436 (1846); Martin v. McCord, 5 Watts, 493 (1836). {—790, 791—] RELIGIOUS TRUSTS 483 by law.° A few cases have arisen on these acts.’ The con- struction, however, is well settled. Where the beneficiaries of the trust are the same as those entitled under the laws to the benefits of the public school, the consolidation is proper, but where the beneficiaries are a particular class or sect of the community, the trust must remain as it was. In one case,® how- ever, where a lot was conveyed in 1794 in trust “for the use of the neighborhood in general for an English Protestant School, and for no other use or uses whatever,” and the trustees sold the land under the Act of April 18, 1853,° there is a dictum by Woodward, J., that the lot might have been conveyed to the school authorities of the City of Philadelphia. Religious Trusts 791. All religious trusts were void in England as_ super- stitious uses, but are valid in Pennsylvania. All property vested in trust for any church, congregation or religious society for religious worship or sepulture or the maintenance of either, must be subject to the control of the lay members of any such church, etc., or such constituted officers or representatives as shall be composed of a majority of lay members, citizens of Pennsylvania.'® A majority of the male members of lawful ® Act of June 16, 1836, §14, P. L. 531; Act of April 7, 1849, §16, Art. 2, P. L. 444; Act of February 12, 1849, §20, P. L. 108. As to trustees of academies: Act of April 11, 1862, P. L. 471, §16, Act of June 10, 1881, P. L. 119, §1. 7 Martin v. McCord, 5 Watts, 493 (1836) ; Wright v. Linn, 9 Pa. 433 (1848); Trus- tees ». Sturgeon, 9 Pr. 321 (1848); Barr v. Weld, 24 Pa. 84 (1854); McLain v. School Directors, 51 Pa. 196 (1865); School Directors v. Dunkleberger, 6 Pa. 29 (1847); Brown v. Church, 23 Pa. 495, (1854). For a case under the Act of 1863 see Pott v. School Directors, 42 Pa. 132 (1862). 8 In Stallman’s App., 38 Pa. 200 at 203 (1861). 2 Pp. L. 503; see §758, ante. 10 Act of April 26, 1855, §7 P. L. 328, as re-enacted by the Act of June 2, 1887, P. L. 298, and Act of May 1, 1907, P. L. 132. By proviso of the Act of April 26, 1855, §7, P. L. 328, as re-enacted by the Act of June 2, 1887, P. L. 298, it is pro- vided that no charter thereafter granted by any court for any church, congregation or religious society, shall be valid without requiring such property to be taken sub- ject to the provisions as to lay members. And, by the Act of May 1, 1907, P. L. 182, this provision is amended so as to read that all charters theretofore granted with- out inserting such clause, shall be as valid as if such clause had been inserted when the charter was originally granted, and so as to validate in full all titles conveyed by such corporations, with a further pro- viso that all property held by such exist- ing corporation shall be subject to the provisions of the act as to control by lay members in the same manner as if a pro- viso to that effect had been inserted in the charter when originally granted. The heading in Pepper & Lewis’s Digest of Decisions, Vol. II, col. 2798, stating 484 GIFTS TO CHARITIES [—791, 792] age of any unincorporated church, congregation or religious society, may choose their trustees, who need not necessarily be laymen, and whenever not previously declared, may declare the manner in which the title to their trust property shall be held, and upon due proof of such consent, the proper court may direct the legal title to be conveyed accordingly, so how- ever, that there shall be no diversion of the trust property to any other use than’ that to which it shall have been con- veyed. There have been a number of cases in Pennsylvania in which the congregation of a particular church has split into different factions, and a controversy has arisen as to which faction conforms to the faith of the church and is, therefore, entitled to the original property. These cases turn largely on questions of church law and doctrine? Other cases have arisen dealing with the validity of a sale made by a church depending on the power and qualifications of the church off- cers, unfortunately called trustees.? Both of these subjects lie outside the scope of this book. Determinable Charitable Gijis at Law 792. There seems to be no more objection to a determi- nable fee * vested in a definite charitable object,> than to any other instance of a determinable fee. If gifts at law to indefi- nite charitable objects are valid,* a determinable fee would, it is apprehended, be admissible in such a case. No authority on this point has been found. A determinable absolute gift of personal property seems to be unknown and probably would be invalid owing to the nature of the subject matter of the gift. the provisions of the Acts of 1855 and 1887 as extending to “charitable corpo- rations and associations,” seems to be unsupported by anything in the acts themselves. 1 By the proviso to §7 of the Act of 1855, P. L. 328, as amended by the Act of June 2, 1887, P. L. 298, and Act of May 1, 1907, P. L. 132, this proviso is amended so that the title shall be held subject to all the terms and conditions upon which the same may have been be- queathed, etc. 2See Brown v. Church, 23 Pa. 495 (1854); Kisor’s App., 62 Pa. 428 (1869); Roshi’s App., 69 Pa. 462 (1871); Ram- sey’s App., 88 Pa. 60 (1878); Church’s App., 88 Pa. 503 (1879); Greek Church v. Greek Church, 195 Pa. 425 (1900). 3See Firestone v. Church, 215 Pa. 8 (1906). ‘As to the validity of determinable fees, see §27, ante. ° For an instance of such a gift, see Henderson v. Hunter, 59 Pa. 335 (1868). °For a discussion of this point, see §§722, 723, ante. [793] DETERMINABLE CHARITABLE GIFTS 485 Determinable Charitable Trusts 793. A determinable trust exists when there is a direction to the trustee to terminate the trust and pay the fund back to the donor or his heirs.’ There is no reason, it is appre- hended, to sustain an exception in this case where the objects are charitable, and it is submitted that the rule against per- petuities and the rule forbidding restraints on enjoyment should apply equally, whether the gift is in trust for a non-charitable object or for a charitable object. One case has arisen in Pennsylvania where there was such a discretion,® and although the point was not raised for decision, the court seemed to think that the discretion could be exercised at a remote period.® It is often a difficult question of construction to distinguish between a determinable gift at law and a determinable trust.?° 7 For a discussion of the application of the rule against perpetuities, see §413, 96 (1851). For a distinction between @ conveyance on condition and a convey- ante; for a discussion of the application of the rule forbidding restraints on en- joyment, see §§524, 539, ante. 5 Lewis’s Est., 152 Pa. 477 (1893). °¥For a further discussion, see Gray, Rule Perp., 2 ed. (1906), §603i. 19See Gumbert’s App., 110 Pa. 496 (1885); see also Griffitts v. Cope,17 Pa. ance in trust, see Barr v. Weld, 24 Pa. 84 (1854). For a case of a conveyance upon condition and discussion of who may take advantage thereof, see McKis- sick v. Pickle, 16 Pa. 140 (1851), s. c. 21 Pa. 232 (1853). For example of a clause of re-entry, see City v. Bicknell, 35 Pa. 123 (1860). (486) TABLE OF CASES CITED IN APPENDIX. PAGE Ault v. Karch, 220 Pa. 366.........0.0..0...00 00000 488 Cassidy’s Estate, 224 Pa. 199........ 0... cece eee 496 Dallett v. Taggart, 223 Pa. 180..........0 002s 491 Ferguson’s Estate, 223 Pa. 580.........0.0.0.00 0.0 cece cece eee eee 494 Fredericks v. Kerr, 219 Pa. 365........ 000.0. c cece cece teens 488 Gibbons v. Connor, 220 Pa. 395......... 000s 489 Krauczunas v. Hoban, 221 Pa. 213.......... 0.00.02 ees 490 Kutz 0. Nolan, 224 Pa.-262% 23 .scaccse de anlin dna avia dieu swag Sanne ed 496 McCaffrey v. Gibney, 223 Pa. 368.......0.. 0. 493 Marsh v. Platt, 221 Pa. 431....... 000. cee cee eee eee 491 Morgan’s Estate, No. 1, 223 Pa. 228.......... 2. ccc ccc eee 492 Morgan’s Estate, No. 2, 223 Pa. 233......... 00.0000 e cece eee eee 493 Van Leer v. Van Leer, 221 Pa. 195....0...... 0. ccc cee ee 489 Walker’s Estate, 219 Pa. 181.......... 0... cee eee 487 Walters’s Estate, 223 Pa. 598........0.. 00. 495 Weinmann’s Estate, 223 Pa. 508.......... 2. cece eee 493 Wilson v. Heilman, 219 Pa. 237.......0 0.00 488 (487) APPENDIX 794. The Appendix contains a discussion of the cases reported in the Supreme Court’ while the work was going through the press, and brings the citations down to 224 Pa., p. 416. Some of the cases were noticed in an examination of the advance reports, and are referred to in the previous part of the work. Upon a second examination of the bound vol- umes, several other cases were discovered, to which the atten- tion of the learned reader will be directed. Walker's Estate 795. In Walker’s Estate,* the testator devised certain prop- erty to A., with a provision that if she should at any time sell the property for over $5,000, the overplus was to be paid to B. It is presumed, although the report does not specifically state, that the devise to A. was a devise in fee. This is a case of a clause of forfeiture upon the voluntary alienation of a legal fee,? with this peculiarity, that the forfeiture only operates upon an aliquot part of the proceeds of the sale. The case arose after the death of B. in a proceeding by A. to enforce her supposed claim. It was too plain for argument that she had no right, the time for the happening of the con- tingency having passed. It has been submitted that a pro- hibition or clause of forfeiture upon the voluntary alienation of a legal fee, qualified as to time* or manner,’ is void in Penn- sylvania, and it is apprehended that the proviso in this case was, in like manner, void, and that B. had no claim in any event. 1No cases in point were discovered in been those of prohibition of alienation. the Superior Court from 36 Super. Court See p. 104, n. 4. to 39 Super. Court, p. 368, inclusive. * As to forfeiture, see p. 115; as to pro- 2219 Pa. 181 (1907). hibition, see pp. 115 and 117. 3 This is a very rare form of limitation. 5 As to forfeiture, see p. 117; as to pro- Most of the Pennsylvania cases have hibition, see p. 118. 488 APPENDIX Wilson v. Heilman 796. In Wilson v. Heilman,® there was a sole and separate use created by deed of trust, under which the court held the cestui que use took an estate tail.’ As the gift was merely for the sole and separate use of the cestui que trust, and as the circumstances necessary to the validity of the sole and separate use had ceased to exist, the husband having died,® the statute of uses applied ® and the woman had, as the court held, a good and marketable title to the property, the estate tail being turned into a fee under the provisions of the Act of 1855.'° Fredericks v. Kerr 797. In Fredericks v. Kerr,’ the testator directed his prop- erty to be sold and the proceeds disposed of, as directed in the will. The testator, however, especially granted to his exec- utor the term of five years in which to make sale of the real estate. Upon the expiration of the five years, the right to compel the sale attached, and as the legatees took immediate interests in the proceeds, postponed in enjoyment only by the five year clause, there was no violation of the rule against perpetuities.? Ault v. Karch 798. In Ault v. Karch,? there was a devise to three daugh- ters, with the proviso that none should alien without the written consent of the others. The case arose on a proceeding to settle the marketability of the title to the real estate. All of the daughters joined in the deed, and no question, there- fore, as to the clause of prohibition was before the court. It is apprehended, however, that the prohibition was void, as a prohibition on the voluntary alienation of a legal fee qualified as to time.’ 5219 Pa. 237 (1908). the statute of uses to the sole and sepa- 7The court said the gift was over on rate use. indefinite failure of issue. As the trust 10 See p. 14. was created in 1877, the Act of July 9, 1219 Pa. 365 (1908). 1897, P. L. 213, did not apply, as to 2 See pp. 241, 242. which see p. 196, n. 9. 3 220 Pa. 366 (1908). 8 See p. 345. 4 See p. 115. °See pp. 77, 78, on the application of APPENDIX 489 Gibbons v. Connor 739. In Gibbons v. Connor,® there was a trust created by will. The court, in an opinion by Fell, J., said,® “It was the intention of the testator, as shown by this provision, that the estates given to his children should be free from the incidents of curtesy and dower, which would have resulted from a vest- ing of the corpus of the estate in this children * * * To give effect to this intention, if for no other reason, the trust should be upheld.” It is submitted that no trust can be created which will take away the legal incidents of an absolute interest.’ The only way to cut out curtesy and dower is to create life estates for the persons contemplated. The case arose on a bill for the partition by one of the children, who claimed an absolute legal interest in his share of the estate. The bill was dismissed. The decision was correct anyhow because the trust could not be terminated in any event, unless all the beneficiaries joined in the application. The reasoning in the case is in line with that previously noticed sustaining the validity of a trust of an absolute interest ® as against the cestui que trust. Van Leer v. Van Leer 800. In Van Leer v. Van Leer,® the testator gave an abso- lute estate to his son John, and then by a codicil, provided that the interest should not be subject to voluntary or invol- untary alienation. The case arose on an application by John for a conveyance of the legal title. The decree of the court below, refusing to direct the conveyance, was affirmed by the Supreme Court on appeal. Mestrezat, J., who delivered the opinion of the court, did not indicate clearly whether he thought the trust was valid as a trust of an absolute gift, or whether because the codicil reduced the estate to a life estate and provided for a gift over of the principal. It has already been submitted that a trust of an absolute interest, either with or without a clause against alienation is, on principle, void as against the cestui que trust, and that the only way 5 290 Pa. 395 (1908). 10 The case is badly reported, as the ° At p. 398. exact words of the will are not given, 7 See p. 365, and n. 9. and it cannot be told whether the limita- ® See pp. 303, 304, 312, as to trust of tions were such as to reduce the fee to an absolute interest. a life estate or not. 9221 Pa. 195 (1908). 490 APPENDIX the donor can put the principal beyond the reach of the cestui que trust," is to create a life estate with a gift over of the principal. The law in Pennsylvania, however, is probably otherwise,’ and this case does not make the matter any clearer. Krauczunas v. Hoban 801. In the case of Krauczunas v. Hoban,” certain real estate was conveyed in trust to trustees to hold for a certain unincorporated religious society. The case arose on a bill in equity by the society against the trustee who had been sub- stituted in the place of the original ones, for a decree directing him to convey the title to other trustees who had been selected by the members of the society. The defence appears to have been that the canons of the Roman Catholic Church provide that the title to the property of a church of that denomina- tion must be in the ordinary. The court below dismissed the bill. On appeal, the Supreme Court reversed, Stewart, J., saying that under the provisions of the Act of April 26, 1855,* providing that a majority of the male members, etc., of any religious society might choose a person who should hold the title of their property, the plaintiffs were entitled to a decree in accordance with the prayer of the bill. The first paragraph of the syllabus, which reads that a conveyance of real estate to a trustee for the use of a particular congregation constitutes an executed legal estate in the congregation itself, is, of course, inconsistent with the facts of the case, and with the opinion of Stewart, J., in the Supreme Court. The learned judge distinctly said that there was a trust with the equitable title outstanding in the church. The reporter evidently copied this language from the quotation from the opinion of another case,* without observing that that part of the sentence quoted had no application to the case in hand. If the statute of uses applied, there would be no necessity or possibility of a con- veyance,° as the legal title would then be in the church. Since the society was an unincorporated charitable society, it could probably take the legal title.* 11 See pp. 303, 304. ° See pp. 83, 86. 1See p. 312. ®See p. 79, on the application of the 2 221 Pa. 213 (1908). statute to a charitable use and p. 438 on 3p, L. 328, §7; see p. 483, n. 10. gifts at law to unincorporated associa- 4On p. 221. tions. APPENDIX 491 Marsh v. Platt 802. In Marsh v. Platt,” the testator directed that his execu- tors should hold the title to certain real estate, his son William to have the use and income, and to pay $200 a year rent for the use thereof to testator’s wife; after her death, the son to pay all taxes and assessments against the land, and upon his death the land to descend to and the title to vest in his heirs at law. The testator further provided that if the executors could obtain a certain price, and they considered it advisable, they were to sell, provided the son consented. The duties given the trustees were not active, the statute of uses applied,® the son had a legal life estate, which was in a position to unite with the legal remainders, and under the rule in Shelly’s case, the son took a fee. The court, however, in a per curiam Opinion, approached the subject from a rather unusual point of view. They said that the limitation was within the express language of the rule in Shelly’s case, and that the only ques- tion that arose was whether the conditions and the trust took the devise out of the rule. They then concluded that the duties were not active, and that the executor was the mere holder of the title on a dry trust.® It is submitted that this is putting the cart before the horse. It was not a question whether the trust took the case out of the rule in Shelly’s case, but whether the trust was so far executed that the case was ripe for the application of the rule. This case can only be sustained on the theory that no conveyance is necessary when the statute applies.’ Dallett v. Taggart 803. In Dallett v. Taggart,’ the cestui que trust of a sole and separate use, in which no express power to will was con- ferred, made a will during coverture. It was held in an action of ejectment after her death, she having survived her husband, that the will had no effect on the property held under the sole and separate use. It was argued that the Act of June 4th, 1879,” providing that a will should take effect as of the 7921 Pa. 431 (1908). could not unite with the legal remainders. 5 See p. 82. 10 See pp. 83, et seq. If the executor held the title, the 1223 Pa. 180 (1909). rule would not apply, as the son would 2 Pp. L. 88. then have the equitable title, which 492 APPENDIX date of death, enabled her to dispose of her sole and separate use estate, because, at the time she died she was capable of making a will, the sole and separate use having then ceased, the will which she made during coverture becoming then valid. As was well said by Stewart, J., “The question raised we regard as definitely settled in the case of Neale’s Appeal, 104 Pa. 214.” The case is perfectly clear, does not seem to call for any discussion, and is logically in accord with the result reached in Neale’s Appeal. The objections to the rea- soning in that case have already been pointed out.* Morgan’s Estate, No. 1 804. In Morgan’s Estate, No. 1,‘ there was a gift by will in trust for M. for three years, and at the expiration of the term to such persons as M. should by any writing under seal appoint, and if he failed to so appoint, then in trust for M. for life with power of appointment by will and limitation over in default of appointment. M. was dead testate, and it is probable, although the report sheds no light on the fact, that the term of three years had not expired. There was also a clause in the will providing that the estate should not be liable for the debts or engagements of the cestui que trust. The account of the executor was filed, and at the audit a creditor of M. intervened, claiming apparently that M. took an absolute estate under the will. The report is obscure, and does not disclose how the creditor came in in the court below. Mr. Justice Stewart, in the Supreme Court, came to the conclusion that the creditor had a right to recover, and reversed the decree of the court below, which made a distribution apparently to the contrary. There was a general power of appointment under which M. could give himself the absolute interest, and as the court would compel the exercise of that power at the instance of the creditor, the law would consider that as done which ought to be done, and direct an immediate distribution to the creditor.> Curiously enough, however, the learned judge, in 3 See p. 348, n. 7. creditor recover out of anything but income. 4223 Pa. 228 (1909). 5 Tf, however, the term had expired, the opportunity to exercise the power was gone, and M. had a life estate with limitations over in default of appoint- ment by will. How, then, could the Confer in this connection the discussion of the application of the rule against perpetuities to limitations under a general power of appointment, pp. 239 and 240. APPENDIX 493 another appeal in the same case on another branch,® said that the appointees under the will of M. took as his legatees and devisees, and not as appointees, because he had an absolute estate. While the court would proceed upon the maxim of equity above referred to, so far as the creditor was concerned, in order to avoid the necessity of a decree directing an exer- cise of the power, there was no necessity for a resort to the fiction so far as the appointees under the will were concerned, and it is submitted, therefore, that on principle, so far as they were concerned, M. did not have an absolute estate, but they took as appointees from him under the special power. This case clearly proceeds upon the theory that a prohibition of involuntary alienation attached to a gift of an absolute estate is void, and to this extent ignores so much of the decisions which have been previously noticed’ as tend to sustain the validity of the clause in such case. McCaffrey v. Gibney 805. In McCaffrey v. Gibney,® the court took jurisdiction to direct a new sale for the purpose of barring contingent remain- ders and executory devises, when it appeared that the first sale under the Act of 1853 had not been conducted so that it would accomplish that purpose. This case seems to further strengthen the conclusion that an ordinary Pennsylvania deed does not destroy contingent remainders.° Weinmann’s Estate 806. In Weinmann’s Estate,’® the testatrix gave a certain sum in trust to accumulate the income and add the same to the principal until a grandson, B., reached the age of forty years, when he was to be paid the income of the principal and the income of the accumulation for his life, and after his death the principal and accumulated income to go to his child- ren then living, and if not, to fall into the residuary estate. The direction to accumulate clearly violated the Act of April 18, 1853, and as it was a direction to accumulate the income of a specific bequest, it is clear that the income was _ properly 6 Morgan’s Estate, No. 2, 223 Pa. 233 °” See pp. 35, 36, n. 9. (1909). 10 293 Pa. 508 (1909). 7 See pp. 127, 136, 142, 143. 1P. L. 503, §9, see p. 389. 5 223 Pa. 368 (1909). 494 APPENDIX distributed to the residuary legatee of the testatrix.? There was a contingent gift of the accumulated fund, and the direc- tion being struck out, the gift was not accelerated.* Ferguson’s Estate 807. In Ferguson’s Estate,* the testator gave the residue of his estate in trust to pay the income to his two daughters, each to receive a certain fixed annual sum, and any deficiency in the amount of the sum in one year to be made up out of the surplus of the subsequent year’s income.® There was a direction that the surplus income, if any, was to be paid to certain charities. There is an obscurity in the report as to the wording of the will on this point, and it cannot be told whether there was a gift to the charities of surplus income, if any, in all events, or whether there was only the gift of the surplus income arising if a daughter should die without issue. The learned judge who delivered the opinion in the court below apparently thought it was the latter. An account ® being before the court, and the daughters being living, it appeared that there was some surplus income which was claimed by the charities. The claim of the charities was dismissed in the court below, which, on appeal, was affirmed in the Supreme Court. The reasoning of the court is difficult to sustain.’ Penrose, J., in the court below, whose opinion was affirmed on appeal by the Supreme Court, said that the gifts to the charities were only by way of remainder, subject to be divested in part by the exercise of a power of appointment, and that such gifts were not accelerated, even by an express illegal direction to accumulate. As, however, there was no direction whatever to accumulate for the benefit of the charity, but merely a gift to the charity of the surplus income, if any, a gift which clearly prevented an accumulation, the relevancy of this reasoning is ? See p. 422. 3 See p. 424. 4223 Pa. 530 (1909). 5 There was also a direction to pay the report does not state whether it was or not. 7There was also a direction to hold surplus income upon certain events, as back to principal, out of income, pay- ments for municipal claims, etc., a direc- tion clearly involving an accumulation; see pp. 393, 394. No question as to this was before the court. 6 Probably of the trustees, although part of the principal of the residuary estate for the benefit of certain grand- children. As, however, the event upon which that was to take effect had not happened, there was no direction to accumulate whatever before the court. APPENDIX 495 difficult to understand. The court directed the surplus income to be paid to the daughters; as however, the interest of the daughters in the estate was limited to a specific sum, it is difficult to see how they could receive any more as_bene- ficiaries under the will. Of course, if they were the only heirs at law of the testator, their right might be sustained on this theory. There was a gift of certain annuities, and no dis- position of the balance of the income, and as the income was of the residue, and the gift over of the residue was contingent, there was no one to whom income was presently payable, therefore, there was a resulting trust to the heirs at law or next of kin, according to the nature of the property. This, however, is a construction leaving part of the property undis- posed of by the will, when there seems to be a clear and expressed gift of that surplus to certain specific beneficiaries, a provision which was no doubt inserted by the testator to cover this very contingency. The learned judge further said® that the testator probably underestimated the income of his estate, and supposed that it would not at any time largely exceed the sum necessary to pay the annuities, and that he wished to protect the daughters from their own improvidence by limiting the amount to be paid each year to each of them. It is sub- mitted, however, that this is an entirely unwarranted inference. It is just as reasonable to suppose that the testator contem- plated a large surplus as a gift to the charities as that he contemplated the daughters should have most of the income. There is no ground to suppose that he limited the income to them to protect them from their own improvidence; it is just as reasonable to suppose that he wished them to have a cer- tain fixed sum which would be sufficient to maintain them in the style of living to which they had been accustomed, and in order that they should always be sure of that specific sum, and would know just how much they would have to spend in each year, that he made the provision which he did. Walters’s Estate 808. In. Walters’s Estate,® the testator gave the residue of his estate in trust to pay the income to a son for life, with a gift over of the principal, and inserted a clause that the inter- est of the son should be inalienable, etc., and that the trustees § On p. 534. 9 223 Pa. 598 (1909). 496 APPENDIX should have discretion as to how much of the income they should pay the son. The son died, and it appeared at the audit of the account of the trustees that there was a large amount of accumulated income on hand which had not been paid to the son. It was held that this accumulated income should be paid to his administrator, and not to the next of kin of the testator, notwithstanding the clause against aliena- tion. As no application was made by the cestui que trust in his lifetime to have the accumulations paid over, no question as to the application of the statute was before the court. Cassidy’s Estate 809. In Cassidy’s Estate’ there was a gift by will which the court below, in an opinion by Anderson, J., which was affirmed on appeal by the Supreme Court, construed in the following language, ‘‘We have therefore * * * an absolute gift modified by a trust for the wife’s protection, with power in her of disposal by will,’’ which the learned judge said did not reduce the absolute gift to a life estate. The case arose after the death of the wife in a controversy over the distribu- tion of the estate, and no question was therefore raised as to how far she could have terminated the trust, had she pro- ceeded in her lifetime. It may be inferred from the language of the learned judge, that she could not, in his opinion, have so terminated it, and if that is his opinion, it is probably in conformity with the decisions which have been previously noted.? If a trust of an absolute interest is valid, as against the cestui que trust, during the lifetime of the first taker, this case illustrates the proposition that the trust terminates upon his death, and the legal title is then to be conveyed to the persons entitled to his estate. Kuiz v. Nolan 810. In Kutz v. Nolan* a young woman executed a deed of trust of all her property, reserving to herself an estate for years, with a power of appointment by will, and with limita- 19 See pp. 169, 170, where the case was 3 See pp. 303, 304, 312, for a discussion cited from the advance reports, on this of the validity of a trust of an absolute point. interest. 1224 Pa. 199 (1909). 4224 Pa. 262 (1909). 2 See p. 202. APPENDIX 497 tion over if she should die intestate during the term. The deed also contained a clause providing that the estate should not be liable in any way to the control or debts, etc., of the cestui que trust. The young woman confessed judgment for $2,000, the term not having expired upon which execution was issued, and the trustee summoned as garnishee. The garnishee, in its answer, set up that the judgment was collusive, and con- fessed with the intent to defeat the trust, and that the judg- ment was prematurely issued. A rule for judgment against the garnishee was made absolute in the court below, which on appeal to the Supreme Court, was reversed. Mestrezat, J., in the Supreme Court, proceeded principally upon the ground that the attachment was prematurely issued, and that the waiver of that irregularity by the cestui que trust was null and void. If the judgment was, as was set up, not a real judgment but was intended as a substitute for a bill to declare the trust at an end and have the title reconveyed, there was no question as to involuntary alienation before the court. If the judgment was not collusive, the creditor could have recovered, as the clause prohibiting an involuntary alienation is void when im- posed by the settlor on the interest reserved to himself.® The waiving of the irregularity, however, partook of the nature of voluntary alienation. No case has been found deciding whether the clause against voluntary alienation is valid when imposed by the settlor upon interest reserved to himself. A like limita- tion upon a gift from a third person is probably void. In the case under discussion, the principle is somewhat different. If a man is so weak that he cannot take care of his property himself, there seems to be no reason why he should not put himself in tutelage for the rest of his life or for any pre- scribed period, and incapacitate himself from dealing with his own property. The learned judge also said’ that the trust was valid and enforceable against every person except a bona fide creditor of the cestui que trust. The trust was valid as against the creditor; the only thing invalid against him was the clause against involuntary alienation attached to the term, and the gift over of the principal was also valid/as against him, unless he was a creditor entitled to proceed, under_ the statutes against fraudulent conveyances. 5 See p. 163, confer p. 162. 7On p. 264. 6 See pp. 110, 130, 142, 175. (498) (499) DETAILED TABLE OF CONTENTS INTRODUCTION CHAPTER 1 SEC. PAGE Introductory discussion. ..........0000.000 00. cece eee ee 1 1 Cujus est dare, ejus est disponere........................ 2 2 Two fundamental ideas involved..............-...0.00.000. 3 2 Analysis of the power of dominion......................-. 4 3 The creation of present and future estates.................. 5 3 Right of alienation.............. 0.0.20 e cee ce ee eee 7 4 Power of use and enjoyment.................00000 0 cee eee 8 4 Scope Of the book si.5 447 4.0bo dae nk Meats aes se eae es wes Wes 9 5 Reasons for the existence of the restraining rules to be discussed 10 5 Principle of public policy generally suggested................ 11 6 Reason suggested by the author.....................2000. 12 6 Reason for exception as to a charity. .................0000. 13 7 Mrs‘ Grays: reasons yards coy os ots ea She ae ae eee cewek Gnas 14 7 The application of the principle of public policy............ 15 8 PART I PROPERTY ALIENABILITY Mopiriep Frrs CHAPTER 2 Alienability Alienability of land in feudal times.................... 18 il Conflicting interests as to alienability.................. 19 12 Development of alienability................200. cece eee 20 «12 Modified fees Preliminary. .g.04 sched oe ees eee Mesa e eae wees OME aes 21 13 Conditional. f@:...00:00 065 see vee ee eae eae ener ene 22 «13 Pstate: tailncesnc< Wer anv Aewad day ora cee bese ceees 23 «14 Act of 1855 misunderstood by the court........-....--- 24 «15 Base fe. sc dceew eee ee oe ee ae oe OE SR oe Bade 25 «15 Qualified fee... 0.66.62 nee eee ee 26 «16 Determinable fee............ 000200 c eect tenes 27) «(«17 Confusion in terminology as to modified fees in Pennsylvania 28 18 Title acquired in eminent domain..........----+-+++--- 29 19 Summary as to modified fees......-..--.--.000- eee eee 30. 6:19 500 DETAILED TABLE OF CONTENTS Furure Lecar Inrerests 1n Reat Property CuHaAprer 3 Preliminary SEC. PAGE Definition of a future interest............-..000.00000 008 385 23 Early common law theory of future interests............ 36 «23 REVEtslOD asi. ceeteeeacus sun dog tedew eae Nee eee arenes 3723 Vested remainders Origin of vested remainders. ..........00.0.000 ee eee ee ee 38 24 DOISiTi A sie ants anade siclinns wen heaton aut aus oe gee aan Meteo 3924 Characteristics of a vested remainder.................... 40 25 Vested remainder a quasi future interest................ 41 26 Definition of a vested remainder..............-....--- 42 26 Pepper & Lewis’s definition of a vested remainder........ 43 27 Attributes of a vested remainder...................... 44 28 Remainders subject to a term of years.................. 45 28 Conditions subsequent and vested remainders............ 46 28 Remainders after an estate tail.....................05. 47 30 Contingent remainders Origin and nature Origin of contingent remainders....................5.5- 48 30 Contingent remainders valid.............. 0000 eee eevee 49 31 ‘ Definition of a contingent remainder................... 50.331 Attributes of a contingent remainder at common law...... 51 32 Attributes of a contingent remainder in Pennsylvania.... 52 32 Contingent remainders in Pennsylvania................. 53-332 Contingent remainders Destructibility Preliminary discussion. ............00 2.000: ee eee eee ee 54 33 Horteithirey cca dase tae kets eaiduni anda eee AGS Hee e a 55-33 SUIrend Cfeew ccd So en ea ioee Rea ccent dawn Seem Mess 5634 i Merger sicgisda de nedian ties die Hogs PES REA Age Leonean 57-334 Tortiouis alienatons en ces esse ns Bee Pear ew eG ee 58 35 Innocent conveyance (Pennsylvania deed).............. 59 = 35 Turning into right of action......................02.. 60 36 Natural termination of the preceding estate.............. 61 37 Summary of law in Pennsylvania as to destructibility of contingent remainders.............-..-.... 00.0 cues 62 37 Distinction between vested and contingent remainders Distinction stated by the author....................... 63 38 Mr. Gray’s distinction...............0..5 000.000. c eee 64 39 Obliteration of the distinction.....................00., 65 40 Remainder to the unborn child of an unborn person........ 66 40 Remainders to a class Preliminary discussion. ..........0 0.6060... cee eee eee 67 40 DETAILED TABLE OF CONTENTS 501 Future Lecau Interests in Reat Property Cuaprer 3 —Continued SEC. PAGE Mr. Gray’s view of remainders to a class................ 68 41 Author’s view of remainders to a class.................. 69 41 Conditions annexed to remainders to a class............ 71 «42 Possibilities of reverter Definition of a possibility of reverter.................... 72 «43 Validity of a possibility of reverter.................... 73 «43 Possibility of reverter in Pennsylvania.................. 74 (44 Attributes of a possibility of reverter.................. 75 45 Right of entry for condition broken Definition of right of entry for condition broken.......... 76 45 Distinction between possibility of reverter and right of entry for condition broken......................-005 77 = =45 Executory devise Origin and definition..................0.0- cee. seen ee 78 46 Attributes of an executory devise.................-..5. 79 «47 Distinction between a contingent remainder and an execu- LOLY GOVISE oases Hig. howd dies eee eka es ER EON ES 80 47 Interests arising by operation of law and by contract Escheat, dower and curtesy..... 2.2.6.6. 0 ee eee 81 48 Rights in the land of another........-....--.-.020-0 055 82 48 Rights arising by contract..............5 020 cece eee 83 49 SUMMAFV wy nee s ethics Aedes 22a bre Be de ged eY 84 49 PERSONAL Property CHAPTER 4 Alienability History of personal property..........--..-.0++..2 eee 86 dl Kinds of personal property......-..--.--+20+.0-00ee 87 52 Term: of -Vearsius.o cis cok eee pai ster eeae bee eee aes 88 52 Chosés in ach One ci4 noe8 ndnle poe oe ie eRe Re eS 89 53 Alienability of personal property......--.---+-+++0-005 90 54 Future legal interests in personal property Preliminary discussion. ........... 000s eee eens 91 54 Chattels real Transfers inter VIVOS..........-0000 +0 etree rere 92 54 Transfers by will...... 0.0.0.0 cece eee eens 93 55 Reason why question of a future interest in chattels real has not arisen in Pennsylvania..........------++++ 94 55 Chattels personal Gifts inter VivoS........... 0000 c eee 95 56 Gifts by will General discussion........---++++++-: 96 57 502 DETAILED TABLE OF CONTENTS PrersonaL Property Cuaprer 4—Continued Law in Pennsylvania as to gifts by will....... tein CONVEFSION i343 cciveta viens Cpax ede ng ce tide ests Statutes relating to future legal interests in chattels personal created by will in Pennsylvania.......... Usss anp Trusts BEFoRE THE Stature oF 27 Henry VIII CuHaprer Origin and history of the use................ 00. e ee eee eee Express use raised on transmutation of possession.......... Implied used raised on transmutation of possession.......... Uses raised without transmutation of possession............ Definition of a Uses. ay ors seks cones Skedarsee ee ale aae ested s we Special trusts o:ss.cessaeccassGs cae ceeeens ee ens eieee nes Tue Sratute or Uses CwHapTer 6 The statute: its operation and effect The statute of useS........... 0... c eee Effect of the statute on the legal title.................. Effect of the statute on the common law................ Springing and shifting uses and conditional limitations. . . . Executory limitations...........0......0.0000000 eee eee The application of the statute General principle as to the application of the statute...... Devise to USCS isciccsccape ae Pees kee SE ewest eve WwEse eee Use! MpOtl. 8) Use ete sue see awig he wae wae ee Pty sowed slese Use in a Pennsylvania conveyance..................--- Use of personal property..............0.. 0020s Use in a residuary clause of realty and personalty........ CONnVErSsION: sf. 3c056HecGiueen aiken. wha Rae Seas Use for a MINOT. osc. 0+cgscue ee nas caegeer aus os Ohad 2 Contingent Us@s.¢ 20 cnhecswiedy dhe doar acne ea cada ye Use after termination of active trust.................. Sole and separate use...........0. 0.00 cece eee eee Charitablé viséyw sss dee te ved Come yeas tues ese yee ee Use with clause against alienation attached............ (Spendthrift trust) Modern ise: ii sur vg kao aed he ee GE OME we da See ae ea Necessity for a conveyance where the statute applies General principle...... 2.0.66. 6066 e cece Law in Pennsylvania examined.....................0.. SEC. PAGE 97 «57 98 59 99 59 100 660 5 10561 106 62 107. 63 108 «64 109 64 110 «64 113 «68 114 68 115 «69 116 «69 117.70 119 71 120. 71 121 72 122. 72 123 73 124 74 125 75 126 75 127. 76 128 76 129 (77 130 79 131 80 132 81 133 82 135 83 136-83 DETAILED TABLE OF CONTENTS 503 Tue Stature or Uses Cuarrer 6—Continued SEC. PAGE Probable cause of confusion in the law.................. 13785 Fallacious notion as to test of an active trust............ 138 85 Conclusion as to Pennsylvania law...................... 139 §=86 Trusts CHAPTER 7 Nature and definition of a trust Pere lina many i aiescsn sts Goeiaiae yuatees Wn od Meagan Goan Sse 146 87 Early conception of the nature of a trust................ 147 89 Objections to the early conception.................... 148 «89 True notion of trust suggested............0..0.0.0000, 149 90 Definition of a trust and division of trusts.............. 150 90 Resulting trusts........0. 0.0... c cece cece cence eee ees 151 91 The Trustee The title of the trustee..... 2.0.2.0. 0000000 cece eee eae 153-92 The power of the trustee Preliminary discussion..............00..0000. cee uue 154 93 Power over the legal title....................0.000.. 155 94 Operation and effect of power of sale in a trustee...... 156 95 Power over the equitable title...................... 157) 95 DISCrevON sxianc ge ooo ares oe eo pete ed es 158 96 Trustees to preserve contingent remainders.......... 159 97 Trustees to preserve contingent remainders in Penn- SVIVADIG.G ved tch wee ctnaoe nae anheeseemedawee may 160 98 The cestui que trust Nature: OF IteneStt scl cit conse Baw Bee ewe ewe ee se We 161 98 Attributes of the equitable estate...................... 162 99 Future trustss2 934+ 2024 5 dasan an tgareaee doce daqlen 163 100 PART II THE RULE FORBIDDING THE CREATION OF RESTRAINTS ON ALIENATION RESTRAINTS ON ALIENATION DEFINED AND ANALYZED CHAPTER 8 The rule forbidding the creation of restraints on alienation.... 171 103 Alienation defined and analyzed...............-..2005.0055 172 103 Restraints on alienation classified.....................05. 173 104 Restraint does not affect quantum of estate .............. 174 104 Division of the subject............ 0... c eee eee eee 175 105 AxssoLUTE Lecat INTERESTS VOLUNTARY ALIENATION CHAPTER 9 Preliminary Preliminary discussion. ............660000 000 c eee e eens 182 108 Clause of forfeiture to grantor........-..-+..-e esse eee 183 108 504 DETAILED TABLE OF CONTENTS ABSOLUTE Luca InTERESTS VoLuNTARY ALIENATION CHAPTER 9 —Continued Clause of forfeiture of contingent interests before vesting.. 184 109 Clause of forfeiture of vested interests before coming into SEC. PAGE POSSESSION og sca edaws sede See e tee eee peewee 185 109 Unqualified restraints on voluntary alienation Common law as to unqualified restraints..........-..--. 187 110 Pennsylvania cases as to unqualified prohibition of aliena- TON aceseateien vamos y oemase setae toe decke ena anaes s 188 110 Unfortunate dictum in Sanders v. Mamolen.............. 189 111 Distinction between restraints and precatory trusts...... 190 112 Restraints qualified as to persons Forfeiture qualified as to persons...................... 191 112 Prohibition qualified as to persons Preliminary discussion of Pennsylvania law.......... 192 113 Turner o., Fowler sos viisc dies eeceedd wew sede dete 193 113 McCullough v. Gilmore..............-..0.00..02. 194 113 Brothers v. McCurdy............0.0020 2000.0 195 113 Fisher 3. Wistel isa co n0a reas once wasanrkasasie as 197 114 Summary of Pennsylvania law...................... 198 114 Restraints qualified as to time Forfeiture for voluntary alienation qualified as to time.... 199 115 Prohibition of voluntary alienation qualified as to time Preliminary discussion of Pennsylvania law.......... 200 115 Hatier-v. Shite: sce) segs sae Roan taeaeaeeees 201 115 Kepple’s Appeal..................005020 0002 eee 202 116 Hartman v. Herbine..............-...00 002 eee 203 116 Summary of Pennsylvania law...................... 204 117 Restraints on alienation qualified as to manner Forfeiture for alienation qualified as to manner.......... 205 117 Prohibition of alienation qualified as to manner Statement of the law in Pennsylvania................ 206 118 Jauretche v. Proctor..........-.. 0.0.00 cee eee 207 118 Kaufman v. Burgert.......... 0.0000. c eee ee eee 209 118 Forfeiture for failure to alienate Discussion of principles involved...................... 212 119 Pennsylvania AW sec ccsiin ee tease ea ead ials beh eaene 213 120 Personal property Absolute anteréstS).<.csc.024404 bund badu ee ee ap eegeen de aay 214 121 Gifts over of unconsumed property.................... 215 121 ApsoLuTe Lecau Interests INVOLUNTARY ALIENATION CHAPTER 10 Forfeiture for involuntary alienation...................... 217 123 DETAILED TABLE OF CONTENTS 505 AssotuTe Lecau Interests InvoLtunrary ALIENATION CHAPTER 10 —Continued Prohibition of involuntary alienation SEC. PAGB Preliminary discussion..............0.0.0.0.0c cee ce cece. 218 124 Curtis v. Longstreth..............0.00000000 0000 eee 219 124 KMeyser's:Appea leu ais agin ae donc. Cau ayreauencer: 220 125 Willard). Dayvis¢ccas gateid fa Gio: neh ewieade hae at 221 125 Beck’s: Estate... osccosee lo egaeiicg ve ec abe viswes eva 222 126 Goes HState: oc Gi day Ac Sines oe Reale eaeee Ge, 223 127 Statement of Pennsylvania law...............0.0.0.0... 224 127 Lecat Estates ror Lire Cuaprer 11 Voluntary alienation Forfeiture for voluntary alienation.................... 225 129 Prohibition of voluntary alienation Preliminary discussion...................2..20.204. 226 130 ‘Curner a Howlers soso hres a wie sea ete oye oy 227 130 Statement of Pennsylvania law.................... 228 130 Involuntary alienation Forfeiture for involuntary alienation.................. 229 131 Prohibition of involuntary alienation Preliminary discussion..............0.02.2 2000 ee eee 230 131 Erisman.:0:(Sener ooo ¢20926% 60s Soe kee oka een 231 131 Hahn v. Hutchinson............... 0.002 c eee 232 132 Wanner v. Snyder............ 0.0.00 233 «133 Wanner v. Snyder distinguished from Hahn v. Hutchinson 234 133 Statement of Pennsylvania law.................... 235 134 ABSOLUTE EQUITABLE INTERESTS CHAPTER 12 Voluntary alienation Forfeiture for voluntary alienation.................... 237 135 Prohibition of voluntary alienation General principle ycc:ie2 age eve dia de ge aden aes tees 238 136 Barker's. Estate: ¢.42ceeredaessee eee doreeedeeges 239 136 Hartman's Bstaten. co.cc encod h awe Hees ween ets 240 139 Hlenainig sa Fista te: got ath 4G ob ye wane ee Bethan demas 241 140 Roclchil Ss Pstatesncanccin ingen Oe ciududewenin Nas 242 141 Statement of Pennsylvania law.................... 243 142 Involuntary alienation Forfeiture for involuntary alienation.................--- 244 143 Prohibition of involuntary alienation General statement of the law............6--.0e eee eee 245 143 Keyser's Appeal... .cacsa gees nse mae selene eines 246 144 506 DETAILED TABLE OF CONTENTS AssoLuTe EquitaBLe InrerEsTs CHAPTER 12—Continued SEC. PAGE Mackrell v. Walker......000. 0000000 ees 247 144 Minnich’s: Bstateso éssccsdeecak opie iasde ee 94 eee eae 88 248 145 Wright's Estates 55055 a5 0080 te dearie as seat ss 249 146 Shower’s Estate.............. ies Sedan a Miia Seer e eget 250 146 Statement of Pennsylvania law.............-+---++ 251 146 Reasons for and against the validity of prohibition of involuntary alienation Preliminary discussion................020 esse eee eee 252 Reasons against validity..........0.. 0000.00. e cease 253 Reasons for validity stated and examined..........-. 254 EqurtasBie Lire Estates INVOLUNTARY ALIENATION CHAPTER 13 (Spendthrift Trusts) Preliminary Forfeiture for involuntary alienation.................... 266 Prohibition of involuntary alienation.................. 267 Spendthrift trusts defined....................-.00005. 268 Objections to validity ................ 5.00. c ee eee ee eee 269 The language necessary to create the clause prohibiting invol- untary alienation General principles.............. 00000 e eee eee eee ee 270 Extreme cases Preliminary discussion...................000-+-00-- 271 Smith v. Savidge........0. 00... e eee eee eee 272 Stambaugh’s Estate........... 20.02.0000 ee eee, 273 Cressler’s Estate.............. 00000 cece eee ee eee 273a Winthrop Co. v. Clinton.................022-.-. 274 Shower’s Estate........0.00.0.0.00000 00000 eee eee 275 Notion that putting in trust indicates a distrust........ 276 Summary of extreme cases..................000-0005 277 Clause void when imposed by settlor upon interest reserved : es ieee fools seonasss «wee ad an ice ecw ais Se ran 278 : Discretionary powers in a trustee....................0. 279 Clause against anticipation......................-.005. 280 Part of the estate covered by the clause................ 281 The effect of the clause prohibiting involuntary alienation Character of the obligation immaterial.................. 282 Decker v. Directors of the Poor...................... 283 Clause does not protect estate in the hands of the cestui Que trust... 6... ee ences 284 Extent of protection as to previously incurred obligations. . 285 147 147 148 152 152 153 153 154 156 156 157 159 160 161 161 162 163 164 164 165 166 166 167 167 DETAILED TABLE OF CONTENTS 507 Equirasie Lire Estares Invotunrary ALIENATION CHAPTER 13 —Continued (Spendthrift Trusts) SEC. PAGE Effect on assets appointed under a power................ 286 168 Effect on accumulated income due cestui que trust at time Ol GOAT © Seicaud'sa a neem Ghote dut rca ao emt orero te seed 287 169 Effect on accrued income. ...........0..0. 0.0.00 cece eee 288 170 Effect of the clause as between trustee and cestui que trust 289 170 Origin of the notion that the clause prohibiting involuntary alienation is valid Mr. Gray s reasons for the origin of the notion............ 291 171 Author's observations on the origin of the notion Dictum in Fisher v, Taylor....................0005 292 172 Vaux v2 Parkes vcscscnauey tem esos sew ww sewiiulaseeices 293 173 Author’s conclusion as to origin of the notion in Pennsyl- VAI gies Fo We cies, a tnd eae ones Wea a ade eee bs 294 173 EquitasB_s Lirs Estates VoLuNTARY ALIENATION CHAPTER 14 Forfeiture for voluntary alienation.....................005 311 175 Prohibition of voluntary alienation Preliminary discussion. .........0.0 000000 e cece nee e ees 312 175 Shankland’s Appeal..............00-0.2. 0000 c cess eee 313 176 Rife 0, Geyer coves es wera a Vanemiae nae aa gad dads 314 176 Phila. Trust Co. v. Guillou..............-...022.-0.. 315 177 Mehaffey’s Estates. ccoscss gecesi ered ede saweu nesses 316 178 Clemens’s Estate..............-0-.-200-0005 Seis ered 317 178 Jones's Hstate:, ..cccee cin an via saaw ina ove srees 318 179 Summary of the Pennsylvania cases and statement of the law as to the validity of prohibition of voluntary aliena- HON Sas. cen ewadade oouaa eke ee eee Meaea seats 319 180 Trusts for support and maintenance..............------ 320 181 PART III THE RULE AGAINST PERPETUITIES Tue Rute Acainst PERPETUITIES CuaPTer 15 Preliminary discussion...........00 5.600 e eee eee eee 325 186 History, definition and object of the rule Historical evolution of the rule......--.--------+----5. 326 187 Is a common law rule........... 0. eee eee 327 187 Mr. Gray’s statement of the rule against perpetuities...... 828 188 The author’s statement of the rule against perpetuities.... 329 188 Meaning of perpetuity............55.0 5 cee cece eee eee ee 330 189 508 DETAILED TABLE OF CONTENTS Tue Rue Acarinst Perpeturrins CHaprer 15—Continued SEC. PAGE Meaning of remote............... 000.000 cece eee eee eee 331 192 Discussion as to the object of therule................5+55 332 192 The true object of the rule suggested..........-.--+--+-5 333 193 The rule discussed and explained Contingency analyzed...............0 000 cece eee 334 194 The contingency must happen within the period.......... 335 194 Death without issue........... 0000s cece eee eee 336 196 Separable contingencies.............0. 0.000 c eee eee eee 337 197 Distinction between rule against perpetuities and rule for- bidding restraints on alienation.................00--- 338 197 Period prescribed by the rule....................000.0-5- 339 198 Livés il Deng ces orca ewes eee ke lhe ee 339 198 Barelay v, Lewi8.ce0sac ease wc cee tt eeeandony 339a 199 The period of twenty-one years.................200005. 340 199 The period of gestation ..............0 0. cece cere eee 341 200 When the period begins to run........-.....-..0-0005- 342 200 Corollaries of the rule Rule does not affect the right to possession .............. 343 201 Rhodes’ Hs tate sngsiacic ected civ ended ae Mad aoe 344 201 Continuation of a vested interest into the remote period AV ELI as caren ears toilet CD Ninian nine © aoe Po ee Na ONS eda) 8 345 203 Pennsylvania cases on the rule Preliminary discussion..............0.002 0000 eee eens 346 203 Chambers 9: Wilson) .cciccies pes gae dees ge eesies ad ada nears 847 203 Donohue v. McNichol............. 00000 ee ee 348 204 Seibert: Wises. eens alee oo dee vee ese ne eee es 349 205 Ward's: HState.cccenncngeeseae settee er sareageeeedeaas 350 205 Cases where the limitations did not violate the rule........ 351 206 Interests SuBJECT TO THE RULE CHapTER 16 Preliminary discussion. ..................000 0000 e eee. 360 209 Legal interests IRE VETSIONSesauigine Pane Maen ods as Haas eee Rake eh 361 210 Vested remainders. c...6 6.00056 eves ees caine ee gawe aes 362 210 Vested remainders subject to a term of years............ 363 211 Contingent remainders General discussion.........-.. 00600000. eee eee eee ee 364 213 Law in Pennsylvania as to application of rule to con- tingent remainders................-..--...00000- 365 214 Paso ments iisyicain ws Pade eer eran memn nak cae nares 366 215 Rights of entry for condition broken.................... 367 215 DETAILED TABLE OF CONTENTS 509 Inrerests SupsecT TO THE RuLE Cuaprer 16—Continued SEC. PAGE Possibilities of reverter ...........00000.0 0000 cece eee 368 217 Future legal interests in personal property.............. 369 217 Executory devises and bequests..................0.0005 370 218 Equitable interests Shifting and springing uses...................00.0.0000. 373 218 The interest of the cestui que trust............0......00.. 874 218 Fallacy that the rule applies to the trust................ 375 219 Clause against anticipation.......................2005. 376 220 Equitable interests implied by law.................... 377 220 Destructible interests...........00. 0.2020 e cece eee 378 221 Where the interest cannot take effect apart from the rule.... 379 221 Interests arising by operation of law...................... 380 222 Interests arising by contract............ 0... c eee eee 381 223 SUM Maryse de sy ite wick cots URES Seue dee ae evirs aeged 382 223 PoWERS AND THE RULE AGAINST PERPETUITIES CHAPTER 17 Preliminary Rule applies to the future interest and not to the power.... 386 227 Division of powers....... Fh Sei ane ea RE Aes Se APE SG 387 228 Powers of appointment Preliminary discussion. ............000 000002 e eee eens 388 228 Special powers of appointment General application of the rule to limitations under a special power of appointment..........--...----. 389 228 Application to limitations under power exercisable only at a remote period............2...00. 0c eee e eee 390 230 Application to limitations under power exercisable only within the period.................000see sree eee 391 230 Consequences of invalidity of limitations under special power of appointment Preliminary .......023 048i ewa cians een ese meee 392 231 Power exercisable at a remote period............-- 393 232 Power exercisable only within the period.......... 394 232 Pennsylvania cases on special powers of appointment Smith's Appeal: ca; sugavae seeten yd ae eworns anew: 395 233 Lawrence’s Estate........0. 00600 cece eee teen eens 396 234 Ronckendorff’s Estate.........0-0 52sec eens 397 236 Boyd’s Estate No. 1........0 0000 e eee eee eee 398 236 Summary of law as to the application of the rule to limitations under special powers of appointment.... 399 238 510 DETAILED TABLE OF CONTENTS Powers AND THE Rute AGatnst Perpeturries CHAPTER 17—Continued General powers of appointment SEC. PAGE Application of the rule to limitations under a general power of appointment............ 00.0000 sere eee 400 239 Mifflin’s: Appeal! i000: 2c0dc8ecacaembuneeeeaewaeuee 401 240 Powers in trust Definition of a power in trust...........-.0..0 000 e scene 402 241 Application of the rule against perpetuities.............. 403 241 Dawson v. Lancaster........-2.20 00. e ccc e eee eee 404 242 Direction to sell with no disposition of the proceeds........ 405 243 Power in an executor.......... 0.00... cee eee eee ees 406 244 Powers in a trustee of a continuing trust Preliminary A power in a trustee defined and analyzed............ 410 244 Power as to equitable title Power as to equitable title defined.................. 411 245 Application of rule against perpetuities.............. 412 246 Determinable trusts...............5...00.000 000s e ee 413 246 Powers as to legal title Preliminary discussion as to application of the rule........ 415 247 Power of sale Preliminary discussion of application of the rule where there is a power of sale....................00005. 416 249 Legal reasons why the period begins to run from the time of the exercise of the power................-. 417 249 Equitable reasons why the period begins to run from the time of the exercise of the power.................. 418 251 Mr. Gray’s view on the subject....................-. 419 252 Author’s objection to Mr. Gray’s view..........-..... 420 252 Powers of sale in trustees for a charity.............. 421 253 Pennsylvania cases and law on power of sale in a trustee Cresson v. Ferree... 2.0.2... cee ee eee 422 253 Wilkinson v, Buist............000 00 0c cece eee eee 423 254 Marshall’s Estate...........00. 00000 e cece eee eee 424 254 Cooper's Estate... . URG cine iain Pata aia eagles pkameaaes 365 BEE EE SE ON ot cam adaeroncd sSoi@ueantu elas 365 INDEX 525 ACTS OF ASSEMBLY—Continued PAGE 1849, February 12, P. L. 108, §20........00.0.0000.0 000 cece 483 “April 7, P. L, 444, §16 Art.2....000.0000.000............... 483 1850, April 25, P. L. 569, §11.¢....000.00000.00.000.0.00-02222.... 338 1853, April 18, P. L. 503, §2 (Sales of Real Estate), 36, 253, 257, 258 464, 465, 483 “April 18, P. L. 503, §9 (Accumulations), 377, 378, a 380, 390 5, 391, 399 1855, April 26, Ps B28, 85 -ccoues eae nea & ealwead Sepa 440, 479 Re ie) NB a ite aaearinelechstnale arias AL dad alle eae 401 “ew $10.....401, 428, 447, 451, 452, 455, 463, 471 473, 474, 476, 480, 481 Sc Mpa Dig Wy GOs IP sbi er lg te aaa! 401 1859, Apel 26, Po Th. 828, 97 os rtwsinsawtsinsnarenadees 483, 484 Us SSS OR oar as ct th ieee te geen a 449 1855, April 27, P. L. 368, §1 (Estate iad De Sisk ests caste ry 14, 15, 16, 52 1856, April 20, Boles 582, $ave sw csniesvs bce deawsjwyeniaet ac 448 1859, April 15, P. L. 670, §1 (Estate tail).................... 14, 124 1SO0, Meri (1, Py Lis API. Ci xacicay es ou aus acd chineun aed nee de 483 1869, April 17 Pe is W0;-Slec esate gis nea creas untae tear meseda 59 VST), Maa 07, BH, B09) wc daacsiaia 20a oaed-nedieGerms osm ane 58 n., 59 T8G8 pl iy he a ns kee oeneeerae oe wire dceueaincelncen 332 1876, May OG, PF. Te, 211) Sie sv.ac0asenre dees ove os 470, 471, 473 1879, June 4, P; Li, 88; §2es 400 nes devseesees steeds wcias 276, 348 1881;- June 10; Ps be T19) §Lice.accicise ct Wye wlennicig elie wh aun ou ae 483 1885,. July ‘75, Be Us: 259s sc. niinc arenas a maionms tne ee Awlwgadle enariace 22 447 I6Re, Jed, Te; BOS A. ps casas unndawswenrniaceernencen 483, 484 1887, June. 35 P. Ly 382,56. sca ee Saaneqeioe ssa ere 332, 339, 342, 344 GG80, Asrah20. Fe WAR, yucatan uted yaar emveadsgaveeuce ort 401 SSO: May ®, Pe Ts B78 vowie eesicccwra Wawveoies 399, 446, 447, 481 POG) Mae Ba. Pe, V0 a oe anc snuecy eens sac. 398, 481, 482 T891; JunésS, Pe De QU ven cans ban adidas ead ene aes 479, 480 1893, June 6, P. Ds 324; §)es ses cc cici sues cae sawed deals 401 1893, June Se Phe Te BEA 6 aces eects seca Aeneas Bisa SB s 332, 342, 344 BE TIS SO as. 5 auth a Gncuh a) anied etern ae aes 357 1895, May 23, P. L. 114, 428, ‘446, 447, 451, 452, 455, 463, 471 ‘473, 476, 480, 481 1897, May 25). Pi: Tis 88)..02.5.45 4 dina buona ase eeea RE 332, 342 1897, June V4) Po Ty. 144g x2. 2c ce ga-ne tele Pere ands Abe yaaa eA 36 A Ly sO Pe AL DIB Stand Maen pean es eh aed MO in hae aecnded & 20eNors 196 1908, March 5, Pa Dies, Dresses byes hl tara neous reriee apn Suan Meneses 482 - 8 se GY ni a Mol wean say alr elude Geese te iaiaeeenaersacne me 452 1907, March 21, P. i OD cde 2ycd20 a ek ah dab Sk OR OE Deane EES 480 Me May cP. Woe AGO we tose sea auia dae eee eR Aes 483, 484 AGE, gift contingent upon arrival at a certain...........-....45-- 300 ALIENATION, defined .........0 0000 ccc cence eee e teens 4, 103 HIsStoryOle. chee necek a aiee eta ne eae ee eee 4,11, 12, 13 involuntary, see involuntary restraints on ClaSsINGd conte ceak tee eods te eae ao eee nid Ma adoas 4, 104 526 ‘INDEX ALIENATION, defined—Continued PAGE Ge hined : < wen si.ncntoaw Al cde a acneeee ea aaa ane e 104 fortéiture,, clause-Of doc os esciaieenkind fe oven Seba aes 104 rare in Pennsylvania.................0 000 cee eee eee 104, n.* involuntary on, does not affect voluntary............--.00++5 104 precatory trusts, distinguished from.. .........-...-.00+0000. _112 prohibition! Of js casds ss -chcecenwsdegauiey nie ee Gan en ee abies 104 public policy and.................. ang udecheubetm ae een 6, 7, 108 quantum of estate, does not ated scglactuie dle duigee oR tee hints a 104 voluntary, on, does not affect involuntary.........-.---.+-- 104 IPH tHOL oa canes nc nGatannate es Ghee aah watt a emer aera nC? Ecol Sie en 4 tule forbidding restraints on discussion of, division of the subject..... Waa g eiaptmteteeenes a 105 enjoyment, distinguished from rule forbidding the imposition Of TESETAINTS ON 4a: pant cia ee aq Ae Gaile us egg dn as ace al wegen 292 ODJECE Of c.1, cana seu Suara micawwee eo dale ae aeeewles 8 perpetuities, distinguished from rule against................- 197 public polity aids sii inci esa nies sae ed dene dae 6, 7, 8, 291 STALE ie sect civ RecA inte ete Semel Oy: toe ae ee Gg we Ahoy Aen 103 voluntary, see voluntary alienation AISTEINABIGDEY. “aetisats aioe ai a ein a sel sien ts ints Bede peseeneta eas 4 ChOSes! in Action; Ol saaveka ae eysa he ok BEX Sead ea dae Gas Ree Rey 53 personal property, of s+ assess ssa ne sse tien er nee ena cae eta es 54 perpetuities, the rule against, and ................ 192, 193, 195, n.!° real property, of conflicting interests as to........ 0... cece eee 12 dévelopinent; of 5.4. girs Coote eitaetd dug ine os dad aeive da ed 12 feudal times in... 05.5. sai eee oe etn es cee e bene eee sae 11, 12, n.4 Pennsylvania law asto .....-.-. 0. scene eee eee utente teeter 12 ANNU DPEES ie. aixieeibonnis Ss Ke Oehis every Mee GV a wean eetegaiadees ... 376 accumulation of income to make up deficiency i is eres ede.. 376, 415 nF sum set aside to Meet... . 2.2.0... cee eee eee ees 406, n.°,423 ANTICIPATION, clause against married women’s trusts, in... -... 26... ccc eects 362, 363 Spendthrift: trusts, in... 6... eae eee nee eee ee aed 164, 165 ASSENT, by executor . Tih astute ete tana Cond cate Sean Seat ace 126, n.° ASSETS, exercise of power, making appointed property........ 168, 169 ASSIGNMENT, see alienation ASSIGNABILITY, see alienability ATTORNEY-GENERAL, as party to suit to carry out a charity.. 440, 476 AUTHORS CITED Ames, J. Barr (in Harv. Law Rev.).... 56, 62, 64, 72, 73, 91, 458, 463 Ames, J. B., Cases on Trusts......-----. 0 secs e eee eee 63, 64 Ames, J. B., Uses and Trusts before Statute 27, Henry VIII...... 62 Bacon, Uses, Rowe’s ed... 0.00... e cence eee n ees 65, 73 Brooks, Edward, Jr., (in Amer. Law Reg.).............-.. 16, 120 Bispham on Equity, 7 ed. (1905).......-.+....2. 0.000. 450, 467, 477 Binney, Horace, Leaders of the Old Bar of Philadelphia.. ... 355, 357 Blackstone’s Commentaries........-- 600+ e eee ee eee cece ee eee 11, 56 Budd, Henry (Sharswood & Budd’s leading cases)........... 16, 120 INDEX 527 AUTHORS CITED—Continued PAGE Challis, Real Prop., 2 ed. (1892), 13, 14, 16, 17, 18, 19, 23, 28, 29, 31, 32, 33, 34, 35, 36, 37, 43, 44, 45, 46, 47, 48, 70, 189, 199, 213, 214. Coke, Inst. 2... eee eee eee wed oars Ga Se PAW wiekeeenire dua eas 11 Coke; Uith sca aie iw Wea hate aioe minty ecient seg indualdla ee aeses 11 Digby, Hist. Law Real Prop., 5 ed. (1897)...-........-. 3, 31, 63, 68 Fearne, on Remainders.......... 31, 36, 46, 47, 57, 58, 195, 200, 375 Fox, Jabez (in Harv. Law Rev.).............000.000 cee eue 190, 192 Gray, J. C., Cases on Property.........-..... 0c eeu 68, 72, 272 Gray, J.C., (in Harv. Law Rev.).. 271, 272, 440, 441, 446, 458, 481, 482 Gray, J. C., Rule Perp., 2 ed. (1906), 6, 7, 13, 14, 17, 18, 24, 29, 30, 33, 38, 39, 40, 41, 43, 44, 54, 55, 56, 57, 69, 70, 93, 97, 100, 187, 188, 191, 192, 194, 195, 196, 197, 198, 199, 200, 201, 203, 204, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 223, 227, 229, 230, 231, 232, 233, 234, 238, 239, 240, 242, 246, 248, 250, 252, 258, 259, 261, 266, 267, 268, 269, 270, 271, 272, 276, 278, 282, 285, 292, 295, 380, 383, 386, 387, 390, 392, 394, 400, 403, 412, 413, 422, 424, 425, 426, 436, 438, 489, 441, 442, 443, 444, 445, 447, 464, 480, 481, 485. Gray, J. C., Rule Perp.,1 ed. (1886)............ 20. :c eee ee eee 400 Gray, J. C., Restraints on Alien., 2 ed. (1895), 12, 53, 70, 72, 73, 80, 82, 84, 100, 105, 109, 110, 111, 112, 113, 114, 115, 117, 119, 120, 121, 124, 126, 127,.129, 130, 131, 137, 138, 144, 147, 148, 149, 163, 171, 174, 176, 189, 220, 295, 321, 334, 354, 359, 362, 363, 382. Hargrave on The Thellusson Act (1842,) ...........-.. 375, 381, 391 Hayes; Cony oxece sacs ane woes evga BA Suis dsmhathghing-vacisewravareres 251 Hill on Trustees, Bispham’s ed. (1867) .... 73, 83, 450, 451, 463, 464, 466 Jenks, Edward (in Law Quar. Rev.).......-.-.5.+++e00 23, 26, 62 Jarman on Wills, 6 Amer. ed. (1893).......-...---0+6- 30, 60, 266, 310 Kales, Albert Martin (in Harv. Law Rev. and Law Quar. Rev.) 23, 38, 39, 188, 211, 214, 271, 272. Lewis on Perpetuity (1843) 13, 14, 15, 24, 30, 55, 70, 187, 189, 190, 194, 196, 197, 198, 200, 201, 203, 215, 217, 218, 229, 234, 239, 240, 248, 261, 270, 381, 392. Lewin on Trusts, 8 ed. (1888).......--+.e0 see e eee eens 362, 364, 365 Lisle, R. Mason (in Harv. Law Rev.).......-.--+-e essere eee 446 Mackey, Arthur (in Law Quar. Rev.)....----.--+.++++00+ 53, 56, 217 Mitchell, Real Est. & Conv. in Penna, (1890).. 12, 14, 18, 36, 61, 215 Pepper & Lewis’s Digest of Decisions...... 27, 159, 365, 436, 447, 483 Pepper & Lewis’s Digest of Statutes.....---.-.+++++seeee> 14, 257 Perry on Trusts, 5 ed. (1899) 61, 68, 73, 93, 98, 200, 332, 333, 433, 438, 450, 451, 452, 461, 463, 464, 467, 470. Pollock & Maitland’s Hist. Eng. Law, 12, 13, 17, 24, 51, 52, 53, 54, 55, 61 Preston’s Estates ...--. cece cece teeter ee can 26 Price on Limitations and Liens (1857)....--+-+-+.+++++eeee- ... 86 Russell & Hale (in Harv. Law Rev.)...--+++-+-+s2s sree retetes 374 Saunders on Uses (1823)...----- 61, 65, 71, 72, 73, 76, 98, 99, 190 Sharswood & Budd’s leading cases...-.--+-+++ seers ree rretes 16, 120 Smith on Executory Interests.....---+++++eer eerste 52, 419 Sugden on Powers, 8 ed. (1861)...-+---++-+++-++ 71, 76, 239, 251, 263 Willard, Joseph (in Harv. Law Rev.)..-----++- sss rsreecreeeees 468 528 INDEX AUTHORS CITED—Continued PAGE Williams on Real Prop., 6 Amer. ed. SEED RiGee ten es 31, 33, 73, 213 Zane, J. M. (in Harv. Law Rev.) .......0..00 eee eee eee cents 19 AUTRE VIE per, trust................ Apa teise bres Oa te eRe Seon. UE 308 B BANKRUPTCY 3.2. gs cuniy Sas aguanecigpadeeat aude wen we pyrene 104 BARGAIN AND SALE) pias cia yene ote cade pelcleh ee eine aaa 64 BASE FEE, arising, how.............00 0 ccc cece eee cence eee eee 16 definition: GF 4. xe sed vcaraidiet fades aeRO Gow ae Me anceeeERE 15 not affected by act of 1855............ 06. cece ce eee 16 obsolete in Pennsylvania.......-...0.0 0 cece cece cece eee eee 16 BENEVOLENT OBJECTS..........00-.0 0c c cece cece e eee nes 457, 461 BOOK, scope of the.........-...-.0.-e0 scans sbesuss weeeAGeads 5 BUILDING RESTRICTIONS. ............ 00 cc eee eee eee 5 Cc CANDLES, all burning at once... 2.6... e eee eee 198 CESTUI QUE TRUST, interest of GttTIDUtES:-OF 5. 2 5.care on Uean lego ee Galen aa Oona ay a seh ew 99 PUGUPE ANtEPESE OF cose ae bees ew eee ty wet eer ae eae dene 100 Ma bure: OF 2 hcios as ese wa aie eis ean a een rade Soe ee 98, 99 perpetuities, rule against application of...................0... 218 CHANCELLOR, Lord, duties of .. 0.0.2.6... 0.00. c eee e eee eee ee 470 CHAR GES ses givie ose e aera Hae ta le iby acide ay erat she ee i 2 ah wie 133, 134 CHARITABLE OBJECTS defined ............-.....--- 432, 433, 434 CHARITY, gifts to accumulation for a............. 0. eee eee eee eee 398-400, 427, 428 alienation, rule forbidding restraints on, application of, to gift to 441, 443 charitable objects defined. ......... 0.0.0.0... cece eee 432, 433, 434 definite charitable objects defined....................202055 443 tidefinite: clases 1. 4400 4.0.2 na dasidecttcem Ace des wos erlaapn a meena 437 corporation charitable, gifts to, see corporations cy pres, see cy pres death of donor, must be one month before gift to a.......... 448, 449 enjoyment, rule forbidding restraints on application of to giftsto 443, 444 exceptional nature of a charitable gift......................004, 446 frauds, statute of and charitable gifts......................004. 448 legislation, Pennsylvania relating to.................-.. 447, 448, 449 perpetuities, rule against, application of............ 442,444, 445, 446 gift to a charity upon a remote contingency after gift to another CHATILY + tag ek oh orges nat LOM RAO MERA Tse oa Sem eM eigs 445, 446 Mr. Gray’s observations On....- 2-60-20. e eee cece eee eee 444 preliminary discussion ....... 0.060000 0e eee eee cece eee eee 431 public policy and gift to. ..... 66... e eee eee eee ee eee 7, 431 taxation, exemption from... .......6-- +e eee ee cece eee eee 449 trusts for contract, as to OFIgin IN... ee eae 450 GEFITIOA Sox) beh coe oc Ak OT ee we Aaa Adah ead cta tea 449 INDEX 529 CHARITY, gifts to—Continued trusts, for—Continued PAGE determinable: si 1 ou- gus the ewargad Ay baw as bk Ae beh eveb ew eles 485 discretion in, OXPIOSS. sks ashes sete ewe yn iy ne vie salon easnwe Me aed ob a ened ae 456 application to specifically designated charitable objects.. 456 discretion, no objects designated, charitable intent dis- CLOSED 5. is seaceeuris ced yaveinn, & ies Bee Bee 457, 458, 459, 462 preliminary discussion of... ........0.0..0.0 cee eee, 456 Pennsylvania lawas to .........0.0.0.0 cece eee ease 462 INNereniby.' « ug sweawetwerkiewe were | » ma@armare eke ds 454 Act of 1855, has no effect on..............0.0...008. 455 preliminary discussion of... 0.2... cece eee eee eee 454 BUPVIVALOR “|, ccucadd.csmdgiovatycamuriivn baw ned en ko ice na 463 GIVOPSIOM 5: Ga fea e-d4 atanigg ae aabe aries oalere cea now od mace iow armada teed 452 Elizabeth, Statute of 43, effect of................0.005. 450, 451 In. -Pennsy Wana ccs one ws wg ated waa Gene aaa eee eee a 451 lease, by trustees of wo eee eee tee eee 466 MONRUSER sn gia daics Juswacwheaca se ieee eaten ese atanion Micag hea Teinsacen 452 non-personal cestui que trust............ 0.02.0. e cece eee 441 PCIPELUITVAOP ale angwsss aw clea eoera enews ka Re Sea en yea ee 451 preliminary discussion of oo... eee cee eee cece eee 449 sale of trust property... 0.6... cece tee eens 464 donor, restraint by, on. 1... eee eee eee 465 perpetuities, as to application of rule against.............. 253 trustee, necessity of naming ...... 0 ........ 00 eee eee 452, 453 trustess; -Chatige-of 4. 4.) aii aiaws emia eos See acted ane arg 463 uses, application of statute of ...................00 00.0000. 79 CHARTER; to: William. Pent. s+ a2 ava vin os o840s soe ba a eae re eee eae 44 CHATTELS PERSONAL (see personal property) CHATTELS REAL, no estate tail in............... wi esa ten leo Bez daes 52 personal property, see CHILDBEARING, gestation (See gestation) Women never deemed past, on question of remoteness........ 194 n.8 CLASS definite: is: 4c cnc tedr caged ce cag yale WMS anes ea a 437 CEATIGION Oleic brane quran sohice npease ate coieaekne nena redns 265, 266 PHIS TO oc. Daent Maes aap read emerald ys 265 et seq. closing of the class, general principle.......-...-...---.-.055 266 direct Siftic: cava Gecisn Px eueiep weg ie ssi Hegel ee teet 267 fAGUre: CE caidas OSE RS 47 BETES Eaee PO ye ee 268 definition of. 0... eee eee ee ee eee panacea ahi dete 266 perpetuities, application of rule against................-..-.. 268 author’s observation ON. . we... eee eee eect eee eee ete 269 Gray’s, Mr., views On. ...-.- + sees eee eee eee ete eee 269 grandchildren of testator, gift to on a remote contingency... 270 great-grandchildren, vested gift to........-+-.-...-.s.eee 271 postponement of enjoyment and........-....... 271, 272, 300 preliminary discussion Of... 0.010 e eee e teeter te eee eens 265 separability of ; geexent aga cedeede seer sitesi eres aie yes. 268 ventre sa mere, en, is child, included...................-.. 267 530 INDEX CLASS—Continued PAGE indefinite, definition of ...............0.0000. epiacae Sanaa 437 remainders, to a ascertainment of members of class...........+-++.00+0eee 008 42 Author's WeW OL vce ieyadevad wea as end Ha ach idee d a viceach GER See 41 conditions annexed to. 1.0.0.0... 00. e cece cece eee eee enas 42, 43 discussion of .................. SLR teen ck had ec ie eine Sa ER ae toe 41 Gray's, Mri, View OF side cio na wen exes wx crandaiawnrascger ees 41 preliminary discussion... ............. fa ax eck i Ne eee eee 40 sale under Act of 1853, and............0. 0000s eee eee 41 n.? COMMON RECOVERY class, remainders to a, as barring sos sscesesce ve eevay sme aks 35 n$ contingent remainders, as barring.............-.2-2-.00+000- 35 ne in-Pennsylyania « 2s0c65 gondn dew ease Sa cbca wide wdun bhcseeea Melee 14 vested remainders, as barring..............0.00 0 eee ee een 30 n.° CONDITION, defined . Giese Shee eRe ate ung anh NO Leeann haae 45 marriage, in restraint Olek Elena id aGrde dot ee deed aeons eames 294 remainders, annexed to PRECCUEM ox ainsiaacnnsiea AGS Nobis deaeetneeSeeueey 25, 30, 31 remainders to a class........ Shed ise salou tae eae a etn agra 42, 43 SUDSE QUENT. Sear asrancne oo nas aha eon eee Aiea oped a odene 28 right of entry for, broken ATUTIDULESIOR: egw ga cwk puke dae Valve nn iy eyed dead aed Sega eee. 45 GOANE s e-ytordents natutten ance aren dlemeurg wh eee ee eee ghee eos 45 ground rent, for non-payment of...................2005. 216, 217 perpetuities, rule against, not within..................... 215, 216 possibility of reverter, distinguished from.................... 45 quia emptores, statute of does not affect................ 108, 109 CONDITIONAL FEE COPING se zncida os si st aits tutta Bb shd acca Saad doen aha oaah desde ued acrodn bas 13 de donis, application of statute ie ogee dae teens Beh sel tt Ss 13 estate tail, tuPTEUMINtO} sisi en aaron Sula Aad Wa awing. oSaee vatuswoles oo 14 Obsolete NOW. . so aiiece enteie sel E Geers cue BEET dw cee gaa Ha eC 14 CONDITIONAL LIMITATION .............. 0.00.00 ccc eee neces 70 CONELICE OR LAWS....3 occss tiara ada eee paw age gs tea ha by ees 390 CONSTITUTION OF PENNSYLVANIA..................25.- 34, 449 CONSIDERATION ~~ aise wake se Seaways dour ag Sedoeetis cnn feos 64 CONSTRUCTION, question of accumulation, whether vested or contingent gift of...... 376, 419, 420 accumulation of a certain sum............... 0... eee eee 425, 426 condition subsequent...... betes Be eis Ws Staats Be Hada ena ho. Rote 29, 30 estate tail, implication of........ 2.0.0.0... cece cee eens 30 failure of issue. .... eee eee Gils ate ged gg atend. trea Ret selec y 196 n.? Penerally kis tundia agialaecosacinnce sors 138, n.!° 142, n.2 400, n.* 412 n2 heirs, meaning children............. 0.000 c eee eee cece eee 247, n3 income, rule applicable to disposition of.................2.2.005 375 power of sale, time of exercise of................,. 230, n.& 248, n.8 precatory trusts and restraints on alienation.................... 112 remainder rather than executory devise.................... 46, 375 restraints on alienation.. 0 6... . eee cece 105, n.° INDEX 531 CONSTRUCTION, question of —Continued PAGE CTMSU ITY CREATINB Ac secioxg 8k cis suns nl’ heey datus GW Seo a daaes Man 313 BSULVIVING 3 ots.cen nog Ne RAGS ANY bGhaNe eee akey daa ke Carag ins 43, n° vesting of equitable interest............000 000.000. c cece ee 99 vested or contingent.........00. 00... cece cece eee e se cececeee 38 CONSTRUCTIVE SEISIN ces a:edsase scot icsasncoe coon aie sucess 31 CONTINGENT REMAINDERS attributes at common law... 2.6... eee ee ec eeee 32 In, Pennsylvania) <. pom vols area aioe Ah ae edsiran gudegaceew fogs: 32 ClASSINGH TOM Ol os dod sed Ne sa aeee ate wank bak ase 31, and n.® definition: Of gee vevaetsg rica Gp est deren bene ehey Goes Je ee 31 destructibility of cestui que use, Conveyance by.............0000 000 eee eens 36 Common recovery, by........0 0. cece eee cece ere eee ee 35, n5 forterture s byAg ax sxc asaya Aa e see i bse tccge ie weds ied wh igen So da 33 innocent conveyance, by os... eee eee eee ee, 35 lease and release, by .. 2.2.0... 0-000 cece cece ec eeneeeeeuey 36 Mereen, Dy kone evan iow inetns Tse ae ebony dak a ees 34 natural termination of precedent estate, by.................. 37 preliminary discussion of.......... 0.0.0... c cece cece eee eee 33 PelinsylVania. deed, bys os-cises sve neem pb peaed Sale vised daa cee'd ws 35 sale under Act of 1853, by..................000000000. 36, n.? SUMMATY 3S TOe- ct eo uteea este hinnd one re ddecenarnae bare Bae cumases 37 SURLENGER, DY angi the dawned Wadi Nadeauuies porn een thee SAN ai 34 tortious alienation, by........ 06... 35 turning into right of action, by............. 0.00... cece eee eee 36 examples of to ascertained persons subject to a condition precedent..... 32,7 to unascertained persons... 6-2... eee eee cece ee eee 32, n.4 executory devise distinguished from.......................-0005 47 turned into by effect of Act of 1855............ 15 OLLI OF cy. | haters ae ete wale hales se saa 4 mMledle oaontenn eden Gun ae 30 Pennsylvania, in: cvisciecievicindnieadotae nad en gama weasie Pe 32 perpetuities, application of rule against.................... 213, 214 trustees to PreServe...... eee eee eee 33, n.* 97, 98 unborn child of an unborn person, t0...........06- 0.00 e eee eee eee 40 SDL roa ch naan ae teAcesitta aie Gudedh wisrs Sate atenated eile thas pecan eugaaen ated aod Gaur 31 vested remainder, distinguished from a distinction stated sa. eices-ca eben cae es ck Ome e we yen Dee aead ms 38 Gray’s,. Mr: distinction s.g:.a: + ose eu cewe ae ee eeee whee ees 39 obliteration of the distinction... ......-.- 6-2 c eee eee eee 40 CONTRACT, right arising by.........0- +0: e eee eee eee eee ees 49 perpetuities, application of rule against..................-+.-5. 222 CONVERSION personal property, future legal interest in.....-.......-....-.0055 59 uses, application of statute of.....--. 0... eee e eee eee eee eee eee 75 CORPORATION, CHARITABLE, gift to esse, corporation not in... 2.6... ieee eee eee eee eee 480 foreign personal property. 61-1. ee eee ee tee eee eee eee 480 532 INDEX CORPORATION, CHARITABLE—Continued foreign—Continued PAGE real estatess.« sivas aae dengan bok keeled a eeenaneee ee eee 479 mortmain, statutes Of ........ 0.0.00 ccc cece eee eee ees 478, 479 preliminary discussion... 00.0.0... ccc cece eee ete eee 478 property, amount of, limited... ... 6.2.0... eee eee 401 COVENANT as to the use of lands. ...........0 00000 e cece eee ees 49 perpetuities, rule against, application of.............0..00.000e+ 223 COVENANT to stand seised... 2.0.0.0. 0c eee e eee e eee ene 64 CREATION of present and future estates. ... 0. eee eee eee eee 3 CUJUS EST DARE, ejus est disponere...............00-0 eee e ee 2 CURES Yo" or crack an te italics Sea cena ei ae haan a em eamlelmlalnih al nuar fears nel 48 determinable fees, in... 2.0.0... 20. 18, n.° perpetuities, application of rule against............... 000.0006 222 CY PRES common instance of application of............ 00.0000 440, 441, 469 CYILICISIN OF doctriney~ ¢ isvaselhdontt vy phate ween adm oye la cela oeg 470 CERNE ies waeee ceed eee ORLER CaaS EEE RENEE Y BRASS EEO EES 466, 467 CISCUSSION OF s.::.acuela teal eons be dhevas Sense arene ee 466, 467 discretion confused with... .......-.. 2.2: cee eect eeeee eee 468, 469 intention has nothing to do with.....-.........0.: cece eee e ee ee 467 JUGIGIal Cy PIES ads vaseauiha RevatGamar Aegan eed Oates 470 law, does not apply to gifts at...... 0.6... cece eee eee eee ee 467 Pennsylvania, doctrine in deeds, gifts by, applies to........... 00 ccc cece eee ees 476 historys.:0f ‘IMpsges stds edie swale ee ew Dodane, nee EES 470, 471 law of Pennsylvania as to............... 000s eee ee eee 476, 477 legislation in Pennsylvania on...........-....00 0000000 473, 474 preliminary discussion .. ......---. 2 eee eee eee eect teens 466, 467 PIELOLALWVE. CY PIS! s.-ccacece ese oe kee Gee dd geen ales eow ena Wa 470 reasons for the doctrine........... 20.000 eee eee eee 468 who make invoke the application of the doctrine..............-. 476 D DEATH WITHOUT ISSUE (see failure of issue) =... -- see 196 DEBTS, accumulation for payment of ................0-.000 eee 393 ability: fOr 3. gsetes Soe dy ed water aiee din ta weeds Ga wee My eae aS 147 power to'sell topay' ss sowia caaietaiectevedoguede mei wes 242 DEFAULT OF APPOINTMENT, limitations in, are vested.......... 232 DEFECTIVE DESIGNATION ... 2.2.0.0... 0c eee eee eee 436 DEFRAUDING creditors, clause against alienation as.............. 149 DESCENT: ‘CAST jojo .cva cqauxie Se wieeee Ae ca nwines Stas ep aoae dame es 36 DESTRUCTIBLE INTERESTS, perpetuities, application of rule against 221 DETERMINABLE FEE Charitable. cst dad eaaete wine Cece we Dawa Mead eaonanaies oe 484 CUTLES YAN as Gon ca eNewee Ganges Meet Anter die cooky oh pebey 18, n.° defined yesyaseciciave ee eee A Ghee ewe aaaave oes 17, 46 OWE Is 4s iin emeteas ea ces caees Mean Beda ee oxece ees 18, n.° Pennsylvania, list-0f, 102 eos cyawecs seer eiee peso ver ee neawe oa 17, n? quia emptores, statute of, effect on....-........... ce eee eee eee 18 title in eminent domain, aS........... 6... e cee eee eee ees 19 INDEX 533 DETERMINABLE TRUSTS PAGE charitable, x cits nonccend ach More Cengu eben fiw 8 deesghee cess 485 cestui que trust, validity of against.......................... 320 perpetuities, rule against, application of...................... 246 DETERMINATH BEE usieiexiivecea tau ce caseeansne vans 17, n3 DISCRETION absolute definitionvof | aguas icy waaaneievene eye den STW dasa eee 316 income, as to..... giclencisly See es a ia hE aE pe fe ae 315, 321, 324, 325 PIMNCIPAly AS 40 ae se ge aay cae nto ae Sik Walp ne ween, 319, 320 condition precedent, aS... 2.6.0.0... 00 ccc eee cece ee. 316, 317 PSTN led cekerwoc mia ei tases ache ans .oaunrm i riaeot ie. 96, 97 entire interest, when cestui que trust has...................... 320 express discretion, charitable objects................... 456, 457, 462 DISCRETION legal defined is egunewe epee dette db Ae ean eek yee oh eee eae 316 INCOME, ASHO.G~ -casegeiaes ae deh dpm Same Seek AG eas ba eee 321 PIMC, AS COs ccs packs elie scr ac \alx-aun e-onys @ enc Sanbadlaw abreseS eee ey 317 perpetuities, application of rule against.................... 245, 246 preliminary discussion sss eeceeeeeeee ne 315 SUEVIVAL ODS 255s é¥ese dagee idea do eves eetdceuiniel a yada 96, 463 vested interests, discretion as to.............. 0... c eee 316, 317 DISSHISIN: 4 stsv weds chien evdueGa sas aahawes ae mom twedaoe Giles 36 DISTRAINT by lord of the fee.................0......005. 25, n.7 DISTRUST, notion that putting in trust indicates.......... 161, 162, 310 DOMINION; pOWerGl :. asosmnesovgaaw ar ohana Seagueteey eben 3 DONOR, right to: @1vGss ssh cee ye its oo een wie awe eye aes 2, 8, 312 DOW To Ric is. aa aes iene oie wert a wie eens e Mery cee ean eend sane. 48 determinable fee, in. ow. eee tee eens 18, n.9 perpetuities, rule against, application of.................. 222 E EASEMENT ..... eee eee eee et ee 48 perpetuities, application of rule against........................ 215 EMINENT DOMAIN, involuntary alienation, as........... rer 104 proceedings in, whether within clause against involuntary alienation 166 title ACQUITED Its). is cadee a ebin ea es end cede ae we eed 19 ENGLISH STATUTES De Donis, 13 Edw. 1, c. 1 (1285).....-.....- 00 eee eee eee, 14, 15 Quia Emptores, 18 Edw. 1, c. 1 (1289). ..-..--..-.. 02. eee, 43, 44 50 Edw. III, c. 6 (1876) ws eee, 62 Uses, 27 Henry VIII, c. 10 (1536)... -..-.-- 0.0 eee eee eee eee 68 Wills 32 Henry VIII, c. 1 (1540). «1... eee eee eee eee eee 46, 71 “ 34, 35 “ ce. 5 (1542) sive ica. sap %, Gi gird’ wite: hiss eae REN alt BAUS SA 46 ioe liane WGRNG, cataveGraebar eveasaeeen yrs 356 n.° es Beri OUI) c)atass avin ee aeew aes Rese 450, 451 Accumulations, George III. 39, 40, ¢. 98 (1800)...... 378, 379, 380, 392 7 Willian TV (1889) acciuicasesssxediecaneemes 196 1 Victoria, c. 26, 29 (1838)...............0.000. 196 Accumulations, 55, 56 Victoria, c. 98 (1892) .................. 380 534 INDEX ENJOYMENT, use and PAGE POWEL Obs. « S ckalss mi bwWAs one degIeGNs de We eae E ame Ree sae ane 4 POSULAINES Ol yivtienn.d.4in tiie aucun aa x hve Nae pe 4, 5, 293, 294 accumulate, direction tO, as....... 0... cee eee eee 425 discretion (see discretion) form ofrestraint. .. .isc.2055 Shcende neu aie tee eeswer ee 293 postponement, clause of COMMON IAW! 22h own halk D4 g ane tw B.8 GAA Ri able ne Sas 295 consequences of upholding the validity of.............+-- 301 Pennsylvania law... 6... eee eee eee ees 299 trust. of an absolute interest consequences of upholding the validity of............ 313, 314 general principle... scssaseveisgecdura er aes ia eeee es 303, 304 Pennsylvania law, a8 to ....... 000 e cece eee ee 304, 312, 303 rule forbidding the imposition of restraints on................00-- 5 alienation, rule against, distinguished from.................. 292 perpetuities, rule against, distinguished from................ 292 SEA TEC a bes casusncraiara nie esas bidaos noaus bid ek ce aura’ bg aus. aud asaie andere 292 who may invoke the application of...................0.0000 293 ENTRY, right of, for condition broken (see condition) EQUITY, general observations on, in Pennsylvania, 88, n.? 105, 148, n.3 150 EQUITABLE INTERESTS TUtUPEr: | dg dade ngn ae OL abeh sd WOM Ras GRE QO AS ee hee eR eeS 100 perpetuities, application of rule against............--...... 218, 219 Vested WHEN, ccc auaan scm ever anes Ghat de oE oat as eee 99 EISCHIGAT 3) 3.4 i crecat sirace hrieco wee sighs os etna tn attain ath Peden Meson meade esi nca tN 48 perpetuities, application of the rule against..............-....... 222 ESTATES, creation of present and future...................0000-000- 3 ESTATES for life (see life estates) ESTATES for years (see years, estates for) ESTATES “PAT 2. goiacaas bie aaa dune sea cack endeGaine esate 14 barred by common recovery......... 0000s eee eee eee eee 14 barred by deed under statute.......... 0... e cece ee eee eee eee 14 chattelsreal (WO) Wii. gks arenas caiman Aimed wa koe nbhemlerd widvewh Giaunaus 52 construction of, on limitation over on death without issue..... 30, n? descends according to the common law................060005 15, n° NISLOLY = hide deh tana ta tor eda ee ses nae Rete Shia 14 limitations after, application of rule against perpetuities 192, n.§ 196 remainders afters, sAcis ah de cemiesges meadiy nso wuss p8a Coed ewes 30 turned into fee by Act of 1855........0.0. 2... 0c cece cee ees 14 does not affect old estates tail...................0.00. 15, n.° EXECUTOR power in, definition of........ 0... c eee c cece eee eens 244 perpetuities, application of rule against.................... 244 trustee, distinction between, and..................0 00 0c eee eee 244 EXECUTORY DEVISE PELTIDULES OF vse soe sis veal sa ae alone GAGS cae aeoweeba eos kaks 47 chattels personal, of ......... 0... cece cee ec cee ee te tenn nae 57, n.7 chattelsreal; Ofc. 25. 4 cacnd Wad eas FORE aaa e nd detee ys eoewls« 55 contingent remainders, distinguished from.................. 47, 48 INDEX 535 EXECUTORY DEVISE—Continued PAGE defeated, not, by power of the first taker over the event.......... 120 ehnitiOn 5 2. xccune yeu pecsce te, cae ean wrg leone Saw ewes Pa a Re era oe 46 fee simple estate, effect of, oON................. 0000 cee eee eee 16, 17 Indestructible... :,.aa02.¢¢eu2eaees) PAReY Aa oeehiaa een aaa eed 47 OVIGIN Of 5.58 a wees Ratiaere BRS NES Se SSDS ae FAM awanaee ee welts 46 perpetuities, rule against, application of....................004. 217 EXECUTORY LIMITATION defined... .........00..0. 000. cece ee 70 EXEMPTION, statutes of.........0. 0000 e cece cece cence ences 149 EXTRINSIC EVIDENCE....................-. 157, 158, 159, n.7 161 F FATLURE OF ISSUG coocs sig oh cote 0b Cae S ESERIES Uae eon 15 estate tail, indefinite, when amounting to...................2.0.. 15 failure of issue of first taker..........-.. 0000 e cece eee eee ee 30 n? fail ure of issue of third person.................00 00 cece ee ee 30 n2 realty and personalty, as to, no distinction, between in Pennsylvania. 19 whether definite or indefinite...........2.. 20.00 e eee eee 30, 196, n.® FEE executory devise, effect of, On... .. 0.6... cece eee eee ete eens 17 TAOCUIFEG A “A. «sein deiacsnnd ato dosten A goora sean Al nda eee go GSENS A Busan a Becca negeaiieeh 13 PROREMENT:.. cain chats te aaeedeada miia Sey Wwe d SecA M wean 25 FEUDAL LAW alienability of land..........00.0. 00.000 e cece eee eres 11, 12, n3 urd eles csdheoe ees waits. ._ Gattang sare hanes tana 62 conditional fee (see further conditional fee) .-. 6 eee eee eee ee 13 futuresinterests. ss cd case shee sees Bo eee ed aE OSES METER LESS 23 BEISIN iehrudyrat eee ave Sy enacts Ral ads yma: Berean am ate art eee 24, 25 ASO DI eh veh bands te ied ates ay d ar ada eed Ma wars hens Ge tea ae .62 FEUDAL SYSTEM (coset seed ie cai aoe Goede eeide swage alee 25, 62, n.* FIDEI COMMISIUM of Roman law.........--- 225.5552 0 0 seers 61, nJ FORFEITURE Clause Of. 4 ei i died ede A WIC EG Gnas eee MeG eae tA eae 104 contingent interests before vesting.....--....+-++++erer rete eee 109 contingent remainder, as destroying a....-.-.+-+++++eere reese 33 involuntary alienation for (see involuntary alienation) quia emptores, effect of statute of, on....---+.-+--+-++-eees 108 tO grantor... ee eee eee eee 108 vested interests, of, before coming into possession.........- 109, 110 voluntary alienation, for (see voluntary alienation) FUNDAMENTAL IDEAS involved .....--.+--- +000 errr 2 FUTURE INTERESTS definition Of . 6. cece eee tenet tenant ete teen ens 23 discussion Of... 1... cece cece ee ene e tenet tes 23 early common law theory......--..+--++sce rece ester tere reese 23 equitable future interests........2--011- ++ sesseeeeneeneeerees 100 personal property, legalin....... 0.0.00 00ee eres eee e eee e teen e es 60 real property, legal in conditions, see contingent remainders, see 536 INDEX FUTURE INTERESTS—Continued PAGE real property, legal in—Continued executory devise, see possibility of reverter, see reversions, see vested remainders, see G GESTATION, period of... 00... ccc ec eee eee 200 GIFTS, subject matter of book...............-.5 000s ee eee 1, 2, 3, 5 GRANDCHILDREN, contingent limitation to...........----- 270, 286 GREAT-GRANDCHILDREN, vested gift to............-0.0e00-0- 271 . I IMPRACTICABLE GIFTS............ 00000. e cece eee ee 437, 440, 459 INCOME, time of payment of ......-...- 000 eee eee eens 402, n." INDEFINITE: OBJECTS iivic svecciw de Sacco as a dare sale wes ogee wna 436 INNOCENT CONVEYANCE........ eee ay eaOne aune sate aasene 35, 36 INTENTION cy pres, application of, does not depend on.................- 467 perpetuities, application of rule against, does not depend on........ 282 trust of an absolute interest, and....................0000000- 313 uses, application of statute of, does not depend on................ 71 INTERESTS subject to the rule against perpetuities (see perpetuities, rule against) INTRODUCTION, Chapter 1... ....... 02000: cece cece cece 1-8 INTRODUCTORY DISCUSSION ........... 0.00 c cece eee 1 INVOLUNTARY ALIENATION forfeiture for involuntary alienation absolute equitable interests 6 6... eee eee eee 143 absolute legal interests kw eee eee eee eee 123, 124 equitable life estates... 2... eee eee eee eee 152 legalilife estates. iss yi oswitntcieewia se seasendne scones same bree 131 prohibition of involuntary alienation absolute equitable interests general discussion . 2::0ec¢es.ueer av sdd essere drs auewes 143 Pennsylvania law... 2. a. ccs ene nterase ee sae cee nena s 146, 147 equitable life estates (see spendthrift trusts, Chap. 13).......... 151 legal absolute interests COMMON AW soc. bcungas Pes ics an auuraWee edhds wana aes 124 PennsylVaniadaw aaj wu ws Wasa cues hap eee Re Awe 127 legal life estates common law: -.aclsecann ind cae aati ani eee RS 131 Pennsylvania,law = dasa pi eagae wines Mee der diaeae sealers 134 reasons for and against the validity of prohibition of voluntary allenatiOn,. ... .iwischeryases oaks se ied oe eee eked 147 ct seq. ISSUE, failure of (see failure of issue) J JUDICIAL sale as a common recovery....--.- eee eee eee eee eee 14 JUDICIAL notice of income producing quality of fund............ 399 INDEX 537 L PAGE LANDLORD and tenant...........0ec eee eee ee eee ees 23, n2 53 LAW AND EQUITY, distinction between................ 88, n? 105 LEASE and release... 1.0.2.0... cece ence ence e ete eeeneeuae 36 LEGACY assent, necessity of, by executor.............-....000000ee 126, n# INtETESIMON a x age eats Sea e umes newest waka d amedaerne-eehon 375 payable; when... 0x3 sseeoui Avaw isa ns ainda ga ouch eee lew eee Be 375 LIFE ESTATE slienability Of yacuesini aiawasa se ale ba ade dn cell ba Gewese Re Rea 148 personal property, life estate in....................000. 55, 57, 58 remote contingency, gift of a present life estate upon............ 195 n. will as to power to dispose by.............0000c eee eeeeeeeuas 389 LIMITATION’ of amount of property to be held by charitable cor- DOLATIONG 2 sass ice i an8 hs apegiela pact RAGA ae samen Be neh Re aed esha ake 401 GIVING, meaninie OF 5.2 sis, antes sei apece ge Sta eee teg aes aaden oe: 284, 285 LOUGHBOROUGH, Lord, Act... 1.00... cece eee eee 378 M MARRIAGE, condition in restraint of...............00.c cece eee 294 contemplation of ................0... eee 345, 346, 348, 350, 351 MARRIAGE SETTLEMENT .............. 0... cece ee eee site doa BOR POStHUPHAL. ocd ages sce escawe nda Wien wine Cake deere essa 332, 333 Prenup tial: :s-ccpm dca Seyats wee Hand welna ice we eee R's ease We ae 332, 333 MARRIED WOMEN disabilities at common law... 2... eee eee 332 removed in Pennsylvania... ........ 2.0... ee cece eens 332 MARRIED WOMEN’S PROPERTY ACTS .................4. 332, n? MARRIED WOMEN’S separate estate, origin of............. 332, 335, n.? MARRIED WOMEN’S TRUSTS, Chapter 24................. 329 et seq. anticipation, clause against... .......... 6. cece cece eee eee 362 circumstances necessary to validity of contemplation of marriage... 2.6.6... cece 345 cesttl Que: trusts. DY e240 se 2 cee ee py eee eve ey @he cere raw 345 donor, by... .ete84 ose ree Seaue ies cece 345, 348, 350, 351 marriage of cestul que trust......... 0.6... cece eee eee eee 345 second marriage, clause invalid on....................0. 352 Pennsylvania cases on circumstances..............0.0 eee eee 346 time of gift, circumstances must exist at.................. 347 woman, cestui que trust must be a...............-.....0.. 345 creation, methods of postnuptial settlement. ...-.-.-.....- 6. eee eee eee ees 332, 333 prenuptial settlement ......-.-.. 00-66. e cece eee eee ee, 332, 333 third person, settlement by.........-........ 0 esse eee 333, 334 definition. ceaccchater reds. Ses weewes S34 Serr we rnns See See 4 334, 335 estate which may be subject to the trust....................00.. 334 husband SODELOL Of We. Me RES ne ae RAGS IANS abu Ga ale aera ete 363 debts, liability fotjof.. s.ie0edsacaxdonaeopesiedand nm euty 363 power Of okies edie deere et een ien arene oeegad ean Meets 363 538 INDEX MARRIED WOMEN’S TRUSTS——Continued husband—Continued PAGE MehtS Of ines) cis duyg dateoods Manse Gia cae aia Aes eae 364-366 personal property........0... ccc cece eee nent nee 366 Teal Estate a2 sand ans wmv eeree me wy aie Mie goes ee -ahee ws 364 when subject to executory eee else eee 366 involuntary alienation, liability for third person, when created. bYy.i sheen te eee cee eee 360 woman herself, when created by...........-..0-00ee scenes 362 language necessary to create Act of 1848, effect of...............002 000s 337, 338, 339, 341 cases on form of the clause.......... 000. c cee eee eee 342, 348, 344 general Principles: gnc. wth yada eiey Magheeg agia wage ae es 335 summary of the law as to.............. eee eee eee eee 342 Nf GiOStBbO: sic ote ceeenet alsa Anau shen eau es oe Bache te Monat A 353, n.? OUTST is eee < ides Pend apioe eran waa ain homeo ou dates ace tae was oa 332, 335, n.? Pennsylvania doctrine as to...............25- 363, 366, 367, 369, 370 preliminary discussion of. 0... 2... e eects 331 trustee, not necessary to appoint........ 0.0... cece eee 336 uses; Stavuiteror, Ande sincsse¥ odalscs Was Wedge Go hadnsee ss cara ken She 77, 78 voluntary alienation express power of CONVEY 2i%.03-2 an Bieta RR ERA Ag Nga eN eae ae 359, n.? MOTPALE aioe sew od Keer geen beaten Mee gies edged ene be 360 n POVOKE gu 2 Mave vu au wa nede MA k ew EE ROE Sees S aoe e EEO EON 360 Willsdviseds ag csteeste eee ye deesmsaee dere ee eeniee ae 359, n.? not subject to, cestui que trust cannot BSSIDU 1 Hie askew Baan o Sabena Halon HOA WEES ea sw ew ecsetees 358 CONVE yaaa AGG ethcwuem casio melee ane need ein ee 357, n& marriage settlement, make. ............... 0000 eee ee eee 358 IMOQUBAGE: stasis s Slide ee wl oa aw he Ad eee yaa Cees . 358 PEVOKE: 0 ccg00 fos ee ode Gene eretert ead odens Woke ee 385 Wil co gdie ree tAeeane heehee i Sita Paes Manse pab tod ated a 357, 358 MASSES, trusts for saying............. feces 482 MERGER contingent remainders, as destroying —..- «5 eee eee ee eee 34 GOH TEETONTOR he soe te hala ak Ane unt dus wp! PIgleeUae ane ACdoectue cg dMn ack Aa Weed os 34 MODIFIED: BRES ec gars tate erie dpe shea Ret elie ners 13 confusion in terminology as tO... 6... eee eee eee eee 18 SUMMARY 2S LO Sacra ce cease SRR RRS SE AM ee as Gta ene AS 19 MONUMENT, trust fora. 0... eee 481 MORTMAIN, statutes of .. 0.00.60 0. c cece cece eee 478, 479 NET INCOME.......6.0.06000005 AS ciate oes ceteeeee 82, n& NON-PERSONAL OBJECTS ... 00... 000s cece cece e eee 436, 441 OBJECTS 0 Charitable. je esc bee ein ea ee A eS we ated 432, 433 CLE Fra iss ste eae ae hc eh eh ea REED BY biter ei a es ese hep area eG AY Goer 437 RENE ATE 2 macsceis race a eh ae Ree eo 436, 437, 438 non-personal 2.2.0... 62 cece ee eee eee es 436, 441 INDEX 539 P PAGE PARENG PAT RIAE. 3 dcr guveid deeb Ui A Si WM ae dw ea aay 470 PARTITION, decree in, as common recovery.................. 14 n8 PENN, ‘William,, charter: to. ...004 0042s. 05+8eesceer wae ech ewe eye 44 PENNSYLVANIA DEED contingent remainders as destroying..................0.00..000e 35 statute of uses, application of............ 0.00.2 72 RISO AIN os fw hwidheralt Gin aeean oes See chee Be henats sic bna ed de uva eevee a Bla gad vials 72 PRACTICAL CONSIDERATIONS............. 195, 199, 487, 440, 441 PERIODICALS CITED American Law Register... ......00. 0.0000. e cece eee eee, 16, 120 American Law Review... 6... cece eens 216 HOM THO eases sarin od Wand keane inde gamete Aone y ave mutes 449 Harvard Law Review...... 19, 23, 38, 39, 40, 56, 62, 64, 72, 73, 91, 188, 190, 192, 193, 211, 214, 267, 271, 272, 314, 374, 440, 441, 446, 458, 463, 468, 481, 482. Law Quar. Review................ 13, 23, 26, 53, 56, 62, 216, 217 University of Penna. Law Review............. 0... sees eee eee 31 PERPETUAL TRUST charitable ‘trust: ./.o< jscesoneet cde caa es doen noag de dene tee eade 451 perpetuities, fallacy that it violates the rule against............ 220 PERPETUITY, meaning of 424 2y0-5vaee sce ese be a pees Sages ea 189-191 PERPETUITIES, rule against, Part III.................... 185, et seq. alienation, rule forbidding restraints on, distinguished from...... 197 application of, generally..........-.050.0 5000202 eeeeee 209, 210, 276 anticipation, clause against... 1.6.6... 0... eee e eee eee eee 220 cestui que trust, interest of, to......... 2.6... cece eee e eae 218 class, gifts to (see class) Chap. 18, p. 265, et seq. condition broken, right of entry for.................. 215, 216 contingent legal remainders........-----++++2+ sees eee ee 213, 214 contract, right arising out of.............. eee eee e eee ee eee 223 CULES). 6 see eect eee eee ede sea ee eaten ee 222 destructible interests... 0.666000 c eee eee eee 221 WEE ap reece eee ANTE das ace RGKAG quem eniae Mama ast aan alsa 222 CHSAIMMOTIES «x 24.5 se erie aE Ge nee AA ols dead wd id eee Jae nei does 215 equitable interests... 02... 0-00 eee e cee eee eee .. 218 BSCHEAT 7 cobatenG aa agha ee Ret ae ee Reee Rema ea Naws 222 estate tail, limitation after © .....-- eee eee eee eee eee ees 196 executory devises and bequests........-..--.-+.s+eeeeeee 218 interests arising by operation of law................-.. 220, 222 personal property, future legal interests in...........-.-., 217 possibilities of reverter ... 0... - 00.0 e esse eres eee e eee 217 powers (see powers) Chap. 17, p. 225, et seq. resulting trust... 1-6... 20s cece te eee teen eee ences 220 POVEESIONS ss Qoawedeniente eh IhWns Me eo aeui Mela zageins 210 shifting Use... 16 sect eee eee eee ees seco abalone Ah 218 springing use... 1-1. eee ee eee eee eee ett 218 summary of application of rule...........-.-....-.2 2s eee 223 trustS. 2... eee ah Ri Sal ok api aoa ied rate es ent ees avn da Gin aces 219. 540 INDEX PERPETUITIES, rule against—Continued application of, generally—Continued Beas vested remainders......... 0.0 cece cece eee eee ete ees 210, 211 vested remainders subject to a term of years......-...-- 211, 212 void, interest, apart from the rule............00-.0000seeeee 221 common law rule... 2.0... eect eens 187, 188 continuation of vested interest into remote period valid.......... 203 contingencies analyzed... ..... 0... ccc e cece cece ee tenet es 194 contingencies, separability of .. 0.0.0... ccc cece cece eens 197 contingency must happen within the period.............-. 194, 195 death without issue... 2.0.0.6... cece cece cnn nen ences 196 gestation, period of 2.0... cece ccc eee eee e enn eee 200 historical evolution of the rule..............0.0 000 cece ences 187 invalidity of limitations, consequences of........ Chap. 19, 275, et seq. inseparable limitations. 0... 6... eee eee eee 277 prior limitations void... 6... eee eens 278 preliminary discussion... .... 0... 0. cece eee e cece eee nets 276 separable limitations... ... ...... 0 ........ ...197, 277 subsequent limitations void prior valid limitations exhaust the fee.................. 278 prior valid limitations do not exhaust the fee equity OCG s ose einsadnss santidial ne Giay ate Od bara edudeee he Sn ATs 280 severe application of rule............-.....0- 286, 287 VTL 4% soca seactork. Seu dearth dee acme aude dl Saath ein Seah gin Mees 280 law GO: silo seades Hea ciaca whan ea eius Ae Se Asan Sehed Ree le 279 WLU anche salen sg tare hh dwn e Rete yesh a luce ie eb getting 279 whole gift violates the rule equity eed a: nos varuw ies ear Aus sad ange ee he hau Reon ENS G 277 SWAN sess aes ate ees ah Pe PA a Reda MAA lates, Gee onsale ages eed 277 law GCI. - di gddtaserac dle hel eee Ree tea tee ek ecale oa 276 WILLS. tienilen. Qiedtan ntcanae ace one Faligyarais goutami Belo awialeees 276 lives.in being’: ages served ge se aiegidw ab iwnrn sade ae eens 198 object of the rule discussed..............0... 000 c cece eee 192 object of the rule suggested............... 0000000 cece eee eee 193 Pennsylvania cases on the rule...........00000 000 eee eee ees 203 period prescribed by the rule...................000 cee ee 188, 200 period, when begins to run....... 2.0... c ccc eee eens 200 possession, does not affect right to........... 00... e eee cece eee ee 201 power of dominion, as countercheck to...............-..00-505 3 TOMOtE, Meaning Of: ccs vee Saw gee he RNG AREY eRe eRe Lewy 192 separability of limitations... 6... eee 398 separable contingencies... 2.6... ee eee 197 statement of the rule by Mr. Gray...........0..000 00 c eee aes 188 statement of the rule by the author.................0.5000 05+ 188 twenty-one years, period of.................. 0. eee 199, 200 INDEX 541 PERSONAL PROPERTY PAGE aliena bility Of aie ciatawse erases es 2rd eG keh ancdayeen nde @eueas 54 chattels persotial'.. a4 da ened apices gu dion eae educa Pye aale as 52 chattels real (term of years). «0.6. eee es 52 choses in action, assignability of...........0 00.0.0. ccc cece eee 53 equitable interests In. 6... cece cece ee eeevees 73, 74 estate tall), NO} Noe. 47 8 sho mndedar away ome dal eaeuie Gets 52, n.4 future legal interests in chattels personal, transfers by will.....................0.004. 57 chattels personal, transfers inter vivos..............0000..0005 56 chattels real, transfers by will.............0.0.00.000000 000s cee 55 chattels real, transfers inter vivos...................0000050- 54 Pennsylvania law, as to.............00000 eee SORES 55, 57, 58 preliminary discussion of.......... 0.000 eee eect e eens 54 statutes in Pennsylvania, relating to............. 0.00000 see eee 59 SUMary: OF the laWece oo) cna wos aula d eda des wna iendee ie 60 ISCOLY. Ol saci wee aes 3 ll wa AAS kad eo aS eek eet 51, 52 kan 8 Of ce.; eoucaeed Sead aa he SOAS Bas an eR Ho 52 Ovmershipsin 2. Lesakeietusyeauews See arene Ureaiaseceeas 52, n? perpetuities, application of rule against to future legal interests in 217, 218 FEMAINAELS IN nc 4 oh eat cee oe EY BESO Pete ote kere Renee ei ates 58, 59 restraints on alienation, absolute interests in personal property.... 121 summary as to future legal interests in................0--0- ee eee 60 LETT OF VOaTrs.. an gamsieuat ees ohare doe aoe es Daler neirea eS 52 USCLOF c4 ope Mana Rte PUA aes ecgs tee MOM wereac Aeeas weelA 73, 74 POSSESSION, transmutation of... 2.6.6... cscs 64 POSSIBILITY, meaning Of... 2... 6... c eee eee eee 43, n.t POSSIBILITY upon a possibility, rule that there cannot be...... 40, 214 POSSIBILITY OF REVERTER ‘AttTibUteS Ol sw. cecsde ding tamed cie helo wea ne Pee eee eee 45 condition broken, right of entry for, distinguished from..........-. 45 eI EL OLN Of eceece Wea eee a hee ceed ASN wil tb eng rebuae ees pines Ake ase ES 43 Peniisylvania, ins. aq0es 6 seer be daae ede eke eee oes 44 perpetuities, application of rule against...........---+- seer eee 217 quia emptores, statute of and .....-... 0.6 - eee cere eee eee 43, 44 Validity Of. c.: 20.0 0asadee Se ies ae ei edlen senate ae ce means 43, 44 POSTHUMOUS CHILD os... .2824 dss bs0 see cere weg ee eee d ene ne 267, n.8 POSTNUPTIAL SETTLEMENT ............ Sects pel daterzltesle acct 332, 333 POSTPONEMENT for a class. .......-000 eee eee eee eee 300 POSTPONEMENT OF ENJOYMENT. consequences of upholding the clause.........-.-.+-+++++e+ee es 301 Pennsylvania law we eee eee ete 301 preliminary discussion ....... 066+ + 000s eeee eee eee eee e eee ees 295 POWERS, division of ....--- 0000s cece e eect eee e rete eens 228 perpetuities, application of the rule against............--.. 227, 228 POWERS OF APPOINTMENT creditors of donee of power, effect as to.....-.....-...--. 225-8 168 general powers of appointment HATIRECOL. acto we ene SOAS MEG ala nce anon OG aniaeAN a, cain ate 239 perpetuities, application of rule against to limitations under.... 239 542 INDEX POWERS OF APPOINTMENT—Continued PAGE preliminary discussion of... 0.02.0... 00 c eee e eee eet ee 228 special powers of appointment HAUTE Oh 3:45 Si carina ea Neale eens ah Se Seon ae AREAS 229, n# perpetuities, application of rule against to limitations under 228, 229 invalidity of limitations under preliminary discussion. ...- see ees 231 remote period, power exercisable at.............--- 232 time, power exercisable in.........-.----+++ eset eee 232 power exercisable within the period.........--..--- 230, 231 power exercisable at a remote period........-----.---++- 230 Summary as to application of rule against perpetuities, limitation UNCON ont sealed avg anucdan et taph anasenea id at Gagsae nde seatienisdatina Ge eee BAM 238 POWER OF DOMINION, analysis of... .......... 00020 e eee eee eee 3 (see also 148) POWER OF USE AND ENJOYMENT... ............20 0002 eee 4 HISCOTYAGE — ..stcchSwrAs aida dia agen amas Mea eDamamly ae ie BERS EE 4 PEStraINts Ofig 4 Soke cok Mewine andl eK AAR REG Ee Be wae Saas yarcereon 5 see enjoyment, use and POWERS executor, in an AehinitiON 2, 2e swe ee ewe ae Bees Sa ee HER ewe dee owe 244 perpetuities, application of the rule against.............--- 244 trust, in dehnition Of | “xa sxeubenedsubsaes esi eeearegieeeeecs< 241 perpetuities, application of rule against...........-.---. 241 sell, direction to, with no disposition of the proceeds. ..... 243 trustee, in a, of a continuing trust discussion and division............ 0000. e cece eee eee ees 244, 245 equitable title, powers over GeHNION a... ase sats we dy Rede baes Gad wee ee ae eH Wae 245 determinable trusts... 2.0.6.0... cece eee eee eee 246 perpetuities, application of rule against............. 246, 247 legal title, powers over appointment of new trustees...................02055 259, 260 definition