144 Pa. 428 | Pennsylvania Orphans' Court, Philadelphia County | 1891
Opinion,
The appellant is the Pennsylvania Company for Insurances on Lives and Granting Annuities, trustee under the will of Thomas Smith, deceased; the appellee, Henry S. Parmalee,
The owner of personal property, in order to make a voluntary disposition of it, may, by a proper transfer of the title, make a gift of it direct to the donee, or he may impress upon it a trust for the benefit of the donee. It is well settled, however, that whether a gift or a trust is intended, if the transaction still remains imperfect and executory, equity will not aid in its enforcement. The expression of a mere intention to create a trust, therefore, without more, is insufficient; like a promise to give, it will not be enforced in equity: Dipple v. Corles, 11 Hare 188; Helfenstein’s Est., 77 Pa. 328. Almost all trusts are in a certain sense executory. Ordinarily, a trust cannot be executed except by conveyance; there is, in most cases, something to be done. But this is not the sense in which a trust is ■ said to be executory. An executory trust, properly so called, is one in which the limitations are imperfectly declared, and the donor’s intention is expressed in such general terms that something not fully declared is required to be done, in order to complete and perfect the trust, and to give it effect. When the limitations of a trust are fully and perfectly declared, the trust is regarded as an executed trust: Egerton v. Brownlow, 4 H. L. 210 ; Cushing v. Blake, 30 N. J. Eq. 689; Pomeroy’s Eq. Jur., § 1001.
Nor, in such case, if it appear that the intention of the donor was to adopt either one of these methods of disposition, will a court resort to the other for the purpose of carrying it into effect. What is clearly intended as a voluntary assignment or a gift, but is imperfect as such, cannot be treated as a declaration of trust. If this were not so, an expression of present gift
^ If a trust is intended, it will be equally effectual whether the donor transfer the title to the trustee, or declare that he himself holds the property for the purposes of the trust. “ It is well settled that the owner of personal property may impress upon it a valid present trust, either by a declaration that he holds the property in trust, or by a transfer of the legal title to a third party upon certain specified trusts. In other words, he may constitute either himself or another person trustee. If he makes himself trustee, no transfer of the subject-matter of the trust is necessary; but if he selects a third party, the sub
There is no certain form required in the creation of a trust. In the case of personal property or dioses in action, trusts may be proved by parol. If the declaration be in writing, it is
In the case at bar, the subject of the alleged trust is certain; the cestui que trust is particularly designated by name and identified, whilst the terms are specific, and sufficiently shown. The contention is, however, that a trust upon these terms was not sufficiently declared; that the whole matter rested in the undeclared and unexcuted intention of the donor, and was, therefore, wholly without effect.
Thomas Smith, although a married man, had no children. He was the owner of a large estate, the personalty alone aggregating about $1,000,000. Thomas Smith Kelly was his nephew, his godson and namesake; and, although his father and mother were both lining* he lived with and was maintained and educated by his uncle from the age of three years until the time of the decedent’s death on the twentieth of May, 1883, when he was about thirteen years of age. His uncle admittedly stood in loco parentis, which would seem to furnish a sufficient motive for making this disposition of the bonds, and would have like effect generally to that which attends the relation of parent and child: Ex parte Pye, 18 Ves. 146. The bonds were purchased the twenty-eighth of January, 1882, and the death of the decedent occurred on the twentieth of May, 1883. A year or more before his decease, which was presumably near the time when the bonds were purchased, Thomas Smith, in a conversation with John H. Kelly, the father of Thomas Smith Kelly, stated “ he had laid by or appropriated some bonds for Tom.” After his death, when his box in the trust company’s vaults was opened, the bonds in question were found amongst his assets. The envelope in which they were contained was
Account Thomas Smith Kelly.
Pensacola and Atlantic Railroad- Company Mortgage Bonds.
Dr.
1882.
Jan. 28. To cash paid E. W. Clark & Kimball for $16,000 bonds at 95, and interest from
August 1st, 1881.....$15,189.38
Less Nos. 1223,1224, 1225, $3,000, sold William Simpson, Jr., same day at same price,
$3,000 .......$2,850.00
Balance $13,000, cost ..... $12,339.33 $13,000 of these bonds I bought for, and are the property of, my nephew and godson, Thomas Smith Kelly, and belong to him.
Thomas Smith.
Philadelphia, January 28th, 1882.
Cr.
1881.
August 1. Due and payable August 1st, 1921, coupons due August 1st and February 1st, six per cent per annum on New York. Principal and interest guaranteed by the Louisville Railroad Company. Bonds, $16,000, $1,000 each, Nos. 1223-1238, both inclusive.
1882.
Aug. 10. Thomas Smith Kelly, interest collected for him ..... $390.00
1883.
Feb. 1. Cash coupons paid M. E. Smith for
Tom S. K.......$390.00
It also appears that the decedent kept a pocket memorandum-book, in which he jotted down 'his monetary transactions as they took place, and in January of each year made a summary of his investments. In the latest statement of this character in the book, dated shortly before his death, the sum total was
Was not all this, taken together, a sufficient and clear declaration of trust in favor of the nephew ? The decedent, as we have seen, in his lifetime, in his own handwriting, and over his own initials and signature declared that these bonds, thus set apart and “ appropriated or laid by ” for his nephew, not only were the “ property of his nephew,” and “ belonged to him,” but they were “ bought for ” and “ held for him.” In the absence of the precise terms “ in trust,” it is difficult to suggest words more expressive of a trust than the words thus employed. Their meaning is so obvious and certain that there can be no doubt of the decedent’s intention.
But it is said that this intention was not properly declared; that the words were written upon the envelope and in the private account-book of the decedent, and it is not shown that these entries and indorsements were witnessed by or were ever exhibited to any one; that they were mere private memoranda which were wholly within the power of the donor, and which in his lifetime he might have revoked, canceled, or destroyed. The argument of appellant’s counsel is that a “ declaration ” of trust involves the idea that the donor must declare his assumption of the trust; in other words, that he must say something, or write something, or exhibit something, to some other person, or to the world at large. “If he stands alone,” say the learned counsel, “ in a room, and repeats his intention to himself, that is not a declaration. If he writes a memorandum, not intended to be shown to any one during his lifetime, that is not a declaration. It may be a testamentary disposition, if he looks forward to its discovery and inspection after death; but it cannot be a declaration of trust, if he does not intend to communicate it in his lifetime. As in^ifts there must be a
It is admitted that the declaration need not be made to the cestui que trust; that, if made to other persons, under circumstances indicating the intention of the donor to mate a declaration, it is sufficient. It is conceded, also, that but little publicity is required, and that the donor may retain the paper in his possession; but it is contended that the declaration must of necessity be made to some one besides himself.
It may be conceded that if a man, being alone, merely repeat his purpose to himself, that would not be a declaration, for it is obvious that, as his utterance was not intended for other ears than his own, it was merely the expression of an intention. It may also be conceded that if, under such circumstances, he were to have written his purpose formally upon paper, and added his signature and seal, he might the next moment have destroyed it. The trust, in such case, would take effect whenever it appeared that the instrument was executed as the deliberate expression of his purpose, a,nd this may be shown by his acts or declarations respecting it, or by circumstances tending to establish the fact.
The purpose of Thomas Smith, with reference to these bonds, was not only written and authenticated by his initials or signature, but the writing was carefully preserved until the time of decedent’s death. The envelope containing the bonds in question had an informal declaration indorsed thereon that the bonds were held for Tom Smith Kelly; the account-book showed, not only that they were bought for his nephew, but that they belonged to him,—they were his property. For whose inspection were those written declarations intended? Certainly not for the inspection of the donor, but for those who might have occasion at any time in the future to investigate his affairs. The donor was advanced in years, and was subject to the ordinary ills, accidents, and misfortunes of life, both physically and mentally. He was liable, although living, to be incapacitated for all business affairs, or he might be removed by death. In any event, his purpose would seem to have been
There was no provision for the assignment of the bonds of the Pensacola & Atlantic Railroad Company on the books of the company. They were simply ordinary coupon bonds, transferable by delivery. A formal assignment was unnecessary to transfer the title. The rights of creditors do not intervene. The appellants stand in the shoes of the testator, and their rights do not rise superior to his. Whilst a gift, in its proper legal acceptation, was not contemplated by Thomas Smith, it is plain that his purpose was to vest the equitable ownership of these bonds in his nephew, and to apply the interest for bis benefit. In the language of the president judge of the Orphans’ Court, his “ declarations and subsequent acts, evidenced by his admissions and solemn entries in his books, and the indorsement upon the envelope containing the bonds, furnish incontrovertible proofs of his intention to hold them as a trustee.”
In Crawford’s App., 61 Pa. 52, Crawford, who was indebted to his wife about six hundred dollars said to her, “ I have added three thousand dollars to your little money; ” and it
We are of opinion that the trust is fully established and
The decree of the Orphans’ Court is affirmed, and the appeal dismissed at the costs of the appellant.