Lippincott v. Williams

63 N.J. Eq. 130 | New York Court of Chancery | 1902

Grey, V. C.

This cause has been argued ex parte, the complainant submitting the case upon the pleadings and the defendants’ counsel presenting that construction of the trust deed for which she has contended in her answer.

The proviso of the trust deed contains the clauses which define by whom, and the mode in and extent to which, the powers of revocation and alteration of the trusts expressed in the deed may be exercised. Upon careful reading it will be found that several powers are granted which are distinctly different. The first authorizes the trustee and his heirs and assigns and Mrs. Kate Baker Williams, at any time during her life, by joining in a deed, either wholly to revoke all or any of the uses and estates limited in the trust lands, or to change or modify them. The second enables the trustee and Mrs. Kate Baker Williams, in the same manner, to sell or to mortgage the trust lands, discharged of the trust, and relieves the purchaser from liability to see to the application of the purchase-money. The third empowers the trustee and Mrs. Williams, in the same manner, to appoint and declare new or other uses of the lands, and to invest the money arising from any sales or mortgage of the premises in other real estate or mortgage, or in stocks or other securities, subject to the same uses and trusts and under the same provisions, conditions and limitations as are by the trust deed declared concerning the trust lands.

It is quite apparent that the first power might readily be so used as to wholly terminate the trust. If the trustee and Mrs. Williams have, in the manner required by the proviso, revoked the trust expressed in the deed as they are authorized to do by the first clause, and have altered it by appointing the lands to the absolute use and enjoyment of Mrs. Williams, the object of the trust has been fulfilled and its life has come to an end. In that case, the trust lands having already been disposed of, there would be no occasion for the exercise of the second power to sell or to mortgage them, or of the third to appoint new or other uses of them, or to invest the moneys arising from their sale subject to the same trusts as are expressed in the deed.

The same result attends upon the trust property when, after a sale, it constitutes either a cash fund or an invested security. It is true that the third clause, in authorizing the trustee and Mrs. Williams to appoint the trust lands to new or other uses, directs that the money arising from a sale or mortgage be invested subject to like uses and trusts as are expressed in the deed. But the same clause also declares that the purchase or mortgage moneys shall be subject to the “same provisions, conditions and limitations as are hereinbefore declared of and concerning the said messuage, lot of land/’ &c. These words subject the purchase-money and its investment to the same conditions and limitations which the trust deed imposes upon the lands. They bring the purchase-money and the securities which represent it under the operation of the powers of revocation and modification given by the first clause of the proviso of the deed.

The settler intended, and has expressed his purpose, that the land and the proceeds of its sale or mortgage, in whatever form they might be secured, should be and remain, subject to the trusts expressed in the deed, until the trustee and Mrs. Kate Baker Williams, in the manner in the deed directed, should revoke, change or modify them and appoint to other uses, and that, when they should so revoke and appoint, the trust lands or the proceeds of their sale should pass to the other uses so by them appointed.

The trustee complainant not only prays that he may be instructed as to the true meaning of the trust deed, but he asks that he may be advised whether or not he holds the cash proceeds of sale and the mortgage securing part of the purchase-money upon the same uses and trusts as are set forth in the deed to Peter W. Baker.

The true construction of the trust deed upon the point submitted has been hereinbefore declared. As to the remaining question whether the trustee now holds the proceeds of sale subject to the same uses declared by the trust deed, he must be advised that at the present time, so far as the facts are disclosed by the bill and answer, he does.

The trust deed provides that the trustee, “by indenture well and sufficiently executed by and with the consent of the said Kate Baker, testified by her becoming a party to and signing and sealing the same,” may revoke, &c. The only allegation in the bill or answer of any act of revocation is the statement in the bill of the service of a notice by Mrs. Kate Baker Williams upon the trustee. If the deed conveying the premises, in which both the trustee and Mrs. Williams joined as grantors, contained a revocation of the trust, it is not so alleged in the pleadings. The revocation has not been accomplished by the mere notice served upon the trustee by Mrs. Williams. The trustee must revoke by his indenture, Mrs. Williams consenting by becoming a party thereto, as prescribed in the trust deed.

A decree will be advised according to the views above expressed.