63 N.Y.S. 771 | N.Y. App. Div. | 1900
Lead Opinion
The plaintiffs are trastees under the will of Dexter T. Mills, deceased. Mr. Mills, a citizen and resident of the State of Massachusetts, died on the 6th of March, 1896, being the owner, among other property, of certain real estate in the city of New York. By his will, after certain legacies, he devised the remainder of his estate to the plaintiffs' as trustees to pay the income to La.vinia Frances Mills, his wife, Anna Dexter Mills, Helen Whittington Coolidge and Susan Lincoln Mills, his daughters, oy such of them as might be living at his death in equal shares for their lives, and he further directed that upon the death of either of the said beneficiaries after himself, the income previously paid to such deceased should be divided equally between such other cestuis que trustent as survived, “ it being my desire that the entire income from said trust fund shall be divided into as many parts or portions as there are survivors of my said wife and daughters from time to time.” He gave some legacies payable upon the death of the last survivor of the cestuis que trustent, and the residue of the trust fund he devised to the trustees of the Museum of Fine Arts in Boston, in fee.
The question presented by the trustees is whether these devises of the will are valid, so far as they relate to the real estate in the city of New York. The learned justice at the Special Term held that the devise in trust for the wife and daughters of the testator was not valid so far as it included the real estate in the city of New York, and that that devise being invalid, the remainder to the Boston Museum of Fine Arts fell with the precedent estate, so that as to the real estate in the city of New York, the testator died intes"tate. From that portion of the judgment entered upon his decision, the Boston Museum of Fine Arts has appealed.
There can be no doubt that down to the year 1893 the devise in trust in this will would have been invalid as to the lands in this State, because it suspended the power of alienation during the lives of all of the cestuis que trustent in violation of the statute, and that the decision of the 'learned justice at the Special Term was not only warranted but required by the law, as it had existed for many years and down to that time. But in 1893 an amendment was made to section 63 of the Revised Statutes, to which his attention was not called, and it is claimed by the Museum of Fine Arts that the effect
If the amendment in question has the effect claimed for it it has worked a grave change in the law as it has existed in this State for many years, and it is not strange that one whose attention is called to that statute for the first time should be surprised at its provisions and should be slow to believe that it operated to create so great a change as is claimed by the appellant. Before that statute there can be no doubt that a devise of lands upon the express trust established by this will would operate to suspend the power of alienation during the existence of the trust. To permit this in like cases and to a certain extent had been the policy of the -State for many years. Such a suspension was not first authorized by the Revised Statutes, although those statutes for the first time regulated and controlled them more closely than had been done before.
It is claimed by the respondents here, and it is undoubtedly the case, that so great a change from what had been for many- years the established policy with reference to estates in land, will not be deemed to have been made unless the provisions of the statute by which it is done are so plain and clear that its reasonable interpretation requires that construction to be given it.
The statute in question is section 63, part 2, chapter 1, title 2, article 2 of the Revised Statutes (1 R. S. 730, § 63). As originally enacted and as the law stood in 1893, the section read : “ Ro person beneficially interested in a trust for the receipt of the rents and profits of lands can assign or in any manner dispose of such interest; but the rights and interests of every person for whose benefit a trust for the payment of a sum in gross is created are assignable.” In 1893 (Laws of 1893, chap. 452) that section was amended by adding to it a provision, which, omitting the verbiage and transcribing only so much of it as is material to. this case, is as follows: Whenever the person beneficially interested in the income of any trust created for receipt of the rents and profits of lands shall, or may, be or become entitled in his own right to the remainder of the principal fund so held in trust, it shall be lawful for such person to make and execute a conveyance or release whereby such person shall convey and release to himself or the person presump
The question is whether the effect of this statute is to make the beneficial interest in a trust to receive the rents and profits of land so far assignable that the cestui que trust may at his pleasure with the assistance of the remainderman terminate the trust and convey an absolute fee in possession. In otlipr words, does that statute, fairly construed, give the power to alienate the absolute fee so that such power is no longer suspended by the creation of such an express trust as this. The prohibition of the statute is that “ Every future estate shall be void in its creation which shall suspend the absolute power of alienation for a longer period than is prescribed in this Article. Such power of alienation is suspended when there are no persons in being by whom an absolute fee in possession can be conveyed.” Were there after the passage of the act of 1893, mentioned above, persons in being who could convey an absolute fee in possession of the land devised by the will of Mr. Mills ?
The test of the alienability of the property under this section is that there are persons in being who can presently give a perfect title. Where there are living persons who have unitedly the right of ownership the statute has no application. The ownership is absolute whether the power of alienation rests in one or in several. If there is a present right to dispose of the entire interest even though its existence depends upon the consent of several persons there is no unlawful suspension of the power of alienation. (Williams v. Montgomery, 148 N. Y. 519, 526.) To convey an absolute fee by this statute it is not necessary that every person making the deed should have such an interest as may be conveyed. If one peiv son in being has an interest which may be conveyed and another person has an interest which he may dispose of by release, and the effect of the conveyance and the release is to give to the grantee and releasee an absolute fee in possession of the land, there is no sus
In the case of Beardsley v. Hotchkiss, above cited, the question ■ was whether there was any unlawful suspension of the power of alienation by the will of Mrs. Hotchkiss, who had devised a vested interest to her son ISTathan and a contingent remainder in his share to other children. It was claimed that the other children could not convey their contingent interest to strangers, and that, therefore, the power of alienation was suspended during the lives of all of them. In reply to that the court said : “ If it were true as claimed * * * that the other children could not have conveyed their contingent interest to a stranger, it is admitted that they could release their interest to ISTathan and then he could have conveyed the whole estate. So in any view there were persons in being at the death of Mrs. Hotchkiss who could convey an absolute fee in possession to Hathan’s share in the real estate, and hence there was no illegal suspension of the power of alienation in respect thereto.”
There is no magic in the word “ conveyed ” as used in the statute quoted above. The important question is whether there are persons in being by whose act all outstanding interests together can be presently converted -into a fee so that the person taking it has an immediate right to the possession of the land. If that state of affairs exists the suspension of the power of alienation is not accomplished. So it remains to be considered whether that suspension exists in this case under this statute. The statute deals only with the power of alienation. If the power to alien exists there is no suspension no matter how complicated the means, nor how numerous so ever the instruments required to carry it into effect.
Before the passage of the act of 1893, as we have seen, the right of the cestui que trust could not be assigned or disposed of and it was impracticable under the law for the trustee to convey away the land free from the trust which was charged upon it. Although he might convey yet the proceeds of his conveyance stood charged with the same trust as did the land which he conveyed. There was no way by which the estate in remainder and the trusts for
The statute provides that when the person interested in the income of the trust fund, “ Shall “ * * or may * * * be or become entitled in his * * * own right * * * to the remainder ” of the fund he may do certain things. Is there any limitation as to the manner in which a beneficiary may become i entitled to the remainder ? If the statute only applies to a case where the remainder shall have been devolved upon the beneficiary by operation of law then it is very clear that until that has taken place he is in no situation to release his beneficial interest, because as he cannot become the owner of the remainder by purchase there is no one in being who can transfer it to him, and, therefore, it is not possible for the remainder and the beneficial interest to become united so that the right given by this statute may come into existence. But the statute by its terms is not limited to the case of one who becomes entitled to the remainder by operation of the law nor is there anything in it which requires so limited a construction to be given to it. The statute makes his power to release depend upon his ownership of the remainder and sets no bounds to the manner of obtaining that ownership. If one buys the remainder he becomes entitled to it and there never was any reason why a cestui que trust should not purchase the remainder, thereby becoming entitled to it if he saw fit. If he did purchase it he became entitled to it just as much as though it had been devised to him or it had descended to him as an heir at law. Hothing in this statute limits the meaning of the word “ entitle ” and no reason is seen why there should not be given to it in the construction of the statute the ordinary and usual meaning which the word has. Giving it that meaning it includes the case of one who becomes the purchaser of the remainder. There are then persons in being who can when they choose transfer and receive it.
It is quite clear then that a beneficiary of a trust estate uniting with the remainderman may be put in such a situation that he can
The statute does not limit the number of deeds to be used in transferring the fee. It is satisfied if there are at present in existence persons by whom an absolute fee in possession may be conveyed without regard for the manner in which it is to be done, or the number of the instruments necessary to do it. If it be said that the remainderman and the beneficiary of the trust cannot to-day transfer an absolute fee in possession of these premises it would be a perfect answer if they at once should proceed to do it as they law
The appellant, the Boston Museum of Fine Arts, appeals from so much of the judgment as adjudges that the payment of the $9,000 mortgage on the Hew York property was just and proper. As this payment was made by the plaintiffs as executors, and their accounts, including the credit of this payment, have been submitted to and approved by the Probate Court of Massachusetts, it is very doubtful whether the propriety of that payment could be considered in this action even if the conclusion which we have reached in the first part of this opinion did not make it unnecessary to do so. But it is sufficient to say that that portion of the judgment was correct.
The heirs at law appeal from so much of the judgment as charges the costs of all the parties in this action upon the property which it was decreed descended to them. So far as their interests were involved in tins action, they were the successful parties, and although the court had discretion whether to give costs to them or not, it had no discretion to require the costs to be paid out of the property (Couch v. Millard, 41 Hun, 212), especially when that property does not of itself constitute a fund in court which is to be disposed of by the judgment. The right to this property was undoubtedly in dispute, but it was not a fund because the title to it was to be determined by the court. So far as that portion of the judgment is concerned, the requirement that the costs should be paid out of this Hew York property is undoubtedly erroneous.
As there is practically no disputed question of fact in the case, it seems to be proper that this court should direct the judgment which is to be entered. It is accordingly directed and adjudged that the trust created by the will of Dexter T. Mills, so far as it affects the lands in the State of Hew York, does not suspend the power of alienation, and that these lands are properly disposed of by the will. It is further adjudged that the payment of the $9,000 mortgage by the trustees out of the personal estate of the testator was properly
O’Brien, J., concurred.
Concurrence Opinion
I concur with Mr. Justice Rumsey, and wish to add some considerations that have occurred to me. A review of the origin and history of the rule against perpetuities and the extent of the limitation imposed by the rule at the time of the adoption of the Revised Statutes will aid ns, I think, in ascertaining the proper construction to be given to the provision of the statute in force at the time of the death of the testator.
It seems that the rule against perpetuities grew up in England after the'Statute of Uses (27 Henry VIII, chap. 10), and the Statute of Wills (32 Henry VIII, chap. 1); and it was in the development of the rules in relation to executory devises of chattels real that the rule had its origin and took its shape. (Gray Perp. § 148.) It was settled in The Duke of Norfolk's Oase (3 Oh. Cas. 53) that a future interest in lands might be limited to commence on any contingency which must occur within lives in being. The period within which future interests must vest was subsequently extended so as to make it cover the time necessary for the birth of posthumous children, and also the minority of a person who was under age at the termination of a life in being (Gray Perp. § 171); and gradually the period of such a minority, viz., twenty-one years, was fixed as an absolute period during which an estate could be so limited, without regard to the minority of any existing individual. This question was finally put at rest in England by Thellusson v. Woodford (reported in the House of Lords in 11 Ves. 112), where the lord chancellor in his judgment says: “ The language of all the cases is, that property may be so limited as to make it unalienable during any number of lives not exceeding that to which testimony can be applied to determine when the survivor of them drops.” The true form of the rule is stated by Professor Gray as that “ No interest subject to
In framing the Be vised Statutes the revisers had before them this rule, and had clearly in mind its extent and limitations. In the revisers’ notes to the provisions of sections 14 and 15, hereafter referred t«, it is said: “ Notwithstanding the abolition of estates tail, our law allows certain executory dispositions of land and the profits of land, by which the former may be rendered inalienable, and the latter may be made to accumulate, for a life or lives in being and twenty-one years thereafter. This limit is derived from the English law, and was originally adopted by the English judges from analogy to settlements by entail. A settlement on a parent for life, with remainder to his eldest son in tail, and any number of remainders over for life and in tail, could be barred by the son’s suffering a recovery as soon as he came of age. Not to give a greater perpetuity to a disposition by executory devise than the possible (and from the exigencies of society, even in that country, the general) limits of an entail, the courts held that no executory devise could he good unless it must necessarily take effect within a life or lives in being, or twenty-one years thereafter. "" * * The difference between the preceding sections and the existing law consists in the following particulars: 1. Alienation cannot be pro
We have thus a clear meaning of the change intended in the law as it stood by the adoption of these provisions of the Revised Statutes, and that change consisted in substituting, for a period during which an estate could be rendered inalienable, two lives in being at the time of the creation of the estate and an actual minority, instead of any number of lives in being at that period and twenty-one years thereafter. ISTo change was made in respect to what would constitute an inalienable estate, or as to what condition rendered an estate inalienable; but, as stated by the revisers, the provision in the section before referred to, that “ Such power of alienation is suspended when there are no persons in being by whom an absolute fee in possession can be conveyed,” is in effect a statement
This general rule has been almost uniformly recognized and applied, as appears from the authorities cited by Mr. Justice Rumsey. In Williams v. Montgomery (148 N. Y. 519) the rule is stated as follows: “ The test of alienability of real or personal property is that there are persons in being who can give a perfect title. * * * Where there are living parties who have xmitedly the entire right of ownership, the statute has no application. * * * The ownership is absolute, whéther the power to sell resides in one individual or in several. If there is a present right to dispose of the entire interest, even if its exercise depends 'upon the consent of many persons, there is no wnlawful suspension of the power of alienation. The ownership, although divided, continues absolute.”
In determining the question whether this will unduly suspends the power of alienation, and thus violates these two sections of the statute to which reference has been made, we must ascertain whether, by the creation of the trust, this„ real property was rendered inalienable for more than two lives in being at the time of the creation of the trust. An express trust is created within subdivision 3 of section 55 of the article upon Uses and Trusts in the Revised Statutes (1 R. S. 728), which provides that an express trust may be created to receive the rents and profits of lands, and to apply them to the use of any person during the life of such person, or for any shorter term, subject to the rules prescribed in the 1st article of the title.
The trust was thus valid unless it violated some of the provisions of the article providing for the creation of estates. The court below held that it violated sections 14 and 15, before cited, in that the power of alienation was suspended for a period greater than two lives in being at the creation of the trust. By section 63 of this article upon Uses and Trusts (1 R. S. 730), prior to the amendment of 1893, to which attention will be called, it was provided that “ Ro person beneficially interested in a trust for the receipt of the rents and profits of lands can assign or in any manner dispose of such interest.” This section, as originally enacted, clearly made the fee of the land inalienable during the continuance of the trust, and, under that section, but for the amendment hereafter referred to, there could be no
By the will in question a trust has been created with a vested remainder over, and under the operation of this section, as amended by the act of 1893, there is nothing to prevent the persons in whom such remainder vested from conveying such remainder to the persons beneficially interested in the trust; and then upon a conveyance or release of their interest in the property, or the income therefrom, to themselves as persons in whom is vested the remainder, the trust would cease by operation of the statute and the fee would vest in these life tenants, and the property at once would become alienable. It would seem that the Legislature intended to allow such a destruction of the trust and thus render alienable what prior to the passage of this amendment would have been inalienable, and that this statute accomplished that purpose. That being so, as there are persons beneficially interested in the rents and profits of land, and a person in whom there is vested an absolute remainder in the same land, who can unite to terminate the trust and at once render the property alienable, there is no suspension of the power of alienation. The first impression, in considering the provisions of this statute and its effect,, was, that it tended seriously to modify the settled policy of the State by allowing trusts to be created for a-period longer than two lives in being, and thus render property inalienable for a longer period; but a further consideration has produced the conviction that the effect of the statute is just the contrary, and that in a case in which a vested remainder is created (and to which this proviso added to section 63 only would apply), the effect is to add a limitation to the power of a person to render property inalienable. Take the ordinary case of a bequest to trustees for the benefit of A. for life, with remainder to B. Before the adoption of this provision, this trust was inalienable dvft-ing the life of A. Under the provisions of this section, as amended, the trust is at any time alienable by the united action of A. and B., by which the title of the trust property vests absolutely in A., who then could convey- “ an absolute fee in possession.” Certainly, in such a case, it could not be said that the power of alienation of this property was suspended
Dissenting Opinion
I dissent. The amendment passed in the year 1893 of section 63'-of the Statute of Uses, does not, in my judgment, have the effect on the power of alienation attributed to it by the majority of the-court. That amendment has been recast as part of section 83 of the Beal Property Law of 1896 (Chap. 547), but this case has been presented upon the text of the statute as it read at the time of the-death of this testator.
As the trust is constituted in the will before us, there are no-persons in being who can convey an absolute fee in possession at or before the expiration of two-lives in being. It is argued that the power of alienation exists because the remainderman may convey to tiie beneficiary and he may release and thus cut off the estate of the trustee, but the trustee’s estate is still inalienable until the beneficiary acquires the interest in remainder. Until that is done neither the deed of the 'beneficiary alone, nor in conjunction with theremainderman, can pass a fee in possession, and, of course, the trustee cannot under any circumstances convey. This condition or situation results from the inalienability of the estate of the trustee- and the interest of the beneficiary. (Everitt v. Everitt, 29 N. Y. 90.) The fee consists of the estate cff the trustee and the remainder. The whole fee may be conveyed by the beneficiary after the estate of the trustee is destroyed and merged in the remainder, pursuant to the amendment of 1893. Until that occurs the trustee’s estate continues indestructible. JN"o one can destroy the trust and effect the merger but the beneficiary, and he cannot do so until he becomes.
I cannot believe that it was the intention of the Legislature to allow the total destruction of trusts created under subdivision 3 of section 55 of the Statute of Uses, as soon as they are created, but only to permit such destruction when the interest in the remainder is actually united in ownership with the beneficial interest and a trustee’s duty becomes merely that of an agent or collector for the substantial owner of the land.
Concurrence in Part
I concur in the opinion of Mr. Justice Patterson. It seems to me that it was the intention of the Legislature, by the act of 1893, to allow the destruction of the trust, and to take the life estate out of the restrictions contained in the 63d section of the Statute of Uses and Trusts, only when the life tenant had become the owner of the remainder, and thus had the absolute power of disposition, after the determination of the life estate. I think that it was
This interpretation of the act in question harmonizes the whole of the legislation upon uses and trusts, and makes no radical change which is not in harmony with the general scheme of the statute.
If this is the true interpretation to be given to the . statute, then it is clear that there are no persons in being who can convey an absolute fee in possession.
It should also be remembered that if, under any contingency, the estate may be tied up for a period of more than two lives in being, the limitation is void. In the case at bar the estate may certainly be tied up for a period beyond two lives in being, and consequently the limitation is void. The trust can only be destroyed upon the happening of an event which may never occur, viz., the union of the life estate and the remainder in one person.
Judgment modified as directed in opinion, with costs to the cestuis que trustent, the plaintiffs, and the appellant, the Museum of Fine Arts, payable out of the estate.
