315 Mass. 457 | Mass. | 1944
This petition, filed October 31, 1942, is brought by The National Shawmut Bank of Boston and Haven Parker as trustees under an indenture of trust under seal entered into by them as trustees with William W. Nicholls of Boston as settlor, dated March 12, 1936, for instructions as to the distribution of the trust property at the termination of the trust.
The evidence is reported, but the material facts are not in dispute. William W. Nicholls, who was born in England on October 24, 1860, migrated to Massachusetts with his mother and sister in 1872. He grew up in Boston, where he became a naturalized citizen on May 12, 1886. He never married. Apparently before 1890 he went to the Azores to live, and there became agent for a steamship line and for a time was American consul. He lived there at Brown’s Hotel, kept by Miss Sophia Brown, at Ponta Delgada on the island of Sao Miguel. But he retained his domicil in Boston, and always described himself as of Boston. Rummel v. Peters, 314 Mass. 504. Cassen v. Cassen, ante, 35.
After he went to the Azores, his mother and sister continued to live in Boston in a house maintained by him until they died about thirty years ago. Even after their deaths he continued to visit Boston every year or two, although he no longer maintained a house there.
He had friends of long standing in New England, some of whom he made legatees in his will. At some time he told one of them that his friends meant much more to him than his relatives in England. One of his friends was Louis G. Neville, a dealer and broker in securities in Boston, who from about 1920 was given a free hand in buying and selling securities for Nicholls.
On October 21, 1926, while on a visit to Boston, Nicholls made his will, which was under seal. He named the petitioning bank as executor, and devised and bequeathed to it as trustee all his property. The income was made payable to Sophia Brown during her life, and after her death to another person (who in fact died before Sophia Brown) for his life. At the death of the survivor of them, pecuniary-legacies were made payable to the respondent Minnie B.
In 1936, while Nicholls was in the Azores, Neville, his son-in-law Haven Parker, an attorney at law, and the bank decided that it would be advisable for Nicholls to establish a voluntary trust. It does not appear that Nicholls had been consulted. An instrument of trust was drawn and sent to Nicholls, and he executed it in the Azores on March 12, 1936. It was in form an indenture, and when executed bore the signatures and seals of Nicholls as settlor and the bank and Mr. Parker as trustees. It was amended, under a power reserved by Nicholls, by another instrument similarly executed, dated May 29, 1936. The combined instruments will.be described as though one. The property thereby conveyed by Nicholls to the trustees consisted entirely of corporate stocks and bonds. It was provided that the trust was established under the laws of Massáchusetts, and was to be governed by those laws. Codman v. Krell, 152 Mass. 214, 218. Proctor v. Clark, 154 Mass. 45, 48. Harvey v. Fiduciary Trust Co. 299 Mass. 457, 464. Loring, Trustee’s Handbook (5th ed. 1940) §§ 118-120. Commonwealth v. Stewart, 338 Penn. St. 9, affirmed Stewart v. Commonwealth, 312 U. S. 649. There is nothing to show that Nicholls did not understand the effect of the trust instrument upon his property and upon his earlier will. But whether he did or not, the terms of the trust instrument, as far as they are valid, bound him and bind all who claim under him.
By those terms, Nicholls was to be paid $230 a month out of the income or, if necessary, out of the principal.
After Nicholls died on October 7, 1937, the trustees made payments under the trust instrument to Sophia Brown until her death on July 24, 1942. They now hold personalty, comprising the principal of the trust property, amounting to more than $29,000, besides neatly $1,000 of income remaining unpaid at the death of Sophia Brown. The Probate Court instructed the trustees to pay over the accumulated income as though it were principal, and the administrator of the estate of Sophia Brown did not appeal. The Probate Court instructed the trustees to distribute the principal and accumulated income equally among the three first cousins of Nicholls in England (including the administrator of the estate of one of them who died on April 11, 1939) living at the death of Nicholls on October 7, 1937. They were his statutory next of kin under the Massachusetts statute of distributions, G. L. (Ter. Ed.) c. 190, §§ 2, 3 (6). Am. Law Inst. Restatement: Property, §§ 310, 311. Some of the legatees named in his will appealed. Apart from the trust property, Nicholls left less than $1,000, and what he left has been consumed in paying debts and expenses of his estate.
2. The legatees under the will contend that the gift over, in default of appointment, to the “person or persons . . . entitled to take” from Nicholls “under the laws of intestacy” — in other words, to his statutory next of kin
By the so called rule of “worthier title,” where a grantor or testator creates a life estate, with what is apparently a remainder to his own heirs at law, so that the instrument appears to give them precisely the same interest that they would get upon the death of the grantor or testator if no such remainder had been given, the heirs will be deemed to take by descent, and not (as the phrase is) as purchasers. An apparent remainder to the heirs of a grantor is thus deemed a reservation of a reversion to the grantor himself. The reason for this rule is said to be that “the title by descent is the worthier and better title.” Ellis v. Page, 7 Cush. 161, 163. Whitney v. Whitney, 14 Mass. 88, 90. Sears v. Russell, 8 Gray, 86, 93-97. Sedgwick v. Minot, 6 Allen, 171. Waters v. Stickney, 12 Allen, 1, 17. Pierce v. Smith, 13 Allen, 42 (to named “children,” in fact heirs). Eldred v. Davis, 181 Mass. 498, 500. Simes, Future Interests (1936) §§ 144-148. Note, 125 Am. L. R. 548, 46 Harv. Law Rev. 993. Simes
But like the cognate rule in Shelley’s Case, 1 Co. Rep. 93, 104 (often confused with it, Doctor v. Hughes, 225 N. Y. 305; Note, 125 Am. L. R. 565-568; Am. Law Inst. Restatement: Property, § 312), which applied to equitable as well as legal estates and still applies to personalty (Sands v. Old Colony Trust Co. 195 Mass. 575), the rule of “worthier title” as applied to equitable interests and interests in personalty, at least, is now no more than a precept of construction which may be outweighed by indications of a contrary intent. Doctor v. Hughes, 225 N. Y. 305. Whittemore v. Equitable Trust Co. 250 N. Y. 298. Schoellkopf v. Marine Trust Co. 267 N. Y. 358, 363. City Bank Farmers Trust Co. v. Miller, 278 N. Y. 134. Engel v. Guaranty Trust Co. 280 N. Y. 43, 47. Scott, Trusts (1939) § 127.1. Simes, Future Interests (1936) § 147. Am. Law Inst. Restatement: Property, § 314. In substance, this has been decided in this Commonwealth in cases where the facts brought them within this rule, although the court discussed the rule in Shelley’s Case. Loring v. Eliot, 16 Gray, 568, 573. Bowditch v. Jordan, 131 Mass. 321. Sands v. Old Colony Trust Co. 195 Mass. 575.
In a number of cases gifts over to the heirs of a settlor have been held to give them title by purchase and not by descent. In Sands v. Old Colony Trust Co. 195 Mass. 575, an unmarried man conveyed securities to a corporate trustee., to pay the income and so much of the principal as the trustee might see fit to the settlor during his life, and at his death to pay the. principal and any accumulated income to his .“legal heirs,” subject to his reserved right to appoint otherwise by will. It was held that the settlor was not the
In several cases in New York, after a life estate, a limitation over, in default of appointment, to the heirs or statutory next of kin of the settlor has been held to be a gift to them as purchasers, with the result that since they could not be ascertained during the life of the settlor the trust could not be revoked by him under a statute allowing revocation “upon the written consent of all the persons beneficially interested.” Whittemore v. Equitable Trust Co. 250 N. Y. 298. Schoellkopf v. Marine Trust Co. 267 N. Y. 358. Engel v. Guaranty Trust Co. 280 N. Y. 43. The authority of those cases seems not to have been impaired by the later holding that the unborn are not “persons” within the statute. Smith v. Title Guarantee & Trust Co. 287 N. Y. 500.
If the trust instrument before us had stopped with the creation of the two life estates, there would have been a resulting trust of the reversion in favor of the settlor, Nicholls. Am. Law Inst. Restatement: Trusts, §§ 404, 407, 430. Scott, Trusts (1939) §§ 404, 411-411.2, 422A. In that case, if Nicholls should leave a will, the trust property would pass under his will; if he should not, it would pass to his statutory next of kin by force of the statute of distributions. Upon the construction contended for by the legatees, Nicholls made provision for one of those alternative contingencies by simply declaring what the legal result would have been without any provision. The other he ignored. Both contingencies could equally well have been
The construction adopted by the Probate Court results in a simple, logical and complete scheme of disposition of the trust property after the life estates. The settlor reserved, not only the power to alter, amend or revoke the trust, but also a general power of appointment of the trust property, after the life estates, to any person, persons or corporation. The trust instrument purported to empower him further to revoke any such appointment and to exercise the power anew. See State Street Trust Co. v. Crocker, 306 Mass. 257, 262, et seq. Only in the event of failure to appoint was the trust property to go to the statutory next of kin. Under the terms of the trust instrument there was no need of any express or implied right to provide by will for the future of the trust property in order to give the settlor the fullest control of it. If disposition by will had been contemplated, it would have been natural to make some mention of it, either in the power of appointment or elsewhere. We think that neither the use of the indicative instead of the subjunctive nor anything else in the case shows that the gift over to the statutory next of kin was to apply only in the
If the provisions of the trust instrument are valid and controlling, the legatees have no concern with the question whether the “person or persons” constituting the statutory next of kin of Nicholls are to be determined as of the date of the trust instrument (in which case their interests would be vested), or as of the date of his death, or as of the date of the death of the surviving life tenant. That question has not been argued. Ordinarily the heirs and statutory next of kin of a person are determined as of the time of his death. Fargo v. Miller, 150 Mass. 225, 229. Merrill v. Preston, 187 Mass. 197. Ford v. Ford, 220 Mass. 322, 324. Tyler v. City Bank Farmers Trust Co. 314 Mass. 528. Old Colony Trust Co. v. Johnson, 314 Mass. 703, 711. Am. Law Inst. Restatement : Property, § 308. Since the statutory next of kin of Nicholls, in the natural and accurate sense of the words, could not be determined until his death, the gift over to them remained wholly contingent until he died. Walcott v. Robinson, 214 Mass. 172. Bailey v. Smith, 222 Mass. 600, 602, 603. Conant v. St. John, 233 Mass. 547, 551, 552. Sherburne v. Howland, 239 Mass. 439, 441, 442. Robertson v. Robertson, 313 Mass. 520, 528. Binney v. Commissioner of Corporations & Taxation, 293 Mass. 96, 101, 102. Tiffany, Real Property (3d ed. 1939) § 321. Until Nicholls died, his cousins had not even what has been called a “vested,” or more properly a transmissible, interest in a contingent remainder (Putnam v. Story, 132 Mass. 205, 210, 211; Hall v. Farmer, 229 Mass. 103), which interest arises where, except for the possible loss of the property through the exercise of an underlying power of appointment, the remainderman cannot fail to take if he lives until the time of vesting. Putnam v. Story, 132 Mass. 205, 210. Whipple v. Fairchild, 139 Mass. 262. Clarke v. Fay, 205 Mass. 228. Nickerson v. Harding, 267 Mass. 203, 207. Commissioner of Corporations & Taxation v. Alford, 282 Mass. 113, 118, 119. Whiteside v. Merchants National Bank, 284 Mass. 165, 174, 175. G. L. (Ter. Ed.) c. 184, § 2.
Here the property was personalty, and the entire legal title vested in the trustees. Scott, Trusts (1939) § 88.1. Welch v. Boston, 221 Mass. 155, 157. Compare Hayward v.
In our opinion the judge was right, assuming that the provisions of the trust instrument are valid, in ordering distribution among the three first cousins (including the administrator of the estate of one of them who died on April II, 1939) living at the death of Nicholls on October 7, 1937.
3. The remaining contention of the legatees presents another important question. They contend that Nicholls reserved full dominion over the trust property; that the provisions for persons other than Nicholls himself were
If that contention should prevail, the trust property would be deemed either the unqualified property of Nicholls, or property held for him under a resulting trust, and would pass under his will, either at his death or at the latest at the death of Sophia Brown, to the executor of his will for the benefit of the legatees named therein.
From the statute allowing the testamentary disposition of property by a will signed and witnessed as required by law (G. L. [Ter. Ed.] c. 191, § 1) and duly proved and allowed after death (§ 7; Loring v. Massachusetts Horticultural Society, 171 Mass. 401, 402-403) the inference is plain that a testamentary disposition of property in any other manner is void.
The distinguishing feature of a testamentary disposition is that it remains ambulatory until the death of the one who makes it. Until he dies, his title remains unimpaired
In some cases in this court it has apparently been thought of consequence that the settlor sought to avoid making a will, or to “evade” or “circumvent” the statutory requirements for a will, or to make a disposition of his property that would make a will unnecessary and in a popular sense would be a substitute for a will. We deem such considerations immaterial. The law prohibits only an unattested disposition that takes effect in a testamentary manner. If an owner of property can find a means of disposing of it inter vivos that will render a will unnecessary for the accomplishment of his practical purposes, he has a right to employ it. The fact that the motive of a transfer is to obtain the practical advantages of a will without making one is immaterial. Perry v. Cross, 132 Mass. 454. Greeley v. O’Connor, 294 Mass. 527, 533. Nichols v. Emery, 109 Cal. 323, 331, 332. Bear v. Milliken Trust Co. 336 Ill. 366, 384, 73 Am. L. R.
We take up in order the provisions relied on by the legatees.
(a) Nicholls reserved to himself not only a life interest but also a power of appointment, subject to the life interests of himself and Sophia Brown, in favor of “such person, persons or corporation” as he might select, and the trustees were to pay over all the trust property accordingly upon the deaths of both Nicholls and Sophia Brown.
No one contends that the reservation by a settlor of an interest for his life, taken by itself, impairs the validity of a trust. Viney v. Abbott, 109 Mass. 300, 303. Perry v. Cross, 132 Mass. 454. Chippendale v. North Adams Savings Bank, 222 Mass. 499, 502. Jones v. Old Colony Trust Co. 251 Mass. 309, 312. Scanzo v. Morano, 284 Mass. 188, 194. Buteau v. Lavalle, 284 Mass. 276, 278. O’Hara v. O’Hara, 291 Mass. 75, 78. Rock v. Rock, 309 Mass. 44, 48.
As to the added power of appointment, it is true that the actual exercise of a power of appointment may sometimes have the result, even the unintended result, of making the property appointed the property of the donee of the power, especially for the benefit of his creditors. Clapp v. Ingraham, 126 Mass. 200. Vinton v. Pratt, 228 Mass. 468. Shattuck v. Burrage, 229 Mass. 448. Hill v. Treasurer & Receiver General, 229 Mass. 474. Hogarth-Swann v. Weed, 274 Mass. 125, 129. State Street Trust Co. v. Kissel, 302 Mass. 328. Old Colony Trust Co. v. Allen, 307 Mass.40. Pitman v. Pitman, 314 Mass. 465. But the power itself, however general, is not property, even though the donee of the power is also the settlor and the life beneficiary.
Accordingly, where a settlor reserves to himself not only a life interest but also a general power of appointment, the exercise of which would defeat provisions for the distribution of the trust property in default of appointment, the existence of that power does not make the trust property the property of the settlor nor make testamentary the provisions made in default of appointment.
(b) Nicholls reserved to himself also power to “alter, amend or revoke” the trust. The power to revoke, if not a kind of power of appointment (Am. Law Inst. Restatement: Property, § 318, comment i; Old Colony Trust Co. v. Gardner, 264 Mass. 68; Saltonstall v. Treasurer & Receiver General, 256 Mass. 519, 524; State Street Trust Co. v. Crocker, 306 Mass. 257, 262, 128 Am. L. R. 1166, 1171; Central Trust Co. v. Watt, 139 Ohio St. 50, 59), is akin to such a power. It is not property, and apart from the bankruptcy act cannot be reached by creditors. Am. Law Inst. Restatement: Trusts, § 330, comment o. Scott, Trusts (1939) § 330.12. Murphey v. C. I. T. Corp. 347 Penn. St. 591, 595. Until a power to revoke is exercised, the interests created by the trust instrument remain unaffected. Old Colony Trust Co. v. Gardner, 264 Mass. 68, 70.
The reservation by the settlor, in addition to an interest for life, of a power to revoke the trust, did not make incomplete or testamentary the gift over to the statutory next of kin. Am. Law Inst. Restatement: Trusts, §§ 37, 57, 57 (1). Scott, Trusts (1939) §§ 37, 57.1, 330.12. Tompson v. Browne, 3 Myl. & K. 32. Sheldon v. Sheldon, 1 Rob. Eccl. 81. Stone v. Hackett, 12 Gray, 227, 232. Davis v. Ney, 125 Mass. 590, 592. Pingrey v. National Life Ins. Co. 144 Mass. 374, 382. Kendrick v. Ray, 173 Mass. 305, 310. Kelley v. Snow, 185 Mass. 288, 297, 298. Seaman v. Harmon, 192 Mass. 5, 8. O’Hara v. O’Hara, 291 Mass. 75, 78. State Street Trust Co. v. Crocker, 306 Mass. 257, 259. Greeley v. Flynn, 310 Mass. 23, 28. Cramer v. Hartford-Connecticut Trust Co. 110 Conn. 22, 73 Am. L. R. 201, and note. Talbot v. Talbot, 32 R. I. 72. Cleveland Trust Co. v. White, 134 Ohio St. 1, 118 Am. L. R. 475, and note. Central Trust Co. v. Watt, 139 Ohio St. 50. Goodrich v. City National Bank & Trust Co. 270 Mich. 222. Rose v. Guardian Trust Co. 300 Mich. 73.
The same is true, a fortiori, of a reservation of the lesser powers to alter or amend the trust, or to withdraw principal
(c) The trust instrument contained this provision: “During the life of Louis Gregg Neville of Wellesley, Massachusetts, the trustees are specifically directed without liability for any loss or depreciation which may result therefrom, to hold, retain, invest and reinvest the trust property solely in accordance with the written instructions of said Louis Gregg Neville, it being the intention and desire of the donor to vest in said Louis Gregg Neville the absolute control over the investment of the trust property held hereunder at any time during the life of said Louis Gregg Neville or until he shall notify the trustees in writing that he no longer wishes to instruct, direct and control the investment of the trust property. The said Louis Gregg Neville may charge any commissions due him on account of any investment of trust property made through him, and may take any profit accruing to him as a result of the purchase or sale by the trustees of investments directed by him, and the trustees are directed to pay such commission and profit.”
Neville was not, as contended by the legatees, thereby given a right to all capital gains, so that the trust could never keep any. He was a dealer and broker in securities.
The powers given to Neville had little or no tendency to show that the trust instrument was to take effect in a testamentary manner. They did not make the trust a merely passive one. Important duties were left for the trustees. We think that the powers given to Neville did not impair the validity of the gift over to the statutory next of kin of Nicholls. Am. Law Inst. Restatement: Trusts, § 37. Scott, Trusts (1939) § 185.
But the legatees contend that by reserving power to alter, amend or revoke the trust the settlor made it possible for him as a practical matter to dominate Neville, and that the power to control the investments was in effect reserved to Nicholls himself. We assume without deciding that this contention is true. It does not follow that the gift over to the statutory next of kin is therefore testamentary and void. We need not decide whether the trust would have been invalid had the trustees been reduced to passive impotence, or something near it. A reservation by a settlor of the power to control investments does not impair the validity of a trust. Am. Law Inst. Restatement: Trusts, §§ 37, 57 (2), (3). Scott, Trusts (1939) §§ 37, 57.2, 185. Talbot v. Talbot, 32 R. I. 72. Beirne v. Continental-Equitable Title & Trust Co. 307 Penn. St. 570. Pinckney v. City Bank Farmers Trust Co. 249 App. Div. (N. Y.) 375. Bear v. Milliken Trust Co. 336 Ill. 366, 73 Am. L. R. 173, and note. Cleveland Trust Co. v. White, 134 Ohio St. 1, 118 Am. L. R. 475, and note. Central Trust Co. v. Watt, 139 Ohio St. 50. Goodrich v. City National Bank & Trust Co. 270 Mich. 222. Rose v. Union Guardian Trust Co. 300 Mich. 73. Keck v. McKinstry, 206 Iowa, 1121. Whalen v. Swircin, 141 Neb. 650. 38 Yale Law Jour. 1135. In Greeley v. Flynn, 310 Mass. 23, the settlor was herself the trustee and had every power of control, including the right to with
It remains to speak of one Massachusetts case which has been thought inconsistent with the result here reached. In McEvoy v. Boston Five Cents Savings Bank, 201 Mass. 50, a wife conveyed under seal to a trustee a savings bank deposit, in trust to pay her whatever she might demand during her life, and at her death, if enough should remain, to pay to her husband a small sum weekly, and at his death to divide any remaining amount among certain cousins. She expressly reserved a power of revocation. The husband survived the wife. After his death the trustee sued the savings bank for the deposit. The administrator of the wife's estate appeared as adverse claimant, and a decision of the trial judge in his favor was affirmed by this court. The trustee admitted in his testimony that the wife told him that she intended by the trust instrument “to dispose of the property after she was dead as well as while she was living,” and that “she intended this instrument in place of any will she might leave.” This testimony was taken by this court as true, since the trial judge had found for the claimant. The opinion holds first that as matter of law the provisions of the trust instrument for the disposition of the property after the death of the settlor were testamentary, and then adds that if that be thought too favorable to the claimant the decision of the trial judge for the claimant should be supported on the ground that “the evidence justified a finding by the trial judge that the paper was intended as a mere testamentary disposition of property, and not as a creation of a trust for any other purpose.” In Jones v. Old Colony Trust Co. 251 Mass. 309, the McEvoy case is distinguished and supported on the ground that there “the nominal trustee had none of the ordinary powers of a trustee and was in substance and effect only an agent of the donor.” See Scott, Trusts (1939) § 57.2.
In the McEvoy case the terms of the trust were fully stated in a formal document. Nothing was left to oral testimony or to inference from circumstances. The question whether the trust instrument was testamentary was
It may be added, that the principles of this opinion are not necessarily controlling in cases which concern the effectiveness of a voluntary trust in subjecting a settlor to a gift tax, or in freeing him from income taxes or his estate or the beneficiaries from estate or succession taxes, with respect to the trust property. Helvering v. F. & R. Lazarus & Co. 308 U. S. 252. Griffiths v. Commissioner of Internal Revenue, 308 U. S. 355. Helvering v. Clifford, 309 U. S. 331. Harrison v. Schaffner, 312 U. S. 579, 581, 582. Helvering v. Stuart, 317 U. S. 154, 168. Welch v. Commissioner of Corporations & Taxation, 309 Mass. 293, 298, 299.
Decree affirmed.
This provision was substituted by the amendment of May 29, 1936, for one which made payable to Nicholls during his life only the income and so much of the principal as the trustees in their absolute discretion might deem necessary. The only other change made by that amendment was the-insertion of the words “or sale” after the word “purchase” in a provision, hereinafter quoted, giving certain powers to Neville.
When the expression “next of kin” has been actually used, it has. sometimes be,en held to mean, not the statutory next of kin or distributees, but the nearest relative or relatives by blood. Swasey v. Jaques, 144 Mass. 135. Fargo v. Miller, 150 Mass. 225, 231 (will; compare Am. Law Inst. Restatement: Property, § 307; New York Life Ins. & Trust Co. v. Winthrop, 237 N. Y. 93). Kelley's Case, 222 Mass. 538, 541; Cowden’s Case, 225 Mass. 66 (workmen’s compensation). Makller v. Independent Workmen’s Circle of America, Inc. 255 Mass. 252, 254, 255 (fraternal benefit). See also O’Connell
Parsons v. Winslow, 6 Mass. 169, 175. Dow v. Abbott, 197 Mass. 283, 287. McLaughlin v. Greene, 198 Mass. 153, 155. Hall v. Hall, 209 Mass. 350, 353. Prescott v. St. Luke’s Hospital of New Bedford, 280 Mass. 229, 231. Smith v. Livermore, 298 Mass. 223, 232. Frost v. Hunter, 312 Mass. 16, 20. Stevens v. Bradford, 185 Mass. 439, 441. Barnes v. Peck, 283 Mass. 618, 625. Commonwealth v. McMenimon, 295 Mass. 467, 469. Fluet v. McCabe, 299 Mass. 173, 178. Commissioners of Public Works v. Cities Service Oil Co. 308 Mass. 349, 360.
A gift causa mortis is no exception, for it must be perfected and title must pass inter vivos. It differs from an absolute gift mainly in being defeasible upon an express or implied condition subsequent. Duryea v. Harvey, 183 Mass. 429. Peck v. Scofield, 186 Mass. 108. Day v. Richards, 197 Mass. 86. Cronin v. Chelsea Savings Bank, 201 Mass. 146. Nelson v. Peterson, 202 Mass. 369. Stratton v. Athol Savings Bank, 213 Mass. 46. Stevens v. Provident Institution for Savings, 226 Mass. 138. Simpkins v. Old Colony Trust Co. 254 Mass. 576. Greeley v. O’Connor, 294 Mass. 527, 533. Rock v. Rock, 309 Mass. 44.
The validity of a conveyance delivered presently in escrow, beyond the control of the grantor, but not to be delivered to the grantee until the death of the grantor, is established. Tewksbury v. Tewksbury, 222 Mass. 595, 598. Wilson v. Jones, 280 Mass. 488. Scott, Trusts (1939) § 56.1. Bogert, Trusts (1935) § 103, page 334. 16 Am. Bar Asso. Journal, 779. Compare Stratton v. Athol Savings Bank, 213 Mass. 46; Russell v. Webster, 213 Mass. 491.
But for the purpose of taxation the exercise or nonexercise of a general power of appointment may be treated as property, or the property may be treated as owned by the person having such a power. Chase National Bank v. United States, 278 U. S. 327. Curry v. McCanless, 307 U. S. 357, 371. Graves v. Elliott, 307 U. S. 383, 386. Pearce v. Commissioner of Internal Revenue, 315 U. S. 543, 544. Graves v. Schmidlapp, 315 U. S. 657, 141 Am. L. R. 948. Chickering v. Commissioner of Internal Revenue, 118 Fed. (2d) 254, 139 Am. L. R. 508. See also Boston Safe Deposit & Trust Co. v. Commissioner of Corporations & Taxation, 294 Mass. 551, 556, relating to a power to revoke or alter a trust. Compare Welch v. Commissioner of Corporations & Taxation,
So, too, in bankruptcy the trustee in bankruptcy is vested with all “powers which he [the bankrupt] might have exercised for his own benefit, but not those which he might have exercised solely for some other person.” Bankruptcy Act, § 70a (3) (U. S. C. Title 11, § 110 (a) (3), as amended June 22, 1938, c. 575, § 1 [52 U. S. Sts. at Large, 879, 880]). This seems not to apply to powers exercisable by will. Montague v. Silsbee, 218 Mass. 107, 111. Forbes v. Snow, 245 Mass. 85, 93. But it seems to apply to a general power, exercisable by an instrument inter vivos, to appoint, or to revoke a trust. 4 Collier, Bankruptcy (14th ed. 1942) 992. Board of Trade of Chicago v. Johnson, 264 U. S. 1. Cohen v. Samuels, 245 U. S. 50. Cohn v. Malone, 248 U. S. 450. Am. Law Inst. Restatement: Property, § 331. Griswold, 52 Harv. Law Rev. 929. Leach, 52 Harv. Law Rev. 961. Alexander, 56 Harv. Law Rev. 742.
These are exceptions to the general rule that a power of appointment, or a power of revocation of a trust (Scott, Trusts [1939] §§ 330, 330.12), is not property, and cannot be reached by creditors. Am. Law Inst. Restatement: Property, §§ 327-331.
As to the power to change the beneficiary in a life insurance policy, see Tyler v. Treasurer & Receiver General, 226 Mass. 306, 309; Goldman v. Moses, 287 Mass. 393, 396; Tolman v. Crowell, 288 Mass. 397, 400; Kruger v. John Hancock Mutual Life Ins. Co. 298 Mass. 124, 126; Ponlain v. Sullivan, 308 Mass. 58; Welch v. Commissioner of Corporations & Taxation, 309 Mass. 293, 297, et seq.; Scott, Trusts (1939) § 57.3.