Perkins v. Burlington Land & Improvement Co.

112 Wis. 509 | Wis. | 1902

Cassoday, C. J.

It is contended by counsel for the appellants that, so far as the estate of the plaintiffs was concerned, the trust deed created a mere passive trust, and that the legal estate vested in each of them, respectively, as he came into being, the same as though no trustee had been named, and hence that the case comes directly within the terms of the statute which declares that

“Every person who, by virtue of any grant, assignment or devise, now is or hereafter shall be entitled to the actual possession of lands and the receipt of the rents and profits thereof, in law or inf equity, shall be deemed to have a legal estate therein of the same quality and duration and subject to the same conditions as his beneficial interest.” Sec. 2073, Stats. 1898 (the same as sec. 3, ch. 57, R. S. 1849).

But the statute further provides that

“ The last preceding section shall not divest the estate of any trustees in any existing trust where the title of such trustees is not merely norrvmul, but is connected with some power of actual disposition or management in relation to the lands which are the subject of the trust.” Sec. 2074, Stats. 1898 (the same as sec. 4, ch. 57, R. S. 1849).

Passive trusts are abolished by the statute which declares that

“ Every disposition of lands, whether by deed or devise, hereafter made, except as otherwise provided in these statutes, shall be directly to the person in whom the right to the possession and the profits shall be intended to be vested and not to any other, to the use of or in trust for such person, and if made to one or more persons in trust for or to the use of another no estate or interest, legal or equitable, shall vest in the trustee.” Sec. 2075, Stats. 1898 (the same as sec. 5, ch. 57, R. S. 1849).

Under these statutes, this court has held that

“ A conveyance of land to one person in trust for and to the use and benefit of another, without any further expression of the nature and purposes of the trust, vests the absolute legal title in the cestui que trust named.” Sullivan v. Bruhling, 66 Wis. 472.

To the same effect, Hannig v. Mueller, 82 Wis. 235, 243; Tyson v. Tyson, 96 Wis. 59; Ruth v. Oberbrunner, 40 Wis. 238.

But we are clearly of the opinion that the trust deed to Dr. Dyer did not create, nor attempt to create, a mere passive trust, within the meaning of the statutes cited and the decisions of this court. White v. Fitzgerald, 19 Wis. 480; Goodrich v. Milwaukee, 24 Wis. 422; Smith v. Ford, 48 Wis. 133; Webber v. Webber, 108 Wis. 626. As indicated in the statement of facts, Dr. Dyer was to have and retain the possession of the lands during the whole continuance of the trust. He was to receive the rents and profits and the proceeds of any sales made by him, and to use the same in the payment of debts, and then he was “ to permit ” the widow to receive the rents and profits to her use for life; she to pay therefrom to Frederick S., yearly, such sum as she might deem proper. In case the widow died before Frederick S., then Dr. Dyer was to pay to him from such rents and profits so much as he might deem proper until he should become twenty-five years of age, and then he was to receive the whole rents and profits to his own use during his life. In case Frederick S. survived the widow, and should have issue, then Dr. Dyer was to convey such lands to such issue, for their use and the use of their heirs, forever; but in case he died without issue, then such lands were to be disposed of as therein stated. By the express terms of the deed, Dr. Dyer had full “ rigjit, power, and authority to sell and convey any and every part ” of the premises in ease of “ necessity arising out of the situation or wants ” of the widow or Frederick S., or at any time “ upon the joint wish ” of the two, “ with the consent of the trustee ”; and in that event Dr. Dyer was to invest the proceeds of such sale “in such safe manner as the trustee ” deemed “ proper for the use of the parties in interest.” And in case Origen Perkins survived his wife or his son, then the trustee was to convey the premises to such person or persons, and in such manner, as Origen should direct by his will or otherwise.

Thus it appears that Dr. Dyer, as such trustee, was expressly given the “ power of actual disposition,” and also the power of actual “ management ” and control of the lands which were “ the subjéct of the trust,” and hence it was in a double sense an active trust, as defined in one of the sections of the statute quoted. Such deed of trust manifestly created an “ express trust,” within the meaning of the statute (subd. 1-3, 5, sec. 2081, Stats. 1898; the same as sec. 11, ch. 57, R. S. 1849). White v. Fitzgerald, supra; Goodrich v. Milwaukee, supra; Smith v. Ford, supra; Webber v. Webber, supra. Another section, of the statute expressly provides that

“ Every express trust, valid as such in its creation, except as herein otherwise provided, shall vest the whole estate in the trustees, subject only to the execution of the trust; and the person for whose benefit the trust was created shall take no estate or interest in the lands, but may enforce the performance of the trust.” Sec. 2086, Stats. 1898 (the same as sec. 16, ch. 57, R. S. 1849.)

The next section relates to the power of the person creating the trust over the subject of the trust “ in the event of the failure or determination of the trust,” and his power to grant or devise “such lands subject to the execution of the trust.” Sec. 2087, Stats. 1898 (the same as sec. 17, ch. 57, R. S. 1849). But here it was only in case the person so creating the’trust survived his wife or his son that he reserved to himself any right to direct Dr. “ Dyer or his heirs ” “ to convey the premises to such person or persons and in such manner as” he (Origen Perkins) should “direct by his will or otherwise.” Unless he survived his wife or his son, he thereby deprived himself of all control over the property. In case he did so survive, then not only Dr. Dyer, but in case of his death then “ his heirs,” were to be subject to such direction. This clearly contemplates the possibility of the title to the lands passing by descent from Dr. Dyer to “ his heirs.” In the event that Origen Perkins should survive both his wife and his son, and his son should leave issue, then neither Dr. Dyer nor his heirs could convey as directed by the trust deed until it should be ascertained whether Origen had or would give other direction “ by his will or otherwise; ” and that might not be known until the death of Origen.

Such features of the trust deed indicate the character of the trust, and they are not weakened by the fact that Origen Perkins did not survive his wife or his son, but died three years after the creation of the trust. So the widow died about two years prior to the commencement of the action against Dr. Dyer. That suit was commenced and terminated in a judgment five years prior to the birth of any of the plaintiffs. Thus it appears'that for seven years no living person had any right, title, or interest in any of the lands in question, either legal or equitable, except Dr. Dyer and Frederick S. Perkins. During that period the suit was commenced and terminated. During that period the whole estate was vested in Dr. Dyer, “ subject only to the execution of the trust,” with power and authority to sell and convey as indicated, and also with power and authority to manage and control as mentioned. During that period Frederick S. was only to receive so much of the rents and profits as Dr. Dyer might deem proper to give him until he should arrive at the age of twenty-five years, and thereafter he was to “ receive the whole” of such “ rents and profits of said lands to his use during his life.” Manifestly, Dr. Dyer represented, and had the legal right to represent, such, issue of Frederick S. as might subsequently be born, including the plaintiffs.

In a case decided by that very able equity jurist, Lord High Chancellor HaRdwioKb, more than 160 years ago, it was among other things, said and held that,

“ If there are ever so many contingent limitations of a trust, it is an established rule that it is sufficient to bring the trustees before the court, together with him in whom the first remainder of the inheritance is vested, and all that may come after will be bound by the decree, though not in esse, unless there be fraud and collusion between the trustees and the first person in whom a remainder of inheritance is vested.” Hopkins v. Hopkins, 1 Atk. 581, 590.

That was expressly sanctioned in a later case. Marquis Cholmondeley v. Lord Clinton, 2 Jac. & W. 1, 133. See, also, Biscoe v. Perkins, 1 Ves. & B. 485; Collier v. Walters, L. R. 17 Eq. 252; United States T. Co. v. Roche, 116 N. Y. 120; Campbell v. Watson, 8 Ohio, 498; Baylor's Lessee v. Dejarnette, 13 Grat. 152. Thus it is held in Georgia that

“ When the person who is to take the remainder is not ascertained, and the remainder is contingent, it is sufficient to have before the court the trustees to support the contingent remainder, and the persons in esse having title to the vested estates.” Schley v. Brown, 70 Ga. 64.

So it has been held in New York that

“ Where anr estate is vested in persons living, subject only to the contingency that persons may be born who will have an interest therein, the living owners of the estate, for all purposes of any litigation in reference thereto, and affecting the jurisdiction of the courts to deal with the same, represent the whole estate, and stand not only for themselves but also for the persons unborn.” Kent v. Church of St. Michael, 136 N. Y. 10.

So it has been held in Illinois that

“ On creditors’ bill to set aside a deed of land to a trustee in trust to collect and pay rents to a married woman during her life, and at her death to convey to the children she might leave surviving, on the ground that such deed is in fraud of creditors of the grantor, the children of such married woman are not necessary parties. In such case the trustee represents the contingent interest of the children, and a decree setting aside the deed of trust is binding on them, the same as if made parties.” Temple v. Scott, 143 Ill. 290.

In another case in the same volume it was held that

“ Where land is devised to trustees in trust to collect the rents, etc., and pay the same to a daughter of the testator during her life, and at her death to convey the same to her issue in such manner and shares as she may direct by will, and, in the event she leaves no issue, then to certain other persons at her death, the legal title will not vest in her children, and they will not become necessary parties to a bill by a third person to have a part of the land sold, but it will be sufficient to make such trustees parties.” Green v. Grant, 143 Ill. 62.

So it has been, held in that state that

“ The general rule that a decree is not binding on one not made a party to the suit is subject to certain well-recognized exceptions. Thus, when a party is before the court by representation, and in such a way that his interest must be deemed to have been as fully and effectually presented and protected as it would have been if he had been personally present, his rights will be concluded by the decree.” McCampbell v. Mason, 151 Ill. 500.

The case at bar is clearly distinguishable from those where there is no uncertainty as to the persons in whom the remainder vests. Patton v. Burlington, 103 Wis. 630. Of course the case is distinguishable from those where the trustee has no right of management or control, no right of possession, no power of disposition, or where there is no trustee having right or authority to represent such contingent interests. Upon such grounds, some of the cases cited by counsel may be readily distinguished.

We must hold that the plaintiffs herein are bound by the judgment of April 25, 1861. This conclusion makes it unnecessary to consider the other question argued by counsel.

By the Oourt.— The judgment of the circuit court is affirmed.