Quin v. Skinner , 33 How. Pr. 229 ( 1867 )

By the Court, Gilbert, J.

If the conveyance from Mr. Palmer, the executor, to the defendant, vested the latter with the title and right of possession of the premises in question, these facts constitute a bar to this action. The question then is, whether, upon a fair and just construction of the will of Benjamin Bhead, and a proper application of the law governing the case, the executor had an effectual power to make such conveyance. The will first provides for the payment of all the testator’s debts, without specifying the manner whereby this is to be done, or creating any particular fund for that purpose. As the personal estate was ample to accomplish this, and leave a surplus to fall into the trust estate next created, it is evident that it was the intention of the testator that the executor should pay his debts in the exercise of the duty and power vested in him by law as executor, and not by virtue of any trust expressed in the will. After the payment of his debts, the testator gave all his estate, real and personal, to Mr. Palmer the executor, by name, upon trust, (1.) To apply the whole net income thereof to thé use of his mother and his wife, the plaintiff, during the life of the former, (2.) To permit these cestuis que trust to use and occupy the farm, of which the premise's in question constitute the major part, during the life of his mother, and (3.) On the death of his mother, to pay certain legacies, and to set apart and invest a fund for the ultimate discharge of other legacies. He then, by the fifth clause of the will, devises all the rest and residue of his estate to the plaintiff, her heirs and assigns, forever, in lieu of dower. Finally, he authorizes and empowers his executor to sell and convey his real estate at any time after the death of his-mother, and pay over the proceeds thereof to the plaintiff.

If the trust thus created did not comprehend the payment of the testator’s debts, it was completely executed before the sale or conveyance to the defendant. The mother had died, and the directions as to legacies had been fulfilled. The estate of Mr. Palmer, the executor, had ceased. For by the express provision of the statute, when the purposes for which an express trust shall have been created shall have ceased, the estate of the trustee shall also cease. (1 B. B. 130, § 67.)

The court below has found that there were debts of the testator unpaid, and that, the personal estate actually in the hands of the executor at the time the conveyance to the defendant was made, was insufficient to discharge them, but that the personal estate left by the testator, was more than sufficient to pay all the debts and legacies. As before intimated, we are of the opinion that neither by the terms of the trust, nor by any reasonable or just implication, can the payment of the debts be brought within it.

Having thus disposed of all the will preceding the fifth clause, the question now arises, what is the legal effect of that? It first contains an absolute devise of all the residue of the estate of the decedent to the plaintiff in fee simple absolute. It then gives the executor a power to sell, unaccompanied by any trust, except to pay over the proceeds to the plaintiff. Such a power cannot be upheld upon any application of the principle of equitable conversion, for there is no conceivable object to be subserved thereby. The doctrine of equitable conversion is never applied or enforced to defeat, but always to uphold and preserve estates. Besides, in any view of the case, the plaintiff had an election, to take the land. (Reed v. Underhill, 12 Barb. 113.) It is a general power in trust, and is. manifestly repugnant to the direct and absolute devise to the plaintiff. She remained in possession after the death of her husband, the testator ; was in actual possession claiming under the devise to her when the conveyance was made to the defendantj and is so still; and she has never relinquished, but on the contrary has always persistently asserted her title as owner in fee. “ The general rule,” says Oh. Kent, “ is, that a power shall not be exercised in derogation of a prior grant by the appointor.” The principle of this rule applies here, notwithstanding the devise and power took effect the same instant. (Duke of Marlborough v. Earl Godolphin, 1 Eden, 423. Co. Lit. 237, a. Lovett v. Kingsland, 44. Barb. 570, affirmed Court of Appeals. 4 Sand. S. C. Rep. 399. 4 Kent’s Com. 319.) Until exercised, the substance of the power was á thing in posse rather than in esse. Before the actual execution of it, there was no estate or interest, legal or equitable, to support it. When executed, it created an estate, which, if valid, swept away the prior vested estate of the plaintiff against her will, notwithstanding she only was to be benefited, if any benefit should accrue, and, so far as I can see, for no good purpose whatsoever. It is perfectly well settled, and has been ever since the case of Doe v. Martin, (4 T. R. 39,) that until' the power is exercised, the estate remains vested in those who would take in default of appointment. The effect of an exercise of a power is to divest the estate. (1 R. S. 129, § 59.) If the object of the power had been worthy, such as distribution, the protection of infants, or the like, of course the principle would not have been applicable. The defendant’s counsel seems to suppose that the testator devised his estate to the executor to sell, and that this vested the legal estate. We have seen that such is not the devise, but that, by its terms, it is a simple creation of an express trust, limited to the payment of legacies and the application of the income to the use of the wife and mother, during the life of the latter. When the purpose for which this trust was created ceasedj the'estate of the trustee ceased also. (1 R. S. supra. Hawley v. James, 5 Paige, 458.) And where there is.no object for the execution of a power in trust, it of course ceases. (4 Cr. Dig. 254. 1 R. S. 734, §§ 102, 121. Hutchings v. Baldwin, 7 Bosw. 241. Sharpsteen v. Tillou, 3 Cowen, 660.) The rule referred to, therefore, has no application to the case, first, because it is not a general devise to sell, but a trust limited both as to the duration of the estate devised, and to the objects of the trust. A general devise to sell, at common law would pass the estate, but not under our statute. The latter requires that there shall not only be a general devise to the executor to sell, but that it shall also include an authority to receive the rents and profits. (1 R. S. 729, § 56. 4 Kent’s Com. 321. Germond v. Jones, 2 Hill, 573.)

hior can the devise to the executor be made to operate in the way suggested, even in connection with the subsequent power to sell. For a devise that an executor may or shall sell lands gives him only a naked power. (Bug. Pow. 8th ed. 112.) Thus in Doe v. Shotter, (8 Ad. & El. 905,) there was a devise to a testator’s wife during her life, and after her decease, “ my will is, that my freehold shall then be sold by my executors in trust, and all the money be divided between all my children or their heirs, by my said executors.” Held by the Court of King’s Bench, Lord Denman, Oh. J. delivering the opinion, that the executors took a power, not a legal estate. And if the power was auxiliary to the trust it necessarily fell with it. But it is clear that the power to sell, in the fifth clause, has no connection with the' devise in the first clause. The latter is a trust, while the former requires the proceeds to he paid to the wife, which would be in direct contravention of the trust. It is our duty to give effect to every part of the will, if possible. If this cannot be done, then it is equally our duty to reject what is repugnant to the general intention, or to any obvious particular intention of the testator. (1 B. 8. 748, § 2. Parks v. Parks, 9 Paige, 116.) The analysis of the will, we think, has shown that it was not the intention of the testator to pass his interest to the executor. The general scheme manifested by the will proves the same. The object of the testator was clear and simple, namely (1.) To have his debts immediately paid out of his personalty, and his farm kept for the use of his mother and wife, and (2.) To have the few and simple objects of the trust fulfilled, after which, (3.) To give the residue of his property to his wife. The power of sale ought not, upon any principle of law or justice, and cannot be allowed, to operate to defeat this intention of the testator so clearly manifested in the will.

We are also of opinion, that effect could not be given to such a power without contravening the policy of the law as expressed in the 47th and 49 th sections of the statute of uses and trusts. . (1 B. 8. 727.) Section 47 provides, 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 in 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. And section 49 requires every disposition of lands to be made directly to the beneficial owner. These provisions have completely extirpated the class of formal trusts; the object of the legislature being to prevent frauds. “ Formal or passive trusts,” say the revisers in their notes, (3 R. S. 2d. ed. 583,) “ separate the legal and equitaMe estate for no purpose that the law ought to sanction. They answer no end whatever but to facilitate fraud."

To. uphold a naked power in trust like that in this case, would provide an easy and effectual method whereby the very evils which the legislature intended to prevent by the enactments cited, might be accomplished. Such a power is deemed, in equity, a trust for the benefit of the person who is to take the fruits of the exercise thereof. (Hunt v. Rousmaniere’s admr’s, 8 Wheat. 207. 1 R. S. 734, § 96.) Upon what principle can courts of justice allow a man to do that indirectly, by means of a power in trust, which the statute does not expressly authorize him to do in that way, but does, in terms, prohibit him from doing directly in any way ? (See 1 R. S. 732, § 74.) I have not been able to discover any. On the contrary, I think it is as much their duty scrupulously to guard against attempted violations of the policy of the law as declared in the statutes, as to annul acts which are expressly prohibited.

The terms of this power, it is true, are within the definition of a general power in trust. (1 B. 8. 732, §§ 77, 94.) But the statute relative to powers does not enumerate or define the objects for which powers may lawfully be created. There can be no doubt, however, that formal powers in trust may be created which would be illegal and void. For example, a power, the execution of which should be directed after the lapse of a period beyond two lives in being ; or a power to sell and convey to an alien. Such powers would be void, because the objects of them would be unlawful, notwithstanding they should be expressed in language bringing them within the definition of a power in trust. (Sug. Pow. ch. 3, § 3 ; ch. 8, § 1. Beekman v. Bonsor, 23 N. Y. Rep. 317.) For the reasons stated, we think the object of this power was not a lawful one. (See Downing v. Marshall, 23 N. Y. Rep. 380. Belmont v. O’Brien, 12 id. 403. N. Y. Dry Dock Co. v. Stillman, 30 id. 194.)

The case does not depend on the question whether the defendant is a bona fide purchaser. But in the eye of the law he is not. (Williamson v, Brown, 15 N. Y. Rep. 354.)

[Dutchess General Term, May 13, 1867.

The judgment must be reversed, and a new trial granted, costs to abide the event.

Lott, J. F. Barnard and Gilbert, Justices.]