Opinion ID: 1885926
Heading Depth: 1
Heading Rank: 3

Heading: Legality of Testator's Intent

Text: At this stage we are squarely confronted, for the first time, with the controversial wait and see version of the Rule Against Perpetuities. [12] So much has been already written on the history and development of this subject that any further discussion would be unduly repetitious. [13] Nonetheless, the statute cannot be understood and applied without reference to the classic statement of the common law Rule Against Perpetuities as set forth in Gray, The Rule Against Perpetuities, § 201 (4th ed. 1942) (hereinafter Gray): No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest. [14] The relevant portions of the statute provide: Rule against perpetuities (a) General. No interest shall be void as a perpetuity except as herein provided. (b) Void interests  exceptions. Upon the expiration of the period allowed by the common law rule against perpetuities as measured by actual rather than possible events any interest not then vested and any interest in members of a class the membership of which is then subject to increase shall be void. This subsection shall not apply to: (1) Interest exempt at common law. Interests which would not have been subject to the common law rule against perpetuities. Estates Act of 1947, Act of April 24, 1947, P.L. 100, § 4, 20 P.S. § 301.4. As succinctly stated in the Commission's comments, to which we may refer, Martin Estate, 365 Pa. 280, 74 A. 2d 120 (1950): This subsection is intended to disturb the common law rule as little as possible, but to make actualities at the end of the period, rather than possibilities as of the creation of the interest, govern and to provide a more equitable disposition of void gifts. [15] The court below, in derogation of both Quigley's Estate, 329 Pa. 281, 198 Atl. 85 (1938), and the wait and see statute, proceeded to a determination of the legality of all the future interests upon testator's death. The lower court's rationale was the necessity to pass on the eligibility of the charities to take under the will since the extent of their taking will affect the tax liability of the estate. It may be true that cases such as Carter Estate, 435 Pa. 492, 257 A. 2d 843 (1969), exemplify this Court's recognition of the necessity, occasioned by the federal estate and state inheritance tax laws, for a prompt determination of questions concerning future interests; however, owing to the ever-increasing extent of estate tax liability, [16] to recognize this principle in this context would emasculate the wait and see rule. We cannot adopt the rationale of the court below in this respect. In our analysis we deem it best to first consider the legality of the most remote interest  the remainder over to the charities. Both at common law, Philadelphia v. Girard's Heirs, 45 Pa. 9, 26 (1863), and by later legislation, Act of May 9, 1889, P.L. 173, [17] it was provided that a charitable gift can be given in perpetuity. Accordingly, it is sometimes said to be the general rule that a charitable bequest or devise is not subject to the Rule Against Perpetuities. See, Scholler Trust, 403 Pa. 97, 105, 169 A. 2d 554, 558 (1961); Gray, § 589. Thus, it would appear, at first glance, that the remainder to the charities is not subject to the wait and see rule since Section 4(b) (1) of the statute exempts all those interests not subject to the common law Rule Against Perpetuities. However, it was also settled at common law that if a remainder over to charity constituted a contingent interest and followed an interest violative of the Rule Against Perpetuities, the charitable bequest or devise was illegal. Compare Ledwith v. Hurst, 284 Pa. 94, 130 Atl. 315 (1925), and Penrose's Estate, 257 Pa. 231, 101 Atl. 319 (1917), with Gageby's Estate, 293 Pa. 109, 141 Atl. 842 (1928). See, also, Bregy, Intestate, Wills and Estates Acts of 1947, § 4(b) (1) at 5304 (1949); Gray, § 594; Simes, Future Interests, 279 (1951); Najarian, Charitable Giving and the Rule Against Perpetuities, 70 Dick. L. Rev. 455, 465 (1966). [18] The remainder over to charity may or may not be valid depending upon (1) whether the interest is contingent; and (2) even if contingent, whether any of the preceding interests run afoul of the Rule Against Perpetuities. In accordance with both Quigley's Estate and the wait and see rule, we will not now determine the validity of the interest to charity. In the same manner, we will discuss, but not determine, the legality of the preceding estates. The first complicating factor is the existence of successive class gifts in this appeal. At common law it was said: Where the gift is to a class, the class must be such that all the members of it must necessarily be ascertained and take absolutely vested interests within the period. If the gift is to a class and it is void as to any one of the class, it is void as to all: [Citations omitted]. Lockhart's Estate, 306 Pa. 394, 401, 159 Atl. 874, 876 (1932). Specifically, we are confronted with gifts to a class, the membership of which is still subject to increase at the expiration of the period, Commission's comments to subsection (b), which is explicitly covered by Section 4(b) of the statute: any interest in members of a class the membership of which is then subject to increase shall be void. Accordingly, [u]nder the statute, the class must actually close within the period, even though it might not have. Bregy, Intestate, Wills and Estates Acts of 1947, § 4(a) and (b) at 5278 (1949). Although its underlying premise is incorrect, the opinion of the court below, effectively mirroring the common law's emphasis on possibilities at the beginning of the period rather than actualities at the end of the period, provides us with an opportunity to contrast the common law and statutory Rule Against Perpetuities. As correctly noted by the lower court, the respective interests devised and bequeathed to testator's brothers and sisters and nephews and nieces must necessarily vest within the period provided by the Rule Against Perpetuities and are valid: (1) the brothers and sisters because the previous death of testator's parents ensures that testator can have no other brothers and sisters; and (2) the nephews and nieces because no other nephews and nieces can be born after the death of the last surviving brother or sister, and the interest of the nephews and nieces must vest, if not immediately, within the period enunciated by the Rule Against Perpetuities. The thought implicit in this rationale is that only the brothers and sisters could qualify as measuring lives since the prior demise of their parents precludes the possibility of a fertile octogenarian adding yet another member to the class of brothers and sisters. Leach, Perpetuities in a Nutshell, 51 Harv. L. Rev. 638, 643-44 (1938); see, Jee v. Audley, 1 Cox 324, 29 Eng. Rep. 1186 (1787). However, under the common law rule, the nephews and nieces could not be measuring lives since there was a possibility of fertile octogenarian parents (brothers and sisters) giving birth to an additional nephew and/or niece after testator's death. Thus, any interest to follow the interest of the nephews and nieces, including the remainder over to the charities, if contingent, would fall victim to the Rule Against Perpetuities. It is toward the prevention of such results that the General Assembly enacted the wait and see version of the Rule Against Perpetuities. In our view, three possible situations could occur by waiting and seeing. First, if no additional nephews and nieces are born, not only do the brothers and sisters qualify as measuring lives but also the six nephews and nieces. Thus, the interest given to the grandnephews and grandnieces must necessarily vest within twenty-one years following the death of the last surviving nephew or niece since membership in the class of grandnephews and grandnieces could not, thereafter, increase. The gift to the charities, if contingent, however, would be valid only if all the grandnephews and grandnieces should produce no offspring. Secondly, if no additional nephews and nieces and grandnephews and grandnieces are born, not only do the brothers and sisters and nieces and nephews qualify as measuring lives but also the twenty-nine grandnephews and grandnieces. In this situation, the interest to great-grandnephews and great-grandnieces would be valid since that interest must necessarily vest within twenty-one years after the death of the last surviving grandnephew or grandniece. As before, the gift to charities, if contingent, would be invalidated if any of the great-grandnephews or great-grandnieces should produce offspring. Thirdly, if any of the brothers and sisters should prove to be fertile octogenarians, then the common law's stress on possibilities coincides with the statute's emphasis on actualities and our earlier discussion of the opinion of the court below controls. Since which of the three situations will eventuate is unpredictable, it is necessary that the wait and see rule be applied. In failing to do so, the court below fell in error.