Court Opinion

ID: 6376422
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:55:38.876592+00
Date Added: 2024-06-11T15:50:11.476325
License: Public Domain

Henderson, J.,
dissenting-—By her will, Emma Wood Hays gave a life estate to her husband, Dr. I. Minis Hays, and provided:
“And upon the death of my said husband I direct that my said estate & all the investments of the same, shall be distributed among such of my children as may then be living & the issue of such of them as may then be dead, in such shares & upon such trusts as my said husband may by his last will & testament direct.
“But if my said husband die without having made such testamentary disposition then I direct that my said residuary estate shall be distributed in equal shares among such of my children as may then be living & the issue of such of them as may then be dead; such issue nevertheless taking & dividing equally among themselves such share only as his, her or their parent or parents would have taken if living, at the time of death of my said husband.”
The testatrix was survived by three daughters and a son, the only children she ever had, and they were all living at the date of the death of the husband, and all of them want the trusts set up by the donee of the power terminated.
Dr. Hays exercised the power by directing that his unmarried or widowed daughters should have for life the free use and occupation of premises, No. 266 South 21st Street, belonging to the donor of the trust, with authority to sell and purchase elsewhere, or to invest the proceeds and use the income to rent another house or apartment; and to use and enjoy for life such furniture, pictures, plate and household goods as belonged to his wife; with provision for an equitable division, in case they do not desire them, to and among all the children for their lives and the lives of the survivors and survivor. The Auditing Judge awarded $25,000 in trust to apply the income to defray the charges of the 21st Street house.
The donee then provided that any income from this trust fund payable to any unmarried or widowed daughter should only “be paid to her so long as she continued to reside in the United States or shall be temporarily traveling abroad with one of her sisters or brother; provided, however, that if she should be abroad unaccompanied by one of her sisters or brother, but return within seven months, the said income accruing to her during her absence shall be paid her upon her return, upon her binding herself satisfactorily to my Trustees to remain in this country for the .seventeen months immediately following her return. I make this provision because of my very strong wish that my children should not expatriate themselves for long periods of time, thereby loosening those family and home ties and associations *577I desire they should be most solicitious to strengthen. I direct my Trustees in the event of any one of my said unmarried (or widowed) daughters remaining abroad unaccompanied by one of her sisters or brother for a period longer than seven months in any two consecutive years, unless detained by serious illness, to withhold the income otherwise payable during that period to such daughter and to distribute the same in equal shares to the other recipients of income from my own and my wife’s residuary estate. On my absent daughter’s return, she is again to enjoy her share of income as it accrues.”
He further directed his trustees, subject to the foregoing provisions, to pay over the clear net income from his wife’s estate, “in precise conformity to the plan of distribution as to income from my own estate as hereinbefore stated.”
In item I (C) of his will he directed the income to be paid monthly for life, to and among his children (the issue of such as were deceased may be disregarded, as there were none such) and the survivors and survivor of them, “free & discharged from all claims of creditors, and without any right of assignment or anticipation whatever.”
Upon the death of the survivor of the children he disposed of the corpus in the following terms:
“Upon the extinction of my inheritable blood through the childless death of my last child or grandchild and the falling in of the last life estate in income, in execution of the power of appointment given by my wife’s will, I give, devise and bequeath, limit and appoint all of the principal of the estate of my said wife, from whatever source arising, to such person, persons or other beneficiaries as my daughter, Sarah Minis Goodrich, shall by her last Will and Testament or paper in the nature thereof limit and appoint, and in default of such appointment, then according to the Will of my oldest surviving child and so on in order of seniority.
“While I disclaim the intention of controlling the manner of exercise of the foregoing power of appointment, I strongly recommend that if there be no descendant of mine capable of inheriting in the next or succeeding generation, the provisions for benefiting mankind by promoting the pursuit of knowledge which I have made in the ultimate disposition of my own estate should be followed.”
The will of the donor vested the title in her estate in fee in her four children, subject only to the power she gave to her husband to “distribute” the same among her children, “in such shares and upon such trusts” as he might by will appoint.
We must now decide is his exercise of the power valid and may the trust be terminated. While the power has been excessively exercised, the question presents itself, stripped of the excess, is any part of the appointment good?
He has appointed an interest for life in the unmarried and widowed daughters in the South 21st Street house, and directed that a fund be set aside to defray the charges thereon; and he has created cross-remainders in the income of the trust in favor of the four children and the survivors and survivor of them with clauses against their debts and against anticipation; he has forbidden the daughters to live abroad or to travel abroad except in pairs, with forfeiture provisions in case these conditions are broken, and a provision that if a daughter should be abroad alone and return within seven months she may receive her income for this period, “upon her. binding herself satisfactorily to my Trustees to remain in this country for the seventeen months immediately following her return.”
He then further provides that upon th'e death of his surviving child and the extinction of his inheritable blood, his daughter, Mrs. Goodrich, may *578appoint the remainder, and in default of her so doing “then according to the will of my (his) oldest surviving child & so on in order of seniority.”
This is truly a remarkable exercise of a very limited power. It is undoubtedly an excessive exercise of the power. The remainder is badly given because he was limited in appointing it to her children, and the Auditing Judge has so declared. The remainder is, therefore, vested, under the donor’s will, in fee in the four children.
The provisions whereunder the daughters must live in this country or be limited in traveling abroad, under pain of forfeitures, is without warrant in the donor’s will, and, hence, excessive and void.
This leaves the trust of the 21st Street house and the fund to defray the expenses thereof and the cross-remainders in the income in favor of the children, with provisions against debts and anticipation. Omitting for further discussion the latter provisions, I have no hesitation in declaring these trusts within the power conferred. But these contingent interests may be refused or released, as all the parties are sui juris and are praying for the termination of the trust. Similar contingent interests were involved in the termination of the trust in Horwitz v. Norris, 49 Pa. 213, and Mr. Justice Strong said (page 221): “Such interests could not be set up in opposition to the decree for which they pray.” See, also, Scull’s Estate, 249 Pa. 52.
Recalling that the appointee merely had the power to “distribute" the estate among the children in such shares and upon such trusts as he thought proper, I must conclude he merely could divide the estate, unequally if he chose, among the class, and if he saw fit, in trust.
He could have appointed separate-use trusts for the married daughters: Boyles’s Estate, 5 W. N. C. 363. He could have erected trusts for the benefit of the children, but he could not exercise the power for the benefit of himself or the donor. She had parted with her right of dominion in favor of her children, and his power of appointment was limited.
Could he insert in the trust provisions against debts and anticipation of income? Yes, if such are for the benefit of the children, otherwise no. Such trusts are but the expression of the dominion of the owner of property, and, in law, are in nowise concerned about the protection of the beneficiary. In Morgan’s Estate, 223 Pa. 228, 230, Mr. Justice Stewart said: “The law rests its protection of what is known as a spendthrift trust fundamentally on the principle of cujus est dare, ejus est disponere'. It allowed the donor to condition his bounty as suits himself, so long as he violates no law in so doing. When a trust of this kind has been created, the law holds that the donor has an individual right of property in the execution of the trust; and to deprive him of it would be a fraud on his generosity. For the law to appropriate a gift to a person not intended would be an invasion of the donor’s private dominion: Holdship v. Patterson, 7 Watts, 547. It is always to be remembered that consideration for the beneficiary does not, even in the remotest way, enter into the policy of the law; it has regard solely to the rights of the donor. Spendthrift trusts can have no other justification than is to be found in considerations affecting the donor alone. They allow the donor to so control his bounty, through the creation of the trust, that it may be exempt from liability for the donee’s debts, not because the law is concerned to keep the donee from wasting it, but because it is concerned to protect the donor’s right of property.”
I have reached the conclusion that under this limited power the donee thereof was not authorized by the donor to insert in the trust provisions against debts or anticipation of income. They are, therefore, in excess of the *579power conferred upon him, and, hence, are void and should he stricken down, and the authorities uphold this conclusion.
In Horwitz v. Norris, 49 Pa. 213, the donor of the trust gave it to his son for life and then to his children in such shares and proportions and for such estate and estates, use and uses, as he might appoint. It .should be noted that he could only define the shares and proportions and direct the estates and uses. The appointment of the remainder was bad, and, hence, it was declared invalid. The trusts for the daughters in whom the remainder in fee under the will of the donor was vested were not for their sole or separate use, and, hence, Mr. Justice Strong held they were executed under the statute of uses. And he further pointed out that if they were not so executed, all of them having contingent interests, the class being closed, could join in asking for a termination of the trust, and said, as was quoted above, “Such interests could not be set up in opposition to the decree for which they pray.”
In Wickersham v. Savage, 58 Pa. 365, the donor gave his estate to his son for life, and after his decease to and among the children and issue of said son in such shares and proportions and for such estates as he by his last will or other appointment in writing shall direct; and in default thereof, then to and among said children and issue and their heirs equally. The donee of the power had but one child, and on his death, after charging the estate with the payment of $3000 annually to the widow, he appointed the residue to be held by his executors in trust to receive and pay over to his son John $1500 annually until he arrived at the age of twenty-five years, and thereafter the whole of the income for life, with provisions against liability for debts and anticipation of income. Chief Justice Thompson, speaking for the Supreme Court, said that the right to exercise the power of appointment did not arise, because there was only one in the class. We must, nevertheless, ascertain what was really involved by the decision. Undoubtedly, a valid separate-use trust could have been created for any married daughter, had there been such, under Boyles’s Estate, 5 W. N. C. 363; a good life estate could have been created for the only son, but as the remainder in fee was vested in him, that life estate was properly terminated unless the provisions of the trust against debts and anticipation of income were good. It could be said that the appointee took a good life estate under the will of the donor, which could not be terminated because of its spendthrift character. But in terminating’ this trust, the Supreme Court has implicitly ruled that under such a limited power a spendthrift trust could not be set up.
In Pepper’s Appeal, 120 Pa. 235, this question seems to have been clearly ruled. Therein the donor gave a life estate to his son Charles, with power to appoint “to the use of such of his children and issue and for such estates and in such shares as he shall by his last will appoint, and in default of appointment, then to the use of his children who may be living at his death and the issue of any deceased child, his heirs, executors, administrators and assigns, as tenants in common, the issue of any deceased child to stand in the place of the decedent and to take only the shares their parents would have taken if living.”
The son referred to had an only child. Under the will of the donor he acquired a vested estate in fee, or the entire interest, subject to being divested, so far as the power should be validly exercised by his father. The question, therefore, in issue was, has there been a valid exercise of the power?
The material part of the execution of the power by Charles Pepper is as follows: “Until the expiration of twenty-one years after the death of the *580survivor of my brothers, George S., Lawrence S., and Frederick Pepper, of my sister, Mrs. Catharine Cardette, and of myself, all of whom were living at the death of nay said father, I devise, bequeath and appoint my said share in my father’s estate to my said son Charles Rockland Pepper, upon the express condition, that he shall not in any manner convey, assign or transfer the same or the rents, issues and profits thereof to any person whomsoever, or do or suffer any act, matter or thing whereby the same shall he attached, seized or taken in execution or be made subject to or be affected by the insolvent or bankrupt laws of the United States, or of any other state thereof, or of any foreign country, and in case any of these events shall happen contrary to the true intent and meaning of the foregoing condition within the said term of twenty-one years after the death of the survivor of my said brothers, sister and myself, and also in case my said son shall $ie before the expiration of the said term of twenty-one years leaving issue, then, and in any such case, I devise, bequeath and appoint my said share in my father’s estate to such issue, their heirs, executors and administrators, and if more than one, in such shares and proportions as if my said son had died seized and possessed thereof intestate.”
This brings me to the crucial question as to whether the donee of the power could validly erect a trust or estate spendthrift in character, and as to this Mr. Justice Paxson said (page 254) : “It was urged, however, that it created a spendthrift trust, and as such may be sustained under the authorities in this state. But the appointment contains no trust of any kind, and to sustain this assumption we would have to write a spendthrift trust into the will of George Pepper. This cannot be done, either by the donee of the power or by this court. We look in vain through the will of George Pepper for one word which authorizes the donee of the power to appoint a forfeitable estate to Charles Rockland Pepper, or create a spendthrift trust. It is true it authorizes the donee to appoint the share referred to ‘in such shares and for such estates' as he shall deem proper. But the testator, when he used this language, was contemplating the distribution of the share among a class consisting of several persons, certainly of more than one. And had there been several of the class, the donee of the power could have appointed an estate for years to one, an estate for life to another, with remainders to the third in fee, or he could have made any other division which would have given the whole share to some one or more of the class. This is what the testator evidently meant when he used the words ‘for such estates.’ They have no meaning as applied to Charles Rockland Pepper as the only member of his class, unless we hold that they were intended to authorize the donee of the power to cut down the estate which he took under his grandfather’s will, from an estate in fee to an estate upon condition and forfeitable for alienation. This we are not prepared to do.”
Under the will of the donor, the donee of the power, had he a married daughter, could undoubtedly have set up a valid separate-use trust. He could have appointed a valid life estate in his son, but as the remainder was vested in him, the use would be executed.
If the spendthrift provision could have been validly attached to the estate for years, then undoubtedly we should have had a good trust which could have been supported; but as the will of the donor did not confer the power to create a spendthrift trust, its inclusion in the exercise of the power was excessive, and, hence, stricken down.
But it is said the will in this case did not establish any trust at all, let alone a spendthrift trust, and that that was the real ground of the decision. *581This, however, overlooks the reasoning of Penrose, J., in the court below, wherein he pointed out (120 Pa. 242) that the estate for years was good, and the legal title could have remained in the trustees under the will of the donor, and he then vigorously argued (page 246) that the spendthrift feature should be sustained as being for the benefit of the cestui que trust.
This court, sitting in banc, refused to adopt these views, and therein was sustained by the Supreme Court.
It may be urged that the real ground of decision in Pepper’s Appeal, 120 Pa. 235, was that the court will not be astute to indulge in inferences to clog titles and set up restraints on alienation.
The exercise of the power by the will of Dr. Hays is bad, for the further reason that he has not created a trust. He has failed to name trustees and he has failed to give the corpus of this estate in trust. The nearest he has come to conforming to these two necessary requirements occurs in Item IV. Therein he directs that his single daughters shall be permitted to occupy the house No. 266 South 21st Street (which belonged to this donor’s estate) free of rent, and he directed, “my (his) said trustees” to pay all charges in connection therewith, and presumably out of his estate. He then provides that if the daughters do not desire to occupy the house, his trustees may rent or sell the same and the proceeds “shall be held by my said executors & trustees under the remaining trusts hereinafter set forth in this my will.” Which of the “remaining trusts” has he referred to? May we say the trusts of his wife’s estate? He has created none—for he has failed to give the corpus to a trustee.
The next provision—item V—assumes he has given the corpus of his wife’s estate in trust to the trustees of his will, but we have looked through the entire will, and in vain, as no such gift is made.
This item is as follows: “Subject to the foregoing provisions, I direct my said Executors and Trustees and their successors in the Trust as to the clear net income arising from my wife’s estate not derived from the Trusts created by Annie Bradford, to observe and adhere to the following directions: Monthly, to divide and pay over the clear net income derived from my wife’s estate in precise conformity to the plan of distribution as to income from my own estate, as hereinbefore stated.”
These clauses contain no gift in trust of the corpus of the appointed estate. The utmost that can be said for the title of the corpus is that it vested in fee under the will of the donor and at least he has given contingent legal life estates to the four children. But .spendthrift provisions may not be annexed to legal life estates (see Ehrisman v. Sener, 162 Pa. 577), and the children desire these interests released and are competent so to do.
The attempted appointment of this estate is bad for a further reason. The will and codicil contains two powers—that in the will is very limited, and under it Dr. Hays could merely distribute his wife’s estate among the children in such shares and upon such trusts as he by will should do; on the other hand, while the power in the codicil was limited, it was only conferred in the event that Mrs. Hays survived the doctor, and this did not happen.
It is as follows: “In the event of my surviving my husband, I, Minis Hays, & in that event only, I give, devise & bequeath all the rest, residue & remainder of my estate, both real & personal to the Executors & Trustees nominated in his will to be held & distributed both as to income & principal, on the same terms & under the same provisions as he has directed in his last will & testament for his own individual estate & I direct that my estate be held with his as a single trust estate.”
*582It is impossible to read Dr. Hays’s attempted appointment of this estate, with its many void provisions, without coming to the conclusion that he has tried to deal with her estate as his own, and that he could only do in the event Mrs. Hays survived him.' He has actually so far regarded the appointed estate as his own as to neglect to give it in trust or to name trustees.
The conclusion is inevitable that he intended to exercise the power in the codicil, and this he had no right to do. It follows, then, that he had no intention of exercising the very limited power in the will; therefore, his exercise of the limited power is bad, and, hence, this estate vested in the four children under the alternative provision in the will of Mrs. Hays.
Summing up, I submit that (1) if the will of Dr. Hays creates a trust of the estate of Mrs. Hays, then the execution of the power is bad in attempting to create a spendthrift trust, as was implicity ruled in Wicker sham v. Savage; (2) the court will not be astute to infer a trust, as was refused in Pepper’s Appeal; (3) it was Dr. Hays’s intent to exercise the unlimited power in the codicil, and this he could not do; (4) the exercise of the limited power in the will is only good to the extent of the contingent life estates, and these the parties renounce.
All of the four contingent remaindermen, in a class which is closed, and all being sui juris, have united in a request for the termination of the trust. I have reached the conclusion that this request should be granted, and, hence, I would sustain exceptions 4, 5, 6 and 7, amend the adjudication accordingly, and award the entire fund of principal and income in equal parts to the four children of the testatrix.