In re Swayze's Estate

• Decision Date: 26 January 1948
• Docket Number: 8748.
• Citation: 191 P.2d 322,120 Mont. 546
• Parties: In re SWAYZE'S ESTATE. v. BENNETT. DEAN et al.
• Court: Montana Supreme Court

191 P.2d 322

120 Mont. 546

In re SWAYZE'S ESTATE.

DEAN et al. v. BENNETT.

No. 8748.

Supreme Court of Montana

January 26, 1948

Rehearing Denied March 31, 1948.

Appeal from District Court, Fifth District, Madison County; Benjamin E. Berg, Judge.

Proceeding in the matter of the estate of Mary Swayze, deceased, by H G. Dean, as administrator of the estate of Frank Gunter, and others, opposed by Lyman H. Bennett, Jr., as executor of the last will and testament of Mary Swayze, to determine heirship. From the judgment, defendant appeals.

Affirmed.

Frank E. Blair, of Virginia City, for appellant.

Corette & Corette and Kendrick Smith, all of Butte, and Arthur S Humphrey, of Junction City, Kan., for respondents.

METCALF Justice.

This is a proceeding to determine heirship under the holographic will of Mary Swayze. Her will is as follows:

'Sheridan, Montana, Nov. 27, 1944.

'I, Mary Swayze being of sound mind and memory do make and execute this my last will and testament, hereby revoking all wills by me previously made. I nominate and appoint Lyman H. Bennett, Jr., executor of this Will, and I direct that he cause my remains to be suitably buried, on the left hand side as you come down the steps, from the 'Rock Haven' gate at the property where I reside. I give devise and bequeath unto Warren H. Merritt of Nome. Alaska my home ranch about 160 acres and all of my interests in the placer mining property, he to maintain my home and the surroundings thereof in their present condition in all respects as a memorial to me.

'I direct my executor to reduce sufficient of my estate to cash, such cash to be utilized for the erection and maintenance of a modern hotel at Virginia City, Montana, where no intoxicating liquors are to be sold at any time, said hotel to me maintained as a memorial to me, and I direct my executor to cause the formation of a corporation to be known as the Mary Swayze Memorial Hotel Company, to which corporation said hotel is to be conveyed, and by which it is to be maintained and operated.

'Mary Swayze.'

The trial court held that the last paragraph of the will was void for uncertainty. The court said:

'1. The hotel provision is so indefinite and uncertain and lacking in definiteness and certainty that the said executor could have no way of knowing or determining with any reasonable certainty what portion or part of said estate should be used and devoted to the purchase of a hotel site, or to the cost of the erection of a hotel building; or of the nature or cost of the furnishings of the building; and said executor would furthermore have no way of knowing or determining what part or portion of said estate should be separately, or otherwise, set aside and used for the purpose of the maintenance of said hotel when erected and furnished; and would have no way of determining what should be done with the proceeds or profits, if any, from the operation of said hotel.

'2. * * * The executor would have no way of determining what was the purpose and intent of the testatrix * * *

'3. * * * This Court has no way of determining what the intent of the testatrix was in respect thereto and could not direct the executor as to the manner, method and means of carrying out said hotel provision. * * *

'9. The intended trust fails because of the failure to indicate the beneficiaries with reasonable certainty in that the beneficiary could not be deemed to be any group, class, or the public at large, in the absence of a charitable purpose, in the absence of a direction that the hotel shall not be run at a profit, and in the absence of a direction that less than reasonable prices shall be charged to all patrons. It is the duty of every trustee unless otherwise directed by the trust instrument to administer his trust profitably.'

Judgment was entered distributing the property under the specific legacies and the remainder of the estate was ordered distributed as if decedent had died intestate. This appeal is from that judgment.

The general rule is that if a person makes a will he must declare his wishes in specific terms and not leave it in wide and uncertain terms for another to make his will for him. 69 C.J. 358. And when a trust is created by a will it is essential to its creation and validity that it be materially certain in its material terms and parts. 54 Am.Jur., Trusts, sec. 37.

Accordingly the subject matter of a trust must be designated with reasonable certainty from facts existing at the time of the creation of the trust. Sec. 7884, Rev.Codes of Montana 1935; Restatement of Trusts, sec. 76.

And the beneficiary must also be designated with reasonable certainty. Sec. 7884, Rev.Codes; 54 Am.Jur., Trusts, sec. 39; Restatement Trusts, sec. 124.

The trial court's conclusions of law above quoted point out the uncertainties in the hotel provision that violate these fundamental rules.

The intended trust was also held invalid because it was the trial court's opinion that the absolute power of alienation was suspended for a period greater than permitted by section 6705, Revised Codes.

Section 6705 provides: 'The absolute power of alienation cannot be suspended, by any limitation or condition whatever, for a longer period than during the continuance of the lives of persons in being at the creation of the limitation or condition, except in the single case mentioned in section 6734.' (Contingent remainder on a remainder in fee to be determined during the minority of the first remainderman.)

Section 6706, Revised Codes, declares that a future interest 'which, by any possibility' violates the rule is void and continues, 'Such power of alienation is suspended when there are no persons in being by whom an absolute interest in possession can be conveyed.'

This rule against restraint of alienation is not a 'rule of construction,' but a peremptory command of the law. It is not, like a rule of construction, a test, more or less artificial, to determine intention. Its object is to defeat intention. Therefore every provision in the will or settlement is to be construed as if the rule did not exist, and then to the provision so construed the rule is to be applied. In re Murphy's Estate, 99 Mont. 114, 124, 43 P.2d 233, quoting from Gray's Rule Against Perpetuities, 3rd Ed., sec. 629.

The company founded in accordance with the direction of the will is only directed to operate and maintain the hotel. No power to alienate the property is granted. Since no power whatsoever is granted the trustee to alienate the property, there is a violation of sections 6705 and 6706 and the interest created is void. In re Hartwig's Estate, Mont., 175 P.2d 178.

Appellant has placed some reliance on the case of Lawrence v. Prosser, 89 N.J. Eq. 248, 104 A. 772, 773, and quotes: 'Again, it is said that the bequest is void, because it violates the rule against perpetuities. The will directs the money to be applied not for maintenance, but for construction and construction only. To the case of such a bequest the law of perpetuities can have no application unless the construction be postponed to a period exceeding a life or lives in being and 21 years. There is a palpable fallacy underlying much of complainants' argument on this head. It is that, because a monument is likely to last beyond the legal period, the case is one of perpetuity. The same might be said of any structure likely to endure.' (Emphasis added.) It is appellant's theory that since this is a memorial it is a valid trust.

The case cited is against the appellant's contention. The executor is directed by the will to 'reduce sufficient of my estate to cash * * * for the erection and maintenance of a modern hotel * * *' the hotel 'to be maintained as a memorial' and the executor is directed to form a corporation by which the hotel is to be 'maintained and operated.' The distinction made in the cited case is pointed out in McCartney v. Jacobs, 288 Ill. 568, 123 N.E. 557, 4 A.L.R. 1124, where the annotator has collected authorities declaring that a provision for the erection of a memorial and the maintenance thereof is void while a provision directing the immediate expenditure of money for the erection of such a memorial is not void. See 1 Scott on Trusts, sec. 124.5.

Therefore if the intended trust be deemed a private one it fails for lack of certainty and because it would suspend the power of alienation for a period longer than lives in being.

However, special consideration is given to gifts for charitable purposes and in such cases the courts have recognized that it is open to the testator to leave to trustees to select the way in which the charitable purpose is to be applied. And where a charitable purpose is established the lack of certainty in the method of carrying out the trust will be remedied by the court by some scheme to accomplish the charitable intent of the testator. Also, a charitable trust is valid although its execution extends beyond the period allowed by the rule against perpetuities or results in a suspension of alienation for a period of time greater than that permitted a private trust. Art. XIX, sec. 5, Mont.Const. But in order to establish the application of these two rules to the instant case, it must be first demonstrated that the trust to which they are applied is a charitable one. Section 374 of the Restatement on Trusts, says: 'A charitable trust is created if it includes a purpose 'the accomplishment of which is beneficial to the community.''

The classic judicial definition of a charity was that of Lord Macnaghten in Income Tax Commissioners v. Pemsel (1891), A.C. 531 at 583: 'Charity in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the...