Penfield v. Tower

• Decision Date: 31 May 1890
• Citation: 1 N.D. 216,46 N.W. 413
• Parties: Penfield v. Tower et al.
• Court: North Dakota Supreme Court

1 N.D. 216

46 N.W. 413

Penfield

v.Tower et al.

Supreme Court of North Dakota.

May Term, 1890.

Syllabus by the Court.

1. An active or express trust suspends the absolute power of alienation during its continuance, and such a trust is therefore void when it is to continue for longer than lives in being at the death of the testator. The absolute power of alienation in this state cannot be suspended for longer than the continuance of lives in being at the testator's death, except as provided in section 2745 of the Compiled Laws. The power to change the trust property from real to personal estate will not save the trust from the condemnation of the statute. The validity of a trust as to real estate is to be determined by the laws of its situs; as to personal property, by the laws of the domicile of the testator at the time of his death.

2. Where the will directs the sale of real estate expressly, or by clear implication, or where a sale is absolutely necessary to the execution of the provisions of the will, such real estate is equitably converted into personalty from the time of the testator's death; and as to such real estate, the trust is a trust of personal property, and its validity is to be determined, not by the laws of the situs of the real property, but by the laws of the jurisdiction in which the testator was domiciled at the time of his death.

3. Provisions of the will examined and held not to create an equitable conversion of real property into personalty.

4. A power of sale dependent on a void trust falls with the trust.

Appeal from district court, Cass county; William B. McConnell, Judge.G. H. Phelps, ( Burnham & Tillotson, of counsel,) for appellant. S. G. Roberts, for respondents.

Corliss, C. J.

The disposition of this case depends upon the validity of a trust attempted to be created by the will of Charlemagne Tower, so far as real estate situated in this state is concerned. The plaintiff by this action seeks to recover $250 paid by him to defendants under a contract for the sale and purchase of real estate owned by Charlemagne Tower in his life-time, the defendants acting as trustees under his will in making the contract, and agreeing to refund to plaintiff the money in case they could not convey a perfect title. A deed having been tendered by defendants, as trustees, plaintiff refused to accept the same, claiming that while the deed was sufficient in form to transfer the title of the testator, the defendants had no authority to execute a deed of the property, for the reason that the trust which the will purports to create is void, as to real estate in this jurisdiction, because in contravention of the statute against perpetuities. For this reason the plaintiff insists that he has a right to recover the $250 paid. The facts are all presented in the complaint. Defendants demurred, and had judgment on the demurrer in the court below, the court holding the trust to be valid. Was this error? The testator has assumed to create a trust as to his residuary estate in favor of his widow, children, and grandchildren. The will makes specific provisions as to the distribution of the income among the beneficiaries under the trust, which however are immaterial so far as the question presented by this appeal is concerned. This trust is to continue until the period for distribution of his estate shall arrive. That period is at the expiration of 21 years from and after the death of the last survivor of his children and grandchildren living at the time of his death. There is a provision that, in case it is unlawful to suspend the power of alienation 21 years after the death of all the children and grandchildren of the testator living at the time of his death, then the period of distribution shall be 21 years after the death of the last survivor of his children and grandchildren living at the date of his will. This provision was unnecessary. The common law rule regulating perpetuities permits the tying up of property for lives in being at the death of the testator, and 21 years in addition. It does not limit the lives to those of persons in being at the date of the will. McArthur v. Scott, 113 U. S. 340, 5 Sup. Ct. Rep. 652; Lang v. Wilbraham, 2 Duer, 171; Hosea v. Jacobs, 98 Mass. 65; Lang v. Ropke, 5 Sandf. 363; 4 Kent, Comm. 283, note 1. Said the court in McArthur v. Scott: “By the law of England the question of remoteness depends upon the state of facts at the time of the testator's death, though differing from that existing at the date of the will.” The trust created by this will is perfectly good at common law. The law was finally settled in Cadell v. Palmer, 1 Clark & F. 372. In this case the house of lords decided that the true limit of the rule against perpetuities was “a life or lives in being and twenty-one years afterwards, without reference to the infancy of any person whatever.” To same effect are Barnum v. Barnum, 26 Md. 119; McArthur v. Scott, supra; 1 Jarm. Wills, 508-517; Waldo v. Cummings, 45 Ill. 421; Philadelphia v. Girard's Heirs, 45 Pa. St. 9; Toms v. Williams, 41 Mich. 552, 2 N. W. Rep. 814;Wilson v. Odell, 58 Mich. 536, 25 N. W. Rep. 506; Hale v. Hale, 17 N. E. Rep. 470; Brown v. Brown, (Tenn.) 6 S. W. Rep. 869. The law allows the power of alienation to be suspended beyond this period during the time of gestation in cases of an infant en ventre sa mere. Waldo v. Cummings, 45 Ill. 421; 1 Jarm. Wills, 515-517. And there may be added two periods of gestation. Says Mr. Jarman: “A possible addition of the period of gestation to a life and twenty-one years, occurs in the ordinary case of a devise or bequest to A. (a male) for life, and after his death to such of his children as shall attain the age of twenty-one years, or indeed in the case of a devise or bequest simply to the children of A. (a male) who shall attain majority, though not preceded by a life-interest. In either case A. may survive the testator, and leave a wife enceinte, and, as such child would not acquire a vested interest until his majority, the vesting would be postponed until the period of twenty-one years beyond a life in being, with the addition, it might be, of nine or ten months; and if to either of these hypothetical cases we add the circumstance that A., the parent, were, as of course he might be, an infant en ventre sa mere at the testator's decease there would be gained a double period for gestation, namely, one at the commencement and another at the intermediate part of the period of postponement. To treat the period of gestation, however, as an adjunct to the lives, is not perhaps quite correct. It seems more proper to say that the rule admits of the absolute ownership being suspended for a life or lives in being, and twenty-one years afterwards, and that for the purposes of the rule a child en ventre sa mere is considered as a life in being.” It is only in cases of gestation that the period of 21 years can be extended. In Cadell v. Palmer, 1 Clark & F. 372, in the house of lords, it was declared to be the unanimous opinion of the judges that there cannot be added to the period of 21 years an absolute period equal to the ordinary or longest period of gestation irrespective of the existence of gestation, but that the time can be enlarged only in those cases in which gestation exists. This is the settled law. But the period of 21 years is an absolute period, and the lives during which the absolute period of disposition is suspended are not necessarily the lives of the persons who are interested in the property. Said the court in McArthur v. Scott, 113 U. S. 340, 5 Sup. Ct. Rep. 652: “The rule of the common law by which an estate devised must at all events vest within a life or lives in being, and twenty-one years afterwards, has reference to time and not to persons. Even the life or lives in being have no reference to the persons who are to take, for the testator is allowed to select as the measure of time the lives of any persons now in existence; and the twenty-one years afterwards are not regulated by the birth or the coming of age of any person, for they begin not with a birth, but with a death, and are twenty-one years in gross, without regard to the life or the coming of age of any person soever.” Every attempt to tie up the absolute ownership of property except as permitted by these rules is without effect in law. The provisions of the will in question do not fall without the scope of these rules, and are therefore valid at common law, the law which it is admitted obtains in Pennsylvania, the domicile of the testator at the time of his death. Is the trust so far as the real estate in this state is concerned to be governed by the laws of this state or of Pennsylvania? Under the statute of this state the trust is void. By section 2717 of the Compiled Laws it is provided that “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 2745.” This case is not material to the question before the court. Section 2718 declares that “every future interest is void in its creation which by any possibility may suspend the absolute power of alienation for a longer period than is prescribed in this chapter. Such power of alienation is suspended when there are no persons in being by whom an absolute interest in possession can be conveyed.” Are there, during the existence of this trust for 21 years beyond lives in being at the time of its creation, persons in being by whom an absolute interest in possession can be conveyed? Clearly not. The beneficiaries take no interest or estate in the land. They may merely enforce the performance of the trust in equity. The whole estate is vested in the trustees. Section 2804, Comp. Laws. There is no title in any one save the trustees that can be conveyed, and the...