Arnold v. Gilbert

The late assistant vice-chancellor decided Upon the demurrer in this cause, that the trusts of the will of William W. Gilbert, were void as to one .sixty-third part of the mass of his estate. The particular shares which were held void, were the one-sixth of one-seventh of the third part, in which the widow was vested with a life interest, which fraction was to devolve upon George Gilbert for life, (after a second life interest in the seventh part to Mrs. Hunt.) with remainder to his children, and a like fraction of the same seventh part, which was limited in the same manner, to Warren Gilbert and his family. In these fractions, each one hundred and twenty-sixth part of the estate, it was adjudged that the will suspended the absolute ownership of the property, (treating it as personal estate,) beyond the period limited by law.

These decrees establish, as the law of the case, that the trusts of the will are void, to the extent of the two fractions before mentioned.

The opinions delivered in the court for the correction of errors, are so irreconcilable with each other, (although all concurring in the affirmance,) that it is impossible to say on what specific ground that court proceeded. The chancellor held the trusts to be void to the extent stated, without considering the question whether the real estate was to be deemed .converted at the death of the testator. The assistant vice-chancellor held that there was an equitable conversion from that date; but, following as he did, the chancellor’s doctrine as to trusts of personal property, it was not necessary for him to decide the question of conversion.

Thus I have no guide in the examination of the remaining trusts of the will, from the adjudications upon the demurrer, beyond the opinion of the chancellor.

It was argued at the hearing, with equal ingenuity and force of reasoning, that future interests in trusts of personal property, are not subject to the provision of the statute of Uses and Trusts, which makes trust interests in lands inalienable. (1 R. S. 729, § 63.) And it was contended, that the various opinions to that .effect which have been pronounced by judges in the court for the correction of errors, if they have not established the position, have, at least, left it an open question.

This is indisputably, a very important, if not a controlling point, in the construction of the will now before me, and 1 will at once state my views on the subject.

The court of last resort has never decided that future interests in trusts of personal property, are not within the provision of the statute to which I have referred. On the contrary, it is difficult to perceive how that court could have affirmed the decrees of the chancellor in some of the cases, where he held that such interests were not alienable, without sustaining that doctrine.

But, conceding that the question is still open in our highest court, it is clearly and firmly established by the learned head of the court of chancery, by whose judgments I must be governed,

The whole property of William W. Gilbert is devised and bequeathed in trust. All of the interests which the will carves out of tire third part of the estate, which was given to his widow for life, and which are to take effect after her death, are future interests, and many of those in the other two thirds, upon which it will be my duty to comment, are contingent interests. It is, therefore, unnecessary, in respect of the effect of those limitations, for me to decide whether the real estate was converted into personalty upon the testator’s death, or not till a subsequent period.

In my .estimation, it is, nevertheless, material to ascertain whether the interest given to the widow by the, will is real estate, or whether it may be regarded as personal property from the time-that the will became operative. 1 will therefore, in the first place, examine that question.

So far as it was necessary to sell real estate for the payment of debts, the will directs an immediate sale, and the conversion to that extent is unquestionable. ■

The fourteenth section directs sufficient sales to make the specific investments enjoined by the will, and to pay the legacies with as little delay as possible, having a regard always for the interest of the whole estate.

To this extent also, an equitable conversion may probably be deemed to have taken place. But I do not understand this clause-as applying to the bequests of the mass of the estate, contained in the fifteenth section, nor to the provision for the widow.

By the eleventh section, the widow was to receive from the-trustees, one third of the net amount of the rents and profits of the real estate, while it remained unsold.

Under the twelfth section, the trustees, in their discretion, could undoubtedly have sold the whole of the real estate within a year after the testator’s death, and thus turned the widow’s third of the rents into a third of the interest of the purchase money;

Her interest was devised to her as the income of real estate,. and it might continue such during her whole life. If its character were changed by a sale, and it from thence became the income of personal property, such change could not have relation back to the testator’s death, so' as to give to the whole interest the quality of personalty from that time. It is only an imperative intent to convert, bearing upon the particular interest as to which the question arises, which can have that effect.

Taken by itself, therefore, I do not think that the widow’s interest under the will, can be regarded as converted into personal estate from the death of the testator.

Assuming, for the argument, that the shares of those who were to take the bulk of the estate under the fifteenth section, ought to be regarded as personalty from his death ; so that on the death of David Gilbert, for example, during the widow’s lifetime, his next of kin, and not his heirs, would have taken his seventh part; does that affect the question as to the conversion of the widow’s life interest in the rents of the third part of the lands ?

For the final distribution of his estate, the testator contemplated that all his lands should be turned into money, and that his children and descendants, taking under that distribution, should receive money and securities, and not real estate. But to establish an entire equitable conversion, there must be a design to give to the produce of real estate, the quality of personalty, to all intents. This is the rule stated by Mr. Cox, in his note to Cruse v. Barley, (3 P. Will. 22,) and it is adopted in all the subsequent .authorities.

- There was no conversion for all purposes, by this rvill. For

Thus, it may be that the testator has converted the real estate out and out, as to the quality of the property which his children are to take under the fifteenth section of the will; while he has made no conversion in the quality of that which he gave to his widow.

He has, at the most, authorized his trustees to convert the latter, but he has not required it. This discretionary power, no more affects the quality of her estate in the lands remaining after the payment of the debts and legacies, and making the specific investments, than it would have done were it expressly restricted in its exercise until after her death.

I think that the question of conversion, as to the widow’s interest, is unaffected by the point as to the conversion of the subsequent trust interests, and must be considered by itself. Thus regarding it, the provision made by the will for her income, must be deemed, at the death of the testator, as a trust in real estate.

The validity of the trusts, depends upon their effect and character when the will became operative, and in my examination of those trusts I must, therefore, treat the widow’s interest as realty, and not as personal property. I will now proceed to consider the effect of those trusts in the will, which were brought to my notice at the -hearing.

First. Following the course of the third part of the estate, the rents and income of which were given to the widow, through the devolutions prescribed by the will. As a trust interest in lands, her right to the income was inalienable at the death of the testator.

The third part, was therefore effectually locked up during her

Upon the death of the widow, this third part of the estate became divisible into seven equal portions, and Mrs. Hunt, Mrs. Fish, George Gilbert, and Warren Gilbert, were each to enjoy one of those portions.

I will first take up Mrs. Hunt’s seventh part. By the sixteenth section of the will, she was to have the interest until her death or re-marriage; the whole seventh being still held intrust. On either of those events, the fund, ($5000 of her whole seventh excepted,) by the seventeenth section was to be divided between the other six children there named; but the share of Mrs. Fish goes to her for life only; and George and Warren take life interests in their shares also, with subsequent limitations which need not be mentioned in this connection.

Thus, as to three sixth parts of the share of Mrs. Hunt in the widow’s third of the estate, if all the bequests are to be enjoyed, there is a suspense of the absolute ownership of the fund for three lives which were in being at the testator’s death. In other words, so long as either the widow, or Mrs. Hunt, or Mrs. Fish lived, an absolute title to the latter’s proportion of the third part, derived through Mrs. Hunt, could not be conveyed or transferred, though every person mentioned or referred to in the will, should join in the transfer.

And the same thing is true of the portion of Warren and George, derived in the same manner. It is no answer to the argument, to say that Mrs. Fish, or Warren, or George, might die before Mrs. Hunt’s death or re-marriage ; or that Mrs. Hunt might die before the widow. The limitation is illegal if it may contravene the statute ; it is not necessary for the party impeaching it, to show' that it must have that effect.

The chancellor’s opinion, when this cause was before him on the demurrer, shows that the provision of the revised statutes, which, when more than two successive estates for life are limited, cuts off those beyond the two first, (1 R. S. 723, § 17,) does

This was decided on the demurrer, and I have gone briefly through the argument, as an introduction to the discussion of the remaining trusts.

As to the one hundred and twenty-sixth part limited to Mrs. Fish, arising from Mrs. Hunt’s share of the third of the estate, the life interest given to Mrs. Fish may be stricken out, pursuant to the seventeenth section of the statute relative to the creation and division of estates before cited; and then the question remains, upon the limitation over, “ to her lawful heirs, according to the laws of this state, in cases of intestacy,” as applicable to her “ children and heirs.” The use of both children and heirs, indicates that the testator did not overlook the distinction between the two terms. Mrs. Fish could have no heirs, (properly so-called,) while living, and her children living at the date of the-will, or at the testator’s death, might never become her heirs. Construing this part of the 16th clause of the will, with the aid of the kindred language in the 17th clause, I think, by “ lawful heirs of Mrs. Fish,” the testator intended those persons, her children and grand-children, who should be her heirs at her decease. (Bowers v. Porter, 4 Pick. 198 .) Upon this construction, there is the same difficulty that exists in respect of the shares of George and Warren already discussed. It cannot be known while Mrs. Fish lives, who will be entitled to this one hundred and twenty-sixth part as her heirs, and the absolute ownership is therefore suspended during her life, as effectually as if the bequest of the interest to her for life were valid and operative.

Next, pursuing the application of the -principles already stated

Each has a life interest in the income. This, with that of the widow, exhausts two lives. • If either shall die without children living, his share becomes divisible into four parts, (or three, if the survivor of the two leaves no children.) The survivor then takes a life interest in one-fourth of the other’s share; and until he dies, (though his life interest be void,) it cannot be known upon whom that fourth will ultimately devolve. Suppose George were to die first without children. Then Warren, by the terms of the will, is to succeed to the income of one-fourth, (that is, of one eighty-fourth of the whole estate,) for his life. This is void for excess, it being the third successive life estate. But the absolute ownership of this fraction is suspended, until his death shall demonstrate who is to take the succession. It follows that, in respect of this one eighty-fourth part, the trusts of the will are invalid.

If Warren should die without children, leaving George surviving, the same state of things would exist as to another one eighty-fourth part of the estate. Both of these contingencies could not occur, but one of them was as likely to occur as the other, at the death of the testator, and the one would affect a different portion of the estate from that subject to be influenced by the other.

Second. This case is presented in another aspect, which, if I have viewed it correctly, has a far more extensive bearing upon the trust interests created by the will.

The seventh clause of the will provides a fund of $3000, the income of which is to be paid to Ephraim, quarter yearly, during the full end and term of his natural life. The fifteenth clause, which is the only one directing a division of the corpus of the estate, in express terms brings this fund of $3000, as well as the fund set apart for the use of the widow for life, into the estimate, account, and distribution. The conclusion appears to be inevitable, that no general distribution was contemplated by the testator until after the death of both the widow and Ephraim. This is confirmed, by the fact that all the provisions of the will,

First. Mrs. Hunt is to have a life interest in one seventh, determinable sooner, on her re-marriage.

Assuming, for the present, that Ephraim’s right in the $3000, was not a future interest, and, being personalty, was alienable, and that his life is not to be counted; Mrs. Hunt’s interest was undoubtedly expectant; and following upon the life estate of the widow, at least two lives must have worn out before her interest would cease. Her seventh should then vest absolutely at all events. Instead of which, three sixth parts .of it are again given over for life, to Mrs. Fish, George, and Warren, and until those lives drop, the persons ultimately entitled, cannot be ascertained. This, as I have before stated, is the necessary consequence, even if their several life interests be rejected as void.

Thus in one-half of Mrs. Hunt’s share, or in one-fourteenth of the bulk of the estate, the absolute ownership is suspended beyond the limit permitted by law.

So far, I have gone on the assumption that Ephraim’s life might be left out, in estimating the suspension of the absolute ownership. But can his life be thus omitted 1 Suppose that Warren Gilbert had died, leaving children, soon after the testator, and while the widow and Ephraim were living: Could an absolute interest in Warren’s one-seventh of the estate, have been conveyed to a purchaser at that time ? It could not be done, because the trustees would be indispensable parties to the transfer, and it would be a palpable violation of their trust, to divide

The objections to the seventh parts of Mrs. Fish, Warren, and George, are still more forcible. In each, there is a life interest, which though not farther removed than the second in succession, is the third in the series of lives during which the ownership is suspended ; and, in addition, the persons who are to take, upon the termination of their lives respectively, cannot be known while they live.

It will be observed, that, in this review of the provisions of the will, I have treated them as if the real estate were to be deemed converted at the death of the testator, with the single exception of the devise of the rents to the widow. Whether that be the proper era, or whether the general conversion relates to the death of the widow and Ephraim, or the survivor of themj I have not examined, and express no opinion.

But applying the principles settled in this court to this will, on the most careful consideration which I can give to the subject, I am compelled to say, that in my judgment, the limitations of the will are void, as to four sevenths of the property disposed of by the fifteenth and subsequent sections.

Upon this conclusion, it is needless to look into the minor, points raised against the other parts of the will.

The trusts being so far void as to overturn the main design of the testator, the overthrow of the residue would follow as a matter of course, even if the trust interests; which, if standing alone, might have been sustained; were not involved in the fate of the void trust devise to the executors. (See Coster v. Lorillard, 14 Wend. 265 .)

Of the specific legacies, that to Mrs. Jane Gilbert is distinct from the void trusts, and her receipt of it is not inconsistent with the breaking up of the will at large. But the legacies to her daughters, must be relinquished upon their coming in as heirs and next of kin. (Hawley v. James, 16 Wend. 62 ; Thompson v. Carmichael's Executors, 1 Sand. Ch. R. 387.)

I have concluded, with some hesitation, that the legacies given by the sixth section of the will, must also fail. They are payable out of the sales of the real and personal property. The parties are all to take as heirs, on avoiding the trusts, and must therefore waive the legacies. Besides, so far as they are to be made out of the real estate, they are dependent on the void trust, and two of them form a part of the subordinate trusts which cannot be sustained. The devise cannot be maintained as a power in trust, in respect of these legacies, if it be void as an express trust. (Hawley v. James, 16 Wend. 174 , 175, per Bronson, J.; 1 R. S. 728, §§ 55, 58.)

The acts of the trustees under the will, should be confirmed, and in the account to be taken, they should have all just allowances, including compensation for their services. The valid powers of sale, were probably sufficient for the protection of bona fide purchasers. The payments made upon the legacies or bequests which are avoided, may be adjusted between the respective heirs in the account. The case of Hawley v. James, ( 16 Wend. 62 , 182, 274, 278,) furnishes a precedent for the proper decree, in this and many other particulars.

There must be a decree declaring these principles, and directing the trustees to account before a master. The complainants costs throughout, and the costs of the other parties in the suit while pending in this circuit, are to be paid out of the estate.

A supplemental bill may be filed to remedy these omissions.