to such persons therein named as he might direct, during his life, and making provision for said trust's division into various trusts on his death; and he received all the income from the trust property until his death. Held, that the beneficiaries in said trusts were liable for transfer tax under said act of 1892, as the trusts showed an intent of the grantor that the beneficial enjoyment of the property by the beneficiaries was not to take effect until after his death, and as the grantor had reserved such powers over the trust property as to preclude the inference of an intention on his part that the trusts should take effect in possession or enjoyment before his death. Appeal from supreme court, appellate division, First department. In the matter of taxation of property transferred by Jabez A. Bostwick, since deceased. From an order of the surrogate confirming the report of an appraiser assessing a tax, Fanny E. Carstairs and others appealed to the supreme court of the appellate division, where the order was affirmed (56 N. Y. Supp. 495), and now appeal from said order of affirmance to this court. Affirmed. Appeal from an order of the appellate division in the First department, which affirmed a decree of the surrogate's court of the county of New York, imposing a transfer tax upon the appellants for property received by them under certain trust deeds executed by Jabez A. Bostwick, deceased. Mr. Bostwick, in his lifetime, made several transfers of property to the New York Life Insurance & Trust Company, as trustee. Three of these trust deeds were made in 1889, and transferred the property described therein in trust for his three sisters during their lives, providing, in each case, upon the death of the beneficiary, for the future disposition of the trust fund. The donor in these deeds reserved to himself, during the continuance of the trust, certain powers, namely, to direct the payment of the income to himself during his life, or to such other persons than the beneficiaries as he might designate in writing; to withdraw the securities constituting the trust fund, and to substitute others; to alter or amend the trust, and to add property thereto, and to terminate the same at any time during his life by a written notice to the trustee. With respect to these three trust transfers of property it appears that in one case the donor received two-thirds of the income, and in the other two cases one-half of the income, until his death, according to his direction. The fourth trust deed was made in 1890, and by its terms the income was to be paid to the donor, or to such persons therein named as he might direct, during his life. Upon his death, provision was made for a division of the property into various trusts. Powers were reserved by the donor, which were similar to those contained in the trust deeds for his sisters, and it appears that the donor received the whole of the income from the property until his death. Two other trust deeds were made in 1892 for the benefit of Mr. Bostwick's two daughters, by 55 N.E.-14 the terms of which the income of the trusts was to be paid to them during their lives, and upon their decease the securities constituting the trust fund. were to be paid over to their children, and, in the event of a default of issue, other provision was made for the disposition of the property. There were reserved to the donor, in each of these two deeds, during his life, powers to alter or to amend the trust whenever he might desire; to withdraw any portion of the trust properties, or to exchange any portion of the same by substituting any other securities as he might in writing direct; to add to the trust; to control any sale or other disposition by the trustee of the securities; and to terminate the trust at any time during the donor's life upon written notice to the trustee. There was no reservation of power to direct the payment of the income of the trusts. R. E. Robinson, for appellants. Jabish Holmes, Jr., Elliott Danforth, and Edgar J. Levey, for respondent. GRAY, J. (after stating the facts). We are inclined to concur with the opinion ente:tained by the learned justices of the appellate division that Eostwick did not, in fact, during his lifetime, dispose of the property affected by these trust deeds, inasmuch as, after their delivery to the trustee, he not only was entitled at any time to revest himself with the ownership of the property, but le continued to be able, in some cases, to enjoy it, and in all cases practically to manage and to dispose of it as effectually as he might previously have done. The only difficulty which arises is with respect to the two trust transfers in favor of Bostwick's daughters. As to the other transfers there can be no reasonable doubt that the properties affected thereby were subject to the operation of the transfer act. It is quite clear from the terms of the trust instruments that the donor retained such a control over the trusts, and such a right to dispose of the income, as to make evident an intention on his part that the beneficial enjoyment of the property by its remaining dependent upon his direction was not to take effect until after his death. The usual absoluteness of right and enjoyment which a completed gift carries was wanting. But as to the transfers for the daughters it is argued that the Masury Case, 28 App. Div. 580, 51 N. Y. Supp. 331, affirmed in this court, without opinion, 159 N. Y. 532, 53 N. E. 1127, controls. In the Masury Case the deeds of trust, which were made in favor of the donor's adopted sons, and as to which it was held that the transfer tax act did not apply, provided each for the payment of the income of the trust to the beneficiary during his minority, and for the delivery to him of the securities when he should attain his majority. The powers reserved in those dee is to revoke or to annul the trust during the donor's lifetime were considered of them selves not to affect the present vesting of the property, or to make its beneficial enjoyment contingent upon the death of the donor. There appeared to be nothing in the transaction which pointed to the existence of an intention on the part of the donor that his transfer should not be absolute, or that the beneficial enjoyment of his gift should be postponed until his death. The reserved power to revoke would enable him, of course, to put an end to the trust; but that was not enough to affect the possession of the trustee, or the beneficial enjoyment of the object of the donor's bounty, while the trust was in force, and such a power carried with it no control over the property or its management. In the present case, however, the donor has reserved, during his life, such numerous and extensive powers over the properties transferred by his deeds as to preclude the legitimate inference of an intention on his part that they were to take effect in absolute possession or enjoyment before his death. The act of 1892 (chapter 399, § 1, subd. 3), whose provisions must control, provided for the imposition of the tax upon the transfer of property when it was made in contemplation of death, "or intended to take effect in possession or enjoyment at or after such death." We must discover the intention of Mr. Bostwick by considering the language of the instruments through which he transferred his properties to the trustee. Instead of an out and out gift, which would provide for the enjoyment by the beneficiary of the income of the property during her life, and for the disposition of the trust fund thereafter, we find powers reserved to alter or amend the trust by notice to the trustee, to withdraw or to exchange any securities, and to control the acts of the trustee in selling or disposing of the securities, or with respect to investments. All these are indicia, rather, of an intention on the donor's part to retain a dominion over the properties transferred, and do not consist with an existing purpose to vest the absolute right to present and future enjoyment in the beneficiaries. He retained practical control of the trust property, and left the question of its beneficial enjoyment and eventual possession open until his death. The affirmance of the decision in the Masury Case may seem to have committed this court to views which support the contention now made in behalf of these appellants; but, if that be so, it is an erroneous inference from that decision. I think that we may have gone too far in generally affirming the Masury decision. Certainly the limit was then reached, beyond which the courts could not go without emasculating the provisions of the statute. We thought there was some reason in the facts of the Masury Case for finding an intention in the donor to make an absolute transfer of property during his life, which the mere reservation of a power to revoke was, of itself, insufficient to negative. But, if the trust transfers now in question were held to be without the operation of the act, too dangerous a latitude of action would be permitted to persons who desired to evade its provisions by some technical transfer. which would still leave the substantial rights of ownership in the donor. If a person intends in good faith to make an absolute gift of his property during his life to others, and thereby to make a provision for them which shall not be contingent as to its possession or enjoyment upon the event of his death, there is no inhibition in the act in that respect. The intent of the law is plain, and it is the duty of the courts to give that construction to its provisions which will effectuate the legislative purpose. while preserving in all its integrity the absolute right of every person to transfer his property during his lifetime, with such rights of enjoyment in the transferee as the donor can give. The order should be affirmed, with costs. All concur. Order affirmed. (160 N. Y. 533) GREENE v. SMITH. (Court of Appeals of New York. Nov. 21, 1899.) REFORMATION OF INSTRUMENTS - APPEAL AND ERROR-FINDINGS OF REFEREE-REVIEW OF FINDINGS OF FACT-MUTUAL MISTAKE OF LAW-EQUITY. 1. Where the findings of a referee are affirmed by the appellate division, they are not open to review by the court of appeals. 2. Where the findings of the referee are conclusive, appellant will be confined to the review of the errors of law raised by proper exceptions. 3. An exception by appellant to a conclusion of law by a referee brings up for review the findings of fact on which such conclusion is supported. 4. In an action on a contract which reserved interest, but did not specify the rate, it appeared that the parties had agreed upon 8 per cent., but omitted any reference to the rate, because they both believed it usurious. No fraud by either party was shown. When it was sought to enforce the contract, only the legal rate of 7 per cent. was allowed, and an attempt was made to reform the contract by inserting the parol agreement providing for 8 per cent. Held, that the omission to reserve 8 per cent. in the contract was the result of a mutual mistake of law, which a court of equity would not remedy. 5. Where, in an action on a contract, the defense set up was that the contract should be reformed, and the effort to reform fails, defendant cannot on appeal urge for the first time that the contract as drawn needed no reformation, and could be read as if reformed. Appeal from supreme court, appellate division, Fourth department. Action by William C. Greene, as receiver, etc., against E. Ashley Smith. From a judgment of the appellate division, Fourth department, affirming a judgment in favor of plaintiff on the report of a referee (43 N. Y. Supp. 610), defendant appeals. Affirmed. Lewis E. Carr, for appellant. David Mill. ar, for respondent. BARTLETT, J. The plaintiff brings this action as receiver of the Merchants' Bank of Lockport. On the 5th day of August, 1876, one Helmer assigned to the First National Bank of Lockport his interest in a certain contract that he held under an agreement with the defendant, as security for his indebtedness to the bank. The assignee bank was afterwards wound up, and the Merchants' Bank of Lockport succeeded to its interest in this contract, and is represented here by the plaintiff as its receiver. In August, 1873, Morgan and Roby entered into a written contract which recited that they had purchased some 315 acres of land in the state of Indiana for $63,076, one-fourth of which had been paid down by Morgan, and the balance was secured by notes at 8 per cent., covering a period of three years; that Morgan was to advance balance of purchase money, and receive interest at the rate of 10 per cent. per annum, compounded semiannually, on all advances made or to be made; that the net profits of the enterprise were to be divided, two-thirds to Morgan and one-third to Roby. In December, 1873, Morgan, in consideration of $8,754.29 (being half the amount and interest he had advanced), assigned to Helmer "the undivided half part of all my interest and rights in and under the foregoing contract between me and Edward Roby; said Helmer assuming the half part of all my liabilities under the same," etc. In February, 1874, Helmer entered into an agreement with the defendant in this action by which he assigned to him "all his right, title, and interest in and to the said several contracts," etc. The defendant assumed Helmer's obligations under his contract with Morgan, and after he was repaid his advances, with interest, the surplus was to be divided between himself and Helmer. In August, 1876, Helmer assigned his right in this contract as collateral security for his indebtedness to the First National Bank of Lockport, as already stated. This action was begun in March, 1894, by the holder of the collateral, for an accounting under this assignment, and the issues were tried by a referee. The main contention at the trial was over the rate of Interest that defendant was entitled to charge on the advances made by him under his contract with Helmer. As that contract did not name the rate of interest in express terms, the plaintiff contended that it should be 7 per cent.; being the legal rate existing in the state of New York at the time the contract was executed. The defendant claimed that he was entitled to compute the interest on his advances at the rate of 8 per cent. per annum, compounded annually. It is conceded that, if plaintiff's rate of interest is adopted, the amount found in defendant's hands over and above his advances is correct, but, if defendant's rate of interest is proper, he has no balance in his hands that plaintiff is entitled to claim. The defendant, in his answer, set up a parol agreement between himself and Helmer providing for the rate of interest at 8 per cent., as he claimed, and alleged that it was omitted from the written contract by a mutual mistake of fact, and prayed that it be reformed so as to express the true meaning of the parties. The referee, in his ninth finding, states, in substance, as follows: That, prior to and on the day of the execution and delivery of the agreement between Helmer and Smith, it was understood and agreed that Smith was to be allowed interest on his advances at the rate of 8 per cent. per annum, compounded annually, "but by a mistake of law the said rate and the method of compounding were not expressed in the said agreement, it having at said time been represented to said Smith by said Helmer, and believed by both said Smith and Helmer, that to express the interest reserved at eight per cent., compounded annually, would render said agreement usurious, and that it was best to trust said Helmer to pay the eight per cent., compounded annually; that said Smith was not at that time a man experienced in business, having theretofore, till within a short time, been engaged in farming, and as an employé in a country store, and said Helmer was a man who had long been in active money business, and was then president of a bank; that Smith and Helmer were warm personal friends, and attendants upon the same church, and much interested therein, and said Smith placed great reliance upon the statements and the business judgment and acumen of said Helmer." The referee, as a conclusion of law, found a mutual mistake of law in the contract between Helmer and Smith, and that the defendant was not entitled to have the same reformed, and that the defendant was only entitled to simple interest at 7 per cent. per annum upon all payments made on account of the lands referred to in the several contracts and agreements. The referee says, among other things, in his opinion, referring to this omitted clause: "The necessity of leaving it out was fully understood between these parties. There is nothing to show that Helmer did not believe that the law forbade the reservation of eight per cent. in the instrument. The evidence is that he said it would not do to put it in, because it would make the contract void for usury, and that he did not want that, and Smith did not want it. It must be concluded that such was the belief of Smith, a belief into which he was led by the statements of Helmer, who was his friend, and upon whose superior business sagacity he relied. Then there was a mutual mistake of law, and not of fact. They both wanted to keep what they understood to be a usurious agreement secret, and so well satisfied were both that it was the proper thing to do, to simply declare in the written instrument that Smith was to have interest (meaning the legal interest in New York) upon his advances, that, when they went to Mr. Bowen in respect to the form of the instrument, they neither of them said anything about the question of interest. I am not willing to hold that the misapprehension of Smith in regard to the law was induced by Helmer's fraud or decep- | to Helmer one-half of all his interest and tion, or by his inequitable conduct. There is no evidence to support such a finding. On the contrary, such evidence as there is tends to show that Helmer believed what he told Smith, and thus the mistake was mutual." The referee has thus found, on conflicting evidence, as a fact, that the parol agreement as to 8 per cent. interest was omitted from the written contract by the parties through a mistake of law, and has followed this up by the legal conclusion that, as the mutual mistake was one of law, the defendant is not entitled to have the contract reformed. The appellate division unanimously affirmed the judgment entered upon these findings, and they are therefore not open to review in this court. Notwithstanding the suggestion in the opinion of the appellate division that the evidence did not sustain the finding as to a parol contract for 8 per cent. interest, yet that learned court has unanimously affirmed the judgment as it stands, and we give the defendant the full benefit of the finding that such an outside agreement was made. As the findings of the referee are conclusive on this court, the defendant is confined to the review of such errors of law as are raised by proper exceptions. The exception to the conclusion of law that, the mutual mistake being one of law, the defendant is not entitled to have the contract reformed, raises the question whether it is supported by the findings of fact. We think that it is, and that this case is brought clearly within Haviland v. Willets, 141 N. Y., at page 50, 35 N. E. 960, where Judge Finch, writing for the court, lays down the rule of law in regard to equitable relief in an action of this kind. He states that the general rule excludes equitable relief for a mistake, when it is one of law, pure and simple, and no other elements are present. He then adds: "It is equally well settled that where there is a mistake of law on one side, and either positive fraud on the other, or inequitable, unfair, and deceptive conduct, which tends to confirm the mistake and conceal the truth, it is the right and duty of equity to award relief. All the cases which deny a remedy for mere mistake of law on one side are careful to add the qualification that there must be no improper conduct on the other. Silliman v. Wing, 7 Hill, 159; Flynn v. Hurd, 118 N. Y. 26, 22 N. E. 1109; Vanderbeck v. City of Rochester, 122 N. Y. 285, 25 N. E. 408." The referee has not found that Helmer was guilty of fraud or deception or inequitable conduct, although he finds that be was a man of large business experience, and defendant was not. The learned counsel for the appellant has argued with great ability a question raised in this court for the first time, which, briefly stated, is this: That the agreement between Helmer and Smith was an assignment of an interest Helmer had in a preceding contract, and necessarily related to and carried with it the original contract; that Morgan assigned rights under the original contract with Roby; that the assignment by Helmer of his interest and rights to defendant annexed the preceding contracts, and referred to them for "a more particular description and specification of the interest so purchased"; that the three papers were by their terms connected together, and made one contract. The argument based on this state of facts is that Morgan, under the original agreement, was entitled to 10 per cent. on his advances; that Helmer was substituted to half of Morgan's rights and obligations, and was entitled to same rate of interest on advances; that defendant was subrogated to Helmer's rights and interests and was to be reimbursed his advances, "with interest," which was 10 per cent., unless reduced by agreement; that the agreement between Helmer and defendant for 8 per cent. interest was intended to cut down defendant's right from 10 per cent.; and that as a consequence the contract needs no reformation, as defendant, if not restricted to 8 per cent., will receive 10 per cent., as originally provided. The counsel for appellant frankly states that the case was tried on the theory that the contract needed reforming so as to express the agreement as to interest, but that the point now taken is sufficiently raised in the record to be available here. We are of opinion that this contention cannot be sustained. It is clear from the answer of the defendant and the proofs that this contract was treated as giving the defendant but 7 per cent. interest on his advances, unless the parol agreement for 8 per cent. was read into it by a reformation of the instrument. It is too late in this court to change the entire theory of an affirmative defense. When the effort to reform the instrument fails, the defendant is not entitled to a judicial construction holding that, as originally drawn, the contract needed no reformation, and could be read as if reformed. Husted v. Van Ness, 158 N. Y. 104, 52 N. E. 645; Oakville Co. v. Double-Pointed Tack Co., 105 N. Y. 658, 11 N. E. 839. The construction of these contracts as suggested by the appellant's counsel is not without force, and possibly the proper course for the defendant original'y was to have stood upon his contract, and refrained from praying a court of equity to reform it. It is too late to assume that position now. The findings of fact are not reviewable in this court, but are conclusive as they stand. The plaintiff makes a point, which was considered below, that this is a stale claim, and barred by the statute of limitations. The fact appears that these contracts have been acted upon by the parties for 20 years without being challenged, and the claim to reform them at this late day, by inserting important provisions, does not appeal very strongly to a court of equity. The judgment should be affirmed, with costs. All concur. Judgment affirmed. (174 Mass. 491) HOWE et al. v. MORSE et al. (Supreme Judicial Court of Massachusetts. Suffolk. Nov. 20, 1899.) TRUSTS ASSOCIATION FOR TRADE-PERPETUITIES - RESTRAINT OF ALIENATION CONTROL OF PROPERTY BY EQUITABLE OWNERS. 1. An association formed to rent and sell lands, and distribute the income as fast as it accrues, created a trust in which the trustees held subject to the control of the directors of the association. The shareholders remained the absolute owners of the equitable interests, with unlimited power to sell or transfer their interests, which were subject to their debts and to the laws governing ordinary property, and were not controlled in any manner by the declaration creating the trust. Held, that such a trust is not within the rule against perpetuities, though, by the terms creating it, it need not necessarily be terminated within the lives in being at the creation of the trust and 21 years. 2. Neither is such a trust void as an illegal . restraint on alienation. Report from supreme judicial court. Suffolk county; Oliver Wendell Holmes, Judge. A bill by Henry S. Howe and Dudley Porter, stockholders, against Charles W. Morse, Lola C. Sprague, and Martin Taylor, as trustees of the Daggett Building Association, asking that the trust under which defendants held be declared void, and a receiver appointed, and the affairs of the association wound up. Findings for plaintiffs, and case reported. Decree for plaintiffs. sociation, at any time after July 1, 1895. Leases for more than five years and sales can be made only in accordance with an affirmative vote of three-fourths of the shares, and a like vote is necessary to terminate the trust. The substance of the situation is that the shareholders for the time being have the whole equitable estate in the corpus of the trust, and can at all times sell and transfer their equitable estates at their own pleasure, and the trustee holds the legal title in fee, in trust to do with the land whatever may be required by the owners of the equitable estate; which owners have full capacity, at all times and at their own option, to require a sale of the land discharged of the trust, or the immediate termination of the trust after a period of five years and a few days,-the owners of the equitable estate being a voluntary association, the beneficial interests in which are represented by shares, and the association acting by vote of the shareholders. That the directions of the association to the trustees are to be given by threefourths votes, rather than by majority votes, is immaterial, since it cannot be said that one is more improbable than the other. Either s a reasonable way of declaring the will of the association, and there is no provision that a vote to sell or to end the trust must be passed within any stated period, or at all. Such a trust for the cor.venience of an unincor J. L. Thorndike, for plaintiffs. B. B. Jones porated association in renting and selling and M. A. Pingree, for defendants. BARKER, J. While the purpose cf the association is to hold, use, and sell land, and the scheme of organization closely follows that of a corporation, and corporations to buy and sell land can be chartered only by special act of the legislature, this is not a proceeding to restrain or to put an end to the usurpation of corporate franchises. Indeed, as was said in Phillips v. Blatchford, 137 Mass. 510, "it is too late to contend that partnerships with transferable shares are illegal in this commonwealth." Is the trust void as creating a perpetuity or imposing an illegal restraint upon alienation? The right of a shareholder to convey his own shares or interests, under the trust, is in no way restricted; but it is contended that illegality is found in the circumstance that no sale of the corpus of the trust, and no termination of the trust, will necessarily occur within the period of a life or lives in being at the time of the creation of the trust and 21 years, and that the provision that the certificate holders shall not have partition of the land, and can compel its sale only by a three-fourths vote, works an illegal restraint upon alienation. The trustees take the legal title to allow the association, through its directors, to manage the land and to enjoy its rent and income, and to sell the land free of trusts, at the will of the association, with a further provision for the termination of the trust, by vote of the as land, under which the land is held for no other purpose, and where the income is not accumulated, but is distributed as it accrues, and where the land is to be sold free of trus's at the will of the association, and where the whole equitable interest in the trust is at every moment vested absolutely in those who at that moment are shareholders, and never can become vested in any other persons save by act of the absolute owners or by operation of law upon their property, and not by force of any limitation contained in the deed of trust, the equitable interests so vested being also constantly vendible by their several owners without let or hidrance, as well as subject to their debts, ard passing like other property upon death, by virtue not of the deed of trust but of the general laws governing the disposition of the property of decedents, withdraws no preerty from commerce, and is not within the reason or the terms of what is called the "rule against perpetuities." The trust involves no future limitations, no restraint upon alienation, and no accumulation eith r of income or of principal. The provisions by which the trust fund may be at some time held for the benefit of persons not sharehollers at its inception, and who may become such at a period more remote than that allowed by the rule, are not future limitations made by the trust deed, in the sense in which the word "limitation" is used in speaking of the operation of the rule. If there shall ever be a shareholder other than those in which the |