5 ward advanced to this son a portion of his share.* The husband filed his account as executor, and the assignee of the son claimed the amount which had been paid to the son after the assignment. The Orphans' Court disallowed the claim of the assignee of the son. This case is very badly reported, and it is not surprising that Mr. Gray failed to understand why the two women, Anna B. Scott and Deborah Mellor, appealed. It appears from an examination of the record that the assignee of the son did not appeal. The two women who appealed objected to certain items in the account relating to investments. The question, then, as to the propriety of the advancement to the son was not before the Supreme Court. The case, therefore, is deprived of much of its force on this point, as it is only a decision of the Orphans' Court. The criticism by Mr. Gray on the case is given in full in the note, and leaves little to be added. 4 The above statement is, with a slight alteration, taken from Gray, Restraints on Alienation, 2 ed. (1895), $124h. 5 Restraints on Alien., 2 ed. (1895), §124h. 6 Restraints on Alien., 2 ed. (1895), $1241, et seq. "In the Orphans' Court the auditing judge ruled that the children took vested interests when they reached twenty-one, but that the husband 'had the right to bestow upon any of the children a sum greater or less than their respective shares. If he chose to exercise that option by giving to the children, other than the bankrupt, a sum so far in excess of their portions as should leave nothing to the debtor, the creditors would be powerless.' The Orphans' Court affirmed the decision of the auditing judge. They said: 'Where there is a present gift, in possession, of the entire beneficial ownership, a trust to protect against creditors is invalid: Keyser's Appeal, 57 Pa. 236; but the power of alienation may, unquestionably, be withheld in the case of a contingent interest before it vests, even in England: Large's Case, 2 Leon. 82; 3 Leon. 182; Barnett v. Blake, 2 The auditing judge, Ashman, Dr. & Sm. 177; and so it would seem in Pennsylvania in case of a vested interest, prior to its coming into possession, or where the restraint is confined to a limited period not transgressing the rule against perpetuities: McWilliams v. Nisly, 2 S. & R. 507, 513. See also Jauretche v. Proctor, 48 Pa. 472.' The Court refers also to Beck's Estate and Goe's Estate, ubi supra. The Supreme Court affirmed the decision, saying that they did so on the reasons given in the opinion of the auditing judge. It does not seem entirely clear that the son did not have a legal interest, but assuming that he had only an equitable interest the ruling of the auditing judge appears to amount to this. If A. having an equitable vested interest in remainder in a trust fund after a life interest given to the trustee, assigns that interest, and the trustee waives his life estate and is ready to pay over A.'s interest at once, the trustee can ignore the assignment and pay the money directly to A., provided he has power to appoint the fund away from A. This is the reasoning approved by the Supreme Court, but it seems open to some criticism. Sup J.,' placed the decision on the ground that as the trustee had discretion to give the principal among the children in such shares as he saw fit, he might distribute it to the others to the exclusion of the son; that, therefore, the son would have no standing to compel the exercise of the discretion in his favor. As he, therefore, had nothing to assign, his assignee would take nothing. In no event could the trustee be surcharged for payment after the assignment unless he had notice thereof, and as it does not appear that he had such notice, the case would appear to be well decided on this ground alone. Unfortunately the court in banc, in dismissing the exceptions, placed the decision on other grounds. Penrose, J., delivered the opinion of the court, and said that the clause against involuntary alienation applied to the share of the son in the principal, and prevented voluntary alienation for payment of debts.10 The learned judge seemed to proceed on the theory that a restraint pose the trustee had died, and his successor is dividing the property, and has notice that A. has assigned his share, he would surely have to pay it to the assignee, and what difference can it make that the life tenant waives his interest, and allows the vested interest in remainder to come into possession at once? And again, what difference can it make that the vested interest could have been divested by the exercise of a power if the power has not been exercised? The full bench of the Orphans' Court places the decision on another ground, viz.: that a future interest though vested, can be put under a restraint against alienation if it has not come into possession; but this ground seems no more tenable than that taken by the auditing judge. It is doubtless true that a future contingent interest may be forfeited by alienation before vesting, §46, ante; but that is a totally different proposition from saying that a contingent future interest shall not be assignable before vesting. Law and equity have always lent themselves to the easy destruction of contingent interests, but that is very different from watching 8 over such interests so carefully as not to allow anyone having a contingent future interest to get rid of it. But further, even a clause of forfeiture upon alienation is not held valid when attached to interests vested in interest though not in possession, 847 et seq., ante. McWilliams v. Nisly and Jauretche v. Proctor contain only dicta. Barker's Estate cannot be considered as having made the state of the law in Pennsylvania any clearer." 7159 Pa. at 523. 8 See the question of discretion discussed, §537, post, to which heading the case in this aspect more properly belongs. 9 159 Pa. at 523. 10 There is a serious question whether the clause against involuntary alienation applied to the share of the son. This point does not appear to have been called to the attention of the court. There is great force in the arguent that the clause applied only to the trust for the maintenance and support of the family of which the share of the son in the remainder was not a part. Such a construction is supported by the case of Moore v. Deyo, 212 Pa. 102 (1905). on alienation qualified as to time was valid at law; that Goe's Estate1 decided that such a restraint on alienation was valid for a limited period, that is, while the legacy was in the hands of the executor, and that, therefore, a restraint on the voluntary alienation of a future vested equitable interest is valid during the continuance of the trust. A restraint on alienation qualified as to time is probably void at law 2 and there seems to be no good reason for extending the doubt into equity. The learned judge failed to observe, however, that the clause in the case at bar restrained only involuntary alienation, and that the case before him was that of a voluntary alienation, and that in Goe's Estate the court awarded the fund to the assignee as against the attaching creditor. Barker's Estate, therefore, seems to be inconsistent with the real decision in Goe's Estate. The learned judge got around this point by saying that an assignment for the payment of debts was the same as the taking of the estate by execution for the debt. It is submitted, however, that this is a confusion of the two kinds of alienation. They should be kept separate and distinct, and the one does not include the other.* Hartman's Estate 5 240. In Hartman's Estate the cestui que trust had been sent to jail for failure to support his wife. He then made an assignment of his interest to his wife, and she endorsed thereon an acceptance thereof and a consent to an order of discharge, which order was accordingly made. On the audit of the executor's account, the assignment to the wife was presented, and the order of the court below directing the payment to her was, on appeal, reversed by the Superior Court. The clause was against both voluntary and involuntary alienation. The opinion of the court turned on the character of the claim for which the assignment was 1146 Pa. 431 (1892), §223, ante, and Beck's Est., 133 Pa. 51 (1890), §222, ante. 2 See $204, ante. 3 146 Pa. 431 (1892), §223, ante. 4 See $173, ante, as to distinction between voluntary and involuntary alienation. 5 31 Super. Ct. 152 (1906). The words made, and the decision was of the will, unfortunately, are not given in full, and it is somewhat difficult to tell whether the interest was legal or equitable. It is considered as equitable, as Beaver, J., in the Superior Court, at p. 154, expressly said that an active trust was clearly created, and the learned judge probably had before him the exact words of the will. based on Board of Charities v. Lockard, without noticing that that was a case of a life estate, and the case at bar was a case of an absolute interest. The question of the validity of the restraint when imposed on an absolute equitable interest apparently was not called to to the the attention of the court. * Fleming's Estate 241. In Fleming's Estate the testator gave his real estate in trust for fifteen years, the trustees during that period to pay over the net income quarterly to his six children, who were specifically named, with the following clause: "None of my children shall during said term have the right to sell, pledge or in any other way anticipate their respective shares in the rents or income of said real estate, nor shall they have the power to sell, mortgage or otherwise encumber their prospective interests therein." The testator further provided that at the expiration of fifteen years from his decease, the trustees should divide the estate equally among the six children, naming them, "or if any of my said children shall have died before the time for such division, to the children then living and the heirs at law or devisees of the child or children who shall have died. *The death of any of my children shall not in any wise affect the provisions of this trust, but the share or shares of the one, or of those, so dying shall descend to him, her or their heirs at law or devisees subject to all the conditions herein named." A son, George, died during the fifteen-year period, having first made a will whereby, among other things, he directed the payment of his debts. The case arose on a controversy between the creditors and other devisees of George over his interest in his father's estate, the land having been sold in partition proceedings, at the expiration of the fifteen years. The Supreme Court held, in an opinion by Mr. Justice Brown, that the creditors were not entitled to come in on the fund. The learned judge said that George could not have disposed of the interest by conveyance inter vivos during the fifteen-year period, nor could the same have been taken in execution for his debts during that time, and as George's interest ceased when he died, and it then went to his devisees or heirs, the only power George could exercise was to devise it, and as the provisions of the will were that 6 198 Pa. 572 (1908). 7219 Pa. 422 (1908). the devisees should take subject to the restraints in the will, they also took subject to the clause against involuntary alienation, and consequently, the devisees of George, who were his creditors, could not take under his will. There is, however, a hiatus in the reasoning of the learned judge. If the clause in the will providing exemption from involuntary alienation applied to George's devisees, the effect it would have would be to exempt their interest from the claims of their creditors, and, it is submitted, it is a confusion in thought to say that the clause operating on the devisees, would have the effect of limiting the power of George to will to his creditors. Furthermore, there was no case of involuntary alienation before the court. The creditors claimed under the provisions of the will. It is material in this case to ascertain the interest which George took. There can be no question but that he took an absolute interest. It went after his death to his heirs or devisees, and the prohibition against voluntary alienation during his life or during the fifteen-year period could not operate to cut down the estate in fee. It is immaterial whether George's interest was vested or contingent; in either case the effect of the decision of the court was to sustain the validity of the clause as imposed on an estate in fee. The decision is difficult to support on any ground. The will expressly provided that if any child died, his share was to be paid to his heirs at law or devisees. The process of reasoning by which the court declined to give effect to this clause as to such of the devisees of the son who happened to be his creditors, is incomprehensible. Rockhill's Estate 242. In Rockhill's Estate 10 although the words of the will are not given, it appears that there was a gift in trust for the payment of debts, the carrying on of the testator's business then for his wife for life, and after her death, for 8 It may be argued that this case is sustainable on the ground discussed $286, post, that the clause against involuntary alienation, when imposed on a life estate, operates when the life tenant has a general power of appointment to exempt the assets which he appoints from the claims of his creditors. The answer to this is that we have not here a case of a life estate with a power of appointment, but the case of a fee. The added alternative devise to the devisees of George can have no other effect than to give him a power of appointment, which is superfluous in the case of a fee. See this question discussed, §174, ante. 10 29 Super. Ct. 28 (1905). |