have no effect on the estate of the donee of the power.1 If the subject matter is personalty, and the gift by deed, we have the preliminary question whether future legal limitations of personalty can be created by a deed inter vivos.2 No case of a legal limitation of a future interest in personalty under a power by deed inter vivos has been found and, therefore, no statement can be ventured as to the law on this point. In considering the disposition of the property we may distinguish two cases: (1) where the power can be exercised at a remote period, (2) where the power must be exercised in time. Invalidity of Limitations Under a Power Exercisable at a Remote Period 393. When the power is exercisable at a remote period the limitations will be entirely void. The power will be nugatory under the law of powers, and as it can never be exercised with any legal effect, it will be considered as if omitted from the instrument, and the property disposed of as in any of default of appointment. The questions raised by such a case are, however, properly solved only by the application of the law of powers, and do not come within the scope of a discussion of the rule against perpetuities.3 Where the Power Must be Exercised in Time and Limitations Thereunder are Void 394. Where the power must be exercised in time, and the limitations thereunder are invalid, the case is somewhat different. The power of appointment has been exercised, and the only difficulty is that the limitations thereunder are invalid. The property so appointed should be disposed of under the principle already discussed, just as if the invalid limitation had been made by the donor of the power. The principles governing this are pointed out in Chapter 19, except that where there is no residuary bequest or the power is to appoint the 1See §§465, 467, 470, post. See also comments in 8401, post. 2 Discussed §§92 and 95 ante. 3 Gray, Rule Perp., 2 ed. (1906), §535. No Pennsylvania case on this point has been found. Mr. Gray says that where the power itself is remote, the limitations in default of appointment being vested, take effect as if the power had been omitted. 4 That the limitations are those of the donor of the power; see $389, ante. residue, the property goes as provided in default of appointment, instead of under the intestate laws or by way of resulting trust. Where the preceding valid limitations under the power exhaust the fee, it is probable that the subsequent invalid limitations drop and the preceding ones remain." If the limitations are separable, the invalid ones are destroyed and the others remain. If they are inseparable, they all fall together. The Pennsylvania cases relating to special powers of appointment will now be considered in chronological order. Smith's Appeal 395. In Smith's Appeals there was a gift of the residue in trust as to a portion thereof for a daughter for life, upon her death to such persons as she should by will appoint, with limitation over in default of appointment to the child or children of said daughter. The daughter died, having made a will whereby she gave her individual estate and that as to which she had a power to appoint, to her sons and daughters for life, and after their death, to the uses of their last wills, with limitations over in default of appointment. All the children of the daughter were born in the lifetime of the father. The question came up at the audit of the account of the trustees under the father's will. It was held that the limitations under the power of appointment were wholly void, and the estate distributed under the original will, as in default. of appointment." The Supreme Court, in an opinion by Paxson, J., said that that portion of the daughter's will which was in exercise of the power, should be written into the will of her father, and the two regarded as one instrument; and that when so regarded there would be a gift to the daughter for life, and then to her sons, and daughters for life, with remainder 5 Smith's App., 88 Pa. 492 (1879), stated $395, post; Boyd's Est., (1) 199 Pa. 487 (1901) stated §398, post; Gray, Rule Perp., 2 ed. (1906), §§533, 534. It is important to bear in mind that the property embraced in the void limitations is to be disposed of as of the estate of the donor, and not of the estate of the donee, in this case differing from the case where the limitations under the power are valid but cannot take effect; see Linton's Est., 198 Pa. 438 (1901). n. 5. Gray, Rule Perp., 2 ed. (1906), §534, 7 Gray, Rule Perp., 2 ed. (1906), §531. See Boyd's Est., (1) 199 Pa. 487 (1901), stated §398, post; and see Smith's App., 88 Pa. 492 (1879), stated $395, post; as to separability see §§337, ante, 463, post. 888 Pa. 492 (1879). 9 As to this point, see §394, ante, and Gray, Rule Perp., 2 ed. (1906), §239, n. 4, 3rd paragraph. to their appointees, which gift would clearly be bad because it included children born after the death of the donor of the power. This case has been pretty well discredited and overruled, and the decision was clearly erroneous. It is important, however, to point out to the student the particulars in which the court misapprehended the rule against perpetuities, as the mistake made by the court is one of frequent occurrence. The limitations under the power to the children were plainly good, as they must all necessarily have been ascertained before the death of the daughter, who was born at the date of the death of the donor of the power. In like manner, as all the children were in fact born before the death of the donor, the limitations over by the daughter after their death were good. Judging by the facts existing at the time of the exercise of the power, it was plain that the limitations over were good. If these limitations had been made by the donor, they would have been void, as it could not have been told at his death whether the daughter would have children born afterward or not. As the limitations over by the daughter were after the several and respective deaths of the children, they were clearly separable and would therefore be good as to those born before the donor's death, and void as to those born after. The court was probably influenced by the doctrine advanced by Mr. Lewis, that an appointment under a power is bad if made to a person unborn at the time of the creation of the power, although living at the date of appointment, and specifically named in it. The rule against perpetuities has to do with the time of vesting, and not with the question when the party who is to take is born." 4 Lawrence's Estate 7 396. In Lawrence's Estate a father gave his estate in trust for his daughter Ann for life, and upon her decease, for the appointees of her will. Ann died, having exercised 1 See Boyd's Est., 199 Pa. 487 (1901), stated $398, post. 2 Gray, Rule Perp., 2 ed. (1906), §239, n. 4, §523c. 3 Gray, Rule Perp., 2 ed. (1906), §395; as to separability see §§337, ante, 463, post. 4 Lewis, Perp., pp. 491, 492 (1843). 5 See a discussion of this fallacy, Gray, Rule Perp., 2 ed. (1906), §§517-523b; see 6 L. R. A. N. S. n. 330. 6 Weinbrenner's Est., 173 Pa. 440 (1896); see language of Ashman, J., at 443. 7136 Pa. 354 (1890); see note on this case, 11 L. R. A. 85. the power, thereby appointing to her executors in trust to pay certain annuities to her children and grandchildren for life, the trust to terminate upon the death of her last surviving child, and then to pay over the principal to a charity. All of Ann's children were living at the death of her father. The parties entitled under the will of the father, in default of the appointment by the daughter, claimed to have the whole estate transferred to them on the ground that the appointment was void. It further appeared that at the death of the daughter the estate consisted solely of real estate. The Supreme Court affirmed the decree of the Orphans' Court.8 Mr. Justice Clark, in the Supreme Court, said that the appointment was valid, as it was to persons who would be in esse at the time of Ann's death; that the appointment was not affected if the limitations over to the charity were void, as where there was a particular estate and remainder, and the particular estate good and the remainder void, the remainder only was cut out. He then concluded that the remainder to the charity was vested, and consequently did not violate the rule, and that the appointment was not invalid because a trust was superimposed upon the estate which was limited. The learned judge said, "In the exercise of that power she did appoint the fee, and we think she was authorized, observing the rule against remoteness, to declare such uses and trusts for life as would best carry out her wishes with respect to the ultimate disposal of the property." "10 The decision is sound. The questions of the validity of the trust and the limitation over to the charity were not before the court.1 This case overrules Smith's Appeal,2 in so far as the latter would invalidate the limitations under the power to the children born in the lifetime of the donor of the power. 8 The office of trustee, under the will of the daughter, being vacant, and the account of the trustee under the will of the father being before the court for settlement, a petition was presented by the appointees under the will of the daughter asking for the removal of the then trustee, and the appointment of a new trustee under the will of the father, in accordance with the appointment under the will of the daughter. The decree of the Orphans' Court, which was affirmed, appointed a Ronckendorff's Estate 3 397. In Ronckendorff's Estate the testator gave one-third of his estate in trust to his daughter for life with power of appointment. The daughter died, having appointed to her husband for life, after his death to her son George for life, with remainder in fee to his issue, and, in default of issue, to her sister. The husband died, leaving George, who was born after his grandfather's death, surviving. The question before the court appears to have been as to the validity of the appointment to George. Ashman, J., said that the limitation was valid, that reading the two wills together, the limitation was to the daughter for life, then to the husband for life, then to the son for life. The report does not disclose whether the husband was born before the death of the testator or not. If he was born afterward the limitation to George was void, because upon the facts as they existed at the time of the exercise of the power, there would be a possibility that he would take at a remote period. If George had been born in the lifetime of the testator, the husband being born afterward, the limitation to him would be valid because he would take, if he took at all, within the period prescribed by the rule. The estate for the life of the son extended into the remote period, but was nevertheless valid.5 The limitations. over after his decease were clearly invalid. Boyd's Estate 398. In Boyd's Estate, No. 1, there was a gift in trust for a daughter, Mary, for life, with power of appointment by will and, in default of appointment, to her heirs. Mary died, having appointed to a trustee in trust to pay the income to her son for life, and $25,000 of the principal to him absolutely upon arriving at the age of twenty-five years, the remainder at his death in trust for his widow and children, if any, as he should appoint, and, in default of appointment, to the persons entitled under the intestate laws had he died seised and possessed thereof intestate, and if he should leave a widow and no children, one-third to the widow, unless he 311 Pa. C. C. 447 (1892). 4 The exercise of the power is to be judged by the facts existing at the time of the exercise, making the period pre scribed by the rule run from the time of 199 Pa. 487 (1901). |