far beyond that prescribed by the rule against perpetuities," and the chancellor might find it just as desirable to authorize a sale at a remote period during the continuance of the trust as at a period within that prescribed by the rule, making the period run from the time of the creation of the trust. It is submitted, therefore, that the circumstance that the power is subject to the control of a court of equity has nothing whatever to do with the application or non-application of the rule against perpetuities.

Effect of the Act of 1853 on the Application of the Rule toPowers in a Trustee

*

428. The Act of April 18, 1853,8 provides, among other things, that the court may decree "the sale, mortgaging, leasing or conveyancing upon ground rent of any real estate held by trustees for any public or private use or trust, and although there may exist a power of sale but the time may not have arrived for its exercise or any preliminary act may not have been done to bring it into exercise, or the time limited for its exercise may have expired," etc. While no question has arisen as to the effect of this act upon the application of the rule against perpetuities, it is submitted that under its provisions the court may direct a sale by a trustee at a period which is remote, and as it may direct a sale where the time fixed for the exercise of the power has not arrived, and as that time may be fixed at a remote period, and the act makes no exception in such case, it would seem as if the trustees can sell, even though the power is in terms limited to be exercised at a period beyond that prescribed by the rule. This legislation, therefore, enables a trustee to make a sale of the trust property in cases where, if the rule be applicable to powers in a trustee, as commonly supposed, there could be no sale under the power conferred."

Summary of Pennsylvania Law

429. The question in Pennsylvania under the authorities. is open.10 It is probable that owing to the provisions of the

7 See §420, ante.

882, P. L. 503; Pepper & Lewis' Digest, col. 4048.

9 No trustee need feel any embarrassment as to the possibility of his disposing

of the trust property, even if there is a question as to the remoteness of the power of sale.

10 See §426, ante.

Act of April 18, 1853,1 the question has not arisen for decision in Pennsylvania. It is submitted that the period prescribed by the rule should begin to run from the time the trustee exercises the power of sale; that the power of the court to control the sale is utterly immaterial in considering the application of the rule against perpetuities, and that it is eminently desirable that such powers should be valid at all times during the continuance of the trust, no matter what the period of time within which they are limited to be exercised.

Power of Sale in Trustees for Bond Issues

430. Property is frequently conveyed to trustees, in trust, to secure bonded indebtedness, and in such cases there is frequently inserted in the deed of trust a power of sale to be exercised, if occasion requires, for the benefit of the purchasers of the bonds. It is apprehended that the rule against perpetuities is involved in this case in exactly the same particular as in an ordinary case of a power of sale in a trust settlement. No question as to this has come before the Supreme Court of Pennsylvania.2

As to Powers Exercisable After the Termination of the Trust

3

431. Mr. Gray lays down several rules as to the case where the power is to be exercised after the termination of the trust, which rules, it is submitted, are totally unnecessary and overlook the real state of affairs at that time. When the trust terminates, an absolute interest necessarily becomes vested in one or more persons. If the subject matter is real estate, and the circumstances are such that the statute of uses applies, the power of the trustee falls, as the legal title is at once taken away from him by force of the statute, and the powers have nothing upon which to operate. Where the statute does not apply, the party or parties are entitled to call for a conveyance of the legal title. It remains in the trustee, if at all, by sufferance only, and the powers are at any time destructible by the parties to which the proceeds belong. Any limitations by the trustee in such case are, in

12 P. L. 503, see §428, ante.

2 There was such a power in the case of Bancroft v. Ashhurst, 2 Grant's Cases, 513 (1860), but no question as to the application of the rule was raised; see

Gray, Rule Perp., 2 ed. (1906) §565.

3 Rule Perp., 2 ed. (1906), §506.

4 See Chap. 6, ante, on the statute of uses.

5

Gray, Rule Perp., 2 ed. (1906), §490.

effect, limitations by the cestui que trust, who is the real owner, as they are made by his sufferance only. As the rule looks at the substance and not at the form the period prescribed by the rule begins to run from the time of the exercise of the power for the same reason that governs that governs limitations under a general power of appointment.

As to Case of a Trust of an Absolute Interest

432. If the conclusion is reached that the powers in a trustee, even though unlimited as to time, are unobjectionable in so far as the rule against perpetuities is concerned, then they are valid during the continuance of the entire trust, no matter to what remote period the trust may subsist. If, then, the Supreme Court should reach the conclusion that the trust of an absolute interest is valid or that the enjoyment or possession of an absolute estate may be postponed to a remote period by the device of a trust, there should be no distinction in the application of the rule. If in such a case it should be felt that the powers are objectionable because exercised at such a remote period, it should be remembered that the error lies in permitting such objectionable trusts in the first place, and not in upholding the validity of the power.

Power to Appoint New Trustees

433. A power to appoint new trustees, it seems, does not offend against the rule. The question has not arisen in Pennsylvania, although such powers are constantly inserted in trust settlements, and no doubt appointments under them have been made at a remote period, computing from the creation of the trust. If no sale can be made under a power in a trustee at a remote period, then no appointment of a new trustee can be made under a similar power. There is no distinction between the two cases. The appointment of a new trustee necessarily either expressly or by implication vests in

post.

This question discussed, Chap. 22,

7 Gray, Rule Perp., 2 ed. (1906), §509, admits this. He falls back on his former reason that as soon as the cestui que trust calls for the legal title the trust is at an end. The reason however, would not

apply to the case put in §420, where the trust may continue beyond the period prescribed by the rule. The reason assigned by the learned author does not, therefore, explain why they are remote in one case and not in another.

him the legal title to the trust estate. It is submitted that it is desirable to uphold the validity of these powers, and that the consideration of them further enforces the position that the period prescribed by the rule against perpetuities in all cases of a power in a trustee as to the legal title begins to run from the time of the exercise of the power.

8

Power to Lease

434. A power in the trustee to lease presents a still stronger case for the non-application of the rule against perpetuities. A lease in praesenti never violates the rule at law, and the fact that it is made by a trustee under a power can make no difference, and as there is no shifting of the equitable estate of the cestui que trust, there is no possible ground to argue that the rule applies.' If the trustee should make a lease to begin in futuro, at a time beyond the period prescribed by the rule, the lease would, of course, be void, as the limitation would violate the rule at law. It may be the law that where the lessee takes with notice of the trust his lease must be surrendered by order of the court when the trust ends.2

Hutchison's Appeal

3

435. In Hutchison's Appeal the testator gave the residue of his estate in trust either to rent or to sell, as the occasion offered, and in further trust, upon receipt of the rents or the purchase money, to divide the same among the testator's four daughters, their heirs and assigns in equal shares. In a proceeding in partition the court said that the bill would not lie, as there was a trust under the terms of the will, and as to the power to lease, the Supreme Court, in a per curiam opinion, used the following language:* "It is very clear that it would be an abuse of his option to lease were

he to make leases conflicting with the testator's intent to sell and furnish such a fund for distribution among his daughters, or contrary to the policy of the law which forbids perpetuities." It is submitted that in this the court overlooked the principles already discussed, that a lease, no matter how long, does not violate the rule. The learned judge probably had in mind the thought that a lease of extraordinary length would postpone the power to sell until a remote period. This, however, is a fallacy, as the property could be sold subject to the lease, and while the existence of the lease might depress the market price it could not destroy the alienability of the title or prevent the operation of the power of sale.

Summary of the Law as to Powers in a Trustee as to the Legal Title

436. If a power in the trustee is so limited as to be exercisable only within the period prescribed by the rule against perpetuities it is admittedly valid, and no case seems to have arisen deciding the question of the application of the rule to the interests actually limited in such a case. If it is not so limited and may be exercised at a remote period the law as to the application of the rule is far from clear. In England it seems to be settled that such powers are valid, whether they are in terms limited to be exercised within the period prescribed by the rule or not. But when the case is put where the trust may continue until a remote period the power is said to be void. The learning on the subject in the books is confusing in the extreme, and the discussion assumes the point in controversy. It is submitted that on principle the power is valid, and that the period prescribed begins to run from the time of its exercise and not from the date of the settlement in trust. The notion that powers in a trustee unlimited as to the time of their exercise violate the rule against perpetuities seems to have had its origin in the mistaken idea that a power of appointment which may be exercised at a remote period is void under the rule. As already pointed out, the rule applies to the future interests limited. under the power, and it is inaccurate to say that the power is void under the rule. If this point had been apprehended 498; Lewis, Perp., pp. 542-555 (1843).

5 See §415, ante.

Gray, Rule Perp., 2 ed. (1906), §§481