$525

Statement of real question involved in the cases.

Consequences of upholding the trust of an absolute interest...... §526

Preliminary Discussion

515. In this chapter we shall discuss the second form in which the attempted restraint on enjoyment appears. This is the case where the donor creates a trust of the absolute interest which he gives the donee, the intention apparently being to prevent the donee from having full control and use of the property. If the trust can remain against the will of the cestui que trust it is a restraint on his use and enjoyment.

General Principle as to Validity of the Trust of an Absolute

Interest

516. The general principle is that a donor may not fetter an absolute gift with a trust.

1 See $489, ante.

2 By absolute gift is meant a fee simple in real estate or an absolute interest in

Such a trust is a restraint on

personal property. No distinction is drawn in this chapter between the two kinds of property

the donee's use and enjoyment of his property, because he is thereby deprived of the use and enjoyment of the legal title, and since the property is his absolutely he is entitled to the whole, legal as well as equitable. The cestui que trust may terminate the trust and have a conveyance of the legal title at his pleasure, and it is entirely inadmissible to rely on the intention of the donor, because that intention is against the law and cannot be carried out against the objection of the cestui que trust.*

Preliminary Discussion of Law in Pennsylvania as to Trust of an Absolute Interest

517. There is a great weight of authority in Pennsylvania in favor of the right of the cestui que trust to terminate the trust. There are, however, a number of recent cases which seem to countenance the proposition that a trust of an absolute interest is valid even against the objection of the cestui que trust. These cases will now be examined."

3 The student will observe that the question is not whether the trust can be created; that it can be is beyond question. The donor can make a separation of the absolute beneficial interest from the legal title by the use of appropriate words. The question is whether that separation can remain against the objection of the cestui que trust. Williams v. Tozer, 185 Pa. 302 (1898), is an illustration of such a trust remaining with the consent of the cestui que trust.

4 Where there are two or more cestuis que trustent they must all unite in order to terminate the trust.

5 See remarks of Gibson, C. J., in Hillyard v. Miller, 10 Pa. 326 at 338 (1849); Penna. Co. v. Price, 7 Phila. 465 (1870), grounds of decision open to objection as to application of the rule against perpetuities; House v. Spear, 1 W. N. C. 34 (1874); Stevenson's Est., 18 Phila. 151 (1878); dictum, Penrose, J., in Moss's Est., 11 W. N. C. 306 at 307 (1882); Willard v. Davis, 3 Penny. 86 (1882); Rodrigue's App., 22 W. N. C. 358 (1888); dictum, Bucher, J., in the court below in Dull's Est., 137 Pa. 112 at 115 (1890); Robin

son's Est., 149 Pa. 418 (1892), see remarks of auditor in the court below, at p. 428; the cases he cites are, however, not in point; dictum, Ashman, J., in the court below in Cooper's Est., 150 Pa. 576 at 579, 580, (1892); McCune v. Baker, 155 Pa. 503 (1893); Reilly's Est., 190 Pa. 509 (1899). In many of these cases the court relied on the fact that the trust was dry. It is submitted that such ground of decision is unimportant, and the rule is the same whether the trust is dry or active. The point is that there is a restraint on an absolute interest. If the subject matter is real estate and the trust dry, the title is at once in the cestui que trust, whether he has had an absolute interest or not. If it is active he can call for a conveyance if he has a fee. If the subject matter is personalty he can have a conveyance if he has an absolute interest, and if he has a less interest he cannot have a conveyance whether the trust is dry or active. See, however, Bringhurst v. Cuthbert, 6 Binney, 397 (1814).

The cases as to the validity of the clause against voluntary or involuntary

Boies' Estate

7

518. In Boies' Estate the testator gave the residue "to my son H., to my daughter M., to my daughter E., and my son Matthew, to be equally divided between them on the following conditions." Then as to the share of Matthew, he provided: "The share going to my son Matthew shall be held in trust by my son H. My son H. shall pay to my son Matthew the income from his share in quarterly payments each and every year during his natural life, and my son H. may, in his discretion, in case my said son Matthew shall reform and abstain from the use of intoxicating drinks for two years, pay to him, my said son Matthew, from three thousand to five thousand dollars to enable him to engage in business." By a codicil the testator further directed as follows: "I desire to have it known and understood by all interested in my last will and testament, and so I will, that it is my intention that my children surviving me, to whom I have left property in trust for their children, shall have the free use and benefit during their lives of the income of such trust, without the necessity of accounting to their children for such income, and that they shall have the power to sell and reinvest the principal at their discretion, in such manner as shall in their judgment best preserve the principal sum for their heirs. Nothing herein, however, is to affect the original provisions of my will concerning my youngest son Matthew." Matthew was dead, and the question was whether the executor under his will was entitled to Matthew's share in his father's estate. The court said that the legatees under Matthew's will were entitled to receive Matthew's share; that the share of Matthew was not cut down to an equitable life estate, but

alienation when attached to an equitable fee, discussed §§243, 251, ante, should be considered in this connection. The principle to be applied seems to be this: if a trust of a fee is invalid against the cestui que trust, then it must necessarily follow, since a spendthrift trust is only an ordinary trust with a clause attached, that a spendthrift trust of a fee will have no greater effect. The clause forbidding involuntary alienation is clearly invalid at common law when attached to a fee; see §218, ante. If valid at all, it is valid only in equity; see

§§243, 251, ante. If the cestui que trust can have a conveyance of the legal title and thus destroy the equitable interest apart from the clause, then the clause must fall with the termination of the trust. This view of the subject does not appear to have been called to the attention of the Supreme Court, and it must be confessed that the cases are somewhat stronger in favor of sustaining a spendthrift trust of a fee than in favor of sustaining a simple trust of a fee.

7 177 Pa. 190 (1896).

was vested in him subject to the trust created for his protection and benefit for life, and that he had a right to dispose of the corpus as he did. The remarks as to the effect of the trust were dicta, as the case did not arise in Matthew's lifetime. The dictum in this case may be said to be the origin of the notion that a trust of an absolute interest can remain as against the objection of the cestui que trust."

Krebs's Estate

8

519. In Krebs's Estate the testator by his will directed as follows: "It is my will that after the death of my wife, ** all the property, real and personal, then left by her shall be divided in equal parts or shares between my children, with the condition that the money loaned to G., (a son,) shall be deducted from his share, and with the condition that G. shall receive only the interest of his share, or as much as in times of sickness or accident my executor will give him to meet his wants." Partition proceedings were had in the estate, and the share of G. was allotted to a trustee under the trusts in the will. The case came up on a petition to set aside the decree in partition appointing the trustee. The petition was dismissed and the Supreme Court affirmed the decision on the opinion of the court below.10 The learned judge of the court below" said, "All the authorities go to show that there may be an absolute beneficial estate consistently with a temporary or continuous trust. The test of the validity of a trust is a lawful purpose legally declared, and its duration measured by the accomplishment of such purpose." The learned judge cites no cases which sustain his position, and up to that time no such decision had been rendered in Pennsylvania. It is believed

8 This case is important, as it seems to be the first clear statement, although by way of dictum, of the notion that the donor can give an absolute interest and then provide that the estate shall be held in trust during the life of the first taker. Traces of this notion are to be found in the remarks of the court in some earlier cases, e. g., Conrow's App., 3 Penny. 356, Clark, J., at 363, 364 (1853); Marshall's Est., 147 Pa. 77 at 84 (1892); Cooper's Est., 150 Pa. 576, Paxson, C. J., at 583 (1892).

184 Pa. 222 (1898).

10 The judge of the court below, at p. 223, said that the real nature of the proceeding was to have the trust declared executed. It is apprehended that the learned judge meant that the proceeding was to have the legal title conveyed; see p. 226. The better practice probably is to present a petition for a decree directing the conveyance of the legal title. 11 Hawkins, P. J., at p. 224.