8 vested the direction to accumulate can have no effect upon alienation, and as has been pointed out, the accumulation can be stopped by the donee under another rule. The act, therefore, does not in any way touch the rule forbidding restraints on alienation. The Act Considered in Connection With the Rule Against Perpetuities 627. The particular in which a direction to accumulate violates the rule against perpetuities has already been pointed out. The statute against accumulations, therefore, still further limits the period prescribed by the rule against perpetuities, so far as directions to accumulate are concerned. The Act Considered in Connection With the Rule Forbidding Restraints on Enjoyment 628. When the contingent gift is dependent on the accumulation, no question as to restraint on enjoyment can arise, because there is no right to enjoy until the interest is vested. Where the direction to accumulate is engrafted on a vested gift, the direction is void as a restraint on enjoyment. In this respect the statute is coextensive with the rule forbidding the imposition of restraints on use and enjoyment. Although no authority on the point has been found, it is apprehended that such a direction would have been void before the act was passed.10 Cases on Accumulation Before the Act 629. Very few cases on accumulation arose in Pennsylvania prior to the Act of 1853, and as that act probably contains all the law on the subject the earlier cases, with one exception, are practically obsolete and require no special comment.' 8 See 88621, ante, 628, post. "See §620, ante. 10 See §621, ante. 1 In Ashhurst v. Given, 5 W. & S., 323 (1843), see Gray, Restraints on Alien., 2 ed. (1895), §223, there was a direction to accumulate the profits of the trust during the lifetime of the trustee for the benefit, at his decease, of his children, the ultimate remaindermen. The direction to accumulate was held to be valid; see Brown v. Williamson, 36 Pa. 338 (1860), stated $631, post; an identical case arising after the act. In Kelso v. Dickey, 7 W. & S. 279 (1844), there was a direction to accumulate until the bene Preliminary Discussion of Directions to Accumulate Which are Valid Under the Act 630. We shall first ascertain what directions to accumulate are valid under the act. It is necessary to approach the subject from this point of view because the act starts out by prohibiting all directions to accumulate, and then allows, by a series of provisos, certain exceptions to the general rule previously laid down. The subject can best be understood by taking up the cases in chronological order. Brown v. Williamson 631. In Brown v. Williamson2 the testator gave one-third of his estate to his son, in trust, to hold the same during his life and out of the profits to make investments for the same uses and trusts, to wit: for the use of such children as F. might have at the time of his death, and if he should die without issue, then for the use of those who should then be the testator's heirs, with a further direction that F. should have a reasonable support out of the trust fund for personal services rendered. The case arose on a proceeding by the son's creditors to attach the trust estate. The attachment was served on the executors of the testator, from which it seems that the trust fund had not yet been handed over to F. The court said that the question was whether the interest of F. in the trust fund was liable to such attachment. It was argued, on behalf of the creditor, that the direction to accumulate was void, and therefore the interest was vested in F. absolutely. The court said that the trust might be transgressive, but that the act avoided only the excess in transgressive trusts, and the interest of F. could not be attached.3 It is submitted that the court overlooked the ficiary should reach twenty-five, which was apparently acquiesced in by all parties. In McKee's App., 96 Pa. 277 (1880), Gordon, J., at 284, said that before the act of 1853, accumulations as necessarily and naturally formed part of the original estate as vegetable accretions form part of the growing plant. In Holloway's Est., 11 Pa. C. C. 90 (1892), the will was dated and proved prior to the act, consequently act did not apply; see remarks of Hanna, P. J., on p. 94, where there is a misprint of 1855 for 1853. In this case there was a direction to pay out the income in the construction of houses on the testator's vacant lots, which would be clearly void since the act. Hillyard v. Miller, 10 Pa. 326 (1849). 236 Pa. 338 (1860). 3 Mr. Gray, Rule Perp., 2 ed. (1906) $717, n. 2, makes the following observation on this case: "The court seem to have overlooked the fact that under the Pennsylvania statute accumulation is force of this argument, which, more accurately stated, amounts to this: the direction was to accumulate the fund and pay it at a certain time to the persons designated. The gift was void, and there was, therefore, a resulting trust of the whole income to the heir at law, and the interest of Francis in this resulting trust was liable to be attached. He would, however, be entitled only to share equally with the other heirs, if any, and not, as was argued, to take the whole income. The case decides, therefore, that a direction to accumulate during the life of a certain person, and to pay the accumulation to his children, is valid and not within the statute. The case is probably overruled, but it is necessary to notice it as it does not appear to have been accurately understood, and it is frequently cited as an authority. Washington's Estate 632. In Washington's Estate 5 there was a direction to accumulate the income of a minor over and above a certain annuity which was to be paid to her, and to add the accumulations to the principal of the estate on the arrival of the minor at twenty-one. A petition was presented by the guardian of the minor, which set forth that there were large accumulations of income, beyond the amount directed to be paid for her maintenance, and that the petitioner was advised that upon her arrival at age, she would be entitled, under the Act of April 18, 1873 (a misprint for 1853), to receive the whole income of the estate, and praying for an increased allowance for the use of the minor. The trustee answered that the minor was not entitled to the additional allowance under the allowed only during the actual minority of a person who would be entitled to the income, if of full age. It does not appear that A. (Francis' children) were minors, and they were certainly not entitled to the income until the death of A." 4 Penrose, J., in Grim's Est., 12 W. N. C. 354 at 356, (1882), said that this case expressly admitted that the trust for accumulations was invalid, the point decided being that such invalidity did not extend to the entire trust, of which the direction to accumulate was only an incident. The court, however, only said that the trust might be transgressive, and if the direction to accumulate was void the creditors should have recovered; said by McCullum, J., in Edwards's Est., 190 Pa. 177 at 180 (1899), without giving any reason, not to be within the Act of 1853, and that the case did not decide that the trust was transgressive. 575 Pa. 102 (1874); 8 Phila., 182 (1871). Trunkey, J., in Carson's App., 99 Pa. 325 at 329 (1882), understands the case as going on the point as to whether she was entitled to the accumulations on coming of age. 8 act, and that the accumulations were not for the benefit of the minor but for the benefit of the remaindermen.' The Orphans' Court decreed the additional allowance asked for, and, on appeal, the decree was affirmed by the Supreme Court. The opinions of the judges, Paxson, J., in the Orphans' Court, and Gordon, J., in the Supreme Court, are difficult to understand. The grounds of decision seem to be as follows: Paxson, J., in the court below, said that the court would have no authority to decree an allowance if the accumulations were to go to some one else than the minor, and, therefore, since they have that authority by the proviso, the accumulations must go to the minor, and that it is no answer to this to say that the proviso only applies to one of the cases of accumulation permitted by the act, (to wit, when an accumulation is intended for a minor,) and in other cases makes no such provision, for the reason that the act permits no accumulation except during the minority of the person entitled to the fund, and "evidently contemplates the payment of the principal to him at his majority." In this he overlooked the fact that the very purpose of the proviso was to give this authority to the court, and as they had the authority before to decree an allowance out-of the minor's income, the proviso would be meaningless unless the legislature contemplated a gift over of the accumulations to a stranger. And then, at the conclusion 10 of his opinion, the learned judge said that the facts of the case justified an increased allowance, and as the sum asked for would not exceed more than one-half of the income, there was no good reason why the prayer of the petition should not be granted. In the Supreme Court, Mr. Justice Gordon seems decision upon the ground that the direction to cumulated income to principal was void. attempt to direct such accumulations into any other channel renders the deed or will void pro tanto, and the rents or profits so appropriated pass to the person or persons who would have been entitled thereto, if such accumulation had not been directed," and, further, that it would be a contradiction in to base his add the ac11 void. He said: "1 "Any The language of the learned judge is so obscure that very little confidence is felt that his exact meaning has been grasped. 10 On p. 190. terms to say that the income of the minor can be accumulated during minority, and then, when the minor comes of age, give the accumulation to some one else. There was no contradiction in terms. The gift took a portion of the income away from B. and gave it to A., and the court overlooked the fact that when the statute permitted a direction to accumulate during that period, it also permitted a disposition of that accumulation. In other words, that the act only prescribed the time during which an accumulation might be permitted, and marked out that time by the specification of a certain minority and a certain income, and necessarily left free to the testator the right to dispose of the accumulations in such manner as he saw fit when the period during which they might be directed had expired. The case has been severely criticised,12 and the grounds of decision seem to be unsound. The case really only decides that where there is a direction to accumulate the income of a minor, the guardian may have an adequate allowance decreed thereout. The dictum of the case is that the direction to add the accumulation to principal is void. Williams's Estate 633. In Williams's Estate1 there was a bequest to an executor, in trust, for the son of the testatrix, who had sailed from New York on a particular vessel, and of whom no tidings had been heard for many years, in case he could be found, after diligent inquiry, correspondence and advertising for the space of twenty full years after her decease, with remainder over. The case is badly reported, and it is difficult to tell what was the real point involved. Hanna, P. J., said that 12 Penrose, J., in Grim's Est., 12 W. N. C. 354 at 356 (1882); Trunkey, J., in Carson's App., 99 Pa. 325 at 329 (1882), said that probably Washington's Est. might have been decided the same way on another point but that it was not, for no other point was considered by the court below or in the Supreme Court. Mr. Gray, Rule Perp., 2 ed. (1906), §717, says: "Suppose property is given in trust to pay the income to A. for life, and on A.'s death to transfer the principal to B., and there is a direction to accumulate the income during A.'s minority, and to add the accumulations to the principal. Such a direction would certainly appear to be authorized by the Statute. If A. were of full age, he would be entitled to the income, and that is enough, according to the Statute, to make the accumulation lawful. If A. would get the income if over age, accumulations made while he is under age ought to be good to whomsoever they go, for there is nothing in the Statute requiring them to go to A. or any other person. Nevertheless, it has been held that such a direction is void altogether, and however little such a doctrine is justified by the Statute it is now settled." 113 Phila. 325, 8 W. N. C. 310 (1880). |