3

4

Estate and Prentice v. Pleasonton, or with the dicta in Conrow's Appeal and Ward's Estate. There are also a number of other dicta which are inconsistent with the decision in Washington's Estate, which are collected in the note." The weight of authority probably is in favor of the construction laid down in Washington's Estate, a construction which has at least the merit of simplicity. No income can be accumulated unless it is the income of a minor, and the accumulations must be paid to the minor upon arriving at the age of twenty-one.

8

Must the Interest of the Minor be Vested for the Direction to Accumulate to be Valid?

640. If the gift of the income is contingent, it may vest in one not a minor, and consequently the direction to accumulate may turn out to be invalid under the act. No case deciding whether the direction is valid has been found. The youngest child of A. shall reach twentyone, and then pay the accumulations to the children of A. is void: Mellon's Est., 16 Phila. 323 (1884); s. c. sub nom. Gowen's App., 106 Pa. 288 (1884). Direction to accumulate until twenty-five, void as to all beyond twenty-one: Young's Est., 16 D. R. 541 (1907).

3 13 Phila. 325, s. c. 8 W. N. C. 310 (1880), stated §633, ante.

46 Sadler's Cases, 90 (1887), stated §635, ante.

53 Penny. 356 (1883), stated $634, ante. 613 W. N. C. 282 (1883), stated §636, ante.

7 Gordon, J., in McKee's App., 96 Pa. 277, at 284 (1880), said: "The extreme period allowed for accumulations by the act is twenty-one years, with the additional allowance of the ordinary period of gestation. Here the time is indefinite. It may be much more than twenty-one years, for it depends on the life of Mrs. McKee." Traces of this dictum are to be found in Schwartz's App., 119 Pa. 337 (1880) and Edwards's Est., 190 Pa. 177 (1899). The dictum seems to give countenance to the probably erroneous notion that a direction for an indefinite period in

part violates the statute, and that a direction to accumulate for a definite period might be valid. In Vastine's Est., 190 Pa. 443 (1899), the validity of a direction to accumulate until twenty-three was tacitly recognized; the point was not raised. In Stephens v. Dayton, 220 Pa. 522 (1908), Mestrezat, J., said at 526 that the trust in that case did not violate the statute that prevents accumulations beyond the life or lives in being and twenty-one years thereafter; a statement so obviously erroneous that it must have been a slip of the pen on the part of the learned judge. For all that appeared in the report, which unfortunately is very imperfect, the remark was a dictum.

The Act of 1853 was only intended to apply to citizens of Pennsylvania, and a trust intended to take effect beyond the bounds of the State of Pennsylvania cannot be affected by it: Fowler's App., 125 Pa. 388 (1889).

"There was probably such a contingent gift in Howell's Est., 5 W.N.C. 430 (1878), although the point was not raised; see Gray, Rule Perp., 2 ed. (1906), §718, n. 2; see also Mellon's Est., 16 Phila. 323 (1884).

invalidity of such a direction is, however, the logical consequence of the construction of the act adopted by the Supreme Court.

Where the Minor is Born After Teslator's Death-Successive

Minorities

641. The Supreme Court of Pennsylvania has not had occasion to consider how far an accumulation can be directed of the income of a minor born after the testator's death, or for a succession of minorities, in each of which cases, if the direction were valid, there would be a period of accumulation during the minority or minorities falling beyond the twenty-one year period. There are dicta that the act applies, 10 but it is submitted that the act does not apply.' The accumulation taking place after that part of the minority or subsequent minorities falling beyond the period of twenty-one years marked out by the act, is an accumulation taking place under the policy of the law."

Time of Going Into Effect

642. The act applies to the will of a person dying after the 18th day of April, 1853, even though the will is dated before that time,3 and although the act contains no provision

10 Penrose, J., in Furness Minors' Est., 14 W. N. C. 391 (1884), said: "It is far from clear that the Act contemplated an accumulation through a succession of minorities; certainly a trust for this purpose which might last, as in the case of the youngest of the present minors, for more than twenty-one years after the expiration of a life or lives in being at the death of the testator, would transgress not only the Act of Assembly, but would be void as creating a perpetuity." It to be is observed, however, that the learned judge gave no reason for his doubts, that the point was not before him for decision, and that his attention does not seem to have been called to the principle of law which permits the accumulation of the income of a minor in any event, whether so directed or not. See also Penrose, J., in the court below in McBride's Est., 152 Pa. 192 at 196 (1893).

1 See In re Cattell, (1907) 1 Ch. Div. 567 where it was decided under the fourth clause of the English act that the minor need not be born at the date of the testator's death. "But wherever a testator has directed an accumulation which will only commence in the event of the beneficial owner being a minor, and which will be limited by and engross only, such income as would have been otherwise accumulated by force of law during such minority, the trust for accumulation seems to be founded on a different principle unproductive of mischief, within the express words of this clause, and not impeachable from any reported case." Hargrave on the Thellusson Act, 131, 132 (1842).

on the point, it is apprehended that all deeds dated after the 18th day of April, 1853, are in like manner, subject to its provisions.

As to Computation of Twenty-one Years

643. The twenty-one years begins to run from the testator's death, and in the computation of the term the day of his death is to be excluded. In the case of a deed the period would begin to run from the day of the date thereof, and in the computation the day of the date would be excluded.

The Act Does Not Render the Direction to Accumulate Void in Toto

5

644. The statute provides that a direction to accumulate shall be null and void in so far as it shall exceed the limits of the act. It is the effect of the proviso that a direction to accumulate which is partly within and partly without the statute is valid as to the part within. This clause is omitted from the English statute, but the same result has been reached in England by construction. A distinction must be taken in applying this proviso. Where there is a contingent gift of the accumulated fund, the proviso cannot apply, because the gift depends on the direction to accumulate, and as that direction fails, the whole gift is void, and there is no one entitled to any part of the accumulations. Where there is a vested gift

sons yet living and of competent mind, as in respect to wills hereafter to be made." Holloway's Est., 11 Pa. C. C. 90 (1892). There is a misprint in the opinion in this case of 1855 for 1853. See also Huber's App., 80 Pa. 348 (1876), stated §672, post.

*No Pennsylvania case has been found on this point; see Gorst v. Lowndes, 11 Simon. 434, (1841), 10 L. J. Ch. 161. 5 Gray, Rule Perp., 2 ed. (1906), §716; dictum, Strong, J., in Brown v. Williamson, 36 Pa. 338 at 341 (1860); Gordon, J., in McKee's App., 96 Pa. 277 at 285(1880); dictum, Clark, J., in Conrow's App., 3 Penny. 356 at 366 (1883); dictum, Penrose, J., in the court below, in Lennig's Est., 154 Pa. 209 at 213 (1893).

A rule of construction entirely novel

7

in the decision of questions as to remoteness: Lewis, Perp., p. 593 (1843); see remarks by Gibson, C. J., in Hillyard v. Miller, 10 Pa. 326 at 335 (1849). The difference between the two statutes was probably overlooked by Strong, J., in Brown v. Williamson, 38 Pa. 338 at 341 (1860), where he said, "The trust indeed may be transgressive, but even under the Ripon Act, 39 and 40, Geo. III., ch. 98, in England, the excess only beyond the period allowed for trusts of accumulation is void. They are sustained for the statutory period. Our Act of 1853 was modeled after the Ripon Act, and it avoids only the excess in transgressive trusts."

7 Gray, Rule Perp., 2 ed. (1906), §§671674; Hillyard v. Miller, 10 Pa. 326 (1849).

of the income and a subsidiary direction to accumulate for a period longer than that prescribed by the statute, the proviso applies and the accumulation can be stopped when the lawful period has expired.R

Proviso as to Minority

645. The proviso authorizes the court in certain cases, on the application of the guardian, to make an order for an adequate allowance to the minor out of the income directed to be accumulated. The constructon of the act adopted in Washington's Estate 10 renders this clause of the act superfluous, as income can be accumulated only for the benefit of and out of the income of a minor, and the court has power1 anyhow in such a case to decree an allowance out of the income."

Direction to Accumulate for the Payment of Debts

646. A direction to pay off legacies, charges, debts or encumbrances out of income necessarily involves an accumulation. A provision for the payment of debts is especially exempt from the operation of the English statute. There is no such provision in the Pennsylvania act, and such a direction to accumulate is probably void in Pennsylvania," although the

question has not been passed on by the Supreme Court." The distinction between this case and the case of a gift of an accumulated sum which is valid, lies in this: in the former case the creditor has anyhow a charge against principal, and the gift out of income operates to relieve the principal of that charge, and, to that extent, increases the capital by the use of income, whereas, in the latter case, the recipient of the accumulated sum has no claim against the principal, and its validity or invalidity cannot affect the amount of the capital of the estate."

9

Direction to Improve Real Estate

647. A direction to trustees to use the income to improve or alter real estate, may involve an accumulation in so far as the income expended under the direction is used for more than ordinary maintenance and repairs. Such a direction does not seem to be within the English act. The question has never been decided in Pennsylvania, although cases sometimes occur in the lower courts where trustees are permitted to spend large portions of the income in what might be termed capital improvements. In Eberly's Appeal 10 the court gave as one of the reasons for permitting the trustee to retain the income that it might be necessary to rebuild some of the improvements if destroyed by fire. There is a dictum of Penrose, J., that a direction to apply surplus income to the alteration and improvement of a trust estate unquestionably transgresses the provisions of the statute against accumulations. In this condition of the cases, therefore, it is impossible to state what the law is, and the question will have to remain open until passed on by the Supreme Court. It is apprehended, however, that the direction is void in Pennsylvania. It will often be extremely difficult in practice to draw the line between expenditures for maintenance and expenditures for improvement.

Application of the Act to Directions to Accumulate Under a Deed 648. In all cases heretofore discussed, the direction to ac6 In Johnston's Est., 185 Pa. 179(1898), the directions had been carried out and the question was not raised.

7 To be distinguished from a direction to pay encumbrances out of principal, for a case of which see Barker's Est., 159 Pa. 518 (1894).

$ Gray, Rule Perp., 2 ed. (1906), §699b, and authorities cited.

9 See Rankin's Est., 19 Phila. 54 (1888); Joyce's Est., 5 Pa. C. C. 179 (1888). 10 110 Pa. 95 (1885), stated §663, post. 1 Mitcheson's Est., 5 Pa. C. C. 99 at 104 (1888).