according to the succession laws of California | the other relatives referred to or any of existing at its creation. Civ. Code, § 769, de- them. Helen D. Gray subsequently brought clares that when a future estate other than a this action to terminate the trust, her conreversion depends on a precedent estate, it may be called a "remainder," and be created and tention being that, notwithstanding she did transferred by that name. Section 773 provides not reserve in the instruments creating it that a remainder may be created to commence at any power of revocation, nevertheless by a future day and be limited upon a life estate, virtue of the terms of the trust itself it is and section 781 provides that a general or special power of appointment shall not prevent determinable at her pleasure. The terms of the vesting of a future estate limited to take ef- the trust itself therefore demand presentafect in case such power is not vested. Held, tion. that the trust created vested remainders in the trustor's heirs, subject to divestiture only upon her exercise of the power of nomination by will. [Ed. Note. For other cases, see Trusts, Cent. Dig. §§ 183-187; Dec. Dig. 140.

For other definitions, see Words and Phrases, First and Second Series, Remainder.] 6. REMAINDERS 14-ALIENATION.

Such remainders in trust, whether regarded as vested or contingent, were alienable.

[Ed. Note.-For other cases, see Remainders, Cent. Dig. § 10; Dec. Dig. 14.]

The conveyance was made to defendant "to manage said trust property as hereinafter provided.” The property subject to the trust came to plaintiff through the will of one Mary E. Bithell.

The "original in

vestment" of funds received from the estate of Mary Bithell could be made only with the concurrence of the trustor. After this original investment, made with the concurrence of the trustor, the trustee is empow

7. DEEDS 128-RULE IN SHELLEY'S CASE-ered "thereafter from time to time to make EFFECT OF ABOLITION.

The effect of Civ. Code, § 779, repealing the rule in Shelley's Case, was to restore to courts of equity their right to construe apt words to create a remainder as a limitation, in accordance with its plain import and intent.

[Ed. Note.-For other cases, see Deeds, Cent. Dig. 88 413-415, 419-421, 427; Dec. Dig. 128.]

Department 2. Appeal from Superior Court, City and County of San Francisco; Geo. A. Sturtevant, Judge.

Action by Helen D. Gray against the Union Trust Company of San Francisco, to terminate a trust. Decree for plaintiff, and defendant appeals. Reversed, with directions to deny plaintiff the relief sought.

Heller, Powers & Ehrman, of San Francisco (Devlin & Devlin, of Sacramento, of counsel), for appellant. Edwin L. Forster and Robert R. Moody, both of San Francisco, for respondent.

investments and reinvestments as in its discretion may seem necessary and proper without consulting the trustor." Certain limitations upon the power of the trustee to make these investments are declared, but they have no bearing upon the question presented on this appeal. "The net income and revenue and profit, less the charge for services of the trustee, shall be paid by said trustee to said trustor," and an accurate account is to be kept. The trustee is entitled to receive for its services 2 per cent. of the gross income of the trust property, and finally the trust instrument declares:

"This trust shall be irrevocable and shall last during the lifetime of said trustor, and upon her death the trust property shall go to and vest as she shall provide in her last will and testament, and leaving no last will and testament, said property shall go to and vest in her heirs the state of California as such laws now exist." at law, according to the laws of succession of

The facts were stipulated, the stipulation embracing the matters of fact above set forth. Drawn from these facts the court made additional findings of fact which are in reality misplaced conclusions of law. The most important of these is as follows:

services as trustee, under the terms of the said trust agreement."

HENSHAW, J. Plaintiff, by two instruments of the same date and forming "parts of the same transaction," made by one of them a transfer to defendant, absolute in form, of certain property, real and person- "That plaintiff is the only person having any al. By the second, contemporaneous there- interest in any of the real or personal property with, she declared the trusts upon which mentioned in the said assignment or in the the defendant, as trustee, was to hold this said agreement, except said defendant, Union Trust Company of San Francisco, for the comproperty. At the time when plaintiff exe-pensation which it is entitled to receive for its cuted the transfer and trust agreement she was and still is an unmarried woman over the age of 21 years, having no child nor oth- [1] It was under this finding, which maner lineal descendant. Plaintiff's mother, ifestly is a conclusion of law embodying the however, is living, and her mother would be court's construction of the trust and its deentitled to inherit, and succeed to all the termination that defendant held but the nakproperty, real and personal, of plaintiff if ed fee, while every beneficial interest in all she should die intestate and unmarried, leav- of the property was vested in plaintiff, that ing her mother surviving. Plaintiff also has the court concluded that the trust was one other relatives now living who would be en- which should be dissolved and terminated titled to succeed to and inherit her property by its decree, and gave judgment accordingif she should survive her mother and there- ly. From that judgment defendant appeals, after die intestate unmarried, leaving no and no serious objection can be raised to child surviving her and leaving surviving her its right to appeal. Indeed, it is its duty to

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

v. McWilliams, 70 Cal. 449, 11 Pac. 659; Scrivner v. Dietz, 84 Cal. 297, 24 Pac. 171; Kopp v. Gunther, 95 Cal. 63, 30 Pac. 301; Salisbury v. Bigelow, 20 Pick. (Mass.) 174; Stone v. Hackett, 12 Gray (Mass.) 227; Viney v. Abbott, 109 Mass. 300.

do so if it belleves that there be other per-, or trustor reserved no power of revocation, sons than Helen Gray whose rights would and the trust is therefor irrevocable by any be impaired or destroyed by the dissolution act of plaintiff. Civ. Code, § 2280; Hellman of this trust. Those persons, if they exist, would be Helen Gray's "heirs at law according to the laws of succession of the state of California as such laws now exist." But those persons, in the contingency provided for by the trust, would not take as inheritors from Helen D. Gray. The laws We have so far refrained from using the of succession as they existed at the time word "remainder" or "remaindermen" in of the creation of the trust would fix the connection with this trust, for the creation class entitled to take, and that class would by the trust of such remainders and remaintake, not as heirs of Helen Gray by virtue dermen is the very heart of the controversy of her intestacy, but as a class designated between these litigants. By appellant it is in the trust instrument in the event that contended that such remainders are creatHelen Gray failed to exercise her powered and with them estates in the remainderto nominate others. In other words, by a men, which it is beyond the just exercise change in the laws of succession conceiva- of the powers of equity to destroy. Upon bly it could happen that those who would be entitled to take under the trust instrument in the event of the death intestate of Helen Gray, would no one of them be an heir at law of Helen Gray at the time of her death. And, finally, upon this proposition it should be pointed out that upon the death of Helen Gray intestate, it would not be the court in probate which would determine to whom the trust property should go. The class entitled to take would be determined by a court of equity in an action brought by the trustee to determine that precise question. The trustee, therefore, owes precisely the same duty to protect the rights of this indeterminable class of beneficiaries as it does to protect the right of the named beneficiary, Helen D. Gray.

the other hand, it is contended that no such remainders are created; that the whole equitable estate is in the trustor, plaintiff herein, and that she is entitled to address herself to equity for the relief here obtained-the relief which will terminate a dry and naked trust, establishing the legal estate in the person who possesses the full equitable estate.

[4-6] It is only when all the parties in interest are before a court, when each is sui gener is, and all join in the application, that a court of equity ever terminates a valid trust. And even when all these circumstances exist, equity does not do so by force of the application, but only when a decree so doing is meet and proper. When such circumstances exist power is in the court of equity to terminate [2, 3] The ultimate question then is the the trust, but with that power is not necespower of the court of equity to terminate sarily imposed the duty so to do. It is still such a trust as this. The primary questions discretionary. Perry on Trusts, § 920; 39 first to be determined, and in whose deter- Cyc. 99; Eakle v. Ingram, 142 Cal. 15, 75 mination the answer to the ultimate ques- Pac. 566, 100 Am. St. Rep. 99; Hildreth v. tion will be found, go to the nature and Eliot, 8 Pick. (Mass.) 293; Wenzel v. Powscope of the trust itself. What then are the der, 100 Md. 36, 59 Atl. 194, 108 Am. St. Rep. nature and scope of the trust? First there 380; Godfrey v. Roberts, 65 N. J. Eq. 323, is conveyed to the trustee the whole legal 55 Atl. 353; May v. Walter's Executors, 97 title, since so much is plainly necessary for S. W. 423, 30 Ky. Law Rep. 59; In re Lewis' the purposes of the trust (Civ. Code, 863), Estate, 231 Pa. 60, 79 Atl. 921; Estate of which general purposes are to give to plain- Yates, 149 Pac. 555. The converse of tiff the usufructuary benefit of the property this proposition follows as matter of during her lifetime and upon her death to course. If all the parties in interest are see that the property goes to her nominees not before the court, equity has no power under her will, or, failing of such nomina- to terminate the trust. Civ. Code, 2280; tion, to those who are her heirs at law at

the time of her death under the laws of suc

cession as they existed at the time of the making of the trust. Plaintiff's usufructuary interest in the whole estate during her life is her equitable life estate, to which is added the power of nominating those who shall take the legal and equitable fee at her death and thus terminate the trust. The trust itself is not a dry, naked trust, since active duties are imposed upon the trustee during the life of the plaintiff, and a no less active duty upon her death in causing to be determined, should she fail to nominate, those

2 Perry on Trusts (6th Ed.) § 920; Brown v. Brown, 97 Ga. 531, 25 S. E. 353, 33 L. R. A. 816; 39 Cyc. 99. The importance of this consideration arises from the fact that if remainders and remaindermen were created, admittedly the latter were not before the court and its decree must fall. And thus by this different method of approach we are brought to the vital consideration in the case: Were such remainders created? Our Civil Code, § 769, declares that:

"When a future estate, other than a reversion, is dependent on the precedent estate, it may be called a remainder, and may be created and

We have in this trust apt language to cre- | Real Property Law, § 40. It follows, therefore, ate such a future estate, dependent for its that the children of the plaintiff are persons enjoyment upon the termination of a pre- it cannot be revoked without their consent. beneficially interested in the deed of trust, and cedent life estate. We have therefore apt They are also necessary parties defendant." language to create a remainder, and it is quite permissible that it should be created to commence at a future day and be limited upon a life estate. Civ. Code, § 773. There is in this trust a power of appointment or nomination reserved to the trustor. It can be exercised in but one way, and that is by her will. But such power of appointment does not prevent the vesting of the future estate in remainder. Civ. Code, § 781. Everything then which the law contemplates shall exist for the creation of equitable remainders or remainders in trust is found in this trust. Whether they be regarded as vested or contingent is immaterial, for in either case the estate and interest are alienable. Davis v. Willson, 115 Ky. 639, 74 S. W. 696; McDonald v. Bayard Sav. Bank, 123 Iowa, 413, 98 N. W. 1025; Sikemeier v. Galvin, 124 Mo. 367.1 But in truth these remainders are to be regarded as vested remainders, subject to divestiture only upon the exercise of the power of nomination by

will reserved to the trustor. A case substan

[7] Respondent places reliance upon certain cases as supporting the decree of the court terminating this trust. Those cases, with a trust where every party in interest is however, deal with a dry, naked trust, or before the court in joining in the application or rest expressly or by necessary implithis ancient rule was of feudal origin and cation upon the rule in Shelley's Case. But lence to the deed of the grantor or the will policy, and did deliberate and designed vioof the testator, to the end that the laws of inheritance should prevail over the wish of the grantor or testator. It arbitrarily declared that apt words which indisputably held as a "limitation." In other words, as a created a remainder in the heirs should be definition of the estate which the grantee or devisee took, and that that estate was the fee and taking nothing. So obnoxious was this simple, the remaindermen being thus cut off rule to justice that it was always subjected to rigidly strict construction, till finally in many states, as in this state, it was absolutely repealed. Civ. Code, 779; Barnett v. effect of the repeal of this arbitrary rule is Barnett, 104 Cal. 298, 37 Pac. 1049. The construe this 'language, in whatever into restore to courts of equity their right to strument it may be found, in accordance with its plain import and intent.

tially identical with this was presented by Crackanthorpe v. Sickles, 156 App. Div. 753, 141 N. Y. Supp. 370. There, as here, the plaintiff, an unmarried woman, conveyed property to a trustee to invest and manage and pay the net income thereof to her during her life, and at her death to distribute it to such persons as she might designate by her will, or, should she die intestate, then to divide the property among her lawful issue, which she might leave surviving. In that case, as in this, plaintiff sought a dissolution of the trust, claiming to be the only person bene-15, 75 Pac. 566, 100 Am. St. Rep. 99. Mrs. ficially interested therein. The court in disposing of these contentions said:

A brief review of the cases relied on by plaintiff should follow the general statement The first of these is Eakle v. Ingram, 142 Cal. concerning them which has been given above.

her daughter, Mrs. Eakle, in trust, to pay Hammack had conveyed certain property to over the rents and profits of the property to the mother during her lifetime and after her death to pay them to her son, Henry Hammack.

after the termination of these equitable inThere was no remainder over terests for life. Mrs. Hammack died, leaving as her heirs four children, Mrs. Eakle, Mrs. Bean, George and Henry Hammȧck. Mrs. Eakle resigned as trustee, and Ingram, defendant in the action, was appointed in her place. Mrs. Hammack's four children who had thus inherited the trust property, and one of whom was beneficially interested in the rents and profits of the property during his life, all joined in their petition to the court to have the trust annulled. Every

"It must therefore be determined just what the interest of these children is. The effect of the deed was to vest in the plaintiff an equitable life estate in the property, with a general power of appointment by will to any person or persons whom she might designate. In default of an appointment of successors to the property pursuant to the power, the deed created a remainder to the lawful issue of the plaintiff who should survive her. It is a well-established rule, both of the common law and by statute, in this state that estates in remainder which are limited to take effect upon default in the exercise of a power of appointment are not prevented from vesting by the existence of the power, but take effect in the same manner as if no power existed, subject, however, to be divested by an exercise of the power. * * By virtue of this clause of the deed there sprung into being upon the birth of each child of the plaintiff a vested remainder, subject to open up and let in after-party in interest was before the court. The born children, and to be divested either by the only person whose rights could be injuriously death of such child without issue before the affected by the termination of the trust was death of the plaintiff or by the plaintiff's exercising her power of appointment by will. It is Henry Hammack, who joined in the request needless to add that such an interest is alienable. that it be terminated. Under this condition Moore v. Littel, 41 N. Y. 66; Campbell v. the court in equity terminated the trust, not Stokes, 142 N. Y. 23, 36 N. E. 811; Matter of under the compulsion of any rules or princiChapman, 133 App. Div. 337, 117 N. Y. Supp. 679; Shindler v. Robinson, 150 App. Div. 875, ples of equity, but because all the parties at page 881, 135 N. Y. Supp. 1056; New York in interest being before it, all assenting and 127 S. W. 551.

indeed requesting that the court do this thing, it was within its power so to do in a proper case, and it considered that to be a proper case. Manifestly this decision has no bearing upon the questions involved in the case at bar, where the gravamen of the complaint is that all of the parties in interest are not before the court and are not consenting. It is perfectly plain, for example, that if Henry Hammack had objected, the court in equity could not have destroyed his equitable

life estate.

In Dodson v. Ball, 60 Pa. 492, 100 Am. Dec. 586, the rule in Shelley's Case, prevailing in Pennsylvania, is the unquestioned foundation of the construction of the trust and of the decree given. The discussion is too long to quote, but the holding is that the words employed bring the trust within the rule in Shelley's Case; that remainders therefore are not created; that all the equitable interest is in Mrs. Dodson; and that the legal estate should therefore be executed in her. And a sufficient exemplification of this may be found in the following single sentence, where that court, after reviewing many of its own authorities, said:

"Those cases decide that a devise for life, with remainder to children and their heirs, and in some of the cases with superadded words of distribution, gave an estate of inheritance to the life tenant.'

direction of said Catherine Cornwell, express

Cornwell v. Orton, 126 Mo. 360, 27 S. W. 537, was not an action to terminate a trust, but an action in ejectment brought by the heirs at law. The grantor conveyed property to a trustee on the trust that he would allow Mrs. Cornwell to occupy the property conveyed and have all the rents and profits thereof, and that the trustee would, at any and all times thereafter, at the request and ed in writing, signed by her, or by her authority, bargain, sell, mortgage, convey, lease, rent, or thereupon dispose of said premises her death convey and dispose of the premises or any part thereof, and that he would at and all profits and proceeds thereof in such manner, to such person or persons, and at such time or times, as Catherine Cornwell by her last will and testament, or by any other writing signed by her or her authority, direct or appoint, and in default of such appointment then he would convey said property to James Cornwell, his heirs and assigns, James In Raffel v. Safe Deposit & Trust Co., 100 Cornwell being the husband of Catherine. Md. 141, 59 Atl. 702, the plaintiff had execut- The contention upon the one hand was that ed a deed of trust to pay the net income of the deed vested a fee-simple estate in Mrs. the property conveyed to her, "reserving, Cornwell, and that the direction of the trushowever, the right by a last will and testa-tee to convey to James Cornwell, his heirs ment to bequeath and devise all the property that may be a part of the trust estate" and upon failure to execute such last will the part undisposed of at the time of her death "to vest in her next of kin or heirs according to law." The case is not a simple one in its facts. The equitable questions touching the construction of the instrument are complicated by the contention of the trustor that she did not understand what she was doing; that she believed she had retained a power of revocation; that she was inexperienced in business matters and did not at all understand the effect of her deed. Discussing these considerations, sufficient in themselves to work an avoidance of the trust,

the court said:

"According to the facts and preponderance of proof in the case the appellant did not intend by the deed to surrender control of her property, and that it was executed by her under a mistaken belief as to her power to revoke it. It also appears that she was misadvised as to the legal effect of the deed and her rights under it."

So far as the construction of plaintiff's deed is concerned, the rule in Shelley's Case prevailing in the state of Maryland, the court's discussion is addressed to the application of that rule, to a review of its cases based on that rule, and the determination is reached that plaintiff is the sole party in

and assigns, in the event that Catherine Cornwell failed to nominate, was a nugatory provision, as it was an attempt to create a remainder upon an absolute fee. The opposing contention was that under the true construction of the deed it conveyed a life estate only to Mrs. Cornwell, with power in the trustee to convey the fee in remainder to her husband or his heirs, in the event that she failed to exercise her right to appoint. The court considered at length the terms of the trust, the absolute power of disposition given to Mrs. Cornwell over all of the property during her lifetime, the compulsion upon the trustee to do any and all things concerning the property which Mrs. Cornwell might direct, declared that the language was inadequate to create a mere life estate, and was fully adequate to the creation of a fee simple absolute, and determined that the trust was a naked trust, and that the fee simple absolute did vest in Mrs. Cornwell; wherefore the remainder attempted to be erected upon it was void. It needs no argument to show that such a conclusion could not and would not be arrived at in construing a trust such as this, where the beneficiary of the equitable life estate not only has no power of disposition of the corpus of the trust property, but no power to control its investments, no power even to dispose of the property except by a