Potter v. Couch Hale/Opinion of the Court

by Horace Gray

United States Supreme Court

141 U.S. 296

Potter  v.  Couch Hale

The matters in controversy concern those shares only of Ira Couch's real estate which he devised to his brother, James, and to his nephew, Ira, the son of James.

1. In order to ascertain the nature and the time of vesting of their interests, it is important, in the first place, to determine the extent and duration of the trust-estate of the executors and trustees named in the will, bearing in mind the settled rule that whether trustees take an estate in fee depends upon the requirements of the trust, and not upon the insertion of words of inheritance. Doe v. Cosidine, 6 Wall. 458; Young v. Bradley, 101 U.S. 782; Kirkland v. Cox, 94 Ill. 400. In the first clause of the will the testator appoints his wife, his brother, Janes, and his brother-in-law, Wood, 'executors and trustees' of his will, and devises and bequeaths to them all his estate, real and personal, 'for the term of twenty years, in trust, and for the uses and objects and purposes hereinafter mentioned and expressed, and for the purpose of enabling them more fully to carry into effect the provisions of this will, and for no other use, purpose, or object;' authorizes them to lease his real estate at their discretion, and, out of any surplus funds, to improve his real estate, to purchase other real estate to be held upon the same trusts and to lend money on bond and mortgage; but, in order that their doings may not create any obstacle to the division of his real estate at the end of the 20 years, provides that they shall not make leases, or lend money on mortgage, beyond 20 years, or purchase or improve by building after 16 years from his death; and he also authorizes them to mortgage real estate for the purpose of rebuilding in case of destruction by the elements. In the next four clauses he devises and bequeaths to his widow, daughter, brother, and nephew, respectively, 'after the expiration of the trust-estate vested in my executors and trustees for the term of twenty years after my decease,' one-fourth part of all his estate, both real and personal, after payment of debts and legacies, which he charges upon the real estate. In the eleventh clause, he directs his executors to pay to his brother a certain part of the income 'until the final division of my estate, which shall take place at the end of twenty years after my decease, and not sooner.' And in the twenty-first clause he declares his wish that Wood shall collect the rents and have the general care and supervision of the affairs of the estate during the same period. These provisions, had the testator said nothing more upon the subject, might have been construed as assuming or implying that the trust-estate was to terminate at the end of 20 years from the testator's death, without any act of conveyance on the part of the trustees. But the will contains other provisions concerning the powers and duties of the trustees, which are wholly inconsistent with such a conclusion.

The sixteenth clause is as follows: 'I will and direct that no part of my estate, neither the real nor the personal, shall be sold, mortgaged, (except for building,) or in any manner incumbered until the end of twenty years from and after my decease, when it may be divided or sold for the purpose of making a division between my devisees as herein directed.' The very object of this clause is to define when and for what purposes the trustees may mortgage or may sell the real estate. Before the end of 20 years it is neither to be mortgaged (except for building, as allowed in the first clause) nor to be sold. At the end of 20 years all authority to mortgage it is to cease, but 'it may be divided or sold for the purposes of making a division between my devisees as herein directed.' This division or sale (like all sales or mortgages spoken of in this clause) is evidently one to be made by the trustees under authority derived from the testator, and while the legal title remains in them; not a judicial division or sale for the purpose of partition after the legal title has passed to the residuary devisees. Again, in the eighteenth clause the testator directs that, in the event of any of the legatees or annuitants being alive at the end of 20 years after his death, there shall be a division of all his estate at that time, 'any thing herein contained to the contrary notwithstanding;' and that 'in such case my executors, in making division of the said estate shall apportion each legacy or annuity on the estate assigned to my devisees, who are hereby charged with the payment of the same according to the apportionment of my said executors.' This clause puts beyond doubt the intention of the testator, not only that the division of his estate, and the assignment and conveyance of the several shares to each devisee, shall be made by his executors, but that the question which share shall be charged with the payment of any legacy or annuity shall depend upon the act of executors in making the division among the devisees. Although, at the expiration of 20 years from the testator's death, all the legacies and annuities to others than the residuary devisees had in fact been paid, yet the duty still remained in the executors and trustees to make a division, by sale if necessary. Under the circumstances of this case, it was impracticable to make the division, either by the patiti on of the lands themselves, or by selling them and distributing the proceeds, immediately upon the expiration of the 20 years; and until a division was made, in one form or the other, by the executors and trustees, the legal title must remain in them. The sale and conveyance by them, whether directly to the residuary devisees, or to third persons for the purpose of paying the proceeds to those divisees, was not in the exercise of a power over an estate vested in other persons, but was for the purpose of terminating an estate vested in the executors and trustees themselves, by conveying it to others. The twentieth clause, by which the daughter's share, in case of her marriage, is to be conveyed at the expiration of the 20 years, by the trustees named in the will, to trustees for the benefit of herself and her children; and the twenty-second clause, by which the share of the widow, in case of her marrying again, is to be held by the executors and trustees in trust for her,-are also worthy of notice in this connection, although they might not, standing alone, affect the time of vesting of the legal title in the shares of the brother and the nephew. Wellford v. Snyder, 137 U.S. 521, 11 Sup. Ct. Rep. 183.

There can be no doubt that all the powers conferred, and all the trusts imposed, were annexed to the office of executors, and not to a distinct office of trustees. And, taking the whole will together, it is quite clear that the legal title of the executors and trustees did not absolutely terminate upon the expiration of 20 years from the death of the testator, because it was necessary for the purpose of enabling them to execute the trusts, and to carry out the provisions of the will, that the legal title should be and continue in them until they had, by sale or otherwise, settled the estate, and conveyed to the devisees severally their shares in the estate or its proceeds. The testator doubtless intended that after the expiration of the 20 years the estate should cease to be held and managed by his executors and trustees as a whole, and should be divided into four parts, to be held in severalty by or for his residuary devisees. But he intended, and expressly provided, that the division should be made by his executors and trustees; and therefore their trust estate could not terminate until they had made the division and conveyed the shares. McArthur v. Scott, 113 U.S. 340, 377, 5 Sup. Ct. Rep. 652; Kirkland v. Cox, 94 Ill. 400; Perry, Trusts, §§ 305, 315, 320. Whether, in case of unreasonable delay on their part to make the division, a court of equity might have compelled them to do so, is a question not presented by this record.

The decision of the supreme court of Illinois in Kirkland v. Cox, above cited, is much in point. In that case the testator devised and bequeathed all his estate, real and personal, to trustees, to control and manage it, and to make such disposition of it as should in their judgment increase its value; to pay to his daughter such installments as they should deem sufficient for her support until she reached the age of 35 years, and then to convey the estate to her in fee; authorizing them, however, if she should be then married to a man whom they thought unworthy, to continue to hold the title in trust during his life; and further providing that, if she died without issue, the whole estate, after paying certain legacies, should 'be divided equally between' three charitable corporations. It was held that the powers conferred on the trustees implied a power to sell the lands, and convert them into money or interest-bearing securities, and, therefore, that the trustees took and held the title in fee-simple, notwithstanding the death of the daughter before reaching the age of 35 years; the court saying: 'The power implied to sell is to sell the whole title, and to this essential the power to convey that title, requiring, as a condition precedent, a fee-simple estate in the trustees. The property is devised to the trustees to sell and convey if the dee m it advisable, or to hold and control until it is to be transferred as directed; and in the contingency that has arisen it was intended that it should be the duty of the trustees to make the equal division of the property between the corporations designated and convey it accordingly; for the grant to these corporations is in severalty, and not as tenants in common, and their title must necessarily rest on the conveyance of the trustees.' 94 Ill. 415. The cases cited against this conclusion differ widely from the case at bar. The two most relied on were Minors v. Battison, L. R. 1 App. Cas. 428, in which the facts were very peculiar, and there was much diversity of opinion among the judges before whom it was successively brought; and Manice v. Manice, 43 N. Y. 303, in which the construction adopted was the only one consistent with the validity of the will under the statutes of New York.

2. From this view of the nature and duration of the estate of the trustees, it necessarily follows that by the terms of the fourth and fifth clauses of the will, devising and bequeathing to the testator's brother and nephew, respectively, 'after the expiration of the trust-estate vested in my executors and trustees,' 'one-fourth part of all my estate, both real and personal.' (after the payment of debts and legacies, which he charged upon the real estate,) no legal title in any specific part of the estate, and no right of possession, vested in either of them until the trustees had divided the estate, and conveyed to each of them one-fourth of the estate, or of the proceeds of its sale; but, on well-settled principles, an equitable estate in fee in one-fourth of the residue of the testator's whole property vested in the brother and in the nephew, respectively, from the death of the testator. Cropley v. Cooper, 19 Wall. 167; McArthur v. Scott, 113 U.S. 340, 378, 380, 5 Sup. Ct. Rep. 652; Phipps v. Ackers, 9 Clark & F. 583; Weston v. Weston, 125 Mass. 268; Nicoll v. Scott, 99 Ill. 529; Scofield v. Olcott, 120 Ill. 362, 11 N. E. Rep. 351. To the suggestion that the will violated the rule against perpetuities, which prohibits the tying up of property beyond a life or lives in being and 21 years afterwards, it is a sufficient answer that after 20 years from the death of the testator, and after the death of the widow and daughter, (if not before,) the title, legal and equitable, in the whole estate would be vested in persons capable of conveying it. Waldo v. Cummings, 45 Ill. 421; Lunt v. Lunt, 108 Ill. 307.

3. Nor is the estate of the residuary devisees affected by the nineteenth clause of the will, which is in these words: 'It is my will that my trustees aloresaid shall pay the several gifts, legacies, annuities, and charges herein to the persons named in this will, and that no creditors or assignees or purchasers shall be entitled to any part of the bounty or bounties intended to be given by me herein for the personal advantage of the persons named; and therefore it is my will that, if either of the devisees or legatees named in my will shall in any way or manner cease to be personally entitled to the legacy or devise made by me for his or her benefit, the share intended for such devisee or legatee shall go to his or her children, in the same manner as if such child or children had actually inherited the same; and in the event of such person or persons having no children, then to my daughter and her heirs.' The devise over in this clause cannot, indeed, by reason of the words, 'gifts, legacies, annuities, and charges,' and 'bounty or bounties,' in the preamble, be confined to the legacies and annuities given by the testator, and charged on his real eatate, by clanses 6 to 13, inclusive, and by clause 18. So to hold would be utterly to disregard the comprehensive and decisive words, 'devisees or legatees,' 'legacy or devise,' and 'share intended for such devisee or legatee,' by which the testator clearly manifests his intention that the devise over shall attach to the shares of his real estate devised to his widow, daughter, brother, and nephew, respectively, by clauses 2, 3, 4, and 5, except so far as its effect upon the shares of the daughter and the widow may be modified by the trusts created for their benefit by clauses 20 and 22. The testator having declared his will that the devises of the shares shall be 'for the personal advantage of' the devisees, and that 'no creditors or assignees or purchasers shall be entitled to any part,' and having directed the devise over to take effect 'if either of the devisees shall in any way or manner cease to be personally entitled to the devise made for his benefit,' the devise over of the shares of the brother and the nephew, if valid, would take effect upon any alienation by the first devisee, whether voluntary or involuntary, by sale and conveyance, by levy of execution, by adjudication of bankruptcy, or otherwise; or, at least, upon any such ailenation before his vested equitable estate became a legal estate after the expiration of the 20 years. But the right of alienation is an inherent and inseparable quality of an estate in fee-simple. In a devise of land in fee-simple, therefore, a condition against all alienation is void, because repugnant to the estate devised. Co. Litt. § 360; Id. 206b, 223a; 4 Kent, Comm. 131; McDonogh v. Murdoch, 15 How. 367, 373, 375, 412. For the same reason a limitation over, in case the first devisee shall aliene, is equally void, whether the estate be egal or equitable. Howard v. Carusi, 109 U.S. 725, 3 Sup. Ct. Rep. 575; Ware v. Cann, 10 Barn. & C. 433; Shaw v. Ford, 7 Ch. Div. 669; In re Dugdale, 38 Ch. Div. 176; Corbett v. Corbett, 13 Prob. Div. 136; Steib v. Whitehead, 111 Ill. 247, 251; Kelley v. Meins, 135 mass. 231, and cases there cited. And on principle, and according to the weight of authority, a restriction, whether by way of condition or of devise over, not forbidding alienation to particular persons or for particular purposes only, but against any and all alienation whatever during a limited time, of an estate in fee, is likewise void, as repugnant to the estate devised to the first taker, by depriving him during that time of the inherent power of alienation. Roosevelt v. Thurman, 1 Johns. Ch. 220; Mandlebaum v. McDonell, 29 Mich. 78; Anderson v. Cary, 36 Ohio St. 506; Twitty v. Camp, Phil. Eq. 61; In re Rosher, 26 Ch. Div. 801.

The cases most relied on, an tending to support a different conclusion, are two decisions of this court, not upon devises of real estate, but upon peculiar bequests of slaves, at times and places at which they were considered personal property. Smith v. Bell, 3 Pet. 68; Williams v. Ash, 1 How. 1. In Smith v. Bell the general doctrine was not denied; and the decision turned upon the construction of the words of a will by which a Virginia testator bequeathed all his personal estate (consisting mostly of siaves) to his wife, 'to and for her own use and benefit and disposal absolutely; the remainder of said estate, after her decease, to be for the use of' his son. This was held to give the son a vested remainder, upon grounds summed up in two passages of the opinion, delivered by Chief Instice WARSHALL, as follows; 'The limitation in remainder shows that, in the opinion of the testator, the previous words had given only an estate for life. This was the sense in which he used them.' 6 Pet. 76. 'The limitation to the son on the death of the wife restrains and limits the preceding words so as to confine the power of absolute disposition, which they purport to confer, of the slaves, to such a disposition of them as may be made by a person having only a life-estate in them.' 6 Pet. 84. In Williams v. Ash a Maryland testatrix bequeathed to her nephew all her negro slaves, naming them, 'provided he shall not carry them out of the state of Maryland, or sell them to any one; in either of which events I will and devise the said negroes to be free for life.' One of the slaves was sold by the nephew, and, upon petition aganst the purchaser, was adjudged to be free. As stated by Chief Justice TANEY, in delivering the opinion of the court, and recognized in the statute of Maryland of 1809, c. 171, therein cited: 'By the laws of Maryland as they stood at the date of this will, and at the time of the death of the testatrix, any person might, by deed or last will and testament, declare his slave to be free after any given period of service, or at any particular age, or upon the performance of any condition, or on the event of any contingency.' 1 How. 13; 3 Kilty's Laws. The condition or contingency, forbidding the slaves to be sold or carried out of the state, was, as applied to that peculiar kind of property, a humane and reasonable one. The decision really turned upon the local law, and appears to have been so understood by the court of appeals of the state in Steuart v. Williams, 3 Md. 425. Chief Justice TANEY, indeed, going beyond what was needful for the ascertainment of the rights of the parties, added: 'But if, instead of giving freedom to the slave, he had been bequeathed to some third person, in the event of his being sold or removed out of the state by the first taker, it is evident upon common-law principles that the limitation over would have been good;' citing Doe v. Hawke, 2 East, 481. But the case cited concerned an assignment of a leasehold interest only, and turned upon the construction of the validity of the restriction upon alienation being suggested by counsel on alienation being suggested by counsel or considered by the court; and the dictum of Chief Justice TANEY, if applied to a conditional limitation to take effect on any and all alienation, and attached to a bequest of the entire interest, legal or equitable, even in personalty, is clearly contrary to the authorities. Bradley v. Peixoto, 3 Ves. 324, Tud. Lead. Cas. Real Prop. (3d Ed.) 968, and note, In re Dugdale, 38 Ch. Div. 176; Corbett v. Corbett, 13 Prob. Div. 136; Steib v. Whitehead, 111 Ill. 247, 251; Lovett v. Gillender, 35 N. Y. 617.

The case at bar presents no question of the validity of a proviso that income bequeathed to a person for life shall not be liable for his debts, such as was discussed in Nichols v. Levy, 5 Wall. 433; in Nichols v. Eaton, 91 U.S. 716, and in Spindle v. Shreve, 111 U.S. 542, 4 Sup. Ct. Rep. 522. In Steib v. Whitehead, above cited, the supreme court of Illinois, while upholding the validity of such a proviso, said: 'We fully recognize the general proposition that one cannot make an absolute gift or other disposition of property, particularly an estate in fee, and yet at the same time impose such restrictions and limitations upon its use and enjoyment as to defeat the object of the gift itself; for that would be, in effect, to give and not to give, in the same breath. Nor do we at all question the general principle that, upon the absolute transfer of an estate, the grantor cannot, by any restrictions or limitations contained in the instrument of transfer, defeat or annul the legal consequences which the law annexes to the estate thus transferred. If, for instance, upon the transfer of an estate in fee, the conveyance should provide that the estate thereby conveyed should not be subject to dower or curtesy, or that it should not descend to the heirs general of the grantee upon his dying intestate, r that the grantee should have no power of disposition over it, the provision, in either of these cases, would clearly be inoperative and void, because the act or thing forbidden is a right or incident which the law annexes to every estate in fee-simple, and to give effect to such provisions would be simply permitting individuals to abrogate and annul the law of the state by mere private contract. This cannot be done.' 111 Ill. 251. The restraint sought to be imposed by the nineteenth clause upon any alienation by the brother or by the nephew of the share devised to him in fee being void for repugnancy, it follows that upon such alienation, or upon an attempt to alienate, his estate was not defeated, and no title passed, under the devise over, either to the nephew in the share of the brother, or to the daughter or her children in the share of the brother or of the nephew; and therefore nothing passed by the daughter's deed to her husband.

For the reasons already stated, the appeal of the nephew, Ira Couch, from so much of the decree below as declared the legal title under the residuary devises to have vested at the expiration of 20 years from the testator's death, is well taken; and the equitable estate in fee in one-fourth of the residue of the testator's property, having vested in Ira Couch from the death of the testator, passed by his deed of assignment to Dupee, and by mesne conveyances back to him. The various alienations of the share of the brother, James Couch, require more consideration.

4. The appellant Potter claims the share of James Couch under proceedings against him by his creditors, at law and in equity, the effect of which depends upon the statutes of Illinois. As we have already seen, the legal title in fee was vested in the trustees, not under a passive, simple, or dry trust, with no duty except to convey to the persons ultimately entitled, but under an active trust, requiring the continuance of the legal title in the trustees to enable them to perform their duties; and until the trustees had divided the property, either by conveying the lands to the residuary devisees, or by selling them, and distributing the proceeds among those devisees, James Couch had only an equitable interest in the testator's whole estate, and no title in any specific part of his property, real or personal. Such being the facts, it is quite clear that the trust was not executed, so as to vest the legal title in him, by the statute of uses of Illinois. Hurd's Rev. St. 1874, c. 30, § 3; Meacham v. Steele, 93 Ill. 135; Kellogg v. Hale, 108 Ill. 164. It is equally clear that such an equitable interest was not an estate on which a judgment at law would be a lien, or an execution at law could be levied, under the Illinois statute of judgments and executions, although the term 'real estate,' as used in that statute, is declared to include 'lands, tenements, hereditaments, and all legal and equitable rights and interests therein and thereto.' Hurd's Rev. St. c. 77, §§ 1, 3, 10; Brandies v. Cochrane, 112 U.S. 344, 5 Sup. Ct. Rep. 194; Baker v. Copenbarger, 15 Ill. 103; Thomas v. Eckard, 88 Ill. 593; Haward v. Peavey, 128 Ill. 430, 21 N. E. Rep. 503. By the chancery act of Illinois, 'whenever an execution shall have been issued agaisnt the roperty of a defendant, on a judgment at law or equity, and shall have been returned unsatisfied, in whole or in part, the party suing out such execution may file a bill in chancery against such defendant and any other person, to compel the discovery of any property or thing in action belonging to the defendant, and of any property, money, or thing in action due to him or held in trust for him, and to prevent the transfer of any such property, money, or thing in action, or the payment or delivery thereof, to the defendant, except when such trust has in good faith been created by, or the fund so held in trust has proceeded from, some person other than the defendant himself.' Hurd's Rev. St. c. 22, § 49. This statute, as has been adjudged by this court, establishes a rule of property, and not of procedure only, and applies to all cases where the creditor or his representative is obliged, by the nature of the interest sought to be reached, to resort to a court of equity for relief, as he must do in all cases where the legal title is in trustees, for the purpose of serving the requirements of an active trust, and where, consequently, the creditor has no lien, and can acquire none, at law, but obtains one only by filing a bill in equity for that purpose. The words 'in trust,' as used in teh exception or proviso, cannot have a more restricted meaning than the same words in the enacting clause. Spindle v. Shreve, 11 U. S. 542, 546, 547, 4 Sup. Ct. Rep. 522; Williams v. Thorn, 70 N. Y. 270, 277; Hardenburgh v. Blair, 30 N. J. Eq. 645, 666. As the only title of James Couch in the property devised was an equitable interest, which could not lawfully have been taken on execution at law against him, and as the trust was an active trust, 'in good faith created by,' and 'the fund so held in trust proceeded from,' the testator, 'a person other than the defendant himself,' the letter and the spirit of the statute alike require that this equitable interest should not be charged for his debts. It follows that neither the judgments and executions at law nor the suits in equity against James Couch gave any lien or title to his creditors; and that the deed from him to a receiver was wrongly ordered by the state court in which one of the suits was commenced, and was rightly set aside by the circuit court since the removal of that suit.

5. The appellant Hale claims the share of James Couch under a deed from him and his wife. The interest conveyed by that deed being an equitable interest only, Hale requires the aid of a court of equity to perfect his title, and would have to seek it by cross-bill but for the order of the circuit court that each answer should be taken as a cross-bill. The real consideration of that conveyance was an agreement by which Hale promised to buy up the existing judgments against James Couch, to sell the interest conveyed by the deed of James and wife, and to pay to the wife one-half of the net proceeds. In fact, he bought up some of the judgments only, and sold those again, and never performed his agreement in this or any other particular. Consequently he is not entitled to the affirmative interposition of a court of equity to obtain the interest included in the deed. Towle v. Ambs, 123 Ill. 410, 14 N. E. Rep. 689.

6. It remains only to consider the contention that by the instrument of January 8, 1877, the devisees entered into an agreement by which they took the whole estate as tenants in common, and rendered any division unnecessary; and therefore all the duties of the trustees ended, and the legal title vested in the residuary devisees, at the expiration of the 20 years. Undoubtedly, those interested in property held in trust, and ultimately entitled to the entire proceeds, may elect to take the property in its then condition, and to hold it as tenants in common; but the acts showing an intention so to take must be unequivocal, and must be concurred in by all the parties interested. Young v. Bradley, 101 U.S. 782; Baker v. Copenbarger, 15 Ill. 103; Ridgeway v. Underwood, 67 Ill. 419; 1 Jarm. Wills, (4th Ed.) 598-602. In the present case the justrument in question cannot have this effect, for two reasons. In the first place, it manifested no intention to alter in any way the existing titles of the residuary devisees, either as being legal or equitable, or as being in severalty or in common, but was simply a power of attorney, the object of which was to continue Wood's management of the estate as a whole, as under the twenty-first clause of the will. In the next place, the instrument was not executed by or in behalf of all the parties in interest, inasmuch as it was not executed by any one authorized to affect the share devised for the daughter's benefit for life, and to her children or appointees after her death. By the clear terms of the twentieth clause of the will, neither the daughter nor her husband had any authority to do this, and her trustees had no power over he share until it had been conveyed or set apart to them by the trustees under the will; and, if the trustees under the will were duly constituted trustees for her and for her children, (which is disputed,) they had no greater power in this respect, before the estate was divided, than distinct trustees would have had.

The result is that the decree of the circuit court must be affirmed in all respects, except that the declaration therein as to the time when the legal estate of the residuary devisees veted must be modified in accordance with the opinion of this court. This conclusion, by which the brother and the nephew take the shares originally devised the them, carries out the intention of the testator, though probably not by the same steps that he contemplated. Decree accordingly; the appellants in each appeal, except James Couch, to pay one-fourth of the costs, including the cost of printing the record.

BREWER and BROWN, JJ., took no part in the decision of this case.

Notes