No. 2. Lord Southampton v. Marquis of Hertford. Counsel having been heard in reply. The MASTER OF THE ROLLS (Sir W. GRANT). I have examined the case of Phipps v. Kelynge, and find it is in substance as stated in the note in Fearne's "Executory Devises;" but, when the circumstances are attended to, I do not think it will be found to be an authority for the proposition that a trust for accumulation, exceeding the allowed limits, is void only for the excess. Lord Alvanley in the Thellusson case says that Phipps v. Kelynge is not properly a case of accumulation, as Phipps had a right to call from time to time to have the rents and profits laid out in lands to be settled. That certainly was so; and there was a direction that, until proper purchases could be found, the money should be laid out in Government or real securities, and the interest paid to the persons who would have been entitled to the rents and profits. There was therefore no period during which the rents and profits of the leasehold estate would have been wholly withdrawn from enjoyment. Still, to a certain degree there was a trust for accumulation, as the rents and profits themselves are not to be enjoyed, but only the produce thereof, when invested in land or securities. Whether that was a trust wholly void, or good in part and bad in part, Lord CAMDEN under the circumstances of the case had no occasion to consider, as the eldest son, the first tenant in tail, had attained twenty-one before the suit was instituted. He did not quarrel with the past application of the rents: nor was it his interest to do so, as his father, the tenant for life, was living. All he contended against his brothers, entitled to estates tail in remainder, was, that this sort of accumulation should go no farther, the leasehold estates having vested absolutely in him, as tenant in tail of the freehold, subject to his father's life estate. If that was true, as it was held to be, it was immaterial whether the trust was retrospectively good, or not; and therefore it would be too much to construe the declaration that the trust ceased and became void upon his attaining the age of twenty-one, into a positive decision that, until he attained that age, it was valid and effectual; that being a point on which no decision was sought by any of the parties in the cause. As Lord CAMDEN decided that the first tenant in tail became absolutely entitled to the leasehold estate, I do not see distinctly how it could be held that it vested in him only at the age of twenty-one. The decision upon the first point implied that the leasehold estate was to be considered as subject to the same limitation as the freehold, notwithstanding the attempt to confine the successive takers to the enjoyment of less than the entire rents and profits of the leasehold. If so, the general rule is, that the leasehold estate vests absolutely upon the birth of the first tenant in tail of the freehold. The question then would have been, whether the direction for a modified accumulation was to be taken as a declaration of intention, that the two estates should go together, subject to such modified accumulation, as long as the rules of law and equity would permit; and whether a court of equity would in consequence of such intention suspend the vesting as long as the testatrix herself might, by a specific provision, have suspended it. In the case of Ware v. Polhill, 11 Ves. 257; 8 R. R. 145, where the rents and profits of leasehold estate were to go to the persons entitled to the rents of the freehold and copyhold estates, but with a power to the trustees at any time, with consent of the persons so entitled, or, if minors, at their own discretion, to sell, and invest the produce in real estate to the same uses. The Lord Chancellor held, that, notwithstanding the power, the leasehold estate vested absolutely in the first tenant in tail from the time of his birth. The present case, however, is different from either of those. This is an attempt wholly to sever the surplus rents and profits from the legal ownership of the estate for a time, that may extend much beyond the period allowed for executory devises or trusts of accumulation, and to give them to a person who may not come into existence until after that period. I do not see how any part of such a trust can be executed. In Ware v. Polhill the Lord Chancellor held the power of sale to be void, upon the ground that it might travel through minorities for two centuries; and adds, "If it is bad to the extent in which it is given, you cannot model it to make it good." In Lade v. Holford the court did not attempt to model the trust, and make it good in the extent to which it might have been well carried on in its creation. As to the possibility, that Lord Southampton may attain the age of twenty-one, that never has been held to be an answer to the objection that the trust, as originally created, is too remote. Supposing this 1 1 It is now, however, well settled that a power of sale need not be expressly limited to take effect within any definite time. See Lantsberg v. Collier, 2 K. & J. 709; 25 No. 2. Lord Southampton v. Marquis of Hertford. — Notes. accumulation allowed to go on, and he dies under twenty-one, what is to become of the accumulated fund? The deed says, it shall go to the first person entitled to the estate who shall attain twenty-one, though there should be no such person for a century to come. As it is impossible so to dispose of it, I should thus deprive Lord Southampton of the rents and profits during the years he had lived upon the speculation that he might live to take the accumulated fund. My opinion is, that this trust is altogether void except so far as it is a trust for the payment of debts.1 ENGLISH NOTES. In Leake v. Robinson (1817), 2 Mer. 363, the Master of the Rolls, Sir Wm. GRANT, lays down the same doctrine as that in the principal case, as follows (p. 389): "Perhaps it might have been as well if the courts had originally held an executory devise transgressing the allowed limits to be void only for the excess, where that excess could, as in this case it can, be clearly ascertained. But the law is otherwise settled. In the construction of the act of Parliament passed after the Thellusson cause, I thought myself at liberty to hold that the trust of accumulation was void only for the excess beyond the period to which the Act restrained it. And the Lord Chancellor afterwards approved of my decision (Griffiths v. Vere, p. 513, supra, and 9 Ves. 127). But there the Act introduced a restriction on a liberty antecedently enjoyed, and therefore it was only to the extent of the excess that the prohibition was transgressed. Whereas, executory devise is itself an infringement on the rules of the common law, and is allowed only on condition of its not exceeding certain established limits. If the condition be violated the whole devise is held to be void." In Marshall v. Holloway (1818), 2 Swanston, 432, a testator devised his estates to trustees upon trust to invest and accumulate the rents and profits while any person beneficially interested by virtue of the trusts afterwards declared should be under twenty-one, and subject thereto in trust for X. (a grandchild living at his death) for life, with various remainders, some of which were void for remoteness. It was held that the trust for accumulation was altogether void, and X. took an immediate life estate. The LORD CHANCELLOR (Lord ELDON) on the final consideration of the case, said he could not distinguish it from Lord Southampton v. The Marquis of Hertford (the principal case, p. 514, supra). 1 This exception is confirmed by the decision of HALL, V. C., in Tewart v. Lawson (1874), L. R., 18 Eq. 490; 43 L. J. Ch. 673. — R. C. No. 2. - Lord Southampton v. Marquis of Hertford. Notes. The principle is briefly stated by Vice-Chancellor KNIGHT-BRUCE, in Broughton v. James (1844), 1 Coll. 26, 45, as follows: "Before the Accumulation Act, a testamentary trust or direction to accumulate, so worded as to last or be capable of lasting beyond the compass of all lives in being at the testator's death and twenty-one years after the death of the survivor of those lives, would have been illegal and void for the whole, and such a trust or direction is not less illegal or less void since the Accumulation Act." In Browne v. Houghton (1846), 14 Sim. 369; 15 L. J. Ch. 391, the principle was again applied by Vice Chancellor SHADWELL to a case where testator devised his estates in trust for A. for life, remainder to his first and other sons in tail male, with remainders over; and directed that if any person for the time being entitled to the possession of the estates should be under twenty-one, the trustees should receive the rents and apply a competent part for maintenance, and accumulate the residue. He held the trust for accumulation was void for remoteness. More recent applications of the principle will be found in the Irish cases of Cochrane v. Cochrane (1883), 11 L. R. Ir. 361; and Smith v. Cunningham (1884), 13 L. R. Ir. 480. The Thellusson Act does not apply to Ireland. But the same principles were applied, and most of the above English cases cited in the judgments. AMERICAN NOTES. The doctrine of the principal case has but a limited application in this country. It being against the policy of our democratic institutions to favour the accumulation and perpetuity of estates in families or classes, many of the States have enacted statutes shortening the period for which the power of alienation may be suspended and within which the estate must vest. Thus, in New York, Michigan, Minnesota, and Wisconsin the absolute power of alienation may not be suspended by any means for a longer period than two lives in being at the creation of the estate (with certain exceptions); in Connecticut and Ohio no estate can be limited to any persons unless they are in being, or to their immediate descendants; in Alabama, estates, other than those given to wife and children, must vest within ten years after three existing lives in being; in Indiana the limitation is to any number of specific lives existing at the time of the creation of the estate; in Kentucky the limitation is to twenty-one years and ten months after an existing life or lives in being, which is substantially the common-law rule; in Mississippi, fees-tail are prohibited, and estates may be limited in succession to two donees in being and the heirs of the body of the remainder-man, and in default thereof to the heirs of the body of the donee in fee. In Iowa and Maryland the limitation can be only for lives in being and twenty-one years. In Arkansas and Vermont, perpetuities are prohibited by the constitutions, and it is believed that the commonlaw rule as to suspension prevails. In all the other States, except Louisiana, No. 2. Lord Southampton v. Marquis of Hertford. Notes. where the civil law prevails, the common-law rules are supposed to be in force. The foregoing are rules in respect to real property. As to accumulations, it is held that in the absence of statutory provision, trusts for accumulation of rents and profits of land must be measured by the rules against perpetuities, and if they exceed this limit, they are wholly void and cannot be cut down to the legal limit. Perry on Trusts, § 393. In New York, Michigan, Wisconsin, and Minnesota, the common-law rule as to accumulations has been modified by statutes, substantially alike, and accumulation is restricted to the minority of one or more existing persons; but in case of direction for a longer accumulation, the excess alone is void. In Alabama, accumulation is limited to ten years or the minority of a child living at the creation of the estate or at the death of the testator. In Pennsylvania, the limitation is for the life of the grantor or testator, and twenty-one years thereafter; and if a longer limitation is attempted, only the excess is void. "In the other States," says Mr. Perry (Trusts, § 398), "the common-law rules are supposed to prevail. The rule in regard to accumulation is analogous to the rules in regard to the vesting of executory estates. At common law the same rule prevails in both cases. In many of the States, the rules regarding the vesting of such estates have been altered by statute. Whether the modification of those rules by statute, without reference to the rule as to accumulations, would also alter the rule as to accumulations in those States does not seem to have been considered." The invalidity of a direction for accumulation will not impair a bequest to which it is attached, if it is separable therefrom. Phelps v. Pond, 23 New York, 69; Philadelphia v. Girard, 45 Penn. St. 1. But otherwise where the bequest is to take effect after and out of the accumulation. Amory v. Lord, 9 New York, 403. ACT OF STATE. (See notes under ACTION, No. 19.) |
