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§ 109. When estate of trustee ceases. When the purpose for which an express trust is created ceases, the estate of the trustee shall also cease.

Formerly section 89, Real Property Law of 1896, chapter XLVI, General Laws:

§ 89. When estate of trustee ceases. When the purpose for which an express trust is created ceases, the estate of the trustee shall also cease.5 Section 89 was formerly 1 Revised Statutes, 730, section 67:

§ 67. When the purposes for which an express trust shall have been created, shall have ceased, the estate of the trustee shall also cease.

Comment on Section. I Revised Statutes, 730, section 67, was, in 1875, amended by chapter 545 of the Laws of 1875.7 This amendment is now set out under the next section of the Real Property Law.8

Cessation of Estate of Trustees. In the course of the observations on the text of section 92 of this act, it was stated that on the determination of a trust if a use was not immediately executed by the Statute of Uses (27 Hen. VIII, chap. 10), a fee simple estate of the trustee could not become the estate of the beneficial owner, without a conveyance from the trustee, even though all the active duties of the trustees had ceased. It was, it is apprehended, because of this principle that the so-called "vesting acts were passed in England. Since the Revised Statutes of New York a different rule seems to have obtained, and when the trusts cease the estate of the trustee ceases, under this section and our revised Statute of Uses, without the necessity of any conveyance whatever.10

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The rule stated in this section is not to be confused with the older principle referred to by Chancellor Kent, “that a trust estate is not to continue beyond the period required by the purposes of the trust." This was a common principle of construction of a limitation of an estate to trustee, where the quantum of the estate was

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5 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, § 460.

6 Repealed, chap. 547, Laws of 1896.

7 See this act set out under the

next section, infra.

8 § 110, infra, p. 527.

9 Supra, pp. 425, 493.

10 Supra, pp. 425, 442; Matter of the Petition of Livingston, 34 N. Y. 555, 567; Sherman v. Jackson, 98 App. Div. 187; In re L'Hommedieu, 138 Fed. Rep. 606, 610.

114 Comm. 233; cf. Burke V. O'Brien, 115 App. Div. 574.

indeterminate.12

13

But where the estate of the trustees was in fee a conveyance was required, before the Revised Statutes, to divest it, and this the beneficial owners might call for when the trusts were fulfilled. It is very doubtful whether this section, which embodies. only a former rule of construction in equity, affords a real argument against the proposition that a trustee of an express trust takes a fee, although it favors the argument that he should take a lesser estate whenever that suffices.14 A deed to a corporation formed. to exist for a day may yet convey a fee,15 and there is much analogy between the estate of a corporation and that of a trustee. In the Roman Law a trustee was a quasi corporation.

Retroactive Application of this Section.

This provision of the statute

has been held to apply to trusts created before the Revised Statutes took effect,16 and also to apply to powers in trust.17

12 Doe, Lessee of Poor, v. Considine, 6 Wall. 458, 471, and cases there cited; Fisher v. Fields, Johns. at p. 505.

13 Supra, pp. 425, 486, 493.

10

14 Supra, pp. 323, 442, 448, and Metcalfe v. Union Trust Co., 181 N. Y. at p. 44.

15 Nicoll v. N. Y. & Erie R. R. Co., 12 N. Y 121.

16 January 1, 1830; Bellinger v. Shafer, 1 Sandf. Ch. 293, 296.

17 Manier v. Phelps, 15 Abb. N. C. 123; Bruner v. Meigs, 64 N. Y. 506, 517.

§ 110. Termination of trusts for the benefit of creditors. Where an estate or interest in real property has heretofore vested or shall hereafter vest in the assignee or other trustee for the benefit of creditors, it shall cease at the expiration of twenty-five years from the time when the trust was created, except where a different limitation is contained in the instrument creating the trust, or is especially prescribed by law. The estate or interest remaining in the trustee or trustees shall thereupon revert to the assignor, his heirs, devisee or assignee, as if the trust had not been created.

Formerly section 90, Real Property Law of 1896, chapter XLVI, General Laws:

§ 90. Termination of trusts for the benefit of creditors. Where an estate or interest in real property has heretofore vested or shall hereafter vest in the assignee or other trustee for the benefit of creditors, it shall cease at the expiration of twenty-five years from the time when the trust was created, except where a different limitation is contained in the instrument creating the trust, or is especially prescribed by law. The estate or interest remaining in the trustee or trustees shall thereon revert to the assignor, his heirs, devisee or assignee, as if the trust had not been created.18

Formerly chapter 545 of the Laws of 1875, as follows:

CHAP. 545.

AN ACT to amend section sixty-seven of article two, chapter one, part two, title two of the revised statutes in relation to trusts.

Passed June 7, 1875.

The People of the State of New York, represented in Senate and Assembly, do enact as follows:

SECTION 1. Section sixty-seven of article two, chapter one, part two, title two of the revised statutes, is hereby amended so as to read as follows: $ 67. When the purposes for which an express trust shall have been created shall have ceased, the estate of the trustees shall also cease, and where an estate has been conveyed to trustees for the benefit of creditors and no different limitation is contained in the instrument creating the trust, such trust shall be deemed discharged at the end of twenty-five years from the creation of the same; and the estate conveyed to trustee or trustees and not granted or conveyed by him or them shall revert to the grantor or grantors, his or their heirs or devisees, or persons claiming under them, to the same effect as though such trust had not been created. 19

18 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, $460.

19 Repealed, chap. 547, Laws of 1896.

Comment on Section. This provision of this section of the statute had its origin in chapter 545, Laws of 1875, just set out in full, which it superseded. The necessity of that act was so manifest as to cause the court to construe it as retroactive, affecting old assignments made long prior to 1875.20 To an astonishing extent assignments for the benefit of creditors were made in the early part of the nineteenth century by farmers and other apprehensive debtors, and frequently the assignors or their descendants remained in peaceable and undisturbed possession of their assigned estates, but without any proof of the discharge or satisfaction of such assignments of record after the financial distress had passed over. Titles to farms and other lands. in possession are not infrequently clouded by these old disused assignments for creditors.

Under the former law the fee simple title of trustees descended to their heirs,21 or passed under a devise of the trustee subject to the trusts.22 Subsequently to the Revised Statutes the legal estate might, under certain circumstances, vest in the creditors as the persons beneficially entitled.23 In either event an old general assignment of record was a cloud on the title of the assignor's descendants, and, consequently, the act of 1875 was not unwelcome, as the assignee's descendants and the creditors' descendants were usually scattered over the Union, and by reason of early migrations and changes of neighborhood so common in this country, releases were almost impossible to obtain.

Devolution of Trust Estate under Old Law. Before the Revised Statutes not all estates of surviving trustees devolved on their heirs; for by express limitation the estate of the surviving trustee might be one for years or for his own life, or else one pur autre vie,24 and then such estate pursued the course prescribed for other estates of like quantity. But where trustees had a fee simple, the ordinary rule of descents applied, in case the surviving trustees did not devise it subject to the trusts.2

25

20 Kip v. Hirsch, 103 N. Y. 565. 21 Infra, and at p. 530, under § III of this act.

22 Jackson v. De Lancey, 13 Johns. 537, 554.

23 Supra, Real Prop. Law, § 92.

24 Supra, p. 486.

25 Note of Revisers, with 1 R. S. 730, 68; Anderson v. Mather, 44 N. Y. 249; Hawley v. Ross, 7 Paige, 103, 107; cf. 2 Spence, Eq. Juris. 364.

§ 111. Trust estate not to descend. On the death of the last surviving or sole surviving trustee of an express trust, the trust estate shall not descend to his heirs nor pass to his next of kin or personal representatives; but in the absence of a contrary direction on the part of the person creating the same, such trust, if unexecuted, shall vest in the supreme court, with all the powers and duties of the original trustee or trustees, and shall be executed by some person appointed for that purpose under the direction of the court, but who shall not be appointed until the beneficiary or beneficiaries shall have been brought into court by such notice and in such manner as the court or a justice thereof may direct; and the person so appointed shall give such security as the court may require, and shall be subject to the same requirements of law as to accounting and the administration of the trust as are testamentary trustees; and shall be entitled to such compensation for his services by way of commissions as the court appointing him shall determine, which shall in no case exceed that now allowed by law to executors and administrators, besides his just and reasonable expenses in the matter in which he is appointed.

Formerly section 91, Real Property Law of 1896, chapter XLVI, General Laws:

91. Trust estate not to descend. On the death of the last surviving or sole surviving trustee of an express trust, the trust estate shall not descend to his heirs nor pass to his next of kin or personal representatives; but in the absence of a contrary direction on the part of the person creating the same, such trust, if unexecuted, shall vest in the supreme court, with all the powers and duties of the original trustee or trustees, and shall be executed by some person appointed for that purpose under the direction of the court, but who shall not be appointed until the beneficiary or beneficiaries shall have been brought into court by such notice and in such manner as the court or a justice thereof may direct; and the person so appointed shall give such security as the court may require, and shall be subject to the same requirements of law as to accounting and the administration of the trust as are testamentary trustees; and shall be entitled to such compensation for his services by way of commissions as the court appointing him shall determine, which shall in no case exceed that now allowed by law to executors and administrators, besides his just and reasonable expenses in the matter in which he is appointed.26

26 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, § 460.

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