power in trust may now coexist in the same person. But a merely passive use, which does not direct or authorize the performance of some act by the trustee, may not be validated as a power in trust.20 The scheme of the original revisers in the reform of the old law of powers favored powers in trust. Their objection was to beneficial powers, and these they desired to circumscribe to very narrow boundaries. But they saw no objection whatever to trust powers.21 The Revised Statutes. Powers in the nature of trusts were, in equity, imperative, and, in the case of their non-execution, they devolved on the court.2 22 The Revised Statutes gave emphatic expression to this principle, and it is now embodied in this section of the Real Property Law. All trust powers not wholly discretionary, by express limitation, are now as imperative as active trusts.23 What Trusts Valid as Powers in Trust. What trust purposes are valid as powers in trust, the statute does not attempt to enumerate.24 But there are some general restrictions applicable to this character of trusts. No trust, operative as a power, may contravene any principle of public policy,25 violate the principles of equity or good morals,20 create a perpetuity,27 or authorize an act which the grantor of the power could not himself do.28 Power in Trust, when Imperative. perative because the grantee has 20 Townshend v. Frommer, 125 N. Y. 446, 457, 468; De Peyster v. Clendinning, 8 Paige, 295, 303. 21 See below, Appendix III, notes of original Revisers on the Article on Powers, and observations under 88 130 and 137, Real Prop. Law, supra. 22 Harding v. Glyn, 1 Atk. 496; 2 Sugd. Pow. 160; 2 Chance, Pow. 555; Dominick v. Sayre, 3 Sandf. 555, 559; notes to 2 White & Tudor, Lead. Cas. in Eq.; Meldon v. Devlin, 31 App. Div. 146, 157. 23 Allen v. De Witt, 3 N. Y. 276, 280; Downing v. Marshall, 23 id. at p. 380; Moncrief v. Ross, 50 id. 431, 436; Delaney v. McCormack, 88 id. 174; Coleman v. Beach, 97 id. 545; Matter of Gantert, 136 id. 106, 110; Smith v. Floyd, 140 id. 337, 342; Farmers' Loan & Trust Co. v. Carroll, 5 Barb. at p. 653; Towler v. A power does not cease to be imthe right to exclude certain perTowler, 142 N. Y. 371; Dominick v. Sayre, 3 Sandf. 555; Van Boskerck v. Herrick, 65 Barb. 250; Hughes v. Mackin, 16 App. Div. 291, 295; Kemp v. Kemp, 36 Misc. Rep. 79. 24 Downing v. Marshall, 23 N. Y. at p. 380; Belmont v. O'Brien, 12 id. at p. 403; Read v. Williams, 125 id. at p. 569; Rochevot v. Rochevot, 74 App. Div. 585, 590. 25 Tilden v. Green, 130 N. Y. 29, 54; Belmont v. O'Brien, 12 id. at p. 403. 26 Read v. Williams, 125 N. Y. 560, 569; Sweeney v. Warren, 127 id. 426. 27 Belmont v. O'Brien, 12 N. Y. 394, 403; Everitt v. Everitt, 29 id. 39, 78; Booth v. Bap. Church, 126 id. at p. 239. 28 Booth v. Stuyvesant, 18 Wend. at p. 265; Genet v. Hunt, 113 N. Y. 158, 170. sons, designated by the settlor as appointees,29 unless the grantor may exclude, in his discretion, all the persons so designated as possible beneficiaries.30 How far a power which is a quasi-trust power may be outside of this principle, and not imperative, it is not always easy to discern.31 Execution of Imperative Trust Power, how Enforced. When a trust power is imperative its execution will be enforced in equity, or by judgment of a court of proper jurisdiction.32 A trust created through the medium of a power in trust is as much the subject of equity cognizance as an express trust, where the legal title is in the But a court of equity has no inherent jurisdiction to construe a will, unless there is a trust of some kind.33 34 A trust power so Power in Trust does not Fail for Want of a Trustee. far partakes of the nature of a trust as not to fail, for want of the designation of a trustee, or even by reason of the death of the grantee of the power.35 But while a peremptory power of sale is a trust power and imperative, the beneficiaries may elect to take the lands and extinguish the power.36 Identity of the Trustee and Beneficiary. The identity of the sole trustee of a trust power and a beneficiary ought not to operate to destroy the trust, although it may incapacitate the trustee from holding, for reasons before suggested under trusts.37 Power in Trust, how Extinguished The resemblance between express trusts under the 96th section of this act and powers in trust is further exemplified by the general application. of the doctrine, that when the trust purpose ceases the estate or power of the trustee 29 Delaney v. McCormack, 88 N. Y. 174, 182; Holland v. Alcock, 108 id. 312, 320; Power v. Cassidy, 79 id. 602, 613; Wilson v. Van Epps, 38 Misc. Rep. 486, 493. 30 Supra, $157, Real Prop. Law; Tilden v. Green, 136 N. Y. 29, 54; Coleman v. Beach, 97 id. 545; Matter of Bierbaum, 40 Hun, 504, 56, 507; Austin v. Oakes, 117 N. Y. 577, 590. 31 Towler v. Towler, 142 N. Y. 371, 375. 32 Haight v Brisbane, 96 N. Y. 132; Chapl. Ex. Trusts & Pow., $ 583; cf. as to powers of sale, Mellen v. Mellen, 139 N. Y. 210; Reade v. Continental Trust Co., 28 33 Mellen v. Mellen, 139 N. Y. 210; Dell v. Wisner, 88 id. 153, 160; cf. $ 1866, Code Civ. Proc. and Tonnele v. Wetmore, 195 N. Y. 436. 34 Infra, § 161, Real Prop. Law. 35 182, Real Prop. Law. 36 Hetzel v. Barber, 69 N. Y. 11; Mellen v. Mellen, 139 id, 210; Smith v. A. D. Farmer Type F. Co., 18 Misc. Rep. 434. 37 Supra, p. 445; Rankine v. Metzger, 69 App. Div. 264; Haendle v. Stewart, 84 ia. 280. ceases.38 By the Revised Statutes this principle was expressly applied to powers.39 While no such explicit cross-reference is contained in this act,40 the general doctrine relating to the extinguishment of powers of this nature is sufficient in itself to continue the application of the principle stated in the article on trusts.41 Powers of Sale, how Extinguished. A power of sale for the benefit of legatees may be extinguished by such legatees if all concur; 42 or by the failure, or the accomplishment, of the trust purpose.43 But a mere naked power to executors need not fail because certain unconnected trusts contained in the same will prove void,44 as such a naked power is good even by implication.45 A naked power of sale is not repugnant to a devise in fee.46 A power of se Power to Appoint, or Select, Uncertain Beneficiaries. lecting certain beneficiaries is often annexed to legacies, and especially to devises for charity, and is a power in trust.47 At the present day such a power, if for a charitable use, may be presumably indefinite or uncertain, and still be enforceable as a charity.48 trustee of a power of this kind may appoint to persons not in being at the time the power is created.49 But a trustee of a power has no authority to appoint to persons outside of the power. 38 Manier v. Phelps, 15 Abb. N. C. 123, 137; Bruner v. Meigs, 64 N. Y. 506; Hetzel v. Barber, 69 id. 1; Prentice v. Jansen, 79 id. 478, 486; Harvey v. Brisben, 50 Hun, 376, $ 109, Real Prop. Law; Cussack v. Tweedy, 126 N. Y. 87, 88; Sweeney v. Warren, 127 id. 426; Hurrell v. Hurrell, 65 App. Div. 527; cf. Lindo v. Murray, 91 Hun, 335. 39 1 R. S. 730, § 67; id. 734, § 102. 40 § 182, Real Prop. Law. 41 8.09, Real Prop. Law; Sweeney v. Warren, 127 N. Y. 426; Harriott v. Prime, 87 Hun, 95; Roberts v. Carey, 84 id. 328; and see supra, p. 470, under $ 97, Real Prop. Law; Meldon v. Devlin, 31 App. Div. 146, 156; Trask v. Sturges, 170 N. Y. 482. 42 Supra, p. 467. 43 Harriott v. Prime, 155 N. Y. 5; Sweeney v. Warren, 127 id. 426; Benedict v. Webb, 98 id. 460, 467; Parish v. Parish, 175 id. 181; Hurrell v. Hurrell, 65 App. Div. 527. 44 Lindo v. Murray, 91 Hun, 345; McCready v. Metropolitan Life Ins. Co., 83 id. 526; affd., 148 N. Y. 761. 50 A 45 Kinnier v. Rogers, 42 N. Y. 531; Strube v. Lentzbach, 12 Misc. Rep. 216; Cussack v. Tweedy, 126 N. Y. 81. 46 Tabor v. Willet, 1 App. Div. 285; Crittenden v. Fairchild, 41 N. Y. 289; Cussack v. Tweedy, 126 id. 81, 87; Mellen v. Mellen, 139 id. 210, 219. 47 Power v. Cassidy, 79 N. Y. 602; Prichard v. Smith, 95 id. 76; Matter of O'Hara, id. 403; Holland v. Alcock, 108 id. 312; Tilden v. Green, 130 id. 29; People v. Powers, 147 id. 104; Willets v. Willets, 20 Abb. N. C. 471; Livingston v. Gordon, 7 id. 53; and see, generally, 2 Harv. Law Rev. 529. 48 Chap. 701, Laws of 1893; and see above, § 113, Real Prop. Law; cf. 1 Sugd. Pow. 254. 49 Meldon v. Devlin, 20 Misc. Rep. 56, 59, 31 App. Div. 146. 50 Austin v. Oakes, 113 N. Y. 577; Townsend v. Townsend, 27 Misc. Rep. 268. Certain Powers in Trust in the Nature of Remainders. A power in trust is, under certain circumstances, in the nature of a remainder.51 Thus, where an estate was settled on trusts for the life of "A.," with power to "A." to devise the inheritance to his issue, and if he had no issue then to the settlor's right heirs, and in default of such appointment remainder over, etc., etc., and "A." exercised the power, the limitation was held to be a remainder expectant on a life estate,52 and this is a fortiori true now, since a power of this nature has become a power in trust 53 and peremptory.54 Whether the constructive remainder is vested or contingent55 may depend on the frame of the power of appointment, e. g., to appoint the inheritance "to any one or more" of his issue by, etc., etc.56 If the donee has power to exclude one child or descendant, the constructive remainder is certainly contingent, at least until the power is executed, and then it becomes vested, but subject to be divested by the execution of a subsequent will.57 51 And this, though not within the letter of Lord Coke's definition, or the definition of this act. Supra, 8 38, Real Prop. Law; 2 Chance, Pow. 34. 52 2 Chance, Pow. 33; Decker v. High Street M. E. Church, 27 App. Div. 408; Kemp v. Kemp, 36 Misc. Rep. at p. 87; Matter of Lansing, 182 N. Y. 238. 53 Smith v. Floyd, 140 N. Y. 337; Gilman v. Reddington, 24 id. 9, 17, 18; Meldon v. Devlin, 31 App. Div. 146, 157; Townsend v. Townsend, 27 Misc. Rep. 268; Austin v. Oakes, 117 . N. Y. 577. 54 Supra, § 157, Real Prop. Law. 55 Supra, § 40, Real Prop. Law; Meldon v. Devlin, 31 App. Div. p. 157. 56 Cf. Goebel v. Wolf, 113 N. Y. 405; 2 Chance, Pow. 34. 57 Cf. Van Axte v. Fisher, 117 N. Y. at p. 403; Sayles v. Best, 140 id. 368. § 158. Distribution when more than one beneficiary. Where a disposition under a power is directed to be made to, among, or between, two or more persons, without any specification of the share or sum to be allotted to each, all the persons designated shall be entitled to an equal proportion; but when the terms of the power import that the estate or fund is to be distributed among the persons so designated, in such manner or proportions as the grantee of the power thinks proper, the grantee may allot the whole to any one or more of such persons in exclusion of the others. Formerly section 138, Real Property Law of 1896, chapter XLVI, General Laws: § 138. Distribution when more than one beneficiary.— Where a disposition under a power is directed to be made to, among, or between, two or more persons, without any specification of the share or sum to be allotted to each, all the persons designated shall be entitled to an equal proportion; but when the terms of the power import that the estate or fund is to be distributed among the persons so designated, in such manner or proportions as the grantee of the power thinks proper, the grantee may allot the whole to any one or more of such persons in exclusion of the others.58 Section 138 was formerly 1 Revised Statutes, 734, sections 98, 99: § 98. Where a disposition under a power is directed to be made to, or among or between several persons, without any specification of the share or sum to be allotted to each, all the persons designated, shall be entitled to an equal proportion.59 § 99. But when the terms of the power import that the estate or fund is to be distributed between the persons so designated, in such manner or proportions as the trustee of the power may think proper, the trustee may allot the whole to any one or more of such persons, in exclusion of the other.60 Illusory Appointments. At common law a donee of a power to appoint to a class in such shares as he chose, might make purely illusory or nominal appointments among some of the appointees, reserving the substantial balance for any other of the class.61 But in equity it was at first held that each of the class was entitled to a "substantial" share, and not an "illusory" one. This uncertain judicial rule led only to protracted litigations, and finally illusory or nominal appointments were upheld in equity.62 In 1830 the 58 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, § 460. 59 Repealed, chap. 547, Laws of 1896. Repealed, chap. 547, Laws of 61 Appendix, 2 Sugd. Pow. 363. 62 Farw. Pow. (1st ed.) 302; Humphrey, Real Prop. (2d ed.) 105; Revisers' note to R. S. on Powers, Appendix II. |