text:
    Gott and others, executors, &c. vs. Cook and others. Kane and wife vs. Gott and others.
    Where the testator, by his will, devised and bequeathed all his estate, except a house and lot in A. and his farm in M., to his executors to be sold and converted into money, and directed his executors to invest the proceeds thereof which were not required, to carry into effect the provisions of tho will, and in like manner to invest the income of the estate, so as to make the whole estate active and yielding an income ; and bequeathed to the widow of his deceased brother, for the support of herself and her family, an annuity of §2000 during her life or widowhood, and made a further provision for the support of her two children, his nieces, until they should arrive at the age of twenty or be married if their mother should die or re-marry before that time; and also bequeathed an annuity of $600 to his mother for life; and directed his executors to pay to each of his two nieces, after they should respectively have arrived at the age of twenty or should be married, on their separate receipts notwithstanding their coverture, one equal half of the income of his estate during their respective lives; and further directed, that in case of the death of either of his nieces after she should have attained the age of twenty years, without leaving lawful issue, the surviving niece should receive the whole income during her life, with remainder in fee to his mother in case both nieces should die without issue during her lifetime; Held, that the nieces took immediate vested interests in their respective moieties of the income of the estate, for life, at the death of tho testator, with a remainder to the survivor for life, in the moiety of each niece, in case of the death of the other without issue; Held also that, upon the true construction of the will, the executors were to accumulate the moiety of the income belonging to each niece, for her exclusive benefit, until she should arrive at the age of twenty or should be married, and then to pay the same over to her, on her separate receipt, or to her legal representatives in case of her death ; and that after the nieces respectively had arrived at that age, or were married, the executors were to pay over to them their several shares of the income as it should accrue and be received by such executors; Held also, that the trust to sell the property and invest the proceeds, and to accumulate the income and pay over the same to the nieces for their separate use notwithstanding coverture, was a valid trust, under the provisions of the revised statutes relative to uses and trusts.
    The testator having further directed that in case of the death of either niece in the lifetime of the other, leaving issue, the children of the deceased niece should have her moiety of the income of the estate, after they had arrived at the age of twenty one if males and at the age of twenty if females, and that the executors should support and educate them out of such income in the meantime, and should also support their father out of the same if neces. sary, and having also directed that in case of the death of both nieces, only one of them leaving issue, that a similar disposition should be made of the whole income until the children of the niece who left issue should arrive at those ages, and then that the whole fund with the income thereof, should be transferred to such children ; Held, that these limitations to the children of the deceased niece, and to her surviving husband, in the events contemplated by the testator in his will might have the effect to suspend the absolute power of alienation for more than two lives in being at the death of the testator, and that those contingent limitations in the income of the estate were therefore void; but that the ultimate limitation of the principal of the fund to the children after they should become of age was valid, as their right to the principal of the fund would vest in interest, at the furthest, at the death of the second niece.
    The testator having also directed that in case of the death of both nieces leaving lawful' issue, the whole trust fund, after providing for the payment of the annuities, should, upon the death of the surviving niece, bo immediately divided by the executors among the children of the two nieces, one moiety to the children of each; Huid that this contingent limitation to the children of the testator’s nieces was valid; as it could not suspend the absolute power of alienation, or the absolute ownership of the fund, beyond the lives of the two nieces who were in being at the time of his death.
    A devise in trust, to receive the rents and profits of real estate, or the income of personal estate, for the benefit of the cestui que trust, and to pay the same over to him when it is received, or to accumulate the same for his use during his minority and then to pay it over to him, is in its legal effect a trust to receive the rents and profits or income of the estate and to apply the same to his use. Such a trust is therefore valid under the several provisions of the revised statutes relative to uses and trusts and to the limitation of future or contingent interests in personal estate.
    Where the testator by his will directs his real estate to be converted into personalty, and the proceeds thereof to be invested and disposed of as personal estate, for the purposes of his will, the court of chancery considers the real estate as converted into personalty, for the purpose of determining the validity of the several future or contingent interests in the fund which the testator has attempted to create by his will, and for the purpose of ascertaining whether the title to the fund is vested in the executors, as special trustees, and whether it belongs to the legatees to whom the beneficial interests therein are bequealhed.
    A trust of personal estate may be created for any purpose which is not ille- . gal, so far as relates to the mere vesting of the legal title to the property in the trustees. But all limitations of future or contingent interests in per. sonal property, or interests in the future income thereof, are subject to the same rules and restrictions which are prescribed by the revised statutes in relation to similar interests in real estate.
    In the case of a trust to receive the rents and profits or income of property, and to apply the same to the use of the cestu quo trust, as authorized by the revised statutes, the cestui que trust, if he is perfectly competent to manage h's own affairs with discretion, has the right to direct how such rents and profits and income shall be applied for his use, after they have been actually received by the trustee ; although he cannot alien or make any other valid disposition of such rents and profits or income previous to that time. But the court of chancery will protect the trustee, if he acts in good faith, in refusing to place the rents and profits or income of the trust fund in the hands of a cestui que trust who is improvident and will probably waste the same.
    If the cestui que trust receives the rents and profits and income from the trustee, after the same have accrued and been collected by the trustee for his use, he cannot afterwards call upon the trustee to account for the money, if such cestui que trust was under no legal disability at the time he received the same.
    The person who creates a trust, to receive the rents and profits or income of property for the use of another, may, in the creation of such trust, direct the manner in which the trustee shall apply the rents and profits or income to the use of the cestui que trust after the trustee has actually received the same.
    An interest in the future income of personal estate, which income is to accrue and be received after the death of the testator, or after the execution of the deed creating such interest, is a future interest in personal property, and is subject to the same rules as a limitation of a future estate of the same nature in lands. And where tire property is conveyed to a trustee, in trust to reeeive such income and apply it to the use of another, the absolute ownership of the personal property out of which such income is to arise is suspended during the continuance of the trust; as the interest of the cestui que trust therein is inalienable.
    A trust to receive the rents and profits or income of propertj', and to accumulate the same for the benefit of an infant who is not in esse at the creation of the trust, must, in order to be valid, be so limited that the accumulation will commence and terminate within the compass of some two lives in being at the creation of the trust.
    The power of alienation of real estate, or the absolute ownership of personal property, can only be suspended so long as there are no persons in being, and ascertained, by whom an absolute estate or interest in fee in possession in the property can be immediately conveyed. A future estate or interest in property may therefore be valid if it is so limited as to vest in interest, so as to be alienable, at the termination of two lives in being at the time of the creation thereof; although it will not vest in possession immediately upon the termination of such two lives.
    Extra counsel fees to the guardian ad litem of infants who have only a contingent interest in the fund in litigation, cannot be allowed by the court, to bo paid out of the fund which may eventually belong to other persons.
    The original bill in this cause was filed by the executors and trustees of the will of W. Cook, deceased, against his heirs and next of kin, and the legatees named in his will, for the purpose of settling the construction of the will and to have the trust thereof, if valid, carried into effect under the direction of this court. Kane, the husband of one of the heirs and legatees of the testator, and his wife by her next friend, subsequently filed a cross bill, against the executors and trustees, for the purpose of obtaining a decree declaring various trusts and provisions in the will void, and for a distribution of the estate of the testator, not legally and effectually disposed of by the will, among his heirs and next of kin; to which cross bill the other parties to the original suit were also made defendants. The testator died unmarried, in July 1834, seized of some considerable real estate, and about $120,000 of personal property consisting principally of.stocks, and of bonds and mortgages and other securities for money ; leaving his mother Candace Cook, and his two nieces Sarah Cook and Jennet M. Cook, his heirs at law, and next of kin surviving him. Sarah, one of the nieces, afterwards married John I. Kane, by whom she had two children. Candace Cook, the mother of the decedent, died before the filing of the original bill, and her personal representative was made a party to the same and to the cross bill. By the will of the decedent, which was made a few months before his death, “ in order to facilitate the management of his estate after his decease,” he devised and bequeathed all his property to J. Gott, R. Marvin, and J. L. Schoolcraft, the executors named in his will, upon trust, to sell all the real estate, except Ms house on the west side of Pearl street, in Albany, and Ms farm in Middlefield then occupied by L. Andrus and wife, and to invest the proceeds not required to carry into effect any of the provisions thereafter expressed and contained in the will, and to invest the personal estate in the same manner, and in like manner to dispose of the income of the estate which was not required for the payment of any of the annuities mentioned in the will, so as to make his whole estate active and yielding an income, except the lot in Pearl street, and the farm in Middlefield. By the fourth clause of the will, he gave to Jennet Cook the widow of his deceased brother, the use of the house and lot in Pearl street, and of the furniture therein, during her life or widowhood. By the fifth clause, he gave her an annuity of $2,000, for the support of herself and family, during the same time, to be paid by his executors quarterly. And by the sixth clause, he gave to his mother an annuity of $600 for life, to be paid in the same manner. By the seventh clause, in case of the death of his sister-in-law, or in case of her remarriage, before his nieces should both have attained the age of twenty years or have married, he gave to the two nieces, and to the survivor of them, the use of the Pearl street house and lot and the furniture; and if either should be u nderthe age of twenty, and not married, at the time of his sister-in-law’s death or re-marriage, the executors were directed to pay the expense of the support, maintenance, and education of such niece or nieces until they had respectively finished their education ; and after that, and until the age of twenty or marriage, to pay for their support a sum not exceeding SI ,000 annually for each. And a further provision was inserted, for the residence of the testator’s mother with the nieces in the Pearl street house, and for a female house-keeper; the expenses thereof to be paid by the executors. By the eighth clause of the will, the testator gave unto each niece after she was of the age of twenty or married, one equal half of the income of his estate after paying the annuities to his mother and sister-in-law, as such income should from time to time be received by the executors; which income was to be paid them by the executors upon their separate receipts, notwithstanding the r coverture. And by the ninth clause, in case of the death of either of the nieces after having attained the age of twenty years, without leaving lawful issue, the testator directed his executors to pay to the surviving niece, the whole clear income of the estate subject to the annuities. And in case of the death of either leaving lawful issue, he gave to the children of the niece so dying the one-half of the income of his estate, after paying the annuities, and directed his executors to apply so much of that half as they should deem necessary, to the maintenance and education of such children, until they should arrive at the age of twenty-one if males, and twenty if females; and if the niece so dying should leave a husband, the testator authorized his executors, in their discretion, to apply a part of that half of the income of his estate to the support of such husband if he needed assistance. He also directed the surplus of that half to be accumulated by his executors; and that they should pay to the children respeclively, as they arrived at the ages aforesaid, their equal shares of such accumulated income. By the tenth clause, in case of the death of both nieces leaving issue, he gave to the children of each one equal half of his estate, in fee, subject to the annuities. And by the eleventh clause, in case of the death of both nieces, and only one of them should leave lawful issue, he gave the whole of the estate to such issue. And he directed and required his executors, if the child or children of the niece so leaving issue should be under the ages before mentioned, to apply so much of his estate as might be necessary for their support, maintenance and education, until the youngest should become of age; and to pay to such as should become of age during the minority of the youngest an equal share of the income of his estate, and then to assign and transfer unto such child or children all the money then on hand, and all the stocks and securities in which any part of the estate might then be invested ; and to release to such child or children any real estate to which the executors might have acquired title in trust for the devisees, in the management of his estate, whether named or not. By the twelfth clause of the will, the ultimate remainder in fee was limited to the testator’s mother in case both nieces died without issue in her lifetime. And by the thirteenth clause, the Middlefield farm was devised to the executors, in trust for Eliza Andrus’ separate use for life, with remainder to her children in fee ; which last mentioned devise was not in controversy here. The bill was taken as confessed against Jennet Cook, the widow of the testator’s deceased brother, and against Dixon, the personal representative of the testator’s mother. And the suit and cross suit were heard upon the bills and the answers of the several other parties therein ; and upon the master’s report, as to the facts, so far as they affected the rights of the parties who were infants.

      May 7.

      J. C. Spencer, for the executors.
    The complainants’ original bill was properly filed for an account, and there should be a reference to a master to take and state an account as prayed for by the original bill; and if any further^duties are to be performed by the executors, under the trusts of the will, an order for a periodical accounting, as prayed for in the original bill, should be entered.
    The prayer of the original bill, for an account, necessarily involves the validity of most of the directions in the will respecting the payment over of monies by the executors and trustees.
    The devise, by the 7th clause of the will, of the house and lot in Peail street, after the death or marriage of Jennet Cook, to the nieces, Sarah C. Cook and Jennet M. Cook, or to the survivor of them who shall be living at her death or marriage, during their lives, does not suspend the power of alienation illegally. If both the nieces survive Jennet Cook, each takes one half during life, and there is then a suspension of each half only during two lives, and if one only survives, there is then a suspension of the entirety during two lives only. And if the construction of this devise is, that if one niece should die after having entered on the enjoyment of her life estate in one moiety there is a cross remainder to the survivor during life, then this last successive life estate is cut off by § 11 of title 2, ch. I, part 2, of the revised statutes.
    The directions in the 8th clause of the will, to pay the income of the testator’s estate to Sarah C. Cook and Jennet M. Cook, after deducting the charges enumerated, is a good and valid trust to pay a legacy to them annually.
    The directions in the eleventh clause of the will do not suspend the power of alienation, or the absolute ownership of the property, beyond the suspension already created by the 8th clause. The legacies given by the eleventh clause, are vested at once, in the issue of the niece leaving children, upon the death of the surviving niece. The directions to apply the income to the support of such issue until they atiain their lawful age, and then to pay over the principal, do not affect the vested interest of such issue, or in any way suspend the absolute ownership of the principal. (5 Ves. 509. 3 Brown, Ch. 408. 3 Mylne & K. 257. 2 Sim. & Stu. 505. 1 Con. Ch. 562.) At all events, the directions in the eleventh clause are wholly independent of, and do not affect the bequests in the tenth clause, or any other clause. If there is an implied direction in the eleventh cla'use for an accumu’ation, it is directed to commence subsequent to the death of the testator, at the termination of two lives in being at the time of his death, and during the minorities of the persons for whose benefit it is intended, and is to terminate at the expiration of their minorities. It is therefore valid. (1 Mad. Ch. 256. 2 Swans. 432.) But even if there be directions for accumulation which are invalid, they do not affect the devise of the principal of the. estate.
    The devise of the farm in Middlefield to Eliza Andrus for life, with remainder to her surviving children, cannot be questioned in the argument, because she is not a party to this suit.
    From the time of the death of the testator to the time of the marriage of the nieces, or of their attaining the age of twenty years, there may be an accumulation the principal of which is devised to unborn issue of the nieces, or to Candace Cook, neither of them being minors in being. This direction for accumulation is therefore void ; but the only consequence .is, that the surplus either goes to the nieces, as the persons entitled to the next eventual estate, or it is undisposed of and goes to the next of kin, who are the nieces; and the executors should be directed to account accordingly for such surplus.
    The annuity to Jennet Cook is admitted by the cross bill to be valid. Even if it may now be questioned, still it is valid, as it is payable out of the principal of the estate and therefore does not suspend the power of alienation.
    The directions in the ninth clause of the will, for the accumulation of the surplus of one half of the income of the testator’s estate, during the minority of the issue of a niece dying and leaving the other niece surviving, is not questioned by the pleadings, and is valid. It is like the directions, in the eleventh clause. And the direction to pay a part of the one half of the income, in such case, to a husband who survives such deceased niece, is also valid.

      James King, for Kane and wife.
    The provisions of the revised statutes are violated by the directions in the will, suspending the absolute power of alienation for more than two lives in being. The absolute power of alienation is suspended f.;r more than two lives in being in the devise of the Pearl-street house and lot. 1 he testator, by the third section of the will, gives, devises and bequeaths his whole estate, both real and personal, to his executors in trust, and then by the fourth section of the will, gives and bequeaths a contingent life estate of Mrs. Jennet Cook in the house and lot in Pearl-street, and afterwards a life estate to his two nieces during their joint lives. The absolute power of alienation is suspended for more than two lives in being in the whole estate, by giving, in the seventh and eighth sections of the will, a life estate in the income to his two nieces, and then by the ninth, tenth and eleventh sections, farther suspending the power of disposition during the several minorities of the children of his two nieces, who were not in being at the time of the death of the testator when the estate was created. The court cannot give effect to the estate in remainder upon the death of the testator’s two nieces, because the trust estate is further prolonged by the minority of the youngest child of his two nieces, who was not named in the will, nor was in being at the creation of the estate. It appears by the pleadings that William Henry Kane, a son of the testator's niece Sarah, was born on the 26th day of September, 1835, after the testator’s death, and was not, and could not be named in the will as one of the children during whose minority the trust estate was intended to endure. The will does not specify any two lives, during which the power of alienation was to be suspended ; but it may, by the will, be suspended during the lives of Mrs. Jennet Cook and her daughters, and the minorities of their unborn children.
    The provisions of the will violate the revised statutes by creating a trust estate for objects and purposes not authorized. There is no authority for the creation of a trust for the sale of real estate for the purposes declared jn the will. There is no authority fur the creation of a trust estate, in which the trustees can only stand seized of the title of the Pearl-street house and lot, when the use and occupation is directly given by the testator to Mrs. Jennet Cook, during her life, or while she remains a widow, without any control or discretion of the trustees to be exercised over the same. There is no authority for the creation of a trust estate for the mere purpose of authorizing the trustees to receive the income and pay the same over to the testator’s nieces. A trust to receive the income of an estate, and pay over the same, or apply it to the use of children unborn at the time the trust estate is created, cannot be sustained under the revised statutes. The purpose of paying an annuity is not an object within the purview of the revised statutes that can sustain a trust estate. The mere duty of distributing the estate as directed under the eleventh section of the will, is not a sufficient object to sustain an express trust; and especially as that service is confined to the sole purpose of distribution, without the exorcise of discretion or judgment on the part of the trustees. The trust estate cannot be sustained under the third subdivision of the 55th section of the second article of title two of the revised statutes relative to uses and trusts, because the estate created is not made subject to the rules prescribed in the first article of that title.
    If the trusts created by the will are not good as express trusts, neither are they good as powers in trust. Although the .testator professedly gives, devises and bequeaths all his estate, both real and personal, yet in all the contingencies which he anticipates by a change of parties, from death or otherwise, he gives and bequeaths or devises his estate, both real and personal, or a share thereof, directly to the person he wishes to become invested with such share of his estate upon the happening of the contingency. He does not direct his trustees to convey except in one case, but lie bequeaths it, or devises it himself. As powers in trust arc charges upon all lands of the testator, they necessarily suspend the power of alienation while they remain unexecuted, and are, therefore, subject to the same objection, on the ground of the suspension of the power of alienation, as the illegal limitation of any other estate. There is not one direction or duty prescribed by the testator in his will, for his trustees to observe or perform, which can be performed under a power in trust. To release real estate, as the trustees are directed to do in the eleventh section of the will can only be done in the execution of a trust.
    The directions to accumulate the surplus income of the testator’s estate for the unborn child or children of his two nieces are void, because the accumulation of the surplus income is not directed to commence within the time limited by the revised statutes for the vesting of future estates.
    The greater part of the provisions of the will are not only unauthorized by the revised statutes, but are in direct hostility to the provisions thereof. It will, therefore, be the duty of this court to declare the whole trust estate void ; and after making provision for the surviving annuitant, Mrs. Cook, to decree that the executors shall settle their accounts before a master, in this court, and that the personal property shall be distributed among the next of kin of the testator. And also to declare that all the real estate of the testator descended to his heirs at law, subject to a life estate in his mother, Candace Cook, except the Otsego farm, in which Eliza Andrus takes a life estate, and her children an estate in remainder; and except also the Pearl-street house and lot in which Mrs. Jennet Cook takes a contingent life estate, by an express bequest from the testator, with remainder in fee to the two nieces of the testator.

      S. Stevens, for the infant defendants, Jennet M. Cook and the children of Kane and wife.
    The devise, by the 7th clause of the will, of the house and lot in Pearl-street, after the death or marriage of Jennet Cook, to the nieces Sarah C. Cook and Jennet M. Cook, or to the survivor of them who shall be living at the death or marriage of Jennet Cook, during their lives, does not suspend the power of alienation for more than two lives in being at the death of the testator. The nieces do not take the estate in remainder in that house and lot as joint tenants, in case both survive Jennet Cook, but each takes one half during her own life. In that event, there is a suspension as to each half, during two lives only. (1 R. S. 727, § 44.) And if only one of the nieces survives the death
      or marriage of Jennet Cook, then there is a suspension of the entirety for two lives only. The life estate limited to the survivor of the two nieces in case only one survives Jennet Cook, is an alternative life estate. The first estate in order is the life estate in each niece of one half, if both survive. But in case the life estate of either niece in a moiety should fail to vest, then a life estate in the surviving niece, in the same one half, is substituted for it. Should the construction of this devise be that in case both nieces should survive their mother Jennet Cook, and one should die after their respective life estates in a moiety had vested in possession, then there is a cross-remainder to the survivor for life; such cross-remainder would be a life estate beyond two successive lives. And being void by the statute, the ultimate remainder in fee in such moiety would immediately vest in possession, at the expiration of the second life estate therein. (1 R. S. 723, § 17.)
    The directions in the 11th clause of the will do not suspend the power of alienation, or the absolute ownership of property, beyond the suspension already created by the 8th clause. So far as it regards the house and lot in Pearl-street, the legal effect of the direction in ihc 11th clause is the same as the 8th. If both nieces survive their mother, each takes a life estate in a moiety ; if one should die after the vesting in possession of her life estate in her moiety, the cross-remainder for life to the surviving niece is cut off by tlie statute, so that the remainder in fee in such moiety will vest in possession at the expiration of the first two life estates, to wit, Jennet Cook, who takes the whole for life, and the niece who takes a moiety for life after the death of Jennet; and if but one niece survive Jennet Cook, such niece takes a life estate in the whole—her life being substituted for that of her sister as to the moiety which would have gone to her sister had she survived Jennet Cook; and in that event upon the death of the surviving niece and Jennet Cook, the remainder in fee in the whole vests in possession. If there is any other real estate which would pass under the 11th clause, only two life estates arc carved out of it, to wit, the life estate of the two nieces ; so that in no event is the power of alienation suspended for more than two lives in being at the death of the testator. The legacies given by the 11th clause are vested at once in the issue of the niece leaving children, on the death of the surviving niece. The lives of the two nieces only, precede the vesting of the legacy given by the 11th clause. The directions to apply the income to the support of such issue until they attain their lawful age, and then to pay over the principal, do not affect the vested interest of such issue, or in any way suspend their absolute ownership of the principal.
    But whatever may be the construction of the 11th clause, it is wholly independent of and does not affect the devises or bequests in any other clause of the will.
    The direction in the 8th clause of the will to pay the income of the testator’s estate to his two nieces, after deducting the charges enumerated, is valid. It is a valid trust to pay a gross sum or legacy annually to them. And it is a legal and valid way or manner of bequeathing a life estate in personal property, and is not prohibited by the statute.
    The accumulation whicli may take place, by the 7th clause of the will, between the death of the testator and the marriage of the nieces, or their attaining the age of 20 years, will commence at the death of the testator; will bo for the benefit of the two nieces who were minors then in being; and will cease at or before the expiration of their minority. It is therefore valid. (1 R. S. 726, §37. Id. 773, §3, subd. 1.)
    But if such accumulation should be deemed to be for the' benefit of the unborn issue of the nieces, or Candice Cook, and therefore void, neither being infants in being at the time the accumulation is directed to commence, then the surplus either goes to those entitled as the presumptive owners of the next eventual estate, the nieces, or it is undisposed of and goes to the next of kin, who are the nieces, the mother being now dead.
    If there is an implied direction in the 11th clause of the will for an accumulation, it is directed to commence subsequent to the deatli of the testator, at the termination of two lives in being at his death, and during the minority of the persons for whose benefit it is intended. And as it is to terminate at the expiration of their minority, it is valid. (1 R. S. 726, § 37, subd. 2. Id. 774, § 3, subd. 2.)
   The Chancellor.

It is conceded by the counsel for all parties in this case, that the executors, as trustees, took no estate or interest whatever in the house and lot on Pearl-street or in the .Middlefield farm ; but that the whole beneficial interests devised, so far as the devise was legal, passed directly to the ecstuis que trust, as legal estates, under the provisions of the forty-seventh section of the article of the revised statutes relative to uses and trusts. (1 R. S. 727.) It is only necessary, therefore, to examine the provisions of this will in relation to the other property of the testator; all of which was intended to be devised and bequeathed to the executors, in trust, and to be converted into personal estate for the purposes of the will. And as this court, upon the principle of equitable conversion, considers a direction to convert one species of property into another, for purposes which are valid in law, as tantamount to an actual conversion thereof, the whole trust fund in this case must be considered as personal estate for the purpose of ascertaining whether the several bequests of future or contingent interests therein are valid ; whether the title to the property is vested in the executors, as special trustees, or it belongs to the several legatees to whom the beneficial interests therein are bequeathed. (Grieveson v. Kusopp,2 Keen's Rep. 653. Du Hourmelin v. Sheldon, 1 Beavan’s Rep. 79.)

The revised statutes have not attempted to define the objects for which express trusts of personal estate may be created ; as they have done in relation to trusts of real estate. Such trusts therefore may be created for any purposes which arc not illegal. Indeed it would be very difficult, if not impossible, in many cases, to create and preserve future and contingent interests in personal property without the intervention-of a trustee ; although trustees would not be necessary, under the provisions of the revised statutes, to create and preserve such future and contingent interests in lands or other real estate. In all other respects, however, except as to the mere vesting of the legal title to the property in the trustee, instead of the cestui que trust, the conveyance or bequest of personal estate must be governed by the same rules which are applicable to a grant or devise of a similar interest in lands or real property. Independent of the common law principle of analogy between estates or interests in real and personal property, the statute creates such an analogy, by restricting the power of suspending the absolute ownership or the right of alienation, within the same limits; by confining the power of accumulating the income of personal estate, and the rents and profits of real estate,^ to the same objects and within the same bounds; and finally by declaring, in general terms, that in all other respects limitations of future or contingent interests in personal property shall be subject to the rules prescribed by the revised statutes in relation to future interests in lands. (1 R. S. 761, tit. 4.) It becomes necessary, therefore, to examine the several estates or future interests in this personal fund, and in the income thereof, which are attempted to be created or limited by this will; for the purpose of seeing whether all or any of them are void by these statutory regulations.

The annuities, to the sister in law and the mother of the testator, are not made payable out of the income of the estate merely, but are a charge upon the principal of the fund. They may therefore be provided for at once, by the purchase of annuities with a portion of the fund. And as the annuities in the present case are not inalienable under the sixty-third section of the article of the revised statutes relative to uses and trusts, which section is confined to beneficial interests in the rents and profits or income of the property, they do not suspend the absolute ownership as to any part of the fund. The provision for the support of the two nieces, and the additional allowance to the mother of the testator while she lives with them, do not appear to conflict with any rule of the revised siatutes; for if the absolute ownership of the property is suspended thereby, it is necessarily limited to two lives in being at the death of the testator ; to wit, the lives of the two nieces.

Upon the argument of this case I was under the impression that there was a part of the income of the estate, between the death of the testator and the coming of age or marriage of the nieces respectively, which was not'disposed of by the will. On examining the third clause in connection with the eighth, however, I am satisfied'it was the intention' of the testator that one half of the income should be accumulated, by the executors, for the benefit of each niece,to be paid' to her on her marriage or on her arriving at the age of twenty. The eighth clause appears to have been intended to direct the accumulated income of the fund to be paid to each, at the time prescribed, and that one half of the future income should then be paid over to each during her life. (See Barber v. Barber, 3 Myln. & Craig, 688.) These accumulations being for the benefit of infants who were in esse at the death of the testator, and being limited so that they must terminate during the minority of the infants respectively, are expressly authorized by the revised statutes, and arc valid. (1 R. S. 729, § 55, sub. 4. Idem, 773, § 3.) The devise or bequest of one half of the income to each niece for life, after the trust of accumulation ceases, is a future interest in personal property within the statutory definition of future estates. (1 R. S. 723, § 10; 725, § 36.) The limitation of such interests must, therefore, be subject to the statutory rules in relation to future estates in lands. One of those rules is that the persons beneficially interested in the trust to receive such income cannot assign or in any manner dispose of such interests during their lives. (1 R. S. 730, § 03.) The absolute ownership of the fund or estate-out of which this income is to arise is therefore suspended, by the limitation of such interests, during the lives of the two nieces. But as those two lives were in being at the death of the testator, this suspense of the absolute ownership, or the power of alienating the principal fund; docs not exceed the limit allowed by law.

The trust in this case is to pay over the income to the nieces respectively, as the same shall be received by the executors, and is not, in terms, to apply it to their use ; which last is the language used in the 3d subdivision of the 55th section of the article relative to uses and trusts. And if that section of the revised statutes applies to trusts of personal property, so that no trust of personal estate is valid except such as are in conformity to the provisions thereof, the question arises whether su,ch a trust as this is void. Upon that question there were differences of opinion expressed by some of the judges, in the court for the correction of errors, in the cases of Lorillard’s and of James’ wills. For the purpose of seeing whether such a trust comes within the principle of the 55th section, it is necessary to ascertain the intention of the legislature in framing the third subdivision of that section, as it was finally amended. The object unquestionably was to authorize a trust in the rents and profits of real estate for the benefit of an improvident beneficiary, so as to ensure him a support notwithstanding such improvidence; or a trust which would protect an unfortunate feme covert against the improvidence of her husband, so as to place what was intended for her beyond his reach, and beyond the reach of his creditors. And if this can be as effectually done under such a provision as is contained in this will as it could be, consistently with other provisions of the statute, if the trust was framed in the very words of the law, courts should not give to the statute a construction which would render it necessary for the trustee to purchase every loaf of bread, and every paper of pins, which may be required for the use of the cestuis que trust, instead of giving them the money, after the same has been received from the rents and profits of the trust estate, to enable them to purchase for themselves. Even as this section originally stood, when the rents and profits were to be applied only to the education and support of the cestui que trust, I have no doubt that the trastee would have been authorized to pay over the rents and profits to an adult cestui que trust, for that purpose, when received. The legislature, however, soon discovered that a cestui que trust might have other uses for money besides a bare education and maintenance ; and that if the trustee could not give it to him, to be so applied, when it was more than sufficient for maintenance and education, the trust as to the surplus must fail; the trustee having no right to keep (the surplus himself, and the legislature having prohibited trusts of accumulation except in cases of minority. The statute, therefore, was amended so as to authorize the rents and profits to be applied generally to the me of the cestui que trust. The great object of the statute is attained if the property, by means of the trust, is placed beyond the reach of those who might squander the rents and profits in anticipation, or might allow the property to be taken for the payment of previous debts; and this is effectually done by the section of the revised statutes which renders the interest of the cestui que trust inalienable. The cestui que trust, if he is in a situation to know and provide for his own wants with ordinary discretion, must certainly have the power to direct how the money shall be applied when it has been actually received by the trustee ; for it never could be tolerated, in such a case, that the trustee should have the power to direct what food the cestui que trust should eat, what clothes he should wear, what church he should attend and contribute to the support of, or to what other specific purpose his surplus income should be applied. In case the trustee should attempt, without any justifiable cause, to exercise such a control over the income of the trust fund, after it had been received so as to become the absolute property of the person for whose use it was to be applied, it would be the duty of this court to remove such trustee, and appoint another who better understood his duty. On the other hand it would equally be a breach of his duty to place the income, after it was received, in the hands of a lunatic or a drunkard, who he had reason to suppose would waste it without applying it to any beneficial use; and so it would be if he purchased articles of food and clothing or other property himself, and placed them in the hands of such a person, when he had reason to believe they would be wasted, instead of being used for the benefit of such cestui que trust or his family. In every such trust, whether the trustee is directed to pay over the rents and profits, as received, in money, or in necessaries to be purchased by himself, a certain degree of discretionary power must be vested in the trustee. And if that discretion is properly exercised by him, the rents and profits or income, received from time to time, will be applied to the use of the cestui que trust, whether the same are delivered to him in money or in necessaries for himself and family. Where the trustee acts in good faith, and for the apparent benefit of the cestui que trust, in refusing to place the rents and profits or income in his hands to be wasted, the court of chancery will protect him in the honest discharge of his duty, by refusing its aid to the improvident cestui que trust. And if the income is paid over to the cestui que trust who is under no legal disability to receive it, after it has actually accrued and not by way of anticipation merely, even where the trust is in the words of the statute, he can never after-wards call upon the trustee to account for the money on the ground that it has been misapplied. The statute having authorized a trust to receive the vents and profits and apply them to the use of the cestui que trust, if the person creating the trust thinks proper to direct the manner of the application, as in this case, by paying them over to the objects of his bounty to be used in such way as they think proper notwithstanding their coverture, I cannot see why the direction is not within the letter as well as within the intent and meaning of the statutory provision on this subject. I therefore concur in opinion with those who hold that a valid trust may be created, to receive the rents and profits of real estate, and to apply them to the use of the cestui que trust by paying the same over to him in money, after they have accrued and been received by the trustee.

The interest in the income of the property in this case, after the death of either of the nieces without issue, is limited to the survivor for life, by the ninth clause of the will. By this provision cross remainders, in the moieties of the income before given to them respectively, are limited upon the previous estate or interests therein. The statute allows two successive estates for life, and this provision is therefore valid. But the provision in the same clause, giving to the children of the niece who dies first an interest in the income of their mother’s share, during the minoi’ity of the youngest child, and giving to the widowed husband a conditional support out of such income, appears to have the effect of suspending the absolute ownership of the property for more than two lives in being at the death of the testator; as the bequest is not so limited that the interests in this part of the income must necessarily terminate during the life of the surviving niece; Even if the provision in the tenth clause could be considered as limiting the continuance of this interest to the time of the death of the surviving niece, in the event of her leaving issue, that would not obviate the objection; for the surviving niece may die without issue, and in that event the interest attempted to be created by the ninth clause, in favor of the husband and children of the one who died first, is so limited as to continue until the termination of the minority of the youngest of those children. And the decision of the court for the correction of errors in Hawley v. James, (16 Wend. Rep. 61,) settles the construction of the fifteenth section of the article of the revised statutes relative to the creation and division of estates to be, that an estate is void in its creation if it is so limited that it can by any possibility continue beyond the two lives in being at the creation of the estate. This provision of the will is therefore void. And if the-event contemplated by the testator in that part of the will should happen, the interest or income of that half of the trust fund will belong to the heirs at law and next of kin of the testator, during the life of the surviving niece, as an interest in the property not legally disposed of by the will.

By the tenth clause of the will the absolute ownership of the fund, upon the death of both nieces leaving issue, is given directly to their children; one moiety to be divided among the children of each. This is an estate in fee, limited upon the termination of two specified lives in being at the death of the testator; and cannot by any possibility suspend the power of alienation, or the absolute ownership of the estate, beyond the limits allowed by the revised statutes. It is therefore valid. And in the event contemplated by the testator in this clause of the will, the executors must pay over to the children of the two nieces the whole principal of the fund, after providing for the annuity to Jennet Cook, the widow of the testator’s brother, if she is then living.

The eleventh clause provides for the contingency of the death of one of the nieces, leaving issue, after the death of the other without issue ; and also for the final distribution of the principal of the trust fund after the death of the surviving niece, without issue, subsequent to the happening of the event contemplated by the testator in the latter branch of the ninth clause of the will. If the absolute ownership and power of alienating the trust fund was, by this eleventh clause of the will, to vest in the children of the niece who had left issue, immediately upon the termination of the life estate of the surviving niece, as is provided by the tenth clause in the event of both nieces leaving issue, the limitation would be valid; for the reasons stated in relation to the interest created in and by such tenth clause. But inasmuch as the absolute ownership of the fund, in either of the events contemplated by the eleventh clause, will have been suspended for the lives of the two nieces, it is evident that the suspense of the absolute ownership of the property, and of the power of alienation, cannot be continued after that time by any limitation or condition whatever. For the reasons stated in relation to a similar provision in the ninth clause of the will, the trust to receive the rents and profits during the minority of the youngest child, and to pay over the shares of the adults, and to accumulate the shares of the infants during their respective minorities, is the limitation of a future estate or interest in this fund; which limitation is void in its creation. (1 R. S. 723, § 14.) A trust to accumulate rents and profits for the benefit of an infant who was not in esse at the creation of the trust, in order to be valid, must be so limited that the accumulation will commence and terminate within the compass of some two ascertained lives in being at the creation of the trust.

It is insisted however, by the counsel for the executors and for the infant defendants, that if the interest created in the income of the estate during the minority of the youngest child, by this clause of the will, is void, the ultimate remainder in fee to the ceildren is thereby accelerated ; so as to give them the absolute ownership and the right to the possession of the fund immediately upon the death of the surviving niece. This case certainly is not provided for by the 17th section of the article relative to the creation and division of estates. (1 R. S. 723.) That section only provided for the acceleration of a remainder which is limited upon more than two successive estates for life to persons in being at the creation of the estate. Here the ultimate remainder, in the events contemplated in this clause of the will, is neither limited upon successive estates for life, nor upon the termination of the minority of a person in esse at the time of the creation of the estate. The trust term in the income of the estate, after the death of both nieces and during the minority of the youngest child, being void, the income during that period cannot be given to the children, as the persons presumptively entitled to the next eventual estate, under the provisions of the fortieth section of the last mentioned article of the revised statutes. (1 R. S. 726.) That section gives the intermediate rents and profits or income to the person presumptively entitled to the next eventual estate, where the limitation of the future estate suspends the absolute ownership of the property or the power of alienation. Here the ultimate remainder in fee, or the direction to distribute the-whole of the principal of the fund, among the children of the niece who left issue, when the youngest of her children arrives at the age prescribed, will be a vested interest in all the children at the death of the surviving niece ; so that the power of alienation or the absolute ownership will be no longer suspended ; the trust term, and the direction to accumulate during the minority of the youngest child, being void in its creation. It is true, the children of the niece who died leaving issue will not be entitled to their ultimate remainders, in possession, until the end of the term attempted to be given to the executors during the minority of - such youngest child ; as the heirs and next of kin of the testator will be entitled to the income in the mean time, as an interest in the property not effectually disposed of by the will. But such children, or their legal guardians, by joining with the heirs and next of kin, can at once convey an absolute ownership or fee in the whole fund the moment their remainder vests in interest. The power of alienation of real property, or the absolute ownership of personal property, which is the same thing in substance, can only be suspended while there are persons in being and ascertained, by whom an absolute estate or interest in fee in possession can be immediately conveyed. (1 R. S. 723, § 14.) I conclude, therefore, that although the trust term to receive the rents and profits for the benefit of the children during their minority is void, the ultimate remainder in fee to the children, which is limited on that term, is not accelerated, neither is it invalid. This ultimate remainder in fee, in the events contemplated in the eleventh clause of the will, is expressly authorized by the twenty-fourth section of the article of the revised statutes relative to the creation and division of estates, so often referred to. (1 R. S. 724.) It is in substance a contingent remainder limited upon a term of years, within the meaning of the twentieth section. But it is valid according to that section, as it is so limited that it must vest in interest, if ever, on the determination of two lives in being at the creation of such remainder ; to wit, the lives of the two nieces of the testator. And as it does not suspend the power of alienation or the absolute ownership of the property, as I have before shown, it does not come in conflict with the provisions of the fifteenth section; although the estate does not vest in possession as soon as it vests in interest.

A decree must be entered declaring the construction of the will accordingly, and containing the proper directions to the executors in the several events contemplated by the will. It must also be referred to the injunction or taxing master of the third circuit to state the accounts of the executors; and to ascertain what is due to Mrs. Kane, as well for the accumulation of her half of the income previous to her marriage, as for the receipts thereof afterwards ; and also to ascertain the accumulated fund, arising from the half of the income of the fund which is to be accumulated for the benefit of the infant defendant Jennet M. Cook until she marries or arrives at the age of twenty years. The decree must also contain a provision for a periodical passing of the accounts of the executors, during the continuance of the trust, before the same master if in office, and if not, then by his successor as injunction or taxing master. The costs of all parties must be paid out of the capital of the estate. And a reasonable counsel fee, to the guardian ad litem and counsel of Jennet M. Cook, to be certified by the master, may be paid to him by the executors out of the accumulated fund belonging to her. The infant children of Mrs. Kane, having no vested interest in the estate, there is nothing out of which any counsel fees for them can be allowed. And the court is not authorized to charge a fund which may eventually all belong to others, with any thing more than the taxable costs of their guardians ad litem.

       Where there is an interest in a fund arising from the proceeds of the sales of both real and personal estate, which interest is not legally and effectnally disposed of by the will, so much of that interest as arises from the proceeds of the real estate belongs to the heir at law, and so much as arises from the personalty belongs to the residuary legatees or next of kin. (Eyre v. Marsden, 2 Keen's Rep. 564.)


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Nodine vs. Greenfield and others.
    Where a mortgagee of real estate, after the giving of the mortgage, devised and bequeathed the rents, and profits, and income, of his real and personal estate to his wife for life, with remainder in fee to the children of his bro. ther who should be living'at the time of her death; and to the issue of such of the children as should then have died leaving issue; and the testator further authorized and empowered his executors, or the survivor of them, to sell his real estate, and to invest the proceeds thereof in permanent securities for the benefit of the devisees thereof; Held, that the children of the brother who were in esse at the death of the testator, took vested remainders in fee, as tenants in common, in the mortgaged premises, subject to open and let in after bom children; and subject also to be divested by death during the continuance of the life estate of the widow of the testator, or to be defeated by the execution of the power of sale given to the executors by the will. Held also, that the children of the brother who were in esse at the time of filing of the bill, ought to have been made parties to a suit in chan, eery to foreclose the mortgage; and that their equity of redemption was not barred by a sale under a decree in a suit in which the widow, and the executors, and the heir at law of the testator, alone were made parties.

      Where there are several future and contingent interests in the equity of redemption in mortgaged premises, it is not necessary, in a bill of foreclosure, to make every person having a future and contingent interest in the premises a party to the bill of foreclosure ; but it is sufficient, if the person who has the first vested estate of inheritance, and all other persons having or claiming prior rights or interests in the premises, are brought before the court.
    To make a decree of foreclosure valid, as against all claimants, the person who has the first estate of inheritance in the mortgaged premises, and the several intermediate remainder-men, must be made parties to the bill.
    Where the purchaser of real estate has sustained an actual and serious injury by the inability of the vendor to give to him a good title to the premises at the time required by the contract, it seems the court of chancery will not decree a specific performance of the contract by the purchaser; although the vendor is afterwards in a situation to make a perfect title to the premises.
    Tub bill in this cause was filed for the specific performanco of a contract to purchase lot No. 58, on Hammond street, in the city of New-York; and a reference was directed to a master, to inquire and report whether the complainant had, or could give, a good title to the premises. The master having reported in favor of the title, the case came before the court upon the exceptions of the defendants to his report. The facts in relation to the title, and upon which a legal question as to the validity of the complainant’s title arose, were as follows : In September, 1805, J. Ruden was seized in fee of this and other lots; and he and his wife then mortgaged the same to Henry A. and John G. Coster, to secure the payment of about $2,500, with interest. J. Ruden afterwards made a will, executed in due form of law to pass real estate, whereby he authorized and empowered his executors, or the survivor of them, to sell and convey his real estate; and directed them to sell and convert all his personal estate not specifically bequeathed by his will, into money, as speedily after his decease as could reasonably be done. After directing the payment of his debts, and several legacies, out of the proceeds, he directed the residue of his estate to be invested upon bond and mortgage, or in stocks and other permanent securities. He then gave the interest or income thereof, and the rents and profits of the real estate remaining unsold from time to time, to his widow for life ; subject to a charge thereon for the maintenance and education of the testator’s adopted son during his minority. And after the death of the widow, he devised and bequeathed all the principal monies so invested, and all the lands and tenements, property, and effects, then belonging to his estate and composing the residue thereof, to the children of his brother, A. Ruden, who should be living at her death, and to the lawful issue of such of the said children as should have died leaving lawful issue, per stirpes; and in default of any such children or issue then living, to the said brother if living, and if not, to such persons as should then be entitled to distributive shares of the testator’s estate. J. Ruden died in September, 1806, seized in fee simple of the premises in question, subject to the mortgage, leaving a widow, and his brother A. Ruden his only heir at law, him surviving; both of whom were still living, at the date of the master’s report. At the death of the testator, A. Ruden had six children, and four more were born afterwards; which ten children were all living at the date of the master’s report. The estate of the testator, after paying his debts, being insufficient to pay all his legacies, and the mortgage remaining unpaid, in August, 1826, the surviving mortgagee filed a bill in equity to foreclose the same, in which suit the surviving executor and the widow and brother of the mortgagor only were made defendants. Under a decree of foreclosure in that cause, the premises were sold and conveyed by the master to John R. Peters. And the title of the latter, which he acquired under the master’s deed, afterwards came to the complainant by a regular chain of conveyances.

      May 7.

      J. L. Mason, for the complainant.
    The children of A. Ruden never had any interest in the estate of J. Ruden under the will; the devise to them being only of the residue of the estate after payment of debts and legacies which it appears the estate was insufficient to discharge. The remainders limited to the children of A. Ruden, upon the life estate devised to the widow, were contingent remainders. The life estate of the widow was effectually destroyed by the proceedings to foreclose the mortgage executed by the testator, she having been made a party to such proceedings. The contingent remainders could not vest until the death of the widow, who is still alive; and the precedent estate on which the contingent remainders depended being destroyed before the remainders could vest, they are destroyed also. The fee of the estate, subject to the life interest of the widow, descended to and was vested in A. Ruden, as the heir at law of his brother the testator—all the estates devised after the life of the widow being contingent merely. A. Ruden was therefore properly made a party to the bill of foreclosure, and the sale under the decree of the court made upon that bill, vested a good title in the purchaser.

      J. W. Gerard, for the defendants.
    The children of A. Ruden, who were living at the time of the foreclosure, should have been made parties thereto, whether their remainders were vested or contingent. All persons having a probable interest in the property, or in the surplus monies in case of a sale, should be made parties. The children of A. Ruden, on the death of the vridow of J. Ruden the testator, will havé a right to redeem the premises in question ; if they have not such right before her death. Where the title is doubtful, the court, upon a bill for a specific performance, will not compel the defendants to take the property.
   The Chancellor.

The objection to the title in this cause is, that the children of A. Ruden, who were in existence at the time the bill of foreclosure was filed, and who were the first devisees of the remainder in fee after the termination of the life estate of the widow, were not made parties to the suit; and that their equity of redemption was, therefore, not extinguished by the sale under the decree in that suit. This objection appears to be well taken; and the master therefore erred in reporting that the complainant could give a good title.

No estate whatever was vested in the executors in this case by the will of the testator; but they had a mere power in trust to sell and convey the estate for the purposes of the will. Neither did the legal title to the premises descend to the heir at law of the testator until the execution of such power; for by the terms of the will, the rents and profits of the real estate remaining unsold are devised to the widow for life, and the estate itself, if not sold by the executors, is devised to the children of his brother who may be living at the time of her death. Upon the death of the testator, therefore, the widow took a life estate in the premises, and the children of A. Iluden, who were then in esse, took vested remainders in fee, as tenants in common therein, subject to open and let in after born children ; and subject to be divested by death during the lifetime of the widow, or to be defeated by the execution of the power of sale by the executors or the survivor of them. (Doe v. Provoost, 4 John. Rep. 61. Doe v. Martin, 4 Term Rep. 39. Osbuy v. Bury, 1 Ball & Beat. 53.) Where there is a contest in chancery in relation to real estate, or where a mortgagee wishes to foreclose a mortgage, in a case where there are several future and contingent interests in the equity of redemption, it is not necessary to make every person having or claiming a future and contingent interest in the premises a party to the bill, in order to bar his right or claim, by the decree in the cause; but is sufficient, if the person who has the first vested estate of inheritance, and all other persons having or claiming prior rights or interests in the premises, are brought before the court. (Story’s Eq. Pl. 140, § 144; 182, § 198. 1 West’s Rep. 619. Ambler, 564.) The person having the first estate of inheritance, and who is in esse, appears however to be a necessary party to a bill of foreclosure, to make the decree a bar either to his right, or to the right of any contingent remainder-man who is not made a party to the suit. In the case of Gore v. Stackpoole, (1 Dow’s Rep. 31,) in the House of Lords, upon an appeal from Ireland, Lord Chancellor Eldon said, it was clear equitable law, that in order to make a foreclosure valid as against all claimants, he who had the first estate of inheritance must be brought before the court; and even then, the intermediate remainder-men for life ought to be brought before the court, to give them an opportunity to pay off the mortgage if they thought fit. (See also Coote’s Law of Mort. 522. Yates v. Hambly, 2 Atk. Rep. 237.) In this case, the children of A. Ruden, who were in esse at the time of filing the bill of foreclosure, had the first estate of inheritance in the mprtgaged premises, in remainder after the termination of the life estate of the widow; and not being made parties, neither they nor the children born subsequently were bound by the decree. The exception to the master’s report must therefore be allowed, with costs.

It appears by the report of the master, that it was proved before him that the estate of the decedent was insufficient to pay the several legacies charged thereon, after satisfying the debts. If such was the fact, it was unquestionably the duty of the surviving executors to sell the equity of redemption, or to release it to the mortgagees in satisfaction of their debt if the value thereof did not exceed the amount due. And as the surviving executor has not only the power but is actually directed by the will to sell the estate and pay the debts and legacies, it is probable a perfect title may still be procured by the complainant, by a conveyance of the equity of redemption by the executor; which equity is probably worth nothing beyond the amount due on the mortgage. If a perfect title to the premises can be made in that way, I will reserve the right to the complainant to make such an application on the subject as he may think proper. But as the defendants have probably sustained a serious injury by the delay, and by the inability of the complainant to give them a good title at the time when their contract of purchase should have been consummated by a conveyance, which would render it improper to compel a specific performance upon a new title now to be procured, I cannot give any further directions on the subject without affording them an opportunity to be heard, in relation to the right of the complainant to compel them to take the title if it can now be made perfect.


text:
    Spring vs. Sandford and others.
    Where real estate is sold by a master, under a decree of the court of chancery, as and for a good title, the purchaser is only entitled to such a title as a purchaser of the premises at a private sale would be bound to receive from his vendor.
    It is no valid objection to the title, under a decree in partition between the heirs at law of the person who died seized of the premises, that the suit for the partition thereof was commenced within the four years allowed by law for proving and recording a will of real estate; unless there is some reasonable grounds for supposing that the decedent actually made a will which has changed the course of the descent.
    A bill for the partition of lands among the devisees or heirs at law of a testator or intestate, may be filed within the three years allowed by law to the creditors to apply to the surrogate for an order of sale. And a purchaser under the decree will be compelled to take the title if it appears that there are no debts, or that the personal property is an ample fund to pay all claims against the estate of the decedent.
    Where the interest of one of the defendants in the premises, in a partition suit, is sold under a judgment at law against him, subsequent to the filing of the complainant’s bill and the notice of the pendency of the suit for partition, the purchaser must come in before the master and prove his claim, under the order of reference as to general liens; as his interest in the premises will be divested by a sale under the decree.
    It is a fatal objection tp the title derived under a decree in partition, that the complainant was a feme covert, and that her husband was not joined with her as a party to the suit. And where it appeared, from the affidavits on the part of the purchaser, to be a matter of doubt whether the complainant was not a married woman, a marriage in fact having been solemnized between her and a man who claimed to be her husband, the chancellor refused to compel the purchaser to take the title, until the complainant should have established the fact, upon a reference, that the alleged marriage was illegal and void.
    May 7.
    This case came before the chancellor upon the several appeals of J. Cook and F. Sebert, two of the purchasers at the master’s sale under the decree in this cause, from an order of the vice chancellor of the first circuit refusing to discharge the appellants from their purchases. Several objections were made to the validity of the title to be acquired under the master’s sale, all of which were overruled by the vice chancellor; and the appellants were ordered to complete their purchases.

      P. De Witt & R. L. Scheiffelin, for the appellants.
    The purchaser is not bound to take a doubtful or questionable title, or one that would subject him to a law suit. (2 Paige's Rep. 586.) Several objections exist to the title of the premises sold by the master. The bill for partition was filed by one of the heirs at law only twenty days after the death of the ancestor, M. Sandford. The title under the decree may be defeated, if within four years from the death of the ancestor, a will should be produced and proved, giving the estate to any others than the parties to the suit; or in case a larger or more advantageous provision should be made therein for the infants. (1 R. S. 748.) The title will also be defeated in case the creditors of the deceased shall, within three years from the death of the ancestor, take proceedings before the surrogate, and sell his real estate for the payment of his debts. (2 R. S, 108, 454. 2 Paige's Rep. 592. 1 Edw. Ch. Rep. 570.) The right and title of Oakley, one of the defendants, to the premises had been sold under a judgment against him, and a certificate of such sale was duly filed, previous to the time when the master advertised for general liens.
    Again; the complainant, at the time of filing the bill for partition, was the wife of Slocum, who is still living. The proceedings in partition are therefore irregular and void.

      Charles Edwards, for complainant.
    The possibility of a creditor suing an heir is not enough to prevent a partition of the estate of the decedent. In the present case, the ancestor left no debts unpaid. Even in ordinary cases, the land which an heir takes is not liable if such land has been aliened. Now, the sale under a decree in partition is a species of alienation through the decree of the court. (2 R. S. 454, § 47.) The statute fixes no time for the commencement of proceedings in partition. They may be commenced by an heir at law the day after the death of the ancestor. The purchasers in this case show nothing which leads to the presumption that there are any debts which are a lien upon the premises. The interest acquired by the sale under the judgment against James B. Oakley, if worth any thing, attaches to his share only. But even this is doubtful. (4 Paiges Rep. 441.) The complainant is not the wife of Slocum. This appears by her affidavit. Her marriage with him was unlawful, and void ab initio. (Fenton v. Reed, 4 John. Rep. 52. 1 Roll Ab. 340, pl. 2; 357, pl. 40. 2 R. S. 139, § 5. Cro. Eliz. 858. 1 Salk. 120.)
   The Chancellor.

Some of the objections to the title in this case, which involve no legal principle but depend for their support upon mere questions of fact, would have been proper subjects of a reference to a master if the purchasers had sworn even to their belief of the existence of a state of facts which would necessarily render the title to be acquired under the master’s deed invalid. But the court, in giving a title to the purchaser, does not undertake to give a title which can by no possible state of facts be defeated. It only assumes to give such a title as a purchaser at a private sale could not legally object to receive. Applying this principle to the objections made to the title in this case, I do not see that they can be sustained, with but one exception; as I can see nothing in the facts of the case which renders it probable that the appellants will not obtain valid titles to the lots purchased by them respectively, unless it should turn out that the complainant is in fact a feme covert.

The first objection is that the bill for partition was filed very soon after the death of the intestate and before the expiration of the four years allowed by law for proving and recording a will of real estate. The object of the statute requiring wills to be recorded was not to suspend the power of selling the estate by the heir at law in the meantime, but it was to protect purchasers against secret wills which might afterwards be set up to defeat their titles. And as there is nothing in this case from which it can be inferred that there is any will in existence, that objection to the title was properly overruled.

Although the master’s report upon the title is not conclusive, it is prima facie evidence at least that the testator made no will changing the course of descent; and it lies upon the purchaser to satisfy the court that there is a probability that a will had been made. If he had sworn to his belief that there was a will, a reference to a master might have been awarded to inquire as to that fact. Even on such a reference, however, the purchasers would hold the affirmative ; and unless they produced some evidence of the existence of a will, the master would be compelled to report in favor of the. goodness of the title derived from the heirs at law.

The same difficulty exists in relation to the second objection to the title, that the creditors of the decedent may defeat it by an application to the surrogate to sell, for the purpose of paying the debts of the intestate, at any time within three years after his death. Such an objection might probably be valid if it appeared that the decedent left debts which his personal estate was insufficient to satisfy. But here the appellants do not swear that they even believe the intestate left any debts which could authorize an application to the surrogate for a sale of the real estate. And if the existence of debts had been alleged, it would have been sufficient, on the part of the respondents, to have shown that the personal estate of the decedent was ample, so that there was no probability that the real estate could ever be reached for the purpose of satisfying such debts.

The objection that the interest of the husband of one of the tenants in common, in his wife’s share of the land, was sold by the sheriff on execution before the master had advertised for general liens, is not well taken. The sale by the sheriff turned what was before a general lien of the judgment creditor into a sprcific lien, in favor of the purchaser under the execution ; and if the sale bad taken place before the commencement of the partition suit it probably would have been necessary to make the purchaser a party in order to divest the specific lien acquired by him under that sale. But as ho was a purchaser pendente lite in this case, his title was divested by a sale under the decree, in the same manner as it would have been if he had obtained a specific lien upon the premises by taking a mortgage upon the husband’s interest, subsequent to the commencement of the suit. The purchaser at the sheriff’s sale, therefore, was only substituted in the place of the judgment creditor who had a general lien upon the premises at the time of the commencement of the partition suit; and to protect his substituted lien he should have come in before the master and claimed such substitution, to the amount of the purchase money bid by him and the interest thereon, when the master advertised for general liens. Whether it is not now too late for him to claim any share of the purchase money, is a question which it is unnecessary to decide here. But that his general lien upon this undivided share of the premises, as a purchaser pendente lite, is actually divested by the master’s sale, so that these appellants will take their titles absolutely discharged of any claim or lien in his favor, I have no doubt.

The objection that the decree directs the premises to be sold upon a three weeks notice only, when the statute requires six, is not sustained by the fact as appears from the decree itself. It is true the decree directs the master to give three weeks previous notice, of the time and place of sale, in such newspapers printed in the city of New-York as he may deem proper; but it also directs that he shall give notice “ in such other manner as the law and rules and practice of this court may require.” This last clause is of itself sufficient to make it the duty of the master to advertise the premises for sale for the time and in the manner required by the statue ; and the previous clause requiring the master to advertise for three weeks in such papers in the city as he may think proper, if it is not mere surplusage, must be construed as an authority to the master to advertise for a portion of the time required by the statute in more than one paper. The master has given the correct construction to the general direction, to give notice in such other , manner as the law required, and has advertised the premises for the term of six weeks, as the partition law required. The decree and sale were therefore both regular, at least so far as is necessary to protect the title of the purchasers, without any amendment of the proceedings.

The objection that the complainant was a feme covert, and that her husband was not a party to the suit, would, if true in point of fact, be a fatal objection to the title of the purchasers under the decree; and it could not be obviated by bringing that share of the purchase money into court to abide the result of a contest between the complainant and her supposed husband. Although the decree might be conclusive upon the defendants, so far as to divest all their interest in the premises, in favor of the purchasers at the master’s sale, it is doubtful whether it would have the same effect upon the interest of a complainant who had brought a partition suit in her own name without the assent and protection of her husband. At all events it could not divest the life estate which the husband had in the share of the premises belonging to his wife. The purchasers would therefore be subject to be turned out of possession of an undivided share of the premises, at the suit of the husband; and this court will not compel a purchaser who has contracted for a good title to take it subject to a life estate in an undivided portion thereof. If there was any real doubt, therefore, as to the fact of the complainant’s being a feme sole, the appellants ought not to have been compelled to take the title, without giving them an opportunity, either by an issue or by a reference to a master, to establish the fact by proof that the complainant was the lawful wife of Slocum. The fact that Slocum claimed to be her husband, however, without some evidence to induce the court to believe his claim was well founded, would not be a sufficient ground for excusing the purchasers from completing their purchases.

In this case, however, it is evident that the appellants have reason to suppose that the titles which they will acquire by the master’s deeds will not be perfect, by reason of the alleged coverture of the complainant at the time of the commencement of this suit. That the ceremony of marriage between her and Slocum was performed, and that she lived with him several years as his wife, appears to be an admitted fact. It also appears, by the petition of Sebert. that Slocum has once sworn that he was never lawfully married to any other woman. Under such circumstances, though the affidavits on the part of those who were interested in carrying the sale into effect rendered” it doubtful whether this marriage was not void, yet as there was no direct and positive evidence that the alleged marriage in Massachusetts, with another woman, was duly and legally solemnized according to the laws of that state, I think the appellants should not have been compelled to complete their purchases until the fact of such previous marriage had been fully established, on a reference to a master, or otherwise; and by such testimony as would be sufficient, in any future litigation, to show the invalidity of the marriage between Slocum and the complainant.

The order appealed from must therefore be reversed, and there must be a reference to a master to examine and report whether the appellants will be able to obtain a good title to the premises purchased by them respectively under the master’s deed in this cause. And upon the coming in of the master’s report, and the confirmation thereof, if it appears that the appellants will obtain a good title, they are to complete their purchases and to pay to the complainant’s solicitor the costs of the reference. But if it appears that a good title cannot be thus obtained, they are to be discharged and their deposites are to be returned to them. And they are also in that case to be paid their costs, including the costs of this appeal, out of the proceeds of the lands directed to be sold under the decree in this cause. The objection to the title, on the reference, is to be confined to the supposed defect arising from the alleged marriage of the complainant to Slocum. And the proceedings are to be remitted to the vice” chancellor to carry this decision into effect; with power to him to make such order for the payment of the respondent’s costs, upon this appeal and upon the proceedings before him, out of the proceeds of the master’s sale, or otherwise, as will be just and equitable between the several parties to this suit who have a common interest in the completion of the sales.


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    Cleveland vs. Loder & Draper.
    Where upon an application for the loan of money, it is by the agreement made a condition of the loan, that the borrower shall receive from the lender uncurrent bills at a higher rate than their value in cash or current funds, the loan is usurious.

      Aliter, where there is no agreement to make the loan in a depreciated cur. rency, but the borrower at his own request, and for his own accommodation merely, receives payment of the loan in bills which are under par at the place where the loan is made.
    Where the money loaned was secured by a transfer of stocks, and it was made a condition of the loan that the lender should have the option, to retain the stocks, with the dividends, at the market value of the stock at the time of making the loan, or to receive back his money, with the interest thereon, at the time appointed for its payment; Held, that this stipulation for a contingent benefit to the lender beyond the legal interest, in an anticipated rise in the value of the stock, rendered the contract usurious.
    Upon a contract for the loan of money, the lender is not at liberty to stipulate even for a contingent benefit beyond the legal rate of interest, if by the terms of the agreement he has the right to demand a repayment of the money lent, with the legal interest thereon, at all events.
    This was an application to dissolve an injunction upon bill and answer. The facts as admitted by the answer were briefly these : In December, 1837, the complainant being the agent and overseer of a fancy corporation, the name of which, for the time being, was “ The New-York and Tuscarora Coal Company,” and being the owner of stock in the company, or at least having stock standing in his name on the books of the corporation, he applied to the defendants for a loan of $5000 for six months. The defendants agreed to make him the loan, at the legal rate of interest, upon his note secured by a transfer of 400 shares of stock in the company, and the transfer of a note for $4000 which the complainant held against D. Wilson. It was also a part of the agreement between the parties, that the defendants should have the privilege of taking 200 shares of the stock, in full satisfaction of the loan, at any time before the first of May thereafter. If they elected to take the stock, they were to re-transfer the residue to Cleveland and give up the notes; and if not, he was to pay the money'loaned and the interest thereon at the end of the six months; and in default of the payment, the defendants were to have the right to sell so much of the stock as was necessary to pay them, and return the balance of the stock to him, together with Wilson’s note. The bill also alleged that it was a part of the agreement that the complainant should receive $1500 of the loan in uncurrent eastern bills, which were then at a discount of two and a half per cent at the brokers, and wei’e not received at par in the banks of New-York where the loan wras made. This part of the agreement was denied by the defendants, though they admitted they paid him that amount in uncurrent bills, at his request, as he wanted the money immediately and could not wait until the opening of the banks the next morning. The par value of the stock was $50 a share, and was worth, as the complainant alleged in his bill, $25 a share in cash in the market at the time of the agreement for the loan, and that the parties anticipated a great increase in the value of the stock previous to the first of May, from certain improvements then in progress by the company. The defendants admitted the nominal value of the stock in market, at the time of the loan, was $25; but denied that the market value in cash was so much. The defendants also admitted that certain improvements were in progress, from which the stockholders expected an increase in the value of their stock, but whether it would increase or diminish in value, depended upon future developements ; and the defendants were unwilling to take the stock at $25 a share and run the risk.

      May 7.

      S. J. Wilkin & E. Griffin, for complainant.

      A. L. Jordan, for the defendants.
   The Chancellor.

If it was a part of the agreement for the loan in this case, that the complainant should take uncurrent bills at a higher rate than their actual value, and for more than they were worth to either party in cash or current funds, the loan was usurious; although the complainant intended to impose upon his workmen by paying them in a depreciated currency. But if the facts were as stated in the answer, that the defendants intended and expected to loan him current funds, and that the uncurrent bills were received in lieu thereof by the complainant, for his own accommodation, when they were willing to let him have current money if he would wait until the bank was open, I do not see that the paying him the loan in these eastern bills was a violation either of the letter or the spirit of the usury laws.

The agreement, however, which forms a part of the written contract between the parties in relation to the loan, that the defendants should have the privilege of taking the stock at $25 a share, would render the transaction clearly usurious, according to the English decisions on the subject of usury. It was a stipulation in behalf of the lenders, that they should have the benefit of any rise in the value of the stock beyond the amount of the loan by the first of May, in case the improvements then in progress should result favorably to the stockholders so as to increase the value of the stock; but without subjecting the lenders to the loss, even of the interest on the loan, if the value of the stock was not enhanced so as to make it an object for them to retain it in lieu of the money loaned and the interest thereon. Whenever the lender stipulates even for the chance of an advantage beyond the legal interest the contract is usurious, if he is entitled by the contract to have the money lent with the interest thereon repaid to him at all events. (Barnard v. Young, 17 Vesey, 44. Chippendale v. Thurston, 4 Car. & Payne, 101. White v. Wright, 3 Barn, & Cress. 276. 5 Dowl. & Ryl. 116, S. C.) That the defendants intended to stipulate for this chance of a greater profit than seven per cent for the use of their money is evident, as it is made a part of the written agreement showing the terms upon which the loan was made; and there is no allegation that there was any mistake in drawing that agreement. They intended therefore to make a contract which the law declares to be usurious. And however unconscientious it may bea for the complainant to resist the payment of the money lent and also to claim a return of the whole stock, this court, under the present laws of the state, is bound to lend him its aid to enforce the forfeiture.

The motion to dissolve, the injunction is therefore denied, with eight dollars costs.