Bacon's Appeal , 57 Pa. 504 ( 1868 )

The opinion of the court was delivered, by

Strong, J.

There are two controlling questions in this case. The first is, whether the trust created by the will of John Warder, for the use of his daughter Mrs. Bacon, continued during her life, though she survived her husband; and the second is, whether the estate given in remainder to her right heirs was legal or equitable. Upon the answers to be given to these questions, depends the rightful determination of all the matters in controversy between the parties.

By the disposition first made by the testator, his sons were constituted trustees of certain real estate for the sole and separate use of Mrs. Bacon during her natural life, and after her decease for the use of her‘husband, in case he should survive her, and after the death of both Mr. and Mrs. Bacon for the use of her right heirs, and to be conveyed accordingly. By this disposition, no active duties were imposed upon the trustees during the life of Mrs. Bacon. They were made mere depositaries of the title. The only conceivable purpose of the trust was to maintain a separate use for a married woman, and to protect the property against the interference of her husband. On the accomplishment of that purpose, the estate of the trustees must have ended. Conseqirently had this disposition of the testator’s will remained unchanged, when Mrs. Bacon became discovert by the death of her husband, the legal estate would by operation of law immediately have vested in her. But the testator did not leave the matter thus. By a codicil to his will, he revoked so much of it as vested any real estate immediately in either of his daughters, and in lieu thereof he devised their portions to the same trustees in trust to receive the income thereof, and pay it -over to the daughters respectively, for the sole and separate use of each daughter during life, and then to her husband, in case a husband should survive, and after the decease of the said daughters and their husbands respectively, the said portions to be conveyed to the right heirs of the daughters respectively in fee simple.

It is obvious that the trust substituted by the codicil is very unlike that set up at first by the will. It is what is denominated an active trust. It imposed upon the trustees duties beyond that of passively holding the title. And they were constant and continuous ; not at all dependent upon the coverture of Mrs. Bacon or any of the daughters. The trustees were to receive the'income of the property and pay it over. Eor this purpose the title was given to them; and for this purpose it was necessary they should hold it during the life of the cestui que trust. Had the trust no other object than the special one of protecting the property for the separate use of the daughters, it might have been left as it was first constituted. The imposition of a duty to receive and pay over the income would have been needless. But the injunction of active duties during the life of each daughter, evinces a purpose beyond that of maintaining separate uses. It involved the necessity of management and care of the real estate, and of preservation for those entitled in remainder. The distinction between an active and a passive trust, so well established in England, is fully recognised with us in many cases; and it is one of much importance. It was well said by Sergeant, J., in Vaux v. Parke, 7 W. & S. 19, that unless the distinction between these two classes of trusts be regarded, their existence cannot be preserved. So long as active duties remain to be performed by the trustees, the legal estate must continue in them to enable the performance. It cannot, therefore, be held that the purposes of the trust instituted by the testator were all accomplished when the husband of Mrs. Bacon died, and that the legal estate of the trustees then terminated. Her interest under her father’s will was equitable, and the use limited for her was never executed.

The second question to be answered is whether the estate limited in remainder to her right heirs rvas legal or equitable. If it was legal, the rule in Shelly’s Case has no applicability, and Mrs. Bacon’s estate was but an estate for life, though a remainder was given by the will to her heirs. As already noticed, the codicil directs that the titles shall be held by the trustees in trust to receive and pay over the income during the life of each daughter, and of her husband, if he should survive her, and then the portion of each to be conveyed to the right heirs of the daughter in foe simple. No other duties toward the remaindermen are prescribed than to convey to them. The trustees were not to receive the income and pay it over to them. They were not at liberty to hold a single hour for the use of those in remainder. At most they were but the conduit through which the title was to pass. Yet it must be conceded that in England the mere duty to convey is sufficient to prevent the execution of an use under the Statute of Uses. There, under a trust to convey, the legal estate remains in the trustee until he makes the conveyance, the reason given being that it is necessary in order to enable the conveyance to be made. It might be doubted whether there is any such necessity, for a power would answer the requirement as well. But in this state, when lands are given by will in trust to be conveyed, when no other power or duty is assigned to the trustee, when he has nothing to'do with the enjoyment of the property, and is only an instrument to enable the cestui que use to acquire the legal estate, it has been understood that a conveyance is unnecessary. At most it can be but a matter of form, rather than of substance. In fact such conveyances have not usually been made. Until the year 1836 we had no court of equity to compel a trustee to convey, and therefore that was considered as having been done which the .trustee should have done, and with the same effect. The cestui que trust being entitled to the whole beneficial enjoyment, and the trustees having no right to interfere with it, no reason was apparent why a legal title should be held continuing in the latter. A severance of the legal right from the beneficial ownership is not to be maintained without some reason. In the case before us the purpose of the trust was accomplished when Mrs. Bacon died. The testator did not intend that the trustees should hold any estate after her death. Se contemplated its immediate transmission to the remaindermen, a transmission by conveyance indeed, but no holding in trust for those in remainder. There was, therefore, nothing substantial to be secured by treating the legal estate as remaining in the trustees, and only an equitable interest in Mrs. Bacon’s heirs. It is true that we have in some cases decreed conveyances from a trustee to a cestui que trust, when the purpose of a trust has been fulfilled, but this is not because the legal and equitable titles remained apart. It was to dissipate a useless cloud upon the title, and make the property more marketable. We have done this when the trust had expired by limitation, and when without doubt the legal estate had passed from the trustee, though it had been given to him formally in fee simple. It is no more remarkable that a devise to trustees to convey to another should pass the legal title to that other, than a devise to trustees and their heirs, for a temporary purpose, vests in the trustees the legal estate only until the purpose is accomplished. In both cases the legal title remains severed from the beneficial ownership so long only as there is any useful purpose or substantial reason for maintaining a separation. Accordingly it has been held that a direction to trustees to convey after the termination of a trust, does not continue the legal estate in them, and make them trustees of the persons to whom they are directed to convey. This was noted in Nice’s Appeal, 14 Wright 143, where the question was distinctly raised in the argument, and it was assumed in Barnett’s Appeal, 10 Wright 392. The decision accords with what, it is believed, has always been considered the law in this state.

Holding then, as we do, that by the limitations of the testator’s will the right heirs of Mrs. Bacon took a legal estate at her death, there was no union of their estate with hers, and consequently nothing passed by her will.

Thus far we have considered only the directions of the testator respecting his real estate. The same rule is applicable to the personalty; By his second codicil ■ the testator revoked so much of his will as gave to either of his daughters directly any part of ■ his personal estate, and in lieu thereof gave it in trust for the sole and separate usé of the daughters, in certain proportions; the income to be received and paid over by the trustees, in the same manner as the income of his real estate during their natural lives respectively, and in case of the decease of any of his daughters, leaving a husband surviving, the income to be received and enjoyed by the husband during his life, and from and after the decease -of his daughters and their husbands respectively the share of each daughter to go to her right heirs for ever. The disposition is very similar to that made of the realty, and if that did not confer a fee upon Mrs. Bacon in the land, it is not easy to see how, under the second codicil, she took an absolute interest in the personalty. The rule in Shelly’s Case has nothing to do with the question. It is true the principle is well established that where personal estate is bequeathed in language which, if applied to real estate, would create an estate tail or a fee simple, it vests absolutely in the person who would be the devisee in tail or in fee. And this rule applies to cases which come within the 'rule in Shelly’s Case. But the words of Mr. Warder’s will, we have seen, would not hare given Mrs. Bacon a fee, had the subject of the gift been realty. Besides, the principle stated is not entirely without exception. A very important one is asserted in Knight v. Ellis, 2 Brown Ch. 570; Ex parte Wyneh, 5 De Gex, McNaughton & Gordon 129; and in Emma Myer’s Appeal, 13 Wright 111. These cases relate, indeed, to verbal construction of wills relative to personalty, but they show that courts are more anxious to support limitations of personal estate than they are of realty. The same thing is shown by the greater readiness with which words importing a failure of issue and introducing a second limitation are construed to refer to a definite failure, when applied to gifts of personalty than when applied to devises of realty. It is enough for this case, however, that, the second codicil of the will would have given only a life estate to Mrs. Bacon, had the subject of the gift been land. The decree of the court below was therefore right.

Decree afiirmed.