Van Cott v. . Prentice

*52 Finch, J. Tbe objection that the trust here sought to be enforced was voluntary and without consideration has no weight, if it was, in fact, fully and completely constituted. (Young v. Young, 80 N. Y. 422, 437; Jones v. Lock, L. R. 1 Ch. 25.) By what the grantor denominated his deed of trust he transferred to the trustee named and appointed in the instrument, the securities and funds now in question, directing the income, during his life, to be paid to Clarence King, to be by him appropriated to the use of, Mrs. Howland and her three daughters in specified proportions, and at his death the principal to be disposed of in accordance with sealed instructions therewith delivered, but not t.o be opened till that event. A full power of revocation was reserved, and it was provided as a condition of the grant that the beneficiaries should have no legal or equitable right to the principal or income; that the trustee should hold subject to the grantor’s direction and control until the event of his death; and that if' any attempt should be made to interfere with the execution of the trust, or to claim the securities contrary to the conditions imposed, then the trust should at once cease and determine. Neither the power of revocation nor the provisions determining the trust in the event of a legal interference, or the death of the trustee in the life of the settlor, are in the least inconsistent with the trust as completely and perfectly constituted. They both assume its separate and effective existence, and. provide merely for its termination upon the happening of specified contingent events. But attention is called to the clauses in the deed which require the trustee to hold and manage the fund subject to the direction and control of the settlor, and deny to the beneficiaries any legal or equitable right to either principal or interest. The latter provision is plainly but an amplification of the idea involved in the power of revocation, for the grantor adds that the beneficiaries 'shall take what they receive as proceeding from his bounty and subject to his right to revoke at any moment. It is made by the statute an element of such a trust, when the subject is real estate, that the beneficiaries shall take no estate or interest *53 in the lands,. but may simply enforce the trust in equity. (1 R. S., 727, § 60.) The beneficiaries in the present trust must have such equitable right, but measured and limited by the lawful terms and conditions of the deed; and when, therefore, it was provided that they should “ have no legal or equitable right to the principal or income ” of the transferred securities, the clause unexplained might seem to some minds a denial of the equitable,, right to enforce the trust, and so inconsistent with its necessary and essential qualities as such. But that equitable right of enforcement is not in terms denied, and the language withholding a right in the fund is not stronger than that of the statute when it denies a right to the land and vests the whole legal and equitable estate in the trustee. We ought not to put the creator of this trust in the attitude of deliberately nullifying his own evident purpose. That he meant to create an effective trust is beyond all question, and a construction which makes him destroy in the very effort to create, should not prevail if there be any other rational interpretation. He gives us his own explanation. After saying what right the beneficiaries shall not have, he specifies what right they shall have in the phrase, “but receive the same only as herein provided as proceeding solely from the bounty of said Prentice, and subject to his power to revoke the trusts hereby created.” Since he intended to create an effective trust, and declared that he had done so, and delivered the possession and passed the title of the fund to the selected trustee, we are bound to understand his denial of an equitable right to the beneficiaries as meaning only to emphasize his own control flowing from ' the voluntary character of his act and his reserved power of revocation ; as a supposed and actual result of his own right to end his bounty at any moment; and not as a denial of the right of the beneficiaries to enforce the trust, as against the trustee, while it should remain in existence, and the settlor, withholding his power of revocation, should permit it to stand. His meaning undoubtedly was, that as against himself and his own freedom of action, the beneficiaries should possess no *54 legal or equitable right, and not that as against the trustee, while the settlement stood unrevolced, there should be no equitable recourse. I think that the phraseology in which the settlor forbids an interference with the trust confirms that construction. The language of the deed is: “ In the event that the said Clarence King, or that the said boneficiaries, or that any person or persons whatever, shall, by any suit or proceeding at law or in equity, interfere with the execution of the trusts herein declared, or make any claim against the said Prentice or the said Van Cott to the said securities or investments or reinvestments or the income thereof contrary to the provisions or conditions of the said trusts, then ” the trusts shall cease and determine. The motive of this provision, doubtless, was a fear that some creditor of Howland might attack the trust fund as being in truth a debt due him paid to his wife and children; and that fear explains the reiteration by the settlor of the idea that the fund came wholly from his bounty, and was purely voluntary. But what he guards against in the. clause quoted is an outside interference preventing the execution of the trust, and a suit, legal or equitable, to enforce a claim contrary to its provisions, and this for the benefit and protection of the beneficiaries. A suit by them against the trustee to enforce the trust according to its terms, he does not forbid. I am therefore quite strongly of opinion that a just construction of the trust deed did not prevent its enforcement by the beneficiaries according to its terms. What has just been said is also quite applicable to the other provisions which have been the subject of comment and which require that the trustees shall hold the fund subject to the direction and control of the settlor until his death. That language only repeats in another form the effect of the reserved power of revocation. The existence of that inevitably leaves in the settlor an absolute control, since at any moment he may end the trust and resume possession of the fund as his own. The trustee is directed to hold the fund and invest and reinvest and pay over as ordered, but is to do all this subject to the settlor’s absolute control. This cannot mean that the trustee *55 is to have no title and the trust no effective existence, and the property remain the settlor’s, but that the trust and the title, good and effectual while it stands, is, nevertheless, to continue and exist only at the will and pleasure of the settlor. Its continued existence was to be absolutely subject to the direction and control of Prentice, a result always inevitable where a power of revocation is reserved. We discover nothing in the provisions of the deed, properly construed, inconsistent with a completely constituted trust, wholly voluntary and benevolent, and subject to revocation by the settlor at any moment; a kind of trust of which the books furnish many instances, and which, indeed, are sometimes subject to doubt and suspicion if the power of revocation is absent. But other questions argued grow out of the sealed and confidential paper to be opened only on the settlor’s death, and which, when opened, disclosed the final disposition to be made of the trust fund. It is said, first, that the paper was testamentary in its character, and so not legally executed. The contention compels a view of the instruments delivered, which is unsound in several particulars. It assumes what is not true, that the title to the securities cons tituting the trust fund was never vested in the trustee, but the property was the settlor’s at the moment of his death, and that the sealed paper alone, and by itself, is to be the subject of consideration, and took effect solely at the death of the signer. The three papers executed and delivered together, and at the same time, constituted the trust deed, and cannot be separated in determining their effect. The sealed paper was a component part of the declaration of trust, and spoke from that date. If it had been open and its contents disclosed, there would have been no doubt-that a trust was created whose duration extended beyond the death of the settlor, and depended in part upon the contingency of that death; but the instrument would not thereby have become testamentary. The result is not changed by the ignorance of the trustee as to the contents of the paper. It was not necessary to his duty that he should know those contents in advance of the time when they were to guide his action. *56 It is not at all uncommon that trustees are ignorant of the persons who are to be beneficiaries by reason of contingencies which only the future can develop. The trustee accepted this trust with full knowledge that he was to learn the contents of the sealed paper only at the settlor’s death, and has steadily and continually performed the duties of the trust from the date of its creation in accordance with its terms. It is immaterial that the beneficiaries were ignorant of the trust for their benefit until disclosed at the death of Prentice. (Cumberland v. Codrington, 3 John Ch. 261; Shepherd v. McIvers, 4 id. 137.) It is sufficient that when disclosed they claim its benefit. The trustee knew when he took the sealed paper, because he was told, that it contained an ultimate disposition of the trust securities. His ignorance was confined to the character and objects of that disposition, and that only durin a period when- the knowledge was unnecessary. He could as he did accept the trust, and obedience to its terms was entirely possible, since he was permitted to know them all in ample time for his necessary action. But when the paper was opened at the death of the settlor, the disposition made was found to be of a character to raise another question which has been quite earnestly debated. The appellant contends that the trust created was void because contrary to the statute against perpetuities. It first devotes at the settlor’s death any further income accruing “ to the use of Mrs. Howland and her three children, one-third to her and the residue equally to the said children or the survivors or survivor of them,” and the principal is directed to be “ delivered to the said persons or survivor or survivors in the same proportions when the youngest of said surviving children shall come of legal age, unless in the exercise of his discretion he (the trustee) shall sooner make such distribution of said principal.” We are of opinion that the survivorship thus referred to is that existing at the date of the death of the settlor, and that the consequent duration of the trust is during the life of the settlor and the minority of the youngest of the three children living at his death, and so the absolute ownership is suspended only *57 during the continuance of those two lives at the most, both of which were in being when the trust was created. It is claimed that the language used is nearly identical with that passed upon in Hawley v. James (16 Wend. 61), but the difference is very marked and clear. There the suspension was not until the youngest of the grandchildren should attain the age of twenty-one years, but until the youngest of those who attained that age should reach it, and it was well suggested that the trust might continue during thirteen minorities by reason of deaths occurring before the prescribed age was attained. That vicious element is not present in the limitation before us. The deaths of any of the three children of Mrs. Howland during the life of the settlor, had such occurred, would have been immaterial, as his own and not theirs was one life measuring the duration of the trust, and at its termination the life or minority of the youngest of the three then living is the only other life bounding such duration. So far, therefore, as the defendants’ appeal is concerned, we discover no error, and the judgment should be affirmed, with costs. But the plaintiff also appeals from an order of the General Term reversing an order of the Special Term permitting an amendment of the summons and complaint. The action was brought against the defendants in their representative capacity as executors of Prentice. The summons and complaint were so entitled, the use of the word “as ” indicating that intention. The complaint alleged that the defendants held the property in their representative capacity, which the latter admitted, and the issue presented by the pleadings was whether the executors had title or the trustee. The complaint conceded that the defendants asserted no other title or claim. After the trial a motion was made and granted amending the summons and complaint and ordering the judgment awarded to be entered against the defendants, individually and de bonis propriis On appeal, the General Term reversed the order, and, we think, correctly. The amendment substituted a new and different cause of action, and the defendants as individuals had been furnished with no opportunity to defend. *58 The order appealed from by the plaintiff should be affirmed with costs. All concur, except Rapallo and Earl, JJ., not voting. Judgment and order affirmed.