Thomson's Executors v. Norris

The opinion of the court was delivered by The Chief Justice. The widow and next of kin of the late John R. Thomson, claim in this suit the right, certain specific and pecuniary legacies having been paid, to dispense with his will, and distribute among themselves, in proportions which they have agreed upon, the entire residue of his estate. In pursuance of this view of their rights, these parties entered into an agreement under seal, by force of which the widow is to take two thirds of this residue of the property, and the next of kin, being the brother and three sisters of the testator, the remaining third part. It was to enforce this contract against Mr. Thomson’s executors and trustees, that the bill in this cause was filed. The argument, before this court, in behalf of the complainants went upon three grounds: first, that one of the provisions of the will was, from an intrinsic defect, invalid; second, that a power of appointment conferred by the will upon the widow, could be legally released by her; and third, that at all events, the contract between the widow and next — 522 — of kin had been legalized by an act of the legislature of this state. The first of the grounds thus taken, has reference to that clause of the will which, with regard to a certain portion of the accumulated income of the estate, declares, that the testator’s widow “ shall be authorized and empowered, by her last will and testament, to give and devise the same among such benevolent, religious, or charitable institutions as she may think proper.” Such a bequest, upon the most familiar principles, is not to be sustained except upon the theory that it constitutes a gift to a charitable use. Is the purpose indicated, then, a charity in a legal point of view ? I do not understand that there is any difference whatever between the common law of England and the law of this state upon the point as to what constitutes the legal definition of a' charity. And by this common law I mean that system, so far as respects this question, which has grown up in a series of decisions founded, in part, upon the 43d of Elizabeth, ch. 4, (the statute of charitable uses). The doctrine of the-English Court of Chancery with regard to the mere classification of things which are, and those which are not, charities in the eye of the law, has been very generally recognized in this country. The discrepancy between the English and American systems regulating charities, consists in this, ■that in England a bequest for a charity will be effectuated no matter how uncertain the objects or the persons may be, or whether the bequest can be carried into exact execution, or not, for when a literal execution becomes impracticable,, the court will administer it on the doctrine of ey pres. In some instances courts of this country have refused to exercise so extensive a jurisdiction. I am not aware, that in our own courts, this subject has received any elucidation. It may well be, therefore, that a bequest, obviously for a charity, and which in England would be carried into effect, might not be enforced in our own courts, on the ground of the indefiniteness of its objects or the impracticability of its exact execution. But this is a diversity of legal administra — 523 — tion, and not of legal classification. Upon the questions what is, or what is not, a charitable use we have no criterion but the rules of the common law, and those rules, consequently, are obligatory upon us. Accepting this guide I readily come, on this head, to the same conclusion with the Chancellor. The bequest is to “ benevolent, religious, or charitable institutions.” This is too broad. Benevolence is wider than charity in its legal signification. In James v. Allen, 3 Mer. 17, the will gave property to “ be applied and disposed of for, and to such benevolent purposes” as the executors, in their discretion, might unanimously agree on. Sir William Grant, Master of the Eolls, decided this bequest void, remarking, “that although many charitable institutions are very properly called benevolent, it is impossible to say that every object of a man’s benevolence is also an object of his charity.” The ground of the decision was, that as the bequest could, consistently with the will, be applied to other than strictly charitable purposes, the court could not execute the trust. In Williams v. Kershaw, 5 Clark & Fin. 111, note, the devise was to “such benevolent, charitable, and religious purposes as the executors should, in their discretion, think most advantageous and beneficial.” Upon a review of the authorities the decision of Lord Coltenham was, that the introduction of the word “benevolent” rendered the purposes, of the testator too indefinite for judicial execution, and that the gift could not take effect. Ellis v. Selby, 1 Myl. & Craig 286, and Williams v. Williams, 5 Law Journal, ch. 4, are cases holding a similar doctrine, and are much in point* Many other decisions to the same effect will be found collected in 2 Roper on Leg. 1237. These decisions appear to me to rest on a proper foundation. It is important that the fact, as to what are legal charities, which will be executed by the courts, should be settled. To sanction the introduction of a genera] term of so wide a signification as the word “ benevolent” would have a tendency to involve the subject in much confusion. — 524 — Upon the argument, the counsel for the respondent laid some stress on the use, in the testamentary clause, of the word "institutions.” But, upon reflection, I am unable to see that this term has a tendency to give definiteness to the expression of the use intended. If, in legal contemplation, a benevolent purpose is more indefinite, embracing a larger class of objects, than a charitable purpose, it seems to follow, necessarily, that á benevolent institution may not, in a legal sense, be a charitable institution. An institution is a mere organism for the accomplishment of an object, and the existence of such organism cannot, in the nature of things, make such object definite. To make the argument of any value it should appear that the class of benevolent purposes, which are not comprehended in the definition of legal charities, are not and cannot be executed by institutions, that is, associations of persons. In Babb v. Reed, 5 Rawle 151, it was held that an association for the purposes of mutual benevolence among its members, is not an association for charitable uses. Here, then, was a benevolent institution which was not a charitable one. Other similar instances will readily suggest themselves. I think the word in question does not restrict the meaning of the term “ benevolent ” in the clause under consideration. As I have already said, I concur in the conclusion that the disposition comprised in this clause of the will, on the ground just specified, is invalid. The second point relates to the capacity of the widow to surrender her power of appointment over that portion of the estate which is set apart for the raising of her income. This branch of the case was disposed of by the Chancellor, on the technical distinction which, in the doctrine of powers, exists between a power in gross and a power simply collateral. The power of appointment contained in the clause of the -will now alluded to, was regarded as belonging to the former class, and, consequently, as extinguishable by the donee of the power. This question seems to me to be one of great nicety in the application of the decisions to the — 525 — present case. I have not found any case in which it was maintained that a power to appoint to strangers, after the expiration of an interest given to the donee of the power, was a power in gross. The decisions referred to by counsel are mostly cases of settlement on a parent, with a power of appointment among his children. In such instances, there is some reason to say the power is not simply collateral, because it is not a naked authority, the father having an interest in the distribution of the estate among his children. Under such circumstances, such a power may not inaptly, in the expression of Sir Edward Sugden, be called “ an emolument of his own estate.” But, on the contrary, when an interest, for life or for years, is given to A, with direction, by will or otherwise, to appoint between B and C, who are strangers to A, why such an authority should be considered anything more than an authority simply collateral, it seems difficult to imagine. I have found no case which determines this question either way; those cases in which the fund, on failure of appointment, is given to the donee of the power, resting obviously on a different principle; and I shall pass the question without the expression of any opinion upon it. I am enabled to do this because, in my examination of the matters involved, I have come to the conclusion, that there is an insuperable difficulty in granting to the complainants the relief prayed for, so far as their claim to such relief rests on general legal principles. Eor the purpose of considering the difficulty thus intimated, I shall assume that the power in question is one in gross, and one, consequently, that Mrs. Thomson could legally' release. The proposition then arises, can she release it for a consideration ? In order to comprehend fully the force of this inquiry, we must place before our minds distinctly the circumstances of her position. Her authority is given to her in the following terms: “ And I authorize and empower my said wife, by her last will and testament, duly executed, to direct, limit or appoint, give or devise the portion of my estate so appropriated for an income of $10,000 a year for — 526 — her support, to give or devise the same to and among all and every the children of my sisters, Caroline Norris and Amelia Reed, and their children, in such proportions and for such estate or estates as she may think proper; or, if my wife so chooses, - she may, by her last will and testament aforesaid, direct, limit or appoint, give or devise the same to^ and- among my- sisters, Caroline, Adeline, and Amelia, and their children and grandchildren, and my brother, Edward, in such proportions and for such estate or estates as she may think proper.” It will be observed, from this quotation from the will, that as appointees the children and grandchildren of Mrs. Norris and Mrs. Read are peculiarly favored. Mrs. Thomson had the right to appoint the whole of this part of the estate to them. In no distribution which she is authorized to make, could they or any of them be omitted. By the arrangement which she has, in point of fact, made with the brother and three sisters of the testator, these children are cut off fropi all possibility of taking any benefit under an appointment. Both the bill of complaint and the articles of agreement state that Mrs. Thomson consented to extinguish the power of appointment in consideration of the division of the residue of the estate, after the payment of specific and pecuniary legacies, by which division two thirds of such residue became her own, absolutely. The children of the sisters of the testator are no parties to this contract. In considering the legal maxim involved it must be treated, then, as a case in which a donee of a power has agreed, for a benefit moving to herself, to surrender her right to appoint. Can any plausibility be given to such a claim ? A power to appoint is not a technical trust it is true, because the possible beneficiary has not the capacity to call for its execution. But it has never been doubted that such a function was a confidence, and as such cannot be made the subject of barter. Courts of equity have very characteristically exercised the keenest vigilance over this class- of agents. The principle which I regard as established is, that they shall — 527 — gain no profit by force of their position. Any other rule •would be impracticable. If it be lawful for the donee of a power to bargain for his own personal ends with a part of the appointees to exercise his authority in a certain mode, or to stipulate with the heirs-at-law or the next of kin to disappoint the expectations of the appointees by a surrender of his power, it is obvious in numerous cases the bulk of the fiduciary property would enure to the benefit of the donees themselves. It is on this obvious ground that courts everywhere have been strenuous in enforcing the utmost good faith on the part of donees of powers. I think no case can be found in which such donee has been allowed to make his position, by any device, profitable to himself. Such is the uniform language of the authorities. In Aleyn v. Belchier, 1 Eden 132, a power of jointuring having been executed in favor of a wife, but with an agreement that the wife should, receive only a part as an annuity for her own benefit, and that the residue should be applied to the payment of the husband’s debts, such arrangement was held a fraud upon the power, the Lord Keeper saying, that “ no point is better established than that a person having a power must execute it bona fide for the end designed, otherwise it is corrupt and void.” And upon the same principle it has been settled, in a series of cases, that whenever an appointment is made to one or more of a class, in exclusion of others, upon a bargain for the advantage of the appointor, equity will relieve against such an appointment as a fraud upon the power. In one of this class of cases, Rowley v. Rowley, Kay 242, Sir "W. Page "Wood, V. 0., said: “ I think it would be impossible to contend, if a direct bribe were given to the appointor, though out of a separate fund, that the appointment could be upheld in favor of a party to whom the fund, subject to the appointment, was given.” And in McQueen v. Farquhar, 11 Ves. 479, Lord Eldon remarks: “It is truly said, this court will not permit a party to execute a power for his own benefit.” A large number of cases illustrative of the same rule may be found in 1 Lead. Cas. in Eq. 304. — 528 — These authorities abundantly suffice to show that the principle is unquestionably established, that an appointment to further the selfish interest of the donee of the power will not stand. The doctrine rests upon the ground of the existence of constructive bad faith towards the donor of the power. And a gainful agreement to refrain altogether from the exercise of the power is necessarily equally fraudulent; it involves, no matter how pure1 the intentions of all parties may be, a constructive fraud. In Gunynghame v. Thurlow, (note to West v. Berney,) 1 Russ. & My. 431, the case of a release of a power to appoint was prevented, the donee gaining an advantage from such release. In this case, a fund was limited to a father for life, with remainder to his children in such shares as he should appoint, and in default of appointment, to the children equally; the father released the power as to a portion of the fund, so as to vest a share of it in himself, as executor of a deceased son, who in default of appointment, took a vested interest; but the court-refused to order the transfer of this share to the father. It will be observed that in the case cited the father had the undoubted right to extinguish his power of appointment ; but as he did this in consideration of a benefit to himself the act was declared illegal. The principle of this •case applies, with entire aptness, to the facts contained in the bill now before this court. I feel constrained to say, therefore, that in my opinion, a court of equity cannot sanction the contract which these parties have entered into, on any of the principles which usually regulate the relations of parties having an interest under a power of appointment. And as an evidence of the strength of my own conviction on this subject, I may remark that I have been led to this result notwithstanding my most perfect confidence that the agreement thus impeached in point of law, has been entered into in entire good faith by all' the parties to it. I am entirely satisfied that the interest of the other appointees has not in the least degree been sacrificed, but has been scrupulously considered. Nor have I entertained the faintest suspicion that the donee — 529 — of the power in this case has taken any advantage whatever of the position in which she was placed by her husband. I am persuaded that the agreement in question was intended to be, what it purports to be, a fair family settlement. My difficulty lias been to find any legal general ground of equity on which to rest a claim in favor of the case made by the bill. Before leaving this head of the case, it is proper to remark that I have assumed that one or more of the sisters of the testator has children living. This fact was stated on the argument. The pleadings are silent upon the subject, but, as the existence of such children is not negatived in the bill, the presumption must be in favor of their existence, on the principle that the complainants are bound to make out all the necessary circumstances on which their title to relief rests. The only remaining foundation for the case of the complainants is the act of the legislature in confirmation of the agreement mentioned in the bill. There are but very few of these acts of special legislation which I regard as possessed of any legal validity. It does not seem to me that their inefficacy arises merely when they conflict with the positive prohibitions of the constitution, or when they disturb vested estates. As a general rule, I think they cannot meddle with vested rights. I have no belief that, by a special act, a •man’s right or expectancy to a contingent remainder, or under an executory devise, can be cut off. Nevertheless, there are some cases in which, from ancient custom, a power of special legislation may be said to subsist as a function of the law making power. The extent of such right will be always ■questionable. In the present instance, the right to ho affected by the act is very remote, and of the most contingent character. These children and grandchildren, whose rights alone are affected by the statute in question, have no interest which is capable of being enforced in any court, unless they should first obtain an appointment in their favor. Their interest, then, is the mere possibility that Mrs. Thomson, in derogation of her agreement with their parents, should appoint a — 530 — part of this fund to them. It may be that, against such a mere possibility, this act of the legislature should prevail. The decision of the Chancellor is in favor of its efficiency for the purpose designed; and leaning, in a great measure, on that opinion, I shall, on this ground, vote for the affirmance of the decree rendered in the Court of Chancery. The decree was affirmed by the following vote: For affirmance — Beasley, C. J., Belle, Clement, Dalrimple, Depue, Kennedy, Olden, Wales, Woodhull. 9. For reversal — Olden.