Opinion
Hearing Granted by Supreme Court Dec. 22, 1927.
Appeal from Superior Court, Los Angeles County; Sidney N. Reeve, Judge.
In the matter of the estate of Ella McCray, deceased. From that part of decree directing distribution which appointed the Citizens’ Trust & Savings Bank of Los Angeles, Cal., as trustee of real property, Harold A. McCray and others appeal. Reversed with directions.
COUNSEL
T. Frank Courtney and D. Webster Egan, both of Los Angeles, for appellants.
Henry Merton, of Los Angeles, for respondent.
OPINION
CONREY, P. J.
Ella McCray, residing in Los Angeles county, died on the 19th day of February, 1925, leaving an estate which consists of both real property and personal property. She left a holographic will bearing date August 20, 1924, which was duly probated; the executor being Citizens’ Trust & Savings Bank, of Los Angeles, Cal. Omitting those parts of the will which refer to personal property, we find therein the following language referring to real property:
"The real estate held in trust 10 years at least and income equally divided among the sons."
On the back of the document the testatrix had written the following:
"I want this real estate fixed so that the McCray estate will be held in trust for a time so that it cannot be squandered & wasted."
There was no appointment of a trustee other than such as may be inferred from the words hereinabove quoted.
Decedent had three sons, all of whom survived her, viz. Richard H. McCray, aged 32 years, Wilbur D. McCray, aged 28 years, and Harold A. McCray, aged 26 years. Richard died in February, 1926, and his widow is administratrix of his estate. The appeal now before this court is from that part of the decree which reads as follows:
"To Citizens Trust & Savings Bank, a Corporation, of Los Angeles, California, as trustee, all the real property belonging to said estate, herein described, to be held in trust for 10 years from August 20, 1924, and the income therefrom to be equally divided annually hereafter share and share alike, one-third to Harold A. McCray, his heirs and assigns, one-third to Wilbur D. McCray, his heirs and assigns, and one-third between the heirs of Richard H. McCray, now deceased, their heirs and assigns, until August 19, 1934, on which last date this trust shall terminate, and the title in fee of all said real property shall thereupon vest, an undivided one-third in Harold A. McCray, his heirs and assigns forever, an undivided one-third in Wilbur D. McCray, his heirs and assigns forever, and an undivided one-third in the heirs of Richard H. McCray, now deceased, their heirs and assigns forever, free from the control of said trustee, or its successors."
Appellants contend that for several reasons the will failed in its inception to create a valid express trust; that, if there was a valid trust, the attempted appointment by the superior court, sitting in probate, of a trustee, as accomplished in the decree of distribution, was void for want of compliance with certain statutory requirements, that the will does not dispose of the real property, and that therefore it passed to the heirs by succession.
We select, as the first item for consideration, point VI of appellants’ brief, which is there stated as follows:
"That, if the will otherwise contained all the elements of a valid express trust, it was still void as an express private trust in real property by a limitation or condition suspending the absolute power of alienation for a longer period than during the continuance of the lives of persons in being at the creation of the limitation or condition in violation of sections 715, 716, and 749, Civil Code."
Sections 715, 716, and 749 of the Civil Code read as follows:
"Restraints upon Alienation. Except in the single case mentioned in section seven hundred seventy-two, the absolute power of alienation cannot be suspended, by any limitation or condition whatever, for a longer period than as follows:
"1. During the continuance of the lives of persons in being at the creation of the limitation or condition; or
"2. For a period not to exceed twenty-five years from the time of the creation of the suspension."
Civil Code, § 716:
"Future Interests Void, Which Suspend Power of Alienation. Every future interest is void in its creation which, by any possibility, may suspend the absolute power of alienation for a longer period than is prescribed in this chapter. Such power of alienation is suspended when there are no persons in being by whom an absolute interest in possession can be conveyed."
"Time of Creation, What. The delivery of the grant, where a limitation, condition, or future interest is created by grant, and the death of the testator, where it is created by will, is to be deemed the time of the creation of the limitation, condition, or interest, within the meaning of this part of the Code."
The future interest of the beneficiaries, provided for by the terms of the will as interpreted by the decree of distribution, was the fee-simple title which at the termination of the trust would "thereupon vest" in the three sons. During all of the intervening ten years that title, according to the decree, is to be vested in the trustee. Since one or all of the sons might die at any time, but the title of the trustee was to continue at all events for the full period of ten years, there was from the very beginning of the trust period a possibility that the absolute power of alienation would be suspended for a longer period than the lives of the beneficiaries. It is the contention of appellants that those terms of the will and decree which attempt to establish a trust subject to such a possibility are void.
Section 9 of article 20 of the California Constitution of 1879 reads as follows: "No perpetuities shall be allowed except for eleemosynary purposes." This is an exact repetition of the same provision contained in article 11, § 16, of the Constitution of 1849. Having in mind that the common law of England is the rule of decision in this state "so far as it is not repugnant to or inconsistent with the Constitution of the United States, or the Constitution or laws of this state" (Pol. Code, § 4468), it is clear that the "perpetuities" forbidden by the Constitution are those perpetuities defined by the common law in relation to that subject. The Supreme Court of California has held that our Legislature, in the use of the phrase "common law," had in contemplation the whole body of that jurisprudence as it stood, influenced by statute, at the time when the Code section was adopted. Martin v. Superior Court, 176 Cal. 289, 293, 168 P. 135, L. R. A. 1918B, 313. This particular Political Code section was enacted in 1872, but was based on a similar statute of 1850. In the Martin Case, Mr. Justice Shaw, with the concurrence of Mr. Justice Sloss, stated a modified view of the subject as follows:
"In 1850 there were in England, I have no doubt, many general acts of parliament in force which no one would claim were adopted as parts of our law by the act of our Legislature. The statement of what is included by that section needs more qualification and elaboration than is given to it in the main opinion."
We are of the opinion, however, that an English statute of the year 1800, dealing with restraints upon the power of alienation, will be conceded to be a part of the common law adopted in this state. "By the Thelluson Act (39 & 40 Geo. III, c. 98), the maximum period during which the power of alienation could be restrained was lives in being and twenty-one years and nine months." In re Walkerly, 108 Cal. 627, 658, 41 P. 772, 779 (49 Am. St. Rep. 64). From the foregoing it follows that the Constitution forbids the enactment of any statute having for its purpose to permit a suspension of the power of alienation of property for a period beyond the lives in being and 21 years and 9 months. By amendment of section 715 of the Civil Code, approved May 18, 1917, the Legislature added to that section the subdivision 2 which we have quoted, and thereby attempted to authorize such suspension of the power of alienation "for a period not to exceed twenty-five years from the time of the creation of the suspension." This amendment being in direct violation of the rule against perpetuities as declared in the Constitution, we are of the opinion that such amendment is void.
But it was within the power of the Legislature to confine the suspension of the power of alienation to a period of time less than that allowed by the common law. This has been accomplished by subdivision 1 of said section 715, which prescribes a limitation of such power to "the continuance of the lives of persons in being at the creation of the limitation or condition."
Therefore, if the attempted creation of a trust in real property, as shown in the case at bar, cannot be recognized and enforced without at the same time suspending the absolute power of alienation of said real property for a period beyond the continuance of the lives of persons in being at the time of the death of the testator, then it must be held that the provisions of the will or of the decree attempting to create such trust are void. And we think that they are void. As was said in the case of In re Walkerly, 108 Cal. 627, 646, 41 P. 772, 775 (9 Am. St. Rep. 64), where a similarly defective will was in question:
"The fatal defect in the trust is that it provides for an absolute period of years for its determination, during which period the power of alienation is suspended."
It was pointed out that every express trust, valid in its creation, vests the whole estate in the trustees. "If this trust be not valid in its creation, the trustees would take no estate, but neither would the beneficiaries whose rights are dependent upon the validity of the trust. If it be valid, then the ‘whole estate’ vests in the trustees." In that case, as in the present case, it was suggested by those seeking to sustain the trust that a given remainder was vested, which remainder would be alienable by the remainderman, subject only to the prior interest limited to the trustees. But the court said:
"The fact that a given remainder is vested renders it absolutely alienable, so far as it is itself concerned, but the absolute fee may at the same time be inalienable. Therefore, to convey this absolute interest in possession, the beneficiaries would be compelled to unite with their conveyance that of the trustees in whom the fee is vested. But the trustees cannot convey until the expiration of 25 years. An attempt by them to convey before that time would contravene the trust, and be a void act (Civ. Code, § 870), and so even by this method of progression our path leads to that barrier of perpetuity which cannot be surmounted. So, even though the beneficiary should be a remainderman under such a trust as this, he still could not alienate the land within the trust period so as to avoid the statute. Such a trust cannot be terminated or destroyed during the period fixed for the existence, even by the consent and joint act of all the trustees and beneficiaries."
The decision in the Walkerly Case has been mentioned with full approval in Estate of Maltman, 195 Cal. 643, 234 P. 898.
The conclusion to which we have come upon those phases of the case which we have attempted to discuss renders it unnecessary to give particular attention to the other points argued by counsel. That part of the decree of distribution described in the notice of appeal is reversed, with the direction that an amended decree be entered distributing the real property of said estate to the persons entitled therein as heirs at law of the decedent.
We concur: HOUSER, J., YORK, J.