Opinion
02-01-1895
C. Christie, for complainant. Gilbert Collins, for defendant David Martling. W. B. Williams, for other defendants.
Bill by Elizabeth Martling, a cestui que trust, against Stephen V. R. Martling, infant trustee, David Martling, and others, to have the trust declared terminated, and the legal title held by the infant trustee conveyed to her by him without consideration. Decree for defendants.
The bill is by a cestui que trust against the infant heir at law of the surviving trustee and the children and heirs apparent of the cestui que trust. The subject of the trust is land. The prayer is—First, that the trust may be decreed to have been surrendered and determined; or, second, that the infant trustee may be decreed to convey the land without consideration, to such person as the cestui que trust shall direct; or, third, that the infant trustee be removed, and a new trustee be appointed. David Martling, son and one of the heirs apparent of complainant, answers admitting the allegations of the bill, and by cross bill sets up a conveyance from complainant to him of a portion of the trust estate, and prays a confirmation of his title. The other adult defendants join in an answer which asserts the existence of the trust, and join in the prayer for a new trustee. The infant defendant submits himself to the direction of the court. The trust was created by a deed of bargain and sale dated May 30, 1851, and acknowledged July 9, 1851, given by Richard H. Paulison to Stephen Martling (husband of complainant) and Peter Acker, and to their heirs and assigns, and the survivor of them, and his heirs and assigns, as joint tenants, "in trust, nevertheless, and upon the condition and limitations following, that is to say: That the said parties of the second part, their heirs and assigns, and the survivor, and his heirs and assigns, shall and will suffer and permit Elizabeth [complainant], now the wife of the said Stephen Martling, of the township of Hackensack aforesaid, to have, receive, and enjoy the rents, Issues, and profits thereof during her natural life, free from the control of her present or any future husband, and to her separate use (subject, however, to the limitations hereinafter mentioned), and in further trust to sell and convey in fee simple the whole or any part thereof, lease, rent, or mortgage the same, or any part thereof, to such person or persons, for such term or terms, for such sum or sums, and on such conditions, as the said Elizabeth by writing under hand of her own free will may direct, said writing to be binding notwithstanding the coverture of the said Elizabeth; and, in case of a sale and conveyance as aforesaid, to Invest the net proceeds, after paying said incumbrances, upon good and sufficient security, and pay her, the said Elizabeth, the interest accruing thereon yearly, and every year, or to reinvest said net proceeds in the purchase of other real estate, as the said Elizabeth by writing as aforesaidmay direct, to be held according to the trusts herein declared; and in further trust to sell and convey. If necessary, the whole or any part of said premises, to pay off, satisfy, and discharge the incumbrances now being and existing on the same as aforesaid; and in further trust, upon the death of said Elizabeth, to convey the lands held under the trusts herein declared, or such parts thereof as may then remain, or, if the same shall then have been sold, to dispose of the proceeds thereof, unto such person or persons as the said Elizabeth, by any writing in the nature of a last will, executed by her in her lifetime, may have appointed and directed, and, in default of such appointment, unto her heirs at law or next of kin as may be; said writing in the nature of a last will to be binding for the purposes of this trust, notwithstanding the coverture of the said Elizabeth at the execution thereof." The farm was purchased with the separate estate of the complainant, previously held in trust for her by her brother Peter Acker. Both the trustees are dead, Peter Acker dying first. Complainant, the wife of Stephen Martling, deceased, at his death had three children,—Stephen H. Martling (oldest son and heir at law of Stephen Martling, the surviving trustee), Annabella Acker, and David Martling,—the defendants above named. These were all born before the conveyance in question. Stephen H. Martling died December, 1891, leaving the defendant Stephen V. R. Martling, an infant, his only son and heir at law. Both the trustees joined with complainant in a conveyance, for a nominal consideration, of a portion of the trust lands to the daughter, Mrs. Acker, the defendant. Stephen Martling, as surviving trustee, joined with complainant in conveying another part, for a full consideration, to her son David Martling, the defendant. Complainant and her husband as such, and not as trustee, conveyed another portion to David Martling for a nominal consideration. Complainant and her husband as such, and not as trustee, conveyed to their son Stephen PL Martling, now deceased, for a nominal consideration, another portion of the trust estate. There were, besides, two conveyances by complainant to her son David, which were the subject of controversy in Martling v. Martling, reported in 47 N. J. Eq. 122, 20 Atl. 41, which controversy was settled by another deed from complainant to David dated December 16, 1891.
C. Christie, for complainant.
Gilbert Collins, for defendant David Martling. W. B. Williams, for other defendants.
PITNEY, V. C. (after stating the facts). The defendants Mrs. Acker, and Mrs. Martling as guardian ad litem of her infant son Stephen V. R. Martling, are entirely willing that a new trustee should be appointed in place of Stephen, who is incapacitated by infancy for the discharge of an active trust involving the duty to look after and protect the rights of the heirs at law of the complainant, who, under the trust as claimed by the defendants, must, in default of appointment by her, take the estate at her death. Mrs. Acker denies the right of complainant to terminate the trust and to assume unlimited control over the estate. On the other hand, complainant and her son David contend that at the death of the husband of complainant the object and purpose of the trust was accomplished, and the same came to an end, and that the power of the complainant under the terms of the trust was so full and complete as to give her, at her option, the right to have a fee simple in herself, and to that end to release and extinguish the trust. They found this claim—First, upon the construction of the deed itself, which they claim shows such to have been the actual intention of the settlor; and, second, they claim that the case comes within the rule in Shelley's Case, which is still in force in New Jersey as to conveyances of land, and that the effect of the conveyance, by force of that rule, was to vest in Mrs. Martling, the complainant, an equitable estate in fee, and that the legal estate is held by the trustee as a naked and executed trust, with the result that the complainant has the right to ask this court to determine it by directing a conveyance by the trustee directly to the complainant, and without consideration. The real object of the suit is to obtain a declaration and decree of this court to that effect. There is an allegation in the bill that Mrs. Martling had been unable to carry out a proposed sale of a part of the premises on account of a doubt of her ability to make a good title by her individual conveyance. The difficulty which at once presents itself in granting the relief first prayed for, viz. that the trust is terminated, is as to how far such a decree would be of any value in the direction of enabling complainant to make a merchantable title. Upon the face of the conveyance, the persons ultimately interested in the trust are, in the absence of testamentary disposition by complainant, "her heirs at law or next of kin, as may be." Now, of course, unless it so happens that the persons who proved to be such heirs at law or next of kin at her death are parties to this suit, they will not be bound by the decree of this court, made herein. I think this court ought not to make such a decree, unless the case is so clear that a purchaser by contract would be decreed to accept it on a bill for specific performance. In the well-considered and important case of Jervoise v. Duke of Northumberland, 1 Jac. & W. 539, Lord Eldon declined to decree specific performance against a purchaser where the title was held under a trust somewhat like the present, although he entertained a strong opinion that the case was within the rule in Shelley's Case, and the present cestui que trust was tenant in tail and competent to convey.
The same difficulty meets us in granting the second prayer, viz. to direct the infant trustee to convey to the complainant withoutconsideration. I am unable to adopt the view that, looking at the scheme of the settlement, it was the intention of the settlor to give such an absolute control of the title to the complainant as that she may dispose of it to her own use at any time during her lifetime. The limitation of the trust seems to have been prepared with care by a conveyancer of some experience, and he seems to have avoided giving such right. The mere fact that he does not give it in express terms, when it was so easy to do so, is significant, and it may well be doubted whether, if he had done so, it would not have defeated the very object of the trust. The provision for a sale and conveyance seems to me to mean a sale and conveyance for value. Else why provide for the investment of the proceeds? I think it is the duty of the trustee of such a trust to see to it that upon the sale of the estate a proper price is obtained. Mortlock v. Buller, 10 Ves. 202; Doran v. Wiltshire, 3 Swanst. 699; 2 Sugd. Powers, *p. 487; Lewin, Trusts (Flint's Ed.) *p. 427, § 18; Chance, Pow. §§ 2418 et sees.
It is contended by complainant that this settlement must be treated as one made by herself in all respects as if it had been a covenant to stand seised to uses. Grant that it must be so construed, still I find in it no express reservation of a power of revocation. The power to direct a sale for a full consideration, which shall be subject to the same trusts, does not amount to a power in the settlor to revoke absolutely. But, then, complainant relies upon the rule in Shelley's Case. Her argument is that complainant clearly takes an equitable estate for life, with remainder to her right heirs, and hence she has a fee. It must be admitted that the rule in question applies to equitable as well as to legal estates, unless the legal estate be vested in trustees who have some duty to perform with regard to it. Or, as expressed by Mr. Cruise (6 Cruise, Dig. tit. "Devise," 284 et seq.; 3 Cruise, Dig. [Am. Ed. 1857] 356): "It has long been settled that in devises of mere trust estates, where no conveyance is directed to be made, the construction is the same in chancery as it would be in a court of common law upon a devise of the legal estate." Here a conveyance is directed to be made, and the argument that it is within the case of Papillon v. Voice, 2 P. Wms. 471, and Lord Glenorchy v. Bosville, Talb. p. 3, is not without force. I have looked at numerous cases, as well those collected in 1 Fearne, Rem. p. 114 et seq., and Prest. Est. *p. 387 et seq., as those collected by Mr. Cruise, ubi supra, and others still later, and, without commenting upon them in detail, I find it enough to say that I am not well enough satisfied that this case is within the rule in question to act upon such a conclusion in the way I am asked to do by the complainant. I will add that at this day the courts are not disposed to extend the rule in question to doubtful cases, because, confessedly, the effect of its application is to produce results contrary to the intention of the donor or testator, as the case may be. A modern case is In re Thurston, 154 Mass. 596, 29 N. E. 53. I therefore decline to advise a decree directing a conveyance by the infant trustee to the complainant without consideration. I will, of course, advise a decree directing him to convey to a new trustee to be appointed, the new trustee to hold upon the same trusts as the present trustee.