In Re Application of Chapman

211 N.W. 325, 168 Minn. 1, 1926 Minn. LEXIS 1494

• Court: Supreme Court of Minnesota
• Decided: December 17, 1926
• Docket: No. 25,471.
• Status: Published

Opinions

¹ Reported in 211 N.W. 325. There has been a rehearing. It was made necessary by the too restricted scope of the original opinion which was limited, on the merits of the case, to a consideration of the effect of the lease as a restraint upon alienation. That limitation of the opinion was due to what we understood to be the assurance, at the oral argument, by counsel for appellant that no other question need be considered. He is right however in insisting that the briefs presented other questions, among them being the one now to be considered. It necessitates a reversal.

It is obvious that the intended trust was for "the beneficial interests" of the persons therein designated. Counsel for appellant still insists that the beneficiaries are not sufficiently designated. The intent is clear that the beneficiaries shall be, not the owners of the adjoining and nearby property at the date of the lease, but the owners thereof from time to time so that each succeeding owner of any of the real property designated would become a beneficiary. Whether in that view of the case the designation of the beneficiaries is of a "fluctuating and uncertain" group within the rule of Lane v. Eaton, 69 Minn. 141, 71 N.W. 1031, 38 L.R.A. 669, 65 Am. St. 559, we do not now decide.

1. However, our reconsideration of the case has brought us to agreement with the argument for the appellant that the trust, being for the "beneficial interests" of the beneficiaries and so within subdivision 6, section 8090, G.S. 1923, is notwithstanding in violation of its proviso, which requires "that the trust shall not continue for a period longer than the life or lives of specified persons in being at the time of its creation, and for twenty-one years after the death of the survivor of them." The lease is for a term of 25 years without reference to a life or lives in being. It might continue for a period longer than that permitted by the statute. Therefore it is void as a trust under the rule of Rong v. Haller, 109 Minn. 191,123 N.W. 471, 806, 26 L.R.A. (N.S.) 825. It was there held that a devise of land which attempted to suspend the absolute power of alienation for a fixed period, however short, without reference to lives in being, was void. It must also be held that an attempted express trust, within subdivision 6 of section 8090, G.S. 1923, without reference to a life or lives in being, for a period of more than 21 years, is void.

2. We cannot hold with respondent that, notwithstanding the invalidity of the lease as a trust, it can still be sustained as a power in trust. That argument is predicated on section 8093, G.S. 1923, which declares that "whenever an express trust is created for any purpose not heretofore in thischapter enumerated, no estate shall vest in the trustee; but the trust, if directing or authorizing the performance of any act which may be lawfully performed under a power, shall be valid as a power in trust." The italics are ours and indicate why respondents cannot avail themselves of this statute. The trust attempted to be upheld as a power is one which is for a purpose "heretofore in this chapter enumerated." Therefore it is excluded from the saving power of section 8093.

The statute forbidding the suspension of the power of alienation can no more be avoided by a power than by a trust. Garvey v. McDevitt, 72 N.Y. 556. So also the statute forbidding the creation of a trust for longer than the specified period can no more be evaded by a power in trust. That to us seems one purpose of section 8093, else why its limitation to trusts for purposes other than those "heretofore in this chapter enumerated?"

It was so held with respect to the "Tilden Trust" (Tilden v. Green, 130 N.Y. 29, 28 N.E. 880, 14 L.R.A. 33, 27 Am. St. 487), under the similar statute of New York. It was there said:

"But section 58 of the Statute of Uses * * * is not, of course, susceptible of the construction that a trust invalid because in conflict with some cardinal rule of law could be upheld as a power. Every trust necessarily includes a power. There is always something to be done to the trust property and the trustee is empowered to do it, and if the trust is invalid because the power to dispose of the property is not one that the law recognizes, it cannot be upheld as a power in trust."

For the reasons indicated, the former opinion [which is printed immediately after this opinion] did not lead to a correct disposition of the case and therefore it is withdrawn and this opinion on the rehearing is substituted. The judgment is reversed and the case remanded for further proceedings not inconsistent with this opinion, our holding being that the lease is void as a trust and that it cannot be given validity as a power in trust.

Judgment reversed.

The opinion which is withdrawn was filed on June 11, 1926, and was as follows:

[1. In absence from printed record of the pleadings, it will not be presumed that there was no prayer for affirmative relief in the answer. In consequence, no error is found in the action of the trial court in disregarding an attempted and partial dismissal by the petitioner.

[2. Lease to trustees for benefit of owners of property adjacent to that leased held to impose no restraint on alienation.]

[Preceding opinion substituted in place of this opinion.]