Page images
PDF
EPUB

out reservation of power can only be revoked by the full consent of all parties in interest; if any of the parties are not in

1

will set aside the settlement on the application of the settlor, when it appears that he did not intend to make it irrevocable, or when the settlement would be unreasonable or improvident, for the lack of a provision for revocation. (a) In Everitt v. Everitt (1870), L. R. 10 Eq. 405, a case

1 Helman v. McWilliams, 70 Cal. 449. [Ewing v. Warner, 47 Minn. 446; Nelson v. Ratliff, 72 Miss. 656; Strong v. Weir, 47 S. C. 307, 323; Riggan's Adm'r v. Riggan, 93 Va. 78.]

(a) Several decisions in Pennsylvania seem to hold that a voluntary trust settlement which is testamentary in its nature is revocable by the settlor, although no power of revocation has been inserted in the settlement. Frederick's Appeal, 52 Pa. St. 338; Rick's Appeal, 105 Pa. St. 528; Rife's Appeal, 110 Pa. St. 232; Chestnut St. Bank v. Fidelity Insurance Co., 186 Pa. St. 333. But later decisions have restricted the apparent scope of these decisions, and it now seems to be law in Pennsylvania that power to revoke such a settlement will not be implied, and, if the settlement itself is a valid trust, it is revocable only in accordance with its express terms. Kraft v. Neuffer, 202 Pa. St. 558; Fry v. Mercantile Trust Co., 207 Pa. St. 640; Rynd v. Baker, 193 Pa. St. 486; Wilson v. Anderson, 186 Pa. St. 531; Potter v. Fidelity Ins. Tr. etc. Co., 199 Pa. St. 360.

It is a general rule in the United States that a power of revocation is not a necessary incident of a voluntary settlement for the benefit of the settlor for life and will not be implied merely from the absence of an express provision against revocation. Crumlish v. S. T. & S. D. Co., 8 Del. Ch. 375; Bunten

v. Am. Security & Tr. Co., 25 App. D. C. 226; Lawrence v. Lawrence, 181 Ill. 248; Richards v. Reeves, 149 Ind. 427; Anderson v. Kemper, 116 Ky. 339; Krankel's Ex'x v. Krankel, 104 Ky. 745; Coleman v. Fidelity Tr. Co., 91 S. W. 716 (Ky. 1906); Dayton v. Stewart, 99 Md. 643; Carroll v. Smith, 99 Md. 653; Rogers v. Rogers, 97 Md. 573; Brown v. Mercantile Tr. Co., 87 Md. 377; Lovett v. Farnham, 169 Mass. 1; Taylor v. Buttrick, 165 Mass. 547; Sands v. Old Colony Tr. Co., 195 Mass. 575; Thurston, Petitioner, 154 Mass. 596; Keyes v. Carleton, 141 Mass. 45: Hackley v. Littell, 150 Mich. 106; Crue v. Caldwell, 52 N. J. Law, 215; Smith v. Boyd, 61 N. J. Eq. 175; Stockett v. Ryan, 176 Pa. St. 71; Neisler v. Pearsall, 22 R. I. 367; Wallace v. Industrial Tr. Co., 73 A. 25 (R. I. 1909); Monday . Vance, 92 Tex. 428; Wade v. Button, 72 Vt. 136.

Where, however, it appears from all the circumstances that undue influence was exerted upon the settlor or that the omission of a power of revocation was due to fraud, accident or mistake, or that the settlement would be unreasonable or improvident for lack of a provision for revocation, equity will

[CHAP. III. being, or are not sui juris, it cannot be revoked at all.1 It is perfectly clear that where the settlor did not misapprehend the

a vol

almost precisely similar in its facts to that under consideration, untary settlement was set aside on the application of the donor. The court said: 'It is very difficult indeed for any voluntary settlement, made by a young lady so soon after she attained twenty-one, to stand, if she afterwards changes her mind and wishes to get rid of the fetters which she has been advised to put upon herself.'

"In Wollaston v. Tribe (1869), L. R. 9 Eq. 44, a voluntary gift which was not subject to a power of revocation, but was meant to be irrevocable, was held to be invalid, and was set aside on the donor's application. In pronouncing the decree, the court said: 'Of course a voluntary gift is perfectly good if the person who makes it knows what it is, and intended to carry it into execution.' In Coutts v. Acworth, L. R. 8 Eq. 558, it was held that 'Where the circumstances are such that the donor in a voluntary settlement of gift ought to be advised to retain a power of revocation, it is the duty of the solicitor to insist on the insertion of such power, and the want of it will in general be fatal to the deed.' In Prideaux v. Lonsdale (1863), 1 De G., J. & S. 433, a voluntary settlement, which the settlor was advised to execute by persons under whose influence, as regarded

1 Shaw v. Delaware, &c. R. R. Co., 3 Stockt. 229.

set the settlement aside. Smith v. Boyd, 61 N. J. Eq. 175, 47 A. 816; Lawrence v. Lawrence, 181 Ill. 248, 54 N. E. 918; Richards v. Reeves, 149 Ind. 427, 49 N. E. 348; Brown v. Mercantile Trust Co., 87 Md. 377, 40 A. 256. The decision of Brown v. Mercantile Trust Co. ubi supra, adopts the rule as stated in Toker v. Toker. 3 De G., J. & S. 491: "That the absence of a power of revocation may be evidence that the party did not understand the transaction and so of undue influence But whether it would be so or not, would depend upon all the circumstances of the case. . . . What the court has to be satisfied of in these cases, I apprehend, is that the settlement whether containing or not containing a power of revoca

tion, is the free determined act of the party making it; and the absence of advice as to the insertion of a power of revocation, is a circumstance, and a circumstance merely, to be weighed in connection with the other circumstances of the case."

If express power of revocation has been reserved by the settlor it can be effectively exercised only in the manner prescribed by the trust instrument. Thus if the trust deed provides that the trust may be revoked by an indenture signed by both the trustee and the settlor, who is the life beneficiary, it cannot be terminated by a simple written notice sent by the settlor to the trustee. Lippincott v. Williams, 63 N. J. Eq. 130, 51 A. 467.

contents of the deed, and there was no fraud or undue influence, and no power of revocation was reserved, the settlor is bound,

money matters, she was, and which subjected her property to trusts and contained provisions which the court thought it was impossible to suppose she understood, and against which she ought to have been advised and cautioned, was set aside. In Hall v. Hall, L. R. 14 Eq. 365, it was held that a voluntary settlement should contain a power of revocation; and if it does not, the parties who rely on it must prove that the settlor was properly advised when he executed it, and that he thoroughly understood the effect of omitting the power, and that he intended to be excluded from the settlement, and further, if that is not established, and the court sees from the surrounding circumstances that the settlor believed the instrument to be revocable, it will, even after the lapse of twenty years, and the death of the settlor, interfere and give relief against it. The decree in that case was reversed. (1873, L. R. 8 Ch. App. 430.) In his opinion, Selborne, L. C., said: 'The absence of a power of revocation in a voluntary deed, not impeached on the ground of any undue influence, is of course material where it appears that the settlor did not intend to make an irrevocable settlement, or where the settlement itself is of such a nature or was made under such circumstances as to be unreasonable and improvident, unless guarded by a power of revocation.' Forshaw v. Welsby, 30 Beav. 243, was a case where a voluntary settlement was made by one, in extremis, on his family. It contained no power of revocation in case of the settlor's recovery. On his recovery it was set aside on his application, on the ground that it was not executed with the intention that it should be operative in case of his recovery from his illness. See also Huguenin v. Baseley, Lead. Cas. in Eq. 406; Cook v. Lamotte, 15 Beav. 241; Sharp v. Leach, 31 Beav. 491; Phillipson v. Kerry, 32 Beav. 628. It is not necessary, however, to rest a decision of this case adverse to the deed on so narrow a foundation as the mere absence of a power of revocation. The circumstances under which a voluntary deed was executed may be shown, with a view of impeaching its validity, and if it appears that it was fraudulent or improperly obtained, equity will decree that it be given up and cancelled. In the present case there is no room for doubt that the grantor was induced, by those in whom she very justly placed confidence, and by whose better judgment she was willing to be guided, to execute a voluntary deed whose effect she and they not only did not understand, but, on the other hand, misapprehended; and which, so far from being according to their intentions, was in two very important respects, at least, admittedly precisely the reverse. It was irrevocable; but they all supposed it was revocable, and intended that it should be so. It deprived the grantor of the power of sale; but they all supposed that she would have that power, and intended that she should have it, clogged only by the necessity of obtaining her mother's consent and concurrence in any bargain or conveyance she might make. The deed contains no power of sale whatever. The testimony of all the parties to the transac

though some contingency was forgotten and unprovided for.1 A policy of insurance on the life of A., payable to his mother, who furnished a portion of the money, is a trust which cannot be revoked by a surrender of the policy, without the mother's consent, and the issue of a new one in favor of A.'s wife.2 The effect of the delivery of the deed of trust cannot be impaired by any mental reservation of the grantor, or oral condition repugnant to the terms of the deed. But where the trust deed was never delivered to the trustee except for safe keeping, and on the understanding that it should be returned for cancellation on demand, and with the consent of the cestui it was so returned and cancelled, no trust arose. If the voluntary settlement be subject to a life estate in the settlor, and also subject to such debts as he contracts during his life, he can defeat the trust by contracting debts to the full amount of the estate, even if the debts are contracted by giving voluntary bonds for the purpose of defeating the settlement. If, however, the settlor has not reserved the right to revoke the settlement, or to charge it with his debts, he can do nothing to impair the rights of those in remainder."

4

tion - the grantor, her mother and uncle has been taken in the cause. It satisfies me that the deed was not 'the pure, voluntary, well-understood act of the grantor's mind' (Lord Eldon in Huguenin v. Baseley), but was unadvised and improvident, and contrary to the intention of all of them. The fact that the infant children of the grantor are beneficiaries under the deed will not prevent the court from setting it aside. Huguenin ". Baseley, Everitt v. Everitt, ubi sup. There will be a decree that the deed be delivered up to be cancelled." See also Rhodes v. Bates, L. R. 1 Ch. 252; Leach v. Farr, 13 Am. Law Reg. 350 (N. s.); Villers v. Beaumont, 1 Vern. 99; Bridgman v. Greene, 2 Ves. 627; Petre v. Espinasse, 2 M. & K. 496; Bill v. Cureton, id. 511; Hastings v. Ord. 11 Sim. 205; Coutts v. Acworth, L. R. 8 Eq. 538; Phillips v. Mullings, L. R. 7 Ch. 244; Hall v. Hall, L. R. 8 Ch. 430; Toker v. Toker, 3 De G., J. & S. 487; Evans v. Russell, 31 Leg. Int. 125.

1 Keyes v. Carleton, 141 Mass. 45, 50.

2 Pingrey v. Nat'l Ins. Co., 144 Mass. 374, 382.

3 Wallace v. Berdell, 97 N. Y. 13.

Burroughs v. De Couts, 70 Cal. 361

5 Markwell v. Markwell, 34 Beav. 12.

Aubuchon v. Bender, 44 Mo. 560; Dean v. Adler, 30 Md. 147; Hall

v. Hall, L. R. 14 Eq. 365; Beal v. Warren, 2 Gray, 447.

Although the power of revocation is reserved, the trust is as good and effectual as if irrevocable, until the power is exercised.1 (a) Where the trust does not break the natural course of descent of the property, and is not needed for the protection of the life cestui, who is the grantor, equity will, on application of the cestui, terminate the trust and decree a conveyance. In this case the trust was made by a woman before marriage for herself for life, remainder to her appointees by will, or her heirs-at-law, if she died intestate. After marriage she applied for a conveyance and discharge of the trust, and as the natural descent was not broken, and the laws of the State sufficiently protected married women, the request was granted.

§ 105. Nor is notice to the cestui que trust or to the trustee, and acceptance by him, essential to the validity of a voluntary trust as against the settlor, if it is otherwise perfectly created. But the absence of notice may become a fact of more or less importance in determining whether the trust is perfectly created or not.*

1 Van Cott v. Prentice, 104 N. Y. 45. [Von Hesse v. MacKaye, 136 N. Y. 114; Hiserodt v. Hamlett, 74 Miss. 37, 47; Charles v. Burke, 60 L. T. 380, 43 Ch. Div. 223, note; Lines v. Lines, 142 Pa. St. 149; Witherington v. Herring, 140 N. C. 495; Seaman v. Harmon, 192 Mass. 5; Kelley v. Snow, 185 Mass. 288; Kelly v. Parker, 181 Ill. 49; Schreyer v. Schreyer, 101 N. Y. App. Div. 456 (aff'd 182 N. Y. 555); Brown v. Spohr, 87 N. Y. App. Div. 522, 84 N. Y. S. 995; Nichols v. Emery, 109 Cal. 323.]

2 Nightingale v. Nightingale, 13 R. I. 116.

3 Tate v. Leithhead, Kay, 658; Donaldson v. Donaldson, id. 711; Roberts v. Lloyd, 2 Beav. 376; Burn v. Carvalho, 4 M. & Cr. 690; Sloper v. Cottrell, 6 El. & Bl. 504; Gilbert v. Overton, 2 Hem. & Mill. 110; Kekewich v. Manning, 1 De G., M. & G. 176; Tierney v. Wood, 19 Beav. 330; Lamb v. Orton, 1 Dr. & Sm. 125; Meux v. Bell, 1 Hare, 73; Otis v. Beckwith, 49 Ill. 121. [See City of Marquette v. Wilkinson, 119 Mich. 413; Libby v. Frost, 98 Me. 288.]

4

Beatson v. Beatson, 12 Sim. 281; Meek v. Kettlewell, 1 Hare, 476;

(a) Such power to revoke, even when coupled with a power of appointment, is not such an interest in the property as can be transferred to another, sold under execution or devised by will, or passed to an

assignee. Jones v. Clifton, 101 U. S. 225; Brandies v. Cochrane, 112 U. S. 344; Hill v. Cornwall, 95 Ky. 512. But see In re Morgan's Estate, 223 Pa. St. 228; Ullman v. Cameron, 92 App. Div. (N. Y.) 91.

« PreviousContinue »