Michigan Trust Co.v.Baker

Supreme Court of MichiganFeb 1, 1924
226 Mich. 72 (Mich. 1924)
226 Mich. 72196 N.W. 976

Docket No. 102.

Submitted October 12, 1923.

Decided February 1, 1924.

Appeal from Ottawa; Cross (Orien S.), J. Submitted October 12, 1923. (Docket No. 102.) Decided February 1, 1924.

Bill by the Michigan Trust Company, administrator de bonis non cum testamento annexo, of the estate of Mathilde F. Howlett, deceased, against Looe Baker and others for the construction of the will. From the decree rendered certain defendants appeal. Modified and affirmed.

Knappen, Uhl Bryant, for appellants.

Connolly Henderson, for appellees.



WIEST, J.

March 13, 1911, Mathilde F. Howlett made her will. She died June 18, 1913, leaving her husband, Nelson R. Howlett, and two sons, Stuart and Looe Baker, surviving her. The will was duly admitted to probate August 5, 1913, and Nelson R. Howlett appointed administrator cum testamento annexo, March 28, 1920, Mr. Howlett died. Stuart Baker died in New Mexico, April 8, 1915, leaving a wife but no issue. Plaintiff, as administrator de bonis non cum testamento annexo of the estate, filed the bill herein to obtain construction of the will. The will gave Nelson R. Howlett the use and control of the estate for life, unless he remarried, with right to spend the income and so much of the principal as he might desire for his support and comfort, and with power to sell and give conveyance, but by precatory words invoked specified financial aid be given Stuart and Looe.

The principal question is whether the following provisions of the will, in connection with what has been mentioned, suspended power of alienation beyond two lives in being contrary to 3 Comp. Laws 1915, § 11533, and restricted the vesting of the estate beyond lives in being and 21 years, in violation of the common-law rule against perpetuities:

"Upon the death or remarriage of my husband, Nelson R. Howlett, I give and bequeath all my estate then remaining in his hands to the Michigan Trust Company of Grand Rapids, Michigan, in trust, to convert the same into money, except as to family heirlooms, and dispose thereof, as well as of said heirlooms, as follows: * * *

"My will is that my son Stuart shall have the use of one-half of my estate not otherwise disposed of by this will and as Mr. Howlett shall be willing, while he lives, but the title shall remain in Mr. Howlett or in said Trust Company.

"If my said son shall have lawful child or children of his body who shall survive him, his share of my estate shall go to such child or children, girls at age of twenty-five years and boys at thirty years and not before.

"If my son Stuart shall die without lawful issue, his share of my estate shall go five thousand dollars ($5,000) to my son Looe Baker in fee, and the remainder for his life and at his death to his lawful children, if any, and if not I give the same to my niece Marie Grampp before named, if living or to her child or children, if any, and if she shall leave no child or children, the same shall go one-half to amt. of ($6,000) six thousand dollars to the children of Looe Baker, Sr., brother of my late husband William C. Baker, Jr., share alike and the remainder to the children of my brother Paul Grampp, if any, and if not, then all to children of Looe Baker, Sr. above.

"The other half of my estate that shall come to said Trust Company and not otherwise disposed of by this will, shall be disposed of as follows: The income thereof shall be paid quarterly to my son Looe Baker for his life, and after his death to his lawful child or children, if he shall leave any, and if not, then five thousand dollars ($5,000) shall be paid to his widow, if he leave one, and if not, the whole shall be paid to his brother Stuart for his life, if living, and at his death to his lawful children, if any, otherwise to be disposed of the same as the half provided for my son Stuart in the preceding paragraph. The principal of his share, in addition to the income, may be used to provide for Looe's necessities, the same as provided for Stuart in the preceding paragraph."

In the circuit the above provisions were adjudged to be in violation of the statute mentioned and also the common-law rule against perpetuities. We find no violation of the statute but do find the provisions offend the common-law rule against perpetuities. The statute forbidding suspension of power of alienation beyond two lives in being relates solely to real property. This will gave the husband a life estate and suspended power of alienation by him except in a limited way. At the death of the life tenant the will vested title to the real property in the trustee, with not only full power of alienation but with mandate to convert the same into money. The suspension of power of alienation ended at the death of the life tenant. At the most here was suspension of power of alienation during the life of but one person in being at the creation of the estate.

The vesting of title in the trustee with mandate to alienate takes the case out of the holding in Grand Rapids Trust Co. v. Herbst, 220 Mich. 321. The common-law rule against perpetuities has no bearing upon the question just decided.

It must be kept in mind that, while the rule against perpetuities applies to future interests in both real and personal property, it has nothing to do with the statutory prohibition against suspension of power of alienation. The rule requires vesting of estates within a period, while the statute prohibits inalienability beyond a period; the rule is a restraint only upon future interests and has no concern with present interests; the statute reaches vested estates in real property but shorn of alienability. With title to the real estate vested in the trustee with power and mandate to sell, the character of the avails thereof is fixed by the will as personal property.

At the close of the life estate given the husband the will required conversion of the real property into money. Whether this has been accomplished in fact or not is of no moment for, if not done, it is to be done and the doctrine of equitable conversion governs and considers it as actually performed. The test of whether the rule against perpetuities applies or not is the remoteness of time when, if ever, the estate vests. The court must be able to say, to avoid the rule, that to a certainty the estate will vest within 21 years after the death of Stuart and Looe, and this vesting must be found to have been discernible at the date of the death of the testatrix. At that time Stuart and Looe were both living but had no children. Certainty as to time the estate will vest must be apparent unaided by events subsequent to the date the will became operative. The dead hand can control contingent devolution toward ultimate vesting only within a fixed period.

The application of the rule is well stated in 21 R. C. L. pp. 289, 290:

"The test therefore by which to ascertain whether a limitation over is void for remoteness is very simple. It does not depend on the character or nature of the contingency or event on which it is to take effect, for these may be varied to any extent. But it turns on the single question, whether the prescribed contingency or event may not arise until after the time allowed by law within which the gift over must take effect. * * * It is not sufficient that the future estate may by possibility become vested within the period allowed by the rule against perpetuities or even that it will probably become vested in such period. If it may possibly happen beyond the established time limits or if there is left any room for uncertainty or doubt on the point the limitation is void. If a future limitation may not by possibility take effect within the prescribed period it cannot be made good by subsequent events."

The very first contingency for vesting Stuart's so-called share was in violation of the rule against perpetuities. If Stuart had had a daughter and died when she was 3 years of age the estate would not vest in her within 21 years after her father's death because the will postpones vesting until the daughter should reach the age of 25 years. If Stuart had had a son and died when the son was 7 years of age the estate would not vest in the son within 21 years after his father's death. This possibility existing at the death of testatrix voids the provision in the will with reference to Stuart's so-called share. Does this infirmity void Looe's so-called share? It does. While it is possible to divide among two the income and corpus of an estate and make the parts so independent of each other as to save one from an infirmity found in the other, yet to accomplish this the will must not be so conditioned that under certain contingencies the division ceases and a merger takes place and the estate vests as a whole. This will provides for a possible union of the two shares by reason of the happening or non-happening of certain events. The shares were not made independent at the creation of the division with right to remain so under all circumstances and, therefore, they must now stand or fall together. The circuit judge was right in holding the above mentioned provisions invalid.

Paragraph 11, subdivision ( f), of the will provides:

"( f) The Baker silver tea set shall go to my son Stuart for his use only for his life, at his death it is to go to his child or children, if any, if none, to his brother Looe, if living, if not to his child or children, if any, and if none, to the said Marie Grampp. If said Marie Grampp shall not be living or does not leave child or children, when the Baker tea set shall reach her or them, it shall go to Alice and William Baker, children of Looe Baker, Sr., before named, or their heirs." * * *

This and subdivisions g, h, i, j and k, of like character, and all relating to heirlooms, were held void in the circuit. Life use of the Baker tea set was granted the husband followed by life use thereof to Stuart. The husband and Stuart were persons in being at the death of testatrix. As stated, the rule against perpetuities permits postponement of the vesting of ownership during a life or lives in being, so the only question is whether the will, under circumstances existing at the death of testatrix, vests ownership in 21 years after the death of Stuart. At Stuart's death the will vested ownership at once. Here we find no provision postponing the vesting of ownership at all, but only designation of who should become such owner at Stuart's death, an alternative being provided to meet possible contingencies.

What we have said applies with equal force to all the provisions relating to heirlooms. Such provisions are valid.

The decree in the circuit will be modified to accord with this opinion and, so modified, affirmed, with costs against appealing defendants.

CLARK, C.J., and McDONALD, BIRD, SHARPE, MOORE, STEERE, and FELLOWS, JJ., concurred.