In the view I take of this case, it will not be necessary to consider the force and effect or to determine the validity of the instrument executed by Fellows on the 15th day of October, 1868, and I will confine my attention to the prior instrument executed October tenth. I will first consider what Fellows intended by that instrument, and then whether that intention can have effect under our laws.
It was his evident intention to vest the title to all the property conveyed in the trustee. He had become old and infirm, and the management of his large estate, located in eight different States, had probably become irksome and harassing to him. He therefore says, that, on account of his infirmities and advanced age, he deems it expedient to convey all his property to his nephew, and he uses apt and proper terms to convey title. He acknowledges a consideration of one dollar, and uses the terms "have sold, and by these presents do grant, release and convey," terms appropriate and ample to convey the fee to real estate. The terms of the trust also show that the grantor must have understood that the title to the property was by the instrument vested in the trustee. It was provided that the trustee should sell the lands by retail for the best price that could be obtained, and convey the same in fee simple to purchasers, with covenants of warranty binding his heirs; that until the lands should *Page 347 be sold he should rent such of them as could be rented for the best prices he could obtain; that he should collect all debts, execute deeds of all lands then under contract, and pay, distribute and dispose of the avails of the real and personal estate as follows: First, to defray the expenses of the trust; secondly, to pay over to Fellows during his life, or appropriate to his use under his direction, all the residue of moneys received; and, thirdly, after his decease to pay and distribute the residue as directed. It will thus be seen that the intention of Fellows to vest the title in the trustee, and not make him a mere attorney under a revocable power of attorney, is too clear for dispute.
This intent should have effect, unless some statute or rule of law stands in the way. It is the injunction of the statute that "in the construction of every instrument creating or conveying, or authorizing the creating or conveying of any estate or interest in lands, it shall be the duty of courts of justice to carry into effect the intent of the parties, so far as such intent can be collected from the whole instrument, and is consistent with the rules of law." (1 R.S., 748.) This statute rule requires not only that the language of an instrument unquestionably valid shall be so construed as to give effect to the intent of the parties, but that the construction shall be such as to uphold the instrument rather than to nullify it. (Post v. Hover, 33 N.Y., 593.)
At common law this instrument would have been valid and effectual to pass the title to the real estate. (4 Kent's Com., 320; Leggett v. Perkins, 2 Coms., 297; Wright v. Miller,8 N.Y., 9.) But the claim is that it is inoperative to pass the title under our statutes, because no express trust is created under section 55 of article 2, title 2, chapter 1, part 2 of the Revised Statutes, and because section 88 provides that where an express trust shall be created for any purpose not enumerated, no estate shall vest in the trustees; but the trust, if directing or authorizing the performance of any act which may lawfully be performed under a power, shall be valid as a power in trust. It is conceded by the counsel for the trustee *Page 348 that no estate vested unless a valid trust was created for some one or more of the purposes mentioned in section 55. He claims, however, that there was a valid trust under subdivision 3 of the section "to receive the rents and profits of lands and apply them to the use of any person during the life of such person or for any shorter term." Here were lands situated in eight different States. The trustee was directed to sell them at retail for the best price he could get. It would be impossible to sell them all at retail immediately, and the probabilities were that it would take years to do so. The grantor evidently supposed that they would not all be sold in his lifetime, as he made provision for distribution, after his death, to his heirs. Under such a power, while the trustee was bound to make the sale with reasonable dispatch, careful regard being had to the interests of the beneficiaries, he was not required to sell until he could find such purchasers as would purchase and pay for the property its fair value. The grantor, therefore, provided that until the lands should be sold, the trustee should rent them for the best price he could get, and that he should pay the avails, both the rents and proceeds of sales, as above specified.
I am of opinion that here was a trust to receive the rents and profits and apply them to the use of the grantor. It is no objection to the validity of the trust that the avails of the real estate were to be applied to the use of the grantor (VanEpps v. Van Epps, 9 Paige, 237; Matter of Livingston,34 N Y, 555; Rome Ex. Bank v. Eames, 1 Keyes, 588); or, that the avails of the real and personal estate were to be mingled together and applied. (De Kay v. Irving, 5 Denio, 646.) The direction to "pay over" is, substantially, a direction "to apply to the use." (Leggett v. Perkins, 2 N.Y., 297; Leggett v.Hunter, 19 id., 445, 454.) It is true that nothing is said in the instrument about receiving the rents, but that is necessarily implied. The authority to rent carries with it an authority to receive the rents. It is not necessary that the purpose of the trust should be declared in the words of the statute; it is sufficient that a purpose within the statute *Page 349 is clearly embraced within the language used. (Vernon v.Vernon, 53 N.Y., 351, 359; Tobias v. Ketchum, 32 id., 319.)
It is claimed on behalf of defendants that the authority to rent is merely incidental to the absolute authority to sell, and that, therefore, there is no valid trust to receive rents and profits within the statute; and this view was sanctioned by the opinion of the learned judge who wrote the opinion of the General Term. Precisely what is meant by the word "incidental," in this connection, I do not understand. The authority to receive rents and profits was not conferred as incidental to the authority to sell, but was conferred in express language and by terms just as absolute as the power to sell. The authority to sell was, doubtless, the primary and most important authority, and when exercised would put an end to the authority to lease. But until the land should be sold, the power to lease was also important, and its exercise for the benefit of the beneficiaries under the instrument was just as essential, until the power to sell should be called into exercise, as the latter power. The leasing of the lands was one of the express purposes for which the conveyance was made, and hence it is in no sense merely incidental to any other purpose. In Irving v. De Kay (9 Paige, 521) the chancellor said: "If any of the purposes for which the trust was created are legal and valid, and would have authorized the creation of such an estate, the legal title vests in the trustees during the continuance of such valid objects of the trust."
It is further claimed by the learned counsel for defendants that a trust within the third subdivision of section 55 operates to suspend alienation, although the title be vested in the trustee, and that there can be no such trust where there is absolute and unqualified authority and discretion to sell, and it was mainly upon this ground that the case was decided against the plaintiff in the courts below. The claim, as I understand it, is, that where there is a trust, under section 55, to lease lands, the title must vest in the trustee for some term, and during such term must be inalienable under the *Page 350 statute; that such a trust cannot coexist with an absolute power of sale which may be executed at once, and that the trustee having absolute power to sell cannot vest himself with title in trust by voluntarily creating a term by his action or omission to sell.
There is no statute providing that a trust to receive the rents and profits and apply them until the land shall be sold, may not coexist with an absolute power of sale, and there is nothing in the nature of the trust and the power which forbids their coexistence.
There is no statute which provides, that, in order to vest title to land in a trustee upon such a trust, the power of alienation must for some term be legally suspended, and there is no reason for such a suspense of alienation. Alienation may be practicably and necessarily suspended and yet not theoretically, in law, suspended; and during such suspense the title may vest for the purpose of such a trust.
The trustee does not confer title to the real estate upon himself by omitting to exercise the power of sale. He takes the title upon the lawful trust at the same time that he takes the power, and while he can put an end to the trust by exercising the power, until he does exercise it the title and trust remain. Suppose the grantor had conferred the title with the trust upon one person and made some other person the donee of the power, could it be doubted that the trust estate would vest at once and remain in the grantee until the power was exercised? There would have been no legal suspense of alienation, and yet no practical or legal inconsistency between the trust estate and the power of sale. The statute requires no particular length of time for the trust to continue. It may be for life or for any shorter term. The duration of the term may not be fixed and certain, and a term, the length of which is defined in the instrument, cannot differ in substance from one which the language of the instrument when applied to the circumstances of the case makes necessary. A trust which must exist for one day is just as valid as one which must exist for life. *Page 351
This construction of the statute is in no way in contravention of its letter or spirit, and must certainly be found in its practical consequences most convenient and suitable. The position of this case would have been the same if the instrument had conferred a purely discretionary power instead of an absolute direction to sell. There would have been no legal suspense of the power of alienation in that case. It might be some years before the lands could all be sold, and unless in the mean time the trustee could lease and receive the rents and profits, the beneficial purposes of the grantor would be defeated; unless the trustee held the title and could thus control the possession, he could not execute the trust. A construction of the statute which leads to such consequences should not be tolerated unless some controlling authority requires it. To maintain his construction defendants' counsel calls our attention to 1 Revised Statutes (730, § 65), and to the following authorities: Boynton v.Hoyt (1 Denio, 57); Hawley v. James (16 Wend., 160); Lang v. Ropke (5 Sandf. Sup. R., 369). Section 65 provides that when the trust shall be expressed in the instrument creating the estate, every sale, conveyance or other act of the trustees in contravention of the trust shall be absolutely void. This section has reference to a sale not authorized by the instrument creating the trust. A sale thus authorized, which simply terminates the trust, cannot be said to be in contravention of it. In Boynton v. Hoyt, Judge BRONSON said a trust to receive the rents and profits and apply them under subdivision 3 of section 55, did suspend the power of alienation. That was said in a case where there was a term during which the rents and profits were to be received, and the question was whether the power of alienation was illegally suspended, and as the term was longer than authorized by statute, it was held to be illegal and void. InHawley v. James, Judge BRONSON again used the same language in a case where he held the power of alienation was illegally suspended by a trust to continue longer than the statute allowed. In Lang v. Ropke, DUER, J., said: "It may be admitted that the necessary effect of the trust *Page 352 which this will creates in relation to the rents and profits was to suspend, during its continuance, the absolute power of alienation, but as the trust was to last no longer than until the youngest child of the testator should attain the age of twenty-one years, the suspense which it involved was far within the limits which the statute allows." In those cases the question here involved was not under consideration. There the rents and profits were to be received for certain terms, and as there was no power to sell during the terms, there was a suspense of the power of alienation — in the two former cases for a period not authorized by law, and in the latter case for a period authorized. The question whether a power to sell could coexist with the trust was not involved in either case.
On the other hand, showing that this is a valid trust that can exist without a legal suspense of the power of alienation, and that it can coexist with an absolute power of sale, there are a number of authorities. In McLean v. MacDonald (2 Barb., 534), lands were devised to trustees upon trust, to receive the rents and profits thereof, and to sell the same and invest the proceeds on bond and mortgage, and to collect the income and profits and apply the same during two specified lives, to the use of certain persons named; and it was held that there was a valid trust, under section 55, and that the trustees were seized of such an estate in the lands as would entitle them to maintain ejectment. The case is imperfectly reported. But as I understand the facts, the trust and power of sale coexisted and there was no suspense of alienation, the trustees being empowered at any time to sell the real estate. The fact that they were to invest the proceeds and continue trustees of them as personal estate had nothing to do with the validity of the trust as to the real estate. That terminated when the sale was made. In Belmont v. O'Brien (12 N Y, 394), lands were conveyed to trustees upon trust to receive the rents and profits, and they were empowered at any time to sell the lands and to invest the proceeds in other lands or personal securities. It was *Page 353 held that the trust to receive the rents and profits was a valid one; that the title vested in the trustees and that the power of sale could coexist with the trust, and that a sale of the lands was not in contravention of the trust within section 65 of the statute. There was no suspense of alienation. Judge HAND said: "The same person may hold the estate in trust for one purpose, and at the same time be a grantee of a power in trust to be executed or take effect at some future day for another. Here the owner in fee gave the power by the same instrument that conveyed the estate; and suppose it had been an absolute power to sell and terminate the present use and appoint the money, it could never have been the intention of the legislature, not only to frustrate the intention of the grantor, but to make an entirely different conveyance. * * * Where a sale is directed in the instrument creating the trust, such sale is not "in contravention of the trust," nor is it repugnant to the grant or devise, for that provides the defeasance, new use, executory limitation, or whatever it may be." In Fitzgerald v. Topping (48 N.Y., 438) lands were conveyed to a trustee upon trust to receive the rents and profits, and to sell under the control and direction of the court. There was no suspense of the power of alienation, as the lands could at any time be sold with the consent of the court; and it was held that the title vested in the trustee, and that he could recover the lands in an action of ejectment. In Vernon v.Vernon (53 N.Y., 351) executors were empowered to receive rents of certain stores and pay them over to the testator's wife during her life, and they were also empowered to sell the stores at a minimum price. There was no legal suspense of alienation, and yet it was held that the trust was valid, and that the executors took the legal title. In Marvin v. Smith (56 Barb., 600), Smith being seized of certain lands, conveyed the same by deed to Bennett forever, in trust, to receive the rents and profits and appropriate the same for the sole use and benefit of Smith's wife, according to her directions, and after her death, in case the grantor should survive her, to convey the *Page 354 lands to her children; but in case no children or descendants should survive her, that then the remainder of the estate granted should, after her death, be conveyed to the grantor, if living; and, in further trust, that whenever the wife should desire a sale or mortgage of the premises, or any part thereof, the grantee should sell or mortgage such part or portion and pay over the proceeds to the wife, or reinvest the same according to her directions. There was no suspense of the power of alienation. The trustee could sell, with the consent of the wife, at any time, and yet it was held that the trust was valid, and that the title vested in the trustee. Judge TALCOTT speaking of Belmont v.O'Brien (supra) says: "Although the power in that case was to sell and reinvest upon the same trusts, and in this case, there is no specific direction to apply the proceeds of the sale or mortgage to the same trusts, yet the argument of the opinion in that case, I think, satisfactorily shows, if argument were needed, that a trust and a power to terminate it, contingent or otherwise, may exist together when they are not inconsistent." That case was affirmed in the Court of Appeals (46 N.Y., 571), and the opinion of Judge TALCOTT expressly indorsed. In Gallie v. Eagle (65 Barb., 583) there was a trust in land to receive the rents and profits and apply the same to the support of a minor until he should attain the age of twenty-one years; and the trustee was authorized, in his discretion, to sell and grant the land and invest and hold the proceeds on the same trust. There was the same objection to this trust which has been made here, and it was held that it was valid, and that the trustee had the title and could maintain an action for the partition of the land. In Fellows v. Heermans (4 Lans., 230) an action by the grantor against the grantee, the plaintiff in this action, to set aside the instrument now under consideration, Judge HOGEBOOM, with whom Judge PARKER concurred, held that this was a valid trust under section 55. I therefore hold, both upon principle and authority, that there was a valid express trust created by this instrument to receive and apply the rents and profits of the lands to the *Page 355 use of the grantor during his life, and that the title vested in the grantee, the plaintiff.
It is claimed by the plaintiff that this trust survived the grantor, and that it must continue until the land shall all be sold under the power conferred upon the trustees. The trust is authorized "to receive the rents and profits of lands and apply them to the use of any person during the life of such person, or for a stated term," subject to the rules prescribed in the first article of the same title. The trust need not be for the benefit of one person only, but may be for the benefit of more than one, provided the conveyance creating the trust does not suspend the power of alienation of the land, or authorize a suspense of alienation for a period longer than that allowed by article 1, referred to. I am inclined to think that this trust cannot be upheld for a longer period than the life of the grantor, and that it, therefore, terminated at his death, and that the legal title to the land, subject to the execution of any valid power contained in the instrument, then vested in the heirs of the grantor, unless there is some other valid trust which continued the legal title in the trustees.
Section 55, subdivision 1, authorizes an express trust "to sell lands for the benefit of creditors," and a deed conveying lands upon such a trust vests the legal title in the trustee. (§ 60;Duvall v. English Ev. L. Church of St. James, 53 N.Y., 500.) This deed, after providing for the expenses of the trust and the payment of the avails of the property, during the life of the grantor, to him, provides as follows: "After my decease and after the payment of all my just and legal debts and the expenses of the trust aforesaid, the residue shall be distributed," etc. Here is a power to sell and pay the avails to the grantor during his life, and after his death, a power to sell, and after the payment of debts, to distribute the balance as directed. This is the same as if he had provided that the trustee should sell and use the proceeds first to pay his debts and then to distribute the balance to his appointees or heirs. If it had been in that form no one would dispute that, within the statute, it was a power to sell for the benefit of creditors. *Page 356 The language used has the same effect. The lands must be sold, and the debts, which at the creation of the trust amounted to nearly $250,000, must be first paid. It is not necessary that a trust should be expressed in the language of the statute. It is one of the fixed rules of equitable construction that there is no magic in particular words, and any expression that shows unequivocally the intention of the parties to create a particular trust will have effect. Language will be liberally construed to give effect to the intention of the parties and to uphold the trust deed. (Hill on Trustees [2d Amer. ed.], 82, and cases cited.)
Here, then, the plaintiff held the legal title to the real estate upon a valid trust, during the life of the grantor. At his death the trust to sell, for the benefit of creditors, came into activity, and the plaintiff took the legal title for the purposes of that trust. Such legal title will continue in him until that trust is fully discharged. As debts remained unpaid at the time of the trial, and there was no proof that there was one dollar of personal property to pay them, he then had the legal title and was entitled to recover by virtue thereof.
In the examination of this case I have not deemed it important to consider the force and effect of the instrument executed October fifteenth. If valid that instrument, certainly, did not weaken plaintiff's title; if invalid, the original instrument was not affected by it.
But there was another defence relied upon at the trial which must be briefly considered. The defendants proved that on the 16th day of December, 1870, a contract was made between Joseph Fellows and defendant Robertson, for the sale of the land in question by Fellows to Robertson, for the sum of $800, and that defendants went into possession under that contract. The terms of that contract are not set out in the case, and it does not appear that any portion of the $800 was paid or tendered by the defendants to any one. The defendants did not claim, either in their answer or upon the trial, to have the contract specifically performed, and there was no proof showing that they were entitled to have it thus *Page 357 performed. I am unable to perceive how this contract and the circumstances connected with it furnish any defence to this action. Fellows had divested himself of the title to the land by the deed of trust, and thereafter had no right to interfere with the land. He could compel an execution of the trust by the trustee, and if he unreasonably delayed sales of the land could, undoubtedly, as one of the beneficiaries of the trust, hasten the sales. But he could not, himself, sell or contract to sell any of the lands. It matters not that he was to receive the entire avails of all sales made in his lifetime. The trustee was not absolutely required to sell all the lands in his lifetime; it may not have been practicable to do so. There were, therefore, other beneficiaries interested, and they were entitled to have the judgment of the trustee in making the sales. Fellows had no more right to sell the lands, or make contracts of sale, than any stranger.
I am, therefore, of opinion that upon the facts appearing upon the trial, the plaintiff was entitled to recover, and the judgment of the General Term should be reversed, and new trial granted, costs to abide event.
ANDREWS and MILLER, JJ., concur with ALLEN, J.; CHURCH, Ch. J., and FOLGER and RAPALLO, JJ., concur in result, on the ground that under the contract with Fellows, the defendant, not being in default, established an equitable defence to the action. EARL, J., dissenting.
Judgment affirmed.