(concurring).
The donor in the case at bar made the gift in default conditional upon the failure of the donee to exercise the power, but the donee did exercise the power and the appointees accepted the appointment; it is therefore hard to see how in strict logic anything could pass under the will. A conditional interest does not take effect unless the condition is fulfilled; and indeed it can be argued that even though the appointees renounce, they should not be allowed to take under the gift in default, for renunciation after exercise of the power is not the equivalent of a failure to exercise it. But that would result in forcing the appointees to choose between taking under the power or taking nothing at all, and the Supreme Court, following In re Lansing, 182 N.Y. 238, 74 N.E. 882, refused to go so far in Helvering v. Grin*39nell, 294 U.S. 153, 55 S.Ct. 354, 79 L.Ed. 825, and held that when the appointees renounced, the property passed under the gift in default. There would have been nothing in that decision to contradict the theory that when they do not renounce, the property passes under the power, were it not that at the conclusion of the opinion (page 158 of 294 U.S., 55 S.Ct. 354, 356, 79 L.Ed. 825) the court said that it had granted certiorari because the two cases of Wear v. Commissioner, 3 Cir., 65 F.2d 665 and Lee v. Commissioner, 61 App.D.C. 33, 57 F.2d 399, were in conflict with the decision below; and then went on to say: “The reasoning and conclusions of chose courts and of the court below cannot be reconciled. We are of opinion that, to the extent of the conflict, the view of the former is wrong and that of the court below is right.” In both Wear v. Commissioner, supra, and Lee v. Commissioner, supra, the appointee had not, however, renounced, and pro tanto the reasoning in neither was in conflict with what had been said below as to the effect of renunciation, nor could it be. There was indeed conflict in reasoning because the two earlier cases had held that the exercise of a general power made the property a part of the donee’s estate, which the lower court in Helvering v. Grinnell, supra, denied. The conflict in conclusion was necessarily complete, for the two earlier cases had held that the property passed under the power and not under the will, and while there was a ground of reconciliation in the fact of renunciation, the court did not suggest it.
The Third Circuit in Rothensies v. Fidelity-Philadelphia Trust Co., 112 F.2d 758 and the Fourth, in Legg’s Estate v. Commissioner, 114 F.2d 760, thought that Helvering v. Grinnell, supra, went further than merely to hold that nothing passed under the power in cases of renunciation, and that it required them to compare the interest appointed with that passing under the gift in default, and to adopt as the test whether the first could be regarded as coming out of the second. We at least gave countenance to the same notion in Central Hanover B. & T. Co. v. Commissioner, 2 Cir., 118 F.2d 270, 273, and with narrow limitations it is laid down as law in the Restatement of Property, § 369. Mr. Griswold has discussed it in 52 Harv. L.R. 929, 933-937 (Powers and the Federal Estate Tax) and Mr. Paul in Federal Estate and Gift Taxation § 9.18. I cannot see that Helvering v. Safe Deposit & Trust Co., 316 U.S. 56, 62 S.Ct. 925, 86 L.Ed. 1266, 139 A.L.R. 1513, sheds any light upon the question. In the face of this authority I am not prepared to say that where the appointee does not renounce, the interests appointed must inevitably pass under the power. There is something to be said practically for the contrary, once we refuse to accept the rule that any exercise of the power is irrelevant. Certainly no donee would ever exercise a power in favor of a legatee in default if he knew that its only effect would be to include the property within his taxable estate. Nor does it seem quite fair to put it into the appointee’s hands by accepting, instead of renouncing, an appointment which makes no difference to him, to throw the tax upon the donee’s estate. On less provocation courts have often avoided such harsh results by holding that the intent of the testator was not correctly expressed in his words. I think that in the case at bar we can leave the question open, because, whatever the scope of the doctrine, it seems to me obvious that no interests should be excluded from the donee’s estate to whose creation the exercise of the power was necessary. Assuming for argument that those may be excluded which could have been made to pass under the gift in default by a more sparing use of the power, they must be the limit.
There are two circumstances, each of which takes the case at bar out of the doctrine so understood: first, the life estates to the wife and daughter were equitable, not legal; and second, Peter, who. was not a legatee in default, was an appointee, while Henry III, who was not an appointee, was a legatee in default. As to the first, there was no way other than' by exercising the power that the donee could have changed the jural quality of what passed to his wife and daughter under the will. He could of course have appointed remainders to others, but that would not have been enough. The difference between a legal and an equitable interest might not in all jurisdictions be today considered serious enough to count; we no longer think so rigidly as we used to of a trust as a transfer of title to the trustee against whom the beneficiary has only rights in personam. Be that as it may, in New York the beneficiary of a trust like that set up in the case at bar has no power to dispose of the property (Real Property Law, Consol.Laws, c. 50, § 103(1), and *40certainly that was a difference with which we cannot suppose that the donee was unconcerned. So I say that since he could not have realized his purpose without exercising the power over the interests of his wife and daughter it cannot be said that they took under the will.
Next as to the objection arising from the donee’s appointment of a third interest to Peter for life with remainders over. Having created these, he could not have secured even a legal life interest in a third of the property to his wife or to his daughter without exercising the power over the whole of that third. Had he attempted to do so by merely appointing remainders over after their deaths upon what passed to them under the will, each would have taken a life interest in two-ninths, not one third, for Henry III would have taken a third of the two-thirds not disposed of. Had the donee tried to make up to each her missing ninth by appointing it under the power, it would have come out of the two-thirds, and would have left to pass under the will, not two ninths to each, but four twenty-sevenths. And so on in an infinite diminishing series. Only by appointing to each her third could he have given her a third; and it follows that, as in the matter of the quality of the interest so in the matter of its quantity, there was no interest which could be left unappointed to pass under the will without mutilating the donee’s purpose. This is not true when the appointees and the legatees in default coincide; nor need it be true where the appointees include all tha legatees in default and more. For example if the legatees in default were three and the donee wished to have them share equally and in common with a fourth person also sharing, he need only appoint one quarter to the fourth. “Illustration 3” to § 369 of the Restatement is an instance of how the same result could be brought about when the class of legatees in default is not enlarged but the division between them is changed. (I should not agree however that only one sixth passed under the power. The donee would have had to appoint one quarter to his daughter, because what he took from the gift in default would be marshalled against her share as well as the sons.)
For the foregoing reasons I reach the same result as my brother Frank without however committing us to the absolute doctrine that in the absence of renunciation all interests appointed must inevitably pass under the power.
CHASE, Circuit Judge, concurs in the result.