I dissent.
Convinced that powers have not been prohibited in this state, but that the right to create them is unlimited, I am not able to read the will as my associates do.
In the first place, I see no force in the proposition that we *Page 555 must first construe the will as though trusts to convey were not prohibited, and then enforce the prohibition ruthlessly. All contract, all conveyances, and other instruments in writing, are to be construed with reference to the laws in force where they were made, and with the idea constantly in mind that they were made in view of such laws and to be enforced under them. If we fail to do this, we do not place ourselves in the position of the contracting parties, and could not expect to understand the language found. They are presumed to know the law and to have ordered their affairs with reference to it.
There is no reason why this universal requirement to presume that parties contract in view of the law should be relaxed as to wills, unless we seek for a pretext to avoid them. If there is any difference, the reason for applying the rule to the construction of wills is more cogent. They are generally more deliberately prepared, and are to be executed by others than the persons who made them, and usually there are those who would gladly defeat their execution. The testator can rely only upon positive law for its execution.
I think, then, since a trust to convey cannot be created in this state, and a power in trust for that purpose is perfectly valid, that the obvious intent of the testator, as shown by the clear language of the will, was to convey to his trustees a life estate only, and that the direction to his trustees, "upon the death of such survivor to transfer and convey," was intended as a power in trust. The language is certainly as appropriate and apt for the creation of a power as for a direction to execute a trust. If the eminent counsel for respondents could believe that powers can be created under our laws, I cannot doubt that they would have so construed it. This proposition once admitted, in my opinion the language of the will cannot be understood in any other way.
The will having been probated, all presumptions are in favor of testacy, and against intestacy. The presumptions in favor of the heirs then cease. The duty of the courts, then, is, to so construe the will, if in reason it can be, so as to prevent intestacy, total or partial. Keeping in view, therefore, these propositions, — to wit, that the testator knew that a trust to convey cannot be created in this state, and that a power in trust can be, and also that an estate in trust cannot be created for a period unmeasured by lives in being, — let *Page 556 us read the will. It is, in effect: "I give my estate to trustees, in trust, for the following uses and purposes; that is to say: to have and to hold the same, in trust, during the lives of my children and of the survivor of them, and upon the death of such survivor to transfer and convey," etc. "In trust, further,during the lives of my children and of the survivor, to manage and control the said trust property and estate."
Here it is expressly declared that the purpose of the trust is, that his trustees shall hold the estate during the mentioned lives, and during such lives, and only for that period, the trustees are expressly authorized to manage and control, to collect rents, etc. There are no further duties as trustees, and no further authority, save to transfer and convey at the termation of the trust. This authority has all the attributes of a power, although it might also have been appropriate as a direction to trustees, had not such trusts been prohibited. Being equally appropriate for both, if one course is unlawful and the other lawful, we must presume the testator meant to do only that which he could lawfully do. Nor do I see how the express declaration that the trustees shall hold during the lives of his children can be regarded otherwise than as also containing the condition that they shall not hold beyond that time, and this is rendered more plausible by the fact that such limitation was required to make the trust legal. The power was to be executed,eo instanti, upon the death of the survivor. If not then executed, the persons and the interests to be conveyed were ascertained. At that instant, if not before, the entire estate became alienable.
I understand respondent to contend that the direction to hold during the lives of the children of the testator is a mode of indicating when the conveyances are to be made. But it seems to me that the only purpose of the trust was to deprive his children of all power to control, manage, or dispose of his estate, while enjoying the profits thereof, and to deprive the children of his son of all interest in it. All this was accomplished by the life trust. The direction to convey was adopted as a mode of ending the trust; so the estate then passed to the beneficiaries in full property, and the purpose of the testator in that regard was accomplished.
To repeat, we cannot doubt that the testator desired to accomplish these ends: 1. To provide ample revenue for each of his children during his or her life. 2. To prevent the *Page 557 descendants of his son from inheriting any part of his estate. 3. Upon the death of all his children, to give one half of his estate to the descendants of his daughters, and the other half to his brothers and sisters and their descendants.
Aside from some special legacies, these are all or the main purposes sought to be accomplished. This can all be done without violating any law and without giving an unnatural or strained construction to any language contained in the will. This will be admitted if the concession be made that it was competent for him to create a power.
Originally, in the second division of the Civil Code, part II, title IV, treated of uses and trusts, and title V of powers. Title IV commenced with section 847: "Uses and trusts in relation to real property are those only which are specified in this title." Title V began: "Section 878. Powers in relation to real property are those only which are specified in this title." It is not contended that title IV conferred upon any one the power to create uses and trusts. The sole purpose of the provisions originally found in that title was to limit and restrict the power of the owners of real property in that regard. This intent is manifest. And, similarly, title V was an express limitation upon the power of the owners of real property. The language, "Powers . . . . are those only which are specified," is not a vesting of authority to do that which before could not be done; it is an express restriction. I understand this to be admitted, as indeed it must be.
The two titles were parts of one statute which recognized the right to create uses and trusts and powers, and limited such rights or authority to certain specified purposes. Two years afterwards, the legislature repealed title V. So far as affects this matter, the language of the repealing clause is only: "Title V is repealed." Two sections were retained, however, by being transferred to the title in regard to trusts. Section 900 was re-enacted as section 860, without the change of a word, and section 895 was re-enacted as section 858. Section 860 provides for the event of the death of one of several donees of a power. Section 858 provides for a power of sale in a mortgagee. This is the only instance in the code, as it now exists, where any power is expressly authorized. The reason for this authorization is not far to seek. Supposing the right to create powers to be in all other respects unlimited, the right to create such a power, but for this section, would be forbidden by the policy in this state in regard to mortgages, *Page 558 which is, that the mortgagee shall have, whatever the form of his contract may be, the right of redemption. This section declares an exception to that rule, and hence its necessity. Other sections recognize the existence of powers, but cannot be considered as authorizing them. Section 860 I have referred to. By section 781, a power of appointment does not prevent a future estate limited to take effect in case such power is not executed. This does not authorize any power, but regulates the effect. It does not state the purpose of the supposed power, except that it must refer to a power to convey land.
Section 1229 refers to a case where power to modify or revoke an instrument affecting real property is reserved to the grantor, or given to another. The section assumes the right to create such power, and states its effect in certain cases.
Section 1330 refers to a power to devise. It assumes the existence of the power, and states one case in which the power shall be deemed executed. Not a word in the section can be construed as authorizing such a power. These provisions existed when title V was in the code, and should have gone with it, if the repeal of that section was to be deemed the abolition of powers. If, on the other hand, the repeal merely did away with a restriction upon the right to create powers, they are still properly in the code, and have their proper use.
It seems to be argued that the title on powers was in reality an exception to the prohibition of uses and trusts contained in title IV, and that powers are trusts. For many reasons this cannot be so. Section 846 forbids this construction. All trusts which could be created were specified in that title. Powers were not there specified, but were in the same statute regulated, and limited in another title. I suppose all will admit that title IV has reference only to real property held in trust for certain purposes. And it will not be contended that a power is real property, or that in an instrument creating the power any interest is conveyed to the donee of the power. The donee of a power has no estate or interest in land, legal or equitable. And in this state there need be no equitable estate in any one, either in the creation or the execution of a power. An example of this is the case of an executor. He may be the donee of a power to sell land, and may execute it, but no equitable estate need be created in any one. (Morffew v. San Francisco etc. R.R. Co.,107 Cal. 587.) *Page 559
Section 857, it must be confessed, did not, when it was first passed, prohibit powers, for the use of powers was regulated in the same statute. How can a new meaning be put into it, then, by a statute which does not refer to it or the title in which it is found, and only says of title V, "It is repealed." Legislative policy can only be deduced from some language used by the legislature. The whole argument consists in denunciations of uses and trusts, and powers, as though powers were part of the same thing, and in contending that the legislature would not strictly limit trusts and leave powers at large. It did once restrict the use of powers, and then repealed the statute, in the face of section 4468 of the Political Code. In so doing it declared that the common law of England would furnish the rule upon the subject.
Certain expressions of law writers are cited, in which powers are declared to be trusts. Of course, powers, when given to be executed in the interest of another, are trusts. The power of an ordinary agent is a trust, and he holds it in trust for another. A public office has been said to be a public trust. A power in trust is a trust in the same precise sense, and in no other. Will any one contend that these are the sort of trusts dealt with in title IV?
But, it is contended, powers cannot exist in this state, for we have no statute of uses, and a power was but the right to appoint a use, which, under the statute, drew to it the legal title. I presume it was never contended before that powers did not exist at common law, and most likely the learned counsel for respondent do not wish to be understood as contending for that proposition. If they did not exist at common law, when were they authorized? Certainly not by the statute of uses. That statute recognized that they were in common use as to equitable estates, and its purpose was to crush out both trusts and powers. If the right to create a power did not exist, one could not have been made to dispose of equitable estates. Why were they efficacious as to equitable estates, and of no avail as to legal estates? and how did the statute enable the land-owner to dispose of freehold estates through the medium of a power? No doubt, powers, as known to the profession, are those which depended for their efficacy upon the statute of uses; and the reason why, in England, powers depended for their efficacy upon the statute of uses was because of the restrictions upon conveyancing which existed at common law. This is most conclusively *Page 560 and elaborately shown by Sugden in the introduction to his work on powers. It was not only, nor principally, because a freehold estate could be created only by livery of seisin, or by some other solemn and public transfer, but because freehold estates could not be created to commence in futuro; nor could a power be reserved to the grantor or given to any other person to limit the estate or create any charge upon it in derogation of the estates created by the original feoffment. The author proceeds to show some devices resorted to at common law, and how, by changing the beneficiary interest into mere equities, almost perfect freedom of alienation was attained, and then how, by the statute of uses, almost a like freedom of alienation resulted as to freehold estates; and, finally, he sums up the effect of the statute upon conveyancing, in the following words, which are not altogether in accord with the vehement denunciation of trusts and powers by the learned counsel for respondents: "The statute is generally considered as having had only the effect of enabling the conveyancer to shift the legal estate from one to another by mere words, in a way which ill accorded with the common law, but is excellently adapted to the increased opulence of the country. It, however, also gave legal effect to modifications of property, which were repugnant to the common law, but are admirably suited to the varying wants and wishes of mankind. It has, moreover, had the beneficial operation of introducing an unrivaled code of equitable jurisprudence, which every admirer of the law of real property must wish forever to remain sacred, and unconfounded with the strict rules of law. In comparing what the statute was intended to perform, with what it actually has performed, one can hardly doubt that almost any other legislative measure which opposed the confirmed habits of the people in disposing of their property would have led to the same results. This should operate as a lesson to the legislature not vainly to oppose the current of general opinion, for, although diverted for a time, it will ultimately regain its old channel, in spite of accumulated acts of Parliament, which become a dead letter, and have a strong tendency to bring the most wholesome laws into disrepute."
I repeat, therefore, that powers were not created by the statute of uses; but, as they existed in England, they depended for their efficacy upon the statute, because, and only because, by means of that statute they were relieved from *Page 561 the restrictions upon alienation which existed at common law, and of course where these restrictions do not exist no statute is needed to give efficacy to powers.
It is not a matter of interest to inquire whether everything could be done here under a power which could have been accomplished in England after the statute of uses. Doubtless, the use of powers is subject to the restrictions which exist in this state upon conveyancing, and in this case to all limitations upon testamentary disposition of property. The direction in this will is to convey to ascertained persons, upon the expiration of a lawful trust, definite and fixed interests in the estate which had been the subject of the trust. The estates to be conveyed were present estates in fee-simple. No reason occurs to me why such a power should be held invalid.
I do not deem it necessary to discuss at length the assumed implication from the authority given the executors in paragraph 17 to sell property. That cannot affect my argument that the testator intended to confer upon his executors a power in trust. If the estate in fee did pass to the executors to enable them to sell, surely the power ended upon the death of the surviving child, and then the estate of the trustees would necessarily end. There is nothing inconsistent in regarding them as trustees for the purposes of the lawful trust, and donees of a power to convey the property when the trust estate ends.
I have only to add that I still concur with Mr. Justice Harrison in the view that the will may also be maintained as a direct devise, if powers do not exist in this state.