Kittell v. Osborn

In the construction of the deed or assignment oi Mr. Owen, we are bound to give effect to the intention of the parties to it (1 R. S. 748, § 2); and if that be attended to, there will be little difficulty in determining the case. The deed created an express trust for the sale of the grantor’s property and the collection of the debts due to him, and provided that the net proceeds of such sales and collections should constitute a fund out of which his just debts should be first paid, and that the residue, if any, should be invested for his use during his life, or in case of his death before the completion of said trust, that is, before the payment of such debts, such residue should be paid over and distributed to his heirs at law as provided by statute in cases of persons dying intestate. The trust is one which is governed by the provisions of *48the .Revised Statutes relative to express trusts (1 R. S. 728, § 55). From the language employed, it is quite apparent that no trust was raised for the benefit of the grantor’s heirs, and that they could be entitled to any portion of the trust estate only in the event of the grantor’s dying before the object of the trust, namely, the payment of his debts, had been accomplished, and of a surplus remaining after such payment. Nor was there even an attempt to create a trust in such surplus for the benefit of the grantor. The clause in the deed, on that subject, amounts to a new direction, which could be fulfilled only by an investment which would give the grantor both the legal and beneficial interest. A mere passive trust to hold property for another’s use cannot exist under our law. It must be created for one of the active objects enumerated in the 52d section of the statute before cited; and every estate or interest not embraced in the trust, and not otherwise disposed of, reverts to the grantor as a legal estate. Id. 729, § 62. The sole purpose of the trust being the payment of the grantor’s debts when they were paid the trust ceased. Id. 730, § 67. What remained of the trust property at once vested in the grantor. All the duty remaining to be performed by the trustees was to pay over the surplus to him, or to invest it conformably to his directions. Either of these acts would operate as an effectual discharge to them.

The referee has found that all the debts were paid, and that afterward the sole acting trustee had a settlement in full with the grantor, of all matters pertaining to the trust, and that the grantor entered into full possession of all the trust property undisposed of. These findings are sustained by the evidence, and required the referee to render, the judgment appealed from.

It is therefore affirmed.

Judgment affirmed.