In some of the States, corporations are specially empowered by statute to take a certain amount of property by devise.[220] In New York, there is a statute, passed in 1860, which prohibits a person having a husband, wife, child, or parent, from devising or bequeathing to any charitable or literary corporation more than half of his or her estate, after payment of debts.
The most frequent and dangerous propensity which law has to check and guard against in testators is that of perpetuating in their family for generations vast property and estates. The desire of founding a family of vast wealth and influence to preserve one’s property is not an uncommon one; it appeals to some of the dearest and most personal feelings of a man’s nature; it is peculiarly gratifying to pride and pomp, and, if not limited and checked, would be dangerous to the public welfare, as it withdraws from the channels of trade and enterprise a large extent of property. Hence, every civilized country finds it necessary to define the extent of a man’s control over his property, how long his volition can regulate its use after death, and to what purposes it shall be put. The common law permitted a control in this respect which would be entirely incompatible with our republican institutions and equality of our citizens.
Under that law, a man had the power to tie up his property and suspend the power of alienation, as it was termed, for any number of lives in being, and twenty-one years and a fraction afterwards. He could order the accumulation of the rents, income, or profits for a similar period. The case which first drew attention to the danger of such a power was one of the most famous in English law, and one that has since been a warning and an incentive to legislation both here and in England. Perhaps, for the amount involved, the tediousness and length of the litigation, and the singularity of the provisions, there has never been a more famous case than that of Thellusson v. Woodford,[221] tried before Lord Chancellor Loughborough, in the year 1798. The case afforded a remarkable instance of the unnatural meanness and ostentation of the testator, in depriving his immediate descendants of their just share of his fortune, not to found any noble charity, but that his fortune might accumulate in the hands of trustees, for the miserable satisfaction of enjoying in anticipation the wealth and aggrandizement of a distant posterity who should bear his name.
Peter Thellusson was born at Paris, of Swiss parentage, his father being a minister from Geneva to the French court. He settled in London as a merchant at an early age, was naturalized, and, on the foundation of a fortune of £10,000, raised the princely possessions which afterwards became the subject of litigation. It is said that he was generally respected, and, though a severe economist, lived in a style suitable to his wealth. His three sons were all members of Parliament. In the sixty-first year of his age, being at the time in perfect health and legal sanity, he made and executed his last will, bearing date April 2d, 1796, and thereby disposed of his property upon trust during the natural lives of his three sons, and of the sons of each of these then in being, and of any such issue as any of his grandsons might have as should be living at the time of his decease. During the lives of the survivors or survivor of these persons mentioned, the trustees were to collect and receive the rents and invest them, and, upon the decease of the last survivor, all the accumulated estates should be divided into three lots, of equal value, and settled upon the eldest male lineal descendant then living of each of his three sons; and, if there should be a failure of male descendants of two of his said three sons, the sole male lineal descendant of the testator should become entitled to the whole three lots, consolidated into one huge mass of landed property. The property was thus tied up in the hands of trustees, and kept from enjoyment for three generations. Shortly after executing this extraordinary will, on 21st July, 1797, Mr. Thelusson died. The money which the will sought to accumulate was estimated at £600,000. An accountant of that time calculated the accumulation—limiting it to seventy-five years, the shortest possible period during which the property would be tied up—at £27,182,000, an immense sum, but which he deemed would be considerably less than the sum it would be likely to reach when the improvement of money at a higher rate and the lengthened duration of the last survivor were taken into account. It was estimated, by one of the counsel in the case, that if there were three descendants to take, each would have an income of £650,000 a year; if only one, he would have an income of £1,900,000 a year, more than double the revenue of the king’s civil list, and surpassing the largest territorial fortune then known in Europe. Chancellor Kent, regarding it from his time, has said that if the limitation should extend to upwards of one hundred years, as it might, the property will amount to upwards of one hundred millions sterling.
The children brought an action to have the will set aside, but the court decided against them, and gave judgment confirming the trusts. The case attracted wide and deep attention from the magnitude of the fortune sought to be reared, and from the important principle of public policy involved. It was argued on both sides by the most eminent counsel at the bar, but nevertheless the Chancellor was compelled to hold the will valid, much, it is said, against his inclination. Next year, he was instrumental in getting Statute 39 and 40 Geo. III passed, restraining dispositions by way of accumulation to the life of the grantor, or twenty-one years after his decease, or the minority of any party living at the time of his decease.[222]
The property was accordingly left to accumulate; but the ambitious and vain visions of the testator and the alarm of the public were destined to disappointment. The structure which threatened even to overshadow the land in its ascending greatness has not risen to a disproportionate size. The operation of the trusts has proved practically a failure, as the accumulated mass of wealth is likely to fall far short of the amount which fanciful calculators had predicted. It has shared the inevitable fate of all such vast estates that get into the grist-mill of the lawyers. The litigation has been so expensive, that what with fees of lawyers, fees of courts, commissions to trustees, and the expense of management, the corpus of the estate has been pretty well eaten up. The expenses of management from January, 1816, to 1833, exceeded £122,700. The only increase in respect of income was £8,356, and an accumulation of capital of £326,364.
The extent of time to which property is allowed to accumulate is very carefully and strictly defined in our statutes. It is generally only during a person’s minority, as in New York and California, and the same is believed to be the rule in general.[223]
The power of suspending the alienation of property by a devise is limited to lives in being in some States, or in others to two lives in being,[224] and no matter how short may be the duration, the suspension will be invalid if it is not made to depend on life as the condition of the limitation.[225] On this account, some very worthy and benevolent schemes of testators have failed.
The two lives must be designated. This may be done either by naming two persons in particular, or else by describing a class of persons, and bounding the suspense of alienation by the lives of the two first who shall die out of the class. The limitation may be restricted for a shorter period than two lives—it may be for a single life. The estate may also be limited so as to depend on some event besides life, provided it must vest within two lives; as an estate to A for ten years, if B and C, or either of them, shall so long live; here, the estate may determine either by the lapse of the ten years, or by the death of B and C; but it can in no event exceed two designated lives. So, an estate during minority, widowhood, or other stage of existence, through which two individuals may pass, would be good, because it could not by any possibility extend beyond two designated lives.[226]
These technical rules have rendered many a noble scheme abortive, and frustrated the benevolent and reformatory intentions of many a testator.