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Sorley v. Wilson, supra, resulting from not distingishing between the suspension of the power of alienation (the only thing forbidden by the statute) and the mere suspension or postponement of alienation. This has often been pointed out and nowhere more emphatically than in Robert v. Cor. ning: 89 N. Y. 225, which the Court in Underwood v. Curtis unsuccessfully attempts to reconcile with its own opinion. At page 239 the Court says: “ But there can be no lawful perpetuity unless the power of sale is suspended, and the mere fact that it might be the duty of the executors, in the exercise of their discretion, to postpone the sale to await a more favorable market, does not, we think, constitute such a restraint as suspends the power of alienation within the statute."
Stoiber v. Stoiber, 40 App. Div., 156. Here was a trust to receive and apply the rents and profits during the lives of A and B, and, after the death of both, during the life of C, remainder to C's surviving children, but the trustees were empowered at any time, with the consent of the cestuis que trustent, to sell the trust property, in which case the testator apparently, according to the will and codicil as interpreted by the Court, ' gave the proceeds to C's sur. viving children absolutely. Held, (1) that the trust did not involve a suspension of the power of alienation, and there. fore did not offend against the statute. (2), semble, that the remainder limited in favor of C's children (including those not in being) was a contingent future interest, which might not vest until after the expiration of three lives, and therefore void under other statutory requirements. The only other statutory requirement cited is section 20 above con. sidered, but this, as we have seen, applies only to a contingent remainder limited after a term of years. Such was not the character of the remainder in this case, and we submit that although the remainder might not vest within the statutory period and might in itself restrain alienation beyond that period, yet, if taking all the provisions of the will together, there was no suspension of the power of alienation, the rule was not violated. If the destructibility of a trust, which involves a restraint upon alienation while it lasts, prevents a violation of the rule, the possibility of determining a contingent interest, which may occasion a sus. pension of the power of alienation while it lasts, should also prevent a violation of the rule.
It is not entirely clear how the Court interpreted the will and codicil. If the codicil is to be interpreted as providing for a trust to continue during three lives at all events, without power in the trustees to terminate it
sooner, there can be no question that the rule was violated. But if such · was the interpretation, the provisions of the will and codicil were bad, because the trust involved a restraint upon alienation beyond the statutory period.
The conclusions of the writer may be summarized as follows:
I. There is only one rule against perpetuities.
II. According to that rule the sole test is the suspension of the power of alienation.
III. Trusts which do not involve a suspension of the power of alienation, and those which, although involving such suspension so long as they continue, may be termi. nated at any time, either by the trustee or by the cestui que trust, or by both acting concurrently, do not violate the rule.
IV. Future contingent interests, although they may not vest within the statutory period, do not offend against the rule, if they do not occasion a suspension of the power of alienation.
V. The only future contingent interests which occasion such suspension are those which are limited in favor of persons not in being and corporations not created, because all other contingent interests are alienable.
VI. Future contingent interests which do occasion such suspension are not bad, if there is a power vested in some person or persons by whom the contingent interests may be determined and an absolute title conveyed.
GEORGE F. CANFIELD.
CORPORATE TRUSTS. “ CORPORATE trusts" to-day constitute one of the
most interesting subjects of study for both bench and bar. The statute books are filled with legislation concerning them. The volumes of reports are filled with cases arising out of that legislation. Courts and counsel are busily at work in the attempt to solve the questions presented by what are termed “corporate trusts.”
But what are they?
Many attempts have been made to give a definition of the term “ corporate trust." It may seem almost a matter of presumption, to make another such attempt. Nevertheless the writer will lay himself open to the charge of rashness and over-confidence, by venturing on another of those attempts.
In its last analysis, it is submitted, that the term “corporate trust” involves no new fact, and no new legal idea. The “corporate trust” will be found, on careful consideration, to have no new feature, other than that of increased magnitude. It is nothing more than an aggregation of capital in the hands of a corporation, for ordinary business pur. poses, in order to compete with its competitors, to make money, by producing, buying and selling at the lowest price. Single individuals have for many centuries been business competitors. Business corporations, now for nearly a century, have been business competitors. Individuals and corporations, both alike, have used precisely the same methods, fair and unfair, honest and dishonest, lawful and unlawful. Both of them have for a long time, in the heat of competition, made numerous efforts to destroy their competitors. Long ago the common law made its decisions, as to what ones of such efforts should be deemed lawful, and what unlawful. The distinction between acts that were lawful and acts that were unlawful, from an early period, practically settled down to an application of the old maxim “sic utere tuo ut alienum non lædas." In other words, every man, and every corporation, had the full right, from either the civil or criminal standpoint, to make any use whatever of his own property, provided he was guilty of no interference with the corresponding right of other men to make the same use of their property.
Until recently, the courts found no great difficulty in solving all questions as to competition, and as to combinations, whether by laborers or capitalists, in restraint of trade or for other purposes. The law was well established, beyond reasonable controversy, that combinations, between any number of individuals, or between any number of corporations, were lawful, or rather, they were not unlaw. ful, so long as they resulted in no overt act, which constituted a violation of some legal right, of some party other than the parties combining. No matter what might be the ultimate intent of a combination, mere intent had never been held to be a violation of law. Intent, when it resulted in an act, did often determine the legal quality of that act. But intent alone, without action, was not held to constitute a violation of law, civil or criminal. It was necessary, that there should be, in addition, an actual injury, an actual interference with some legal right of another. This was the well-established law; so well established, that it is unneces. sary to cite authorities to the proposition.
But legislatures and courts, in these latter days, bave thrown this principle and rule of law to the winds. They have done so in view of the danger, which, in their belief, has arisen from the large modern masses of capital, which in these last years have come under single separate corporate control.
The figures are, indeed, fitted to cause wonder. The capitalizations of some of our modern industrial corporations are beyond all comparison with anything in the business world of former periods. It is evident, too, that large combinations of capital, for the purpose of controlling manufacture and markets, are to-day more numerous than they have ever been before.
But is there really any essentially new feature in the situation which arises from these large modern combinations? Have they really made any essential change in in. dustrial methods, or industrial conditions? Have they really brought into our modern business world any new
dangers ? To go one step further, if there are any new dangers, what is the wisest policy by which we are to meet those dangers ?
The answers to these questions will involve some consideration of economic conditions.
Dread of the control of markets, by the use of large amounts of capital, is no new thing. The possibility of being compelled to pay exorbitant prices for articles of daily use, especially for food products, is one which has existed for centuries. The fear has always been that the prices of many articles of merchandise, and especially of food products, would rise to such a point as to cause want, and possibly starvation, among large portions of the population.
But no serious rise in prices has ever come from that cause. History shows that, notwithstanding the fact that producers and speculators have made innumerable attempts to raise the prices of all kinds of merchandise, every rise in prices which has ever been accomplished by those men has been very limited, in both locality and time. It has never done any seri. ous injury. The reason is, that success in any such venture is made a practical impossibility by the unvarying laws of commerce. Such ventures invariably defeat their own purpose. The first attempt to raise prices results in a curtailment of purchases. Purchasers wait for prices to go down. They use other things. They go without. If speculators put up the price of wheat, people eat potatoes, or corn, or rice, or any one of the numberless other food products. If speculators put up the price of wool, people use cotton, or wait till wool goes down again. Meantime the interest account is always running, and that fact soon brings the speculators to their bearings. The “cornering,” as it is termed, of any product involves the purchase of practically the entire marketable supply of that product. That involves, especially to-day, the use of large amounts of money. Almost invariably it compels large borrowings. In either way it involves the loss of large amounts in the way of interest. The object of these ventures is, of course, the profit to be made on sales. But sales cannot be made, except at prices which purchasers are willing to pay. It takes two to make a bargain. So that it has invariably