HARVARD

LAW REVIEW.

VOL. XXV.

NOVEMBER, 1911.

No. 1.

POWERS IN TRUST AND GIFTS IMPLIED IN DEFAULT OF APPOINTMENT.

POWERS in trust or in the nature of trust are often spoken of

in the books.

In a sense, all special or limited powers are fiduciary. They cannot be exercised for the benefit of the donee of the power or of any other person not an object of the power. But this is not what is meant by a "power in trust." A power in trust or in the nature of trust is a power which imposes upon the donee a duty to exercise it, enforceable in equity.

Though "power in trust" is a common, it is not, I venture to think, an exact expression. Two separate things are confounded under it.

A power is an authority to deal with property apart from ownership. It is generally an authority to deal with property owned by some person other than the donee of the power; but a man may be given a power to deal with property which he himself owns. Such a power is called a power appendant.

A power appendant is always destructible by the donee. A man cannot be deprived of the right to deal as owner with property which he owns by giving him a power; and by conveying the property as owner, he is estopped to exercise the power.

When property is given to a man with the provision that he shall have a power to appoint it in a certain way, if this provision creates a trust, the trust is imposed upon him as owner of an estate or interest, and not upon him as donee of a power. If it were im

posed upon him as donee of the power, since the power is appendant, and all powers appendant are destructible, the trust attached to it would be destructible also.

The man holds his estate or interest subject directly to the trust, and equity does not allow him to deal with his estate or interest in a manner inconsistent with the trust; and this is the result whatever words are used to create the trust; whether the word "power" is used or not. In a case of this kind there may be said to be a power in trust or in the nature of a trust; but the better expression would be that there is a trust in the form of a power.

It makes no difference whether the estate or interest which the man holds is legal or equitable.

The question which arises in this class of cases is whether a provision is simply advice, or whether a trust is created, -the question of precatory trust. This question does not concern us here; if a trust is created, it attaches itself directly to the estate or interest, though it be put in the form of a power.

But there is another class of cases.

A power may be given to a man, the exercise of which does not derogate from his own estate or interest,-that is, which is not a power appendant, but which derogates from the estate or interest of some other person or persons. The donee may have an estate or interest in the property, as when property is given to A. for life, with a power to him to appoint the remainder; this is called a power in gross or collateral. Or the donee may have no estate or interest in the property, as when property is given to A. for life, with a power to B. to appoint the remainder; this is called a power simply collateral.

Is such a power ever a power in trust?

A system of law is conceivable in which equity would compel a donee to exercise such a power or would exercise it for him. In such a system a power of this kind might be properly called a power in trust.

But such is not the system of our law.

When our law thinks that the objects of a power ought to have an estate or interest in the property, although no appointment has been made, it does not compel the donee to exercise the power, nor does it exercise it for him, but it declares that there is an implied gift to the objects of the power in default of appointment.