American Jurisprudence

Volume 41

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American Jurisprudence

Volume 41

Powers, §§ 1–103

A Comprehensive Text Statement of American Case Law

as Developed in the Cases and Annotations

in the Annotated Reports System

By the Editorial Staff of the Publishers

Bancroft-Whitney Company · San Francisco, California

The Lawyers Co-operative Publishing Company

Rochester · New York

Jurisprudence Publishers, Inc. — 1st Edition (1936–1952 series)

Note on This Transcription

This is a verbatim transcription of American Jurisprudence, Volume 41 (1st edition), “Powers,” §§ 1–103 (pp. 802–881), produced from photographs of the original printed pages using Anthropic Claude optical-character recognition. Every effort has been made to reproduce the text exactly as printed, including all footnote citations and this printing's no-period citation abbreviation style (“NE”, “ALR”, “S Ct”). Characters that were genuinely illegible in the source images are marked [?].

This excerpt begins mid-volume; no copyright page was available in the source photographs. American Jurisprudence's 1st edition was published 1936–1952 across 66 volumes; this volume's exact printing year is unconfirmed. The original work is in the public domain in the United States. This transcription edition is presented for educational and research purposes.

Transcription completed August 2026.

1.Table of Contents

2.Post Office

§ ¹⁵¹ POST OFFICE ⁴¹ Am Jur

A requested instruction, in a prosecution for using the mails to defraud, that a person has the legal right to act on the advice of an attorney if he relies upon such advice in good faith, is properly refused, since such an instruction has the effect of setting up the advice of counsel not merely as a matter to be considered by the jury in determining the defendant's guilt, but as a legal bar to conviction.⁸

In a prosecution charging use of the mails to defraud, there has been held to be no prejudicial error in charging the jury as to the importance of the Mail Fraud Act, and stating that "it is the duty of all public officials charged with its enforcement, among whom are you jurors, to proceed with such enforcement fearlessly and diligently, without prejudice or favoritism or sympathy," where they were also told repeatedly that they must not find the defendants guilty unless convinced of their guilt beyond a reasonable doubt.⁹

cused mailed the letters in question or received letters in reply from the mails, an instruction that the gravamen of the case is the obtaining of the property fraudulently, given in response to an exception by the accused's counsel, is not erroneous on the ground that the gravamen of the charge is not the fraudulent obtaining of the property, but the design of a scheme or artifice to defraud. Ibid.

An instruction, in a criminal prosecution under an indictment charging a scheme to defraud through the sale of stock and specifically with the use of the mails in furtherance thereof, that the jury might take into consideration the payment of dividends as showing fraud, is not erroneous, where the instruction makes it clear that the payment of dividends would not constitute fraud unless made for the purpose of misrepresenting the financial soundness of the corporation, and no undue emphasis is placed by the instruction upon the payment of the dividends. Picker v. United States (CCA 10th) ¹¹⁰ F(2d) ⁸¹⁷, ¹²⁹ ALR ⁵⁶³, writ of certiorari denied in ³¹⁰ US ⁶⁴⁸, ⁸⁴ L ed 1414, ⁶⁰ S Ct 1100.

8 Shushan v. United States (CCA 5th) ¹¹⁷ F(2d) ¹¹⁰, ¹³³ ALR 1040, writ of certiorari denied in ³¹³ US ⁵⁷⁴, ⁸⁵ L ed 1531, ⁶¹ S Ct 1085, 1086.

9 Anno: ¹²⁴ ALR 1137.

Generally as to the propriety of instructions as to the importance of the enforcement of the law, or the duty of the jury in that regard, see TRIAL.

POSTPONEMENT

See CONTINUANCE, Vol. ¹², p. ⁴⁴⁷.

POUNDS

See ANIMALS, Vol. ², p. ⁷⁹², §§ ¹³³, ¹⁴³.

POWER COMPANIES

See ELECTRICITY, Vol. ¹⁸, p. ⁴⁰³; PUBLIC UTILITIES AND SERVICES; STEAM HEAT AND POWER COMPANIES.

POWER LINES

See ELECTRICITY, Vol. ¹⁸, p. ⁴⁰³.

POWER OF ATTORNEY

See AGENCY, Vol. ², p. ²⁹, §§ ²⁶ et seq.

POWER OF SALE

See EXECUTORS AND ADMINISTRATORS, Vol. ²¹, p. ⁷⁶⁷, §§ ⁶⁸⁶ et seq.; LIFE ESTATES, REMAINDERS, AND REVERSIONS, Vol. ³³, p. ⁴⁴⁵; MORTGAGES, Vol. ³⁷, p. ¹⁰⁶, §§ ⁶⁴⁷ et seq.; POWERS, infra, p. ⁸⁰³.

POWERS

I. INTRODUCTORY (§§ 1-5).

II. CREATION (§§ 6-13).

III. RIGHTS OF CREDITORS (§§ 14-22).

IV. EXERCISE (§§ 23-93).

A. IN GENERAL.

B. PERSON EXERCISING.

C. INSTRUMENT.

D. NECESSITY OF REFERENCE TO POWER; OTHER MANIFESTATIONS OF INTENT TO EXERCISE POWER.

E. PERSONS APPOINTED.

F. ESTATE APPOINTED.

G. EXCLUSIVE, ILLUSORY, OR FRAUDULENT APPOINTMENT.

H. EFFECT OF EXERCISE.

I. EFFECT OF PARTIAL INVALIDITY.

J. EFFECT OF NONEXERCISE OR DEFECTIVE EXERCISE; TAKERS IN DEFAULT OF APPOINTMENT.

V. AGREEMENTS TO APPOINT (§ 94).

VI. EXTINGUISHMENT (§§ 95-101).

VII. EQUITABLE RELIEF (§§ 102, 103).

I. INTRODUCTORY.

§ 1. *Scope.*

§ 2. *Definition and General Nature; Distinctions.*

§ 3. *Discretionary and Imperative Powers; Beneficial and Trust Powers.*

§ 4. *General and Special Powers.*

§ 5. *Naked Powers; Powers Coupled with Interest.*

II. CREATION.

§ 6. *Generally.*

§ 7. *Power to Make Disposition Different from Testamentary Disposition.*

§ 8. *Creation of Power of Sale.*

§ 9. *Construction of Power of Appointment.*

§ 10. *Construction of Power of Sale.*

§ 11. *—

As Including Power to Mortgage.*

§ 12. *—

As Including Power to Exchange.*

§ 13. *Capacity of Married Persons to Give Power.*

III. RIGHTS OF CREDITORS.

§ 14. *Generally; Unexercised General Power of Appointment.*

§ 15. *Where General Power Is Exercised—

General Rule.*

§ 16. *—

Necessity of Fraud.*

§ 17. *—

Limited Powers; Manner of Exercise of Powers.*

§ 18. *—

Appointments to Volunteers and Creditors; Persons Claiming under Appointee.*

§ 19. *—

Effect of Provisions as to Creditors in Instrument Creating Power.*

§ 20. *—

Necessity of Exhausting Donee's Own Property.*

§ 21. *—

Power Possessed by Married Woman.*

For later cases and annotations, see cumulative pocket supplement inside back cover

3.Powers

POWERS ⁴¹ Am Jur

III.—continued.

§ 22. *Minority Rule as to Rights of Creditors where General Power Is

Exercised.*

IV. EXERCISE.

A. IN GENERAL.

§ 23. *Generally.*

§ 24. *Time.*

§ 25. *Power Dependent on Contingency.*

§ 26. *Consent of Third Person.*

§ 27. *Power of Sale.*

B. PERSON EXERCISING.

§ 28. *Generally.*

§ 29. *Joint Donees.*

§ 30. *—

Survivor.*

§ 31. *Delegation of Power; Exercise by Donee's Representative.*

§ 32. *Delegation of Power of Appointment; Creation of New Power

of Appointment.*

§ 33. *Married Women.*

§ 34. *Infants.*

C. INSTRUMENT.

§ 35. *Generally.*

§ 36. *Deed or Will.*

§ 37. *Requisites of Exercise by Will.*

§ 38. *What Law Governs; Probate of Will Exercising Power of Ap-

pointment.*

§ 39. *Construction of Will Exercising Power of Appointment.*

§ 40. *Exercise by Will Executed Prior to Creation of Power.*

§ 41. *—

Application of Common-law Rule to General Powers.*

§ 42. *—

Application of Common-law Rule to Special Powers.*

§ 43. *—

Effect of Statute.*

§ 44. *Effect of Reference to Power.*

D. NECESSITY OF REFERENCE TO POWER; OTHER MANIFESTATIONS OF INTENT TO

EXERCISE POWER.

§ 45. *Generally.*

§ 46. *Proof or Presumption of Intent to Exercise Power.*

§ 47. *Matters to Be Considered in Determining Intention.*

§ 48. *General Devise or Bequest.*

§ 49. *—

Effect of Statute.*

§ 50. *Residuary Clause of Donee's Will.*

§ 51. *Reference to Subject of Power as Reference to Power.*

§ 52. *—

Power Not Coupled with Interest.*

§ 53. *—

Power Coupled with Interest.*

§ 54. *Direction in Will for Payment of Debts.*

E. PERSONS APPOINTED.

§ 55. *Generally.*

§ 56. *Exercise of Power by One Spouse in Favor of the Other.*

§ 57. *Under Power of Appointment to "Children."*

§ 58. *Under Power of Appointment to "Issue," "Descendants," etc.*

§ 59. *Appointment of Nonobjects.*

F. ESTATE APPOINTED.

§ 60. *Generally.*

§ 61. *Limited Estates.*

§ 62. *—

Trust Interests.*

G. EXCLUSIVE, ILLUSORY, OR FRAUDULENT APPOINTMENT.

§ 63. *Generally.*

§ 64. *Illusory Appointment.*

§ 65. *Fraudulent Appointment.*

§ 66. *Appointment for Benefit of Nonobject Other than Donee.*

§ 67. *—

Antecedent Agreement as to Appointee's Disposition.*

§ 68. *—

Condition; Request or Suggestion of Appointor.*

41 Am Jur POWERS §¹

IV.—continued.

H. EFFECT OF EXERCISE.

§ 69. *Generally.*

§ 70. *Doctrine of Relation Back.*

§ 71. *Finality or Completeness of Appointment; Revocation.*

§ 72. *—

Subsequent Marriage or Birth as Revocation.*

§ 73. *—

Partial Appointment.*

§ 74. *—

Appointment by Mortgage.*

§ 75. *Lapse of Appointments.*

I. EFFECT OF PARTIAL INVALIDITY.

§ 76. *Generally.*

§ 77. *Attempted Appointment among Objects and Nonobjects.*

§ 78. *—

Appointment to a Class.*

§ 79. *Invalid Remainder.*

§ 80. *Invalid Conditions and Provisos; Fraud.*

§ 81. *Codicil Making Invalid Change of Part of Appointment.*

§ 82. *When an Appointment Followed by Invalid Limitations Over Is

in Fee, etc.*

§ 83. *Appointment to Object Following Invalid Precedent Estate, In-

terest, or Provision.*

J. EFFECT OF NONEXERCISE OR DEFECTIVE EXERCISE; TAKERS IN DEFAULT OF

APPOINTMENT.

§ 84. *Generally.*

§ 85. *Devolution of Subject of Power where Appointment Is Ineffec-

tive.*

§ 86. *—

Important Circumstances.*

§ 87. *—

Effect upon Rights of Donee's Creditors.*

§ 88. *—

Application of Principles to Appointment in Trust.*

§ 89. *—

Application of Principles to Appointment Not in Trust.*

§ 90. *Effect of Nonexercise; Gifts in Default of Appointment.*

§ 91. *—

Time of Ascertainment of Heirs or Next of Kin Taking in

Default of Appointment.*

§ 92. *—

Nonexercise of Special or Imperative Power.*

§ 93. *—

Time of Ascertainment of Class Taking in Default of Exercise

of Special Power.*

V. AGREEMENTS TO APPOINT.

§ 94. *Generally.*

VI. EXTINGUISHMENT.

§ 95. *Generally.*

§ 96. *Releasability of Powers of Appointment.*

§ 97. *Mode of Extinguishment; What Amounts to Release, Estoppel,

or Exhaustion of Power.*

§ 98. *Cessation of Purposes for Which Power Was Created.*

§ 99. *Death of Donee.*

§ 100. *Death of Donor.*

§ 101. *Revocation.*

VII. EQUITABLE RELIEF.

§ 102. *Generally; Aiding Defective Exercise.*

§ 103. *Compelling Exercise of Power.*

I. INTRODUCTORY

§ 1. Scope.—

This article is mainly concerned with the rules relating to powers of appointment, although it deals in part with certain general rules applicable to powers generally, including powers of sale and the power or authority of an agent.1 Although this article discusses the effect of an appointment which is partially invalid because of the rule against perpetuities,2 the applica-

¹ As to the main treatment of the rules relating to the power or authority of an agent, see 2 Am Jur 1, AGENCY.

² See infra, §§ 76, 83.

§ ² POWERS ⁴¹ Am Jur

tion of the rule against perpetuities to powers is dealt with in another article.³

Other articles also deal with the testamentary powers of executors,⁴ with powers of appointment as assets in bankruptcy,⁵ and with questions of conflict of

laws with respect to powers.⁶

§ ². Definition and General Nature; Distinctions.—A power over property is

defined as a liberty or authority reserved by, or limited to, a person to dispose

of real or personal property for his own benefit, or for the benefit of others,

and operating on an estate or interest, vested either in himself or in some other

person; the liberty or authority, however, not being derived out of such estate

or interest, but overreaching or superseding it, either wholly or partially.⁷

Such a power has also been defined as an authority enabling one person to dispose of the interest which is vested in another.⁸ It has been defined by statute

as an authority to do some act in relation to lands, or the creation of estates

therein, or of charges thereon, which the owner, granting or reserving such

power, might himself lawfully perform.⁹ Both real and personal property may

be subjected to a power of appointment.¹⁰

A power of appointment is not an absolute right of property nor is it an

estate, for it has none of the elements of an estate.¹¹ The authority given to the

donee of a power of appointment does not vest in him any estate, interest, or

title in the property which is the subject of the power.¹² A general power of

disposition existing as a power does not imply ownership; in fact, the existence

of such a power, as a technical power, excludes the idea of an absolute fee

simple in the person who possesses the power,¹³ although where the power is

for his own benefit, he has the means of acquiring such interest, right, or

title; and in all cases, by the execution of the power, the possession, right, title,

or interest is altered or divested.¹⁴ A power to convey land creates in the

donee thereof no right, title, or interest in the property to be conveyed.¹⁵ Property that passes by power of appointment belongs to the donor of the power

and not to the donee.¹⁶ Whether a power of appointment is or is not exercised,

³ Generally as to perpetuities, see PERPETUITIES AND RESTRAINTS ON ALIENATION, supra, p. 47.

⁴ As to the testamentary powers of executors to sell property, see 21 Am Jur 767, EXECUTORS AND ADMINISTRATORS, §§ 686 et seq.

⁵ See 6 Am Jur 596, BANKRUPTCY, § 148.

⁶ See 11 Am Jur, CONFLICT OF LAWS, p. 344, § 49; p. 371, § 84; p. 486, § 179.

⁷ Boyle v. John M. Smyth Co. 248 Ill App 57, citing RCL; Maryland Mut. Ben. Soc. v. Clendinen, 44 Md 429, 22 Am Rep 52; Re Vanatta, 99 NJ Eq 339, 131 A 515, citing RCL.

⁸ Burleigh v. Clough, 52 NH 267, 13 Am Rep 23, overruled on other points in Emery v. Haven, 67 NH 503, 504, 35 A 940; Re Vanatta, 99 NJ Eq 339, 131 A 515, citing RCL; Davis v. Kendall, 130 Va 175, 107 SE 751, citing RCL; Bowerman v. Bowerman, 67 Ohio App 425, 35 NE(2d) 1012, citing RCL.

⁹ Tilden v. Green, 130 NY 29, 28 NE 880,

¹⁴ LRA 33, 27 Am St Rep 487; Sweeney v. Warren, 127 NY 426, 28 NE 413, 24 Am St Rep 468.

¹⁰ Cawker v. Dreutzer, 197 Wis 98, 221 NW 401, citing RCL.

¹¹ Jones v. Clifton, 101 US 225, 25 L ed

⁹⁰⁸ (power of appointment and revocation reserved by grantor of deed); Carver v. Jackson, 4 Pet(US) 1, 7 L ed 761; Patterson v. Lawrence, 83 Ga 703, 10 SE 355, 7 LRA 143; Burleigh v. Clough, 52 NH 267,

¹³ Am Rep 23, overruled on other points in Emery v. Haven, 67 NH 503, 504, 35 A 940. As to power of revocation and appointment reserved in settlement deed by husband to wife, see 26 Am Jur 920, HUSBAND AND WIFE, § 321.

¹² United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461; Supreme Colony, U.O.P.F. v. Towne, 87 Conn 644, 89 A 264, Ann Cas 1916B 181; Rhode Island Hospital Trust Co. v. Anthony, 49 RI 339, 142 A 531, 59 ALR 1501.

¹³ Maryland Mut. Ben. Soc. v. Clendinen,

⁴⁴ Md 429, 22 Am Rep 52; Burleigh v. Clough, 52 NH 267, 13 Am Rep 23, overruled on other points in Emery v. Haven,

⁶⁷ NH 503, 504, 35 A 940.

¹⁴ Maryland Mut. Benev. Soc. v. Clendinen, 44 Md 429, 22 Am Rep 52.

¹⁵ Barnard v. Moore, 71 Colo 401, 207 P 332, citing RCL.

¹⁶ Highfield v. Delaware Trust Co. 34 Del 306, 152 A 124, citing RCL; Slayton v. Fitch Home, 293 Mass 574, 200 NE 357, 104 ALR 669; Farmers' Loan & T. Co. v. Mortimer,

²¹⁹ NY 290, 114 NE 389, Ann Cas 1918E 1159.

41 Am Jur POWERS § ³

the property that was subject to appointment is not subject to distribution as

part of the estate of the donee.¹⁷

The right to appoint the proceeds of a mutual benefit certificate has sometimes been treated as in the nature of a power of appointment.¹⁸

§ ³. Discretionary and Imperative Powers; Beneficial and Trust Powers.—It

has been said that the distinction between a power and a trust is marked and

obvious, that powers leave the act to be done at the will of the party to whom

they are given and are never imperative, but that trusts are always imperative

and are obligatory on the conscience of the person intrusted.¹⁹ Furthermore,

there is authority to the effect that the exercise of a naked power is discretionary,²⁰ but there is also authority to the effect that some powers are imperative, that imperative powers are powers in trust,¹ that powers in trust are imperative,² and that powers in trust are trusts.³

It has been stated that the donee has a beneficial interest if he may appoint

himself.⁴ In some jurisdictions a beneficial power has been defined by statute

as one that has for its object the grantee of the power and is executed solely

for his benefit.⁵ Under such a statute, when a power is conferred on an individual, and not on a trustee, and no person other than the donee of the power

has an interest in its execution, the power is beneficial,⁶ and the same is true

where the instrument creating the power is silent as to the person to be benefited by its execution.⁷ In other jurisdictions, by statutory definition, trust

powers have for their object persons other than the grantee and are solely

for the benefit of such other persons.⁸ Thus, where a power is given to one in

a representative capacity, as an executor, the presumption is that the power

was not intended as a beneficial one, but was intended as one to be executed

for the benefit of the estate.⁹

In some jurisdictions statutes provide that if an express trust is created

for any purpose not enumerated no estate vests in the trustee, but if the trust

authorizes the performance of any act lawful under a power, it shall be valid

as a power in trust.¹⁰

¹⁷ United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461.

¹⁸ Supreme Colony, U.O.P.F. v. Towne, 87 Conn 644, 89 A 264, Ann Cas 1916B 181; Maryland Mut. Benev. Soc. v. Clendinen,

⁴⁴ Md 429, 22 Am Rep 52.

¹⁹ Stanley v. Colt, 5 Wall.(US) 119, 18 L ed 502 (holding that a will did not devise to a society subject to a condition and subject to certain powers in trustees, such as to lease and pay rents to the society, but devised title to the trustees with certain directions and powers to such trustees); Clark v. Campbell, 82 NH 281, 133 A 166,

⁴⁵ ALR 1433. Inadvertently, perhaps, it has been stated that the distinction was the converse of the text statement, powers being peremptory. Mallet v. Smith, 27 SC Eq (6 Rich) 12, 60 Am Dec 107. As to the nature of trusts, see TRUSTS [Also 26 RCL p. 1160].

²⁰ Taylor v. Benham, 5 How(US) 233, 12 L ed 130. Anno: 50 LRA(NS) 637.

¹ Peter v. Beverly, 10 Pet(US) 532, 9 L ed 522; Re Fair, 132 Cal 523, 60 P 442, 64 P 1000, 84 Am St Rep 70 (power in trust to convey); Clark v. Campbell, 82 NH 281,

¹³³ A 166, 45 ALR 1433. Anno: 50 LRA(NS) 637.

² Taylor v. Benham, 5 How(US) 233, 12 L ed 130 (stating that an imperative direction to sell and dispose of the proceeds in a certain way is a power coupled with a trust).

³ Re Fair, 132 Cal 523, 60 P 442, 64 P 1000, 84 Am St Rep 70.

⁴ Haslen v. Kean, 4 NC (Term Rep 279),

⁷ Am Dec 718.

⁵ Tilden v. Green, 130 NY 29, 28 NE 880,

¹⁴ LRA 33, 27 Am St Rep 487; Sweeney v. Warren, 127 NY 426, 28 NE 413, 24 Am St Rep 468. 6, 7 Sweeney v. Warren, 127 NY 426, 28 NE 413, 24 Am St Rep 468.

⁸ Tilden v. Green, 130 NY 29, 28 NE 880,

¹⁴ LRA 33, 27 Am St Rep 487; Sweeney v. Warren, 127 NY 426, 28 NE 413, 24 Am St Rep 468 (power of sale); Russell v. Russell, 36 NY 581, 93 Am Dec 540 (power of sale).

⁹ Sweeney v. Warren, 127 NY 426, 28 NE 413, 24 Am St Rep 468; Russell v. Russell,

³⁶ NY 581, 93 Am Dec 540.

¹⁰ See TRUSTS [Also 26 RCL p. 1179, § 16].

§§ ⁴, ⁵ POWERS ⁴¹ Am Jur

§ 4. General and Special Powers.—

There is an important distinction between general and special powers. The donee of a general power of appointment may appoint anyone.11 There is some difference of opinion as to whether general powers include powers exercisable only by will so that the donee cannot appoint himself although he can appoint his estate.12 Special powers of appointment have been defined as those in which the donee of the power is restricted to passing on the property to certain specified individuals, or to a specific class of individuals.13 It has been stated that a general power is, in regard to the estates which may be created by force of it, tantamount to a limitation in fee, not merely because it enables the donee to limit a fee, but because it enables him to give the fee to whom he pleases. He has an absolute disposing power over the estate, and may bring it into the market whenever his necessities or wishes may lead him to do so.14 There is also some authority to the effect that a general power of appointment is one which is general with respect to the persons or uses to which the property may be appointed.15

The mode of execution of a power of appointment does not affect its classification as regards its character as a general or a special power.¹⁶

§ 5. Naked Powers; Powers Coupled with Interest.17—

A power simply collateral and without interest, or a naked power, exists when, to a mere stranger, authority is given to dispose of property in which he has no estate. A collateral power may be a power of appointment or of sale. But when power is given to a person who derives, under the instrument creating the power, or otherwise, a present or future interest in the land, it is then a power relating to the land. These last powers are subdivided into powers annexed to the estate, or powers appendant or appurtenant, and powers in gross. Both are considered as powers with an interest, because the trustee of the power has an interest in the estate, as well as in the exercise of the power. If, as one of the old cases expresses it, the person clothed with the power has at the same time an estate in the land, the power is not collateral, because it savors of the land.18 A power appendant exists where a person has an estate in the land, and the estate to be created by the power is to take or may take effect in pos-

¹¹ Grace v. Perry, 197 Mo 550, 95 SW 875, 7 Ann Cas 948; Lyon v. Alexander, 304 Pa 288, 156 A 84, 76 ALR 1427; Thompson v. Garwood, 3 Whart (Pa) 287, 31 Am Dec 502; Lancaster v. Dolan, 1 Rawle (Pa) 231, 18 Am Dec 625.

¹² As to this question and as to further related questions concerning what persons can be appointed under general powers, see infra, §§ 55 et seq.

¹³ Fidelity-Philadelphia Trust Co. v. McCaughn (CCA 3d) 34 F(2d) 600 (writ of certiorari denied in 280 US 602, 74 L ed 647, 50 S Ct 85), citing RCL; Lyon v. Alexander, 304 Pa 288, 156 A 84, 76 ALR 1427; Thompson v. Garwood, 3 Whart(Pa) 287, 31 Am Dec 502. In Haslen v. Kean, 4 NC (Term Rep 279), 7 Am Dec 718, the donee was restricted to any person qualified to take, hold, and transfer land in a certain state. In University System v. Trust Co. of Georgia, 186 Ga 498, 198 SE 345, 121 ALR 125, it was stated that the word "specially" in the phrase "specially empowered" (which was used in the instrument before the court) had apparently been employed in the sense of "expressly."

¹⁴ Grace v. Perry, 197 Mo 550, 95 SW 875, 7 Ann Cas 948; Lancaster v. Dolan, 1 Rawle (Pa) 231, 18 Am Dec 625; Thompson v. Garwood, 3 Whart.(Pa) 287, 31 Am Dec 502. As to estates which may be appointed, see infra, §§ 60-63. As to time for exercise of power, see infra, § 24.

¹⁵ See infra, § 55.

¹⁶ St. Matthews Bank v. De Charette, 259 Ky 802, 83 SW(2d) 471, 99 ALR 1146.

¹⁷ As to discretionary nature of naked powers, see supra, § 3. As to the termination of a power by revocation or by death of the donor or of the donee, see infra, §§ 99-101.

¹⁸ Mansfield v. Mansfield, 6 Conn 559, 16 Am Dec 76; Bergen v. Bennett, 1 Caines (NY) 1, 2 Am Dec 281; Haslen v. Kean, 4 NC (Term Rep 279), 7 Am Dec 718; Re McKallip, 324 Pa 438, 188 A 343, 108 ALR 1095. Re D'Angibau, LR 15 Ch Div 228, 2 Eng Rul Cas 281, 21 Eng Rul Cas 349, 24 Eng Rul Cas 164. The donee of a power of appointment need not have any estate in the property subject to the power. Riley v. Gordon, 137 Cal App 311, 30 P(2d) 617, citing RCL.

41 Am Jur POWERS § ⁵

session, during the continuance of the estate to which the power is annexed, as a power to a tenant for life in possession to make leases. A power in gross exists where the person to whom it is given has an estate in the land, but the estate to be created under or by virtue of the power is not to take effect in possession until after the determination of the estate to which it relates.¹⁹ By a power coupled with an interest is meant a power coupled with an interest in the thing itself, that is to say, the power must be engrafted on the estate in the thing, and not on the product of the exercise of the power.²⁰ The distinction between naked powers and powers coupled with an interest is well illustrated in the case of a power of sale vested in executors. If the testator merely directs his executors to sell lands, the lands descend to the heirs and the power is a naked one, but if he devises the lands to his executors to make a sale, this is a power coupled with an interest.¹ Where, however, in connection with a direction to executors to sell, the title descending to the heirs, the executors are given the right to possession and are entitled to hold the proceeds of a sale, the power has been deemed one coupled with an interest,² and the same is true of a power of sale given executors coupled with the active and continuing duty of managing the property and making disposition thereof.³

Where the legal title vests in the donee or grantee of the power, it is usually held that the power is coupled with an interest.⁴ Thus, a trust deed conveying title to trustees who are given a power of sale creates a power coupled with an interest.⁵ But a mere power of attorney authorizing one to sue for and collect moneys for another is not a power coupled with an interest, although the donee is authorized to deduct his charges from any money collected.⁶ Nor is a contract giving authority to sell property on commission for a share of the proceeds a power coupled with an interest.⁷

A power given as security has been regarded as a power coupled with an interest.⁸

By reason of the fact that so far as survivability is concerned the same rule ordinarily applies to a trust power and to a power coupled with an interest,

¹⁹ Wilson v. Troup, 2 Cow (NY) 195, 14 Am Dec 458. Re D'Angibau, LR 15 Ch Div 228, 2 Eng Rul Cas 281, 21 Eng Rul Cas 349, 24 Eng Rul Cas 164.

²⁰ Wilson v. Snow, 228 US 217, 57 L ed 807, 33 S Ct 487, 50 LRA(NS) 604; Crowe v. Trickey, 204 US 228, 51 L ed 454, 27 S Ct 275; Taylor v. Burns, 203 US 120, 51 L ed 116, 27 S Ct 40; Hunt v. Rousmanier, 8 Wheat.(US) 174, 5 L ed 589; Rowe v. Beckett, 30 Ind 154, 95 Am Dec 676; Carter v. Slocomb, 122 NC 475, 29 SE 720, 65 Am St Rep 714. Anno: 50 LRA(NS) 632. It is the possession of the legal estate, or a right in the subject over which the power is exercised, that makes a power coupled with an interest. Peter v. Beverly, 10 Pet (US) 532, 9 L ed 522.

¹ Wallace v. Foxwell, 250 Ill 616, 95 NE 985, 50 LRA(NS) 632; May v. Frazee, 4 Litt (Ky) 391, 14 Am Dec 159; Price v. Courtney, 87 Mo 387, 56 Am Rep 453; Bergen v. Bennett, 1 Caines (NY) 1, 2 Am Dec 281; Bradshaw v. Ellis, 22 NC (2 Dev & B Eq) 20, 32 Am Dec 686; Ware v. Murph, 24 SCL (Rice) 54, 33 Am Dec 97. Anno: 50 LRA(NS) 632. See 21 Am Jur 767, EXECUTORS AND ADMINISTRATORS, §§ 686 et seq.

² Dabney v. Manning, 3 Ohio 321, 17 Am Dec 597.

³ Wilson v. Snow, 228 US 217, 57 L ed 807, 33 S Ct 487, 50 LRA(NS) 604. For comprehensive treatment of testamentary powers of sale given to executors as vesting fee in executor or as conferring right of possession, see 21 Am Jur 775, EXECUTORS AND ADMINISTRATORS, §§ 701, 702.

⁴ Loring v. Marsh, 6 Wall.(US) 337, 18 L ed 802; Eisel v. Miller (CCA 8th) 84 F (2d) 174, citing RCL (power of sale). Anno: 50 LRA(NS) 634 (power of sale). As to authority of an agent or a power of attorney coupled with an interest, see 2 Am Jur 61, AGENCY, §§ 77 et seq. As to power of sale in mortgage as a power coupled with an interest, see 37 Am Jur 108, MORTGAGES, § 650.

⁵ Eisel v. Miller (CCA 8th) 84 F(2d) 174, citing RCL; Rowe v. Beckett, 30 Ind 154, 95 Am Dec 676; Frank v. Colonial & U. S. Mortg. Co. 86 Miss 103, 38 So 340, 70 LRA 135, 4 Ann Cas 54. Anno: 4 Ann Cas 58.

⁶ See 2 Am Jur 68, AGENCY, § 84.

⁷ See 2 Am Jur 67, AGENCY, § 84; 8 Am Jur 1009, BROKERS, § 43.

⁸ See 2 Am Jur 65, AGENCY, § 80.

§ ⁶ POWERS ⁴¹ Am Jur

the cases sometimes denominate powers as coupled with an interest which are

in reality powers coupled with a trust.⁹

II. CREATION

§ 6. Generally.—

When the intention to create a power is plain it should be

given effect; no technical form of words is necessary.¹⁰ However, to create a

power which will be operative, the instrument by which this object is sought

to be accomplished must itself be both valid and legally sufficient; otherwise,

the attempt to create the power will necessarily be abortive. Moreover, if the

power is itself vicious and incapable of legal enforcement, it cannot, of course,

be exercised, whatever may be the character of the instrument by which the

same was sought to be created. Hence, if a trust deed is void for usury, a

power of sale therein also is void.¹¹ Furthermore, where a seal is a requisite of

an instrument passing the title to realty, a sealed instrument is essential to

create a power to convey the fee.¹² A valid power over real estate may, how-

ever, be created by executory articles of agreement.¹³

To create a valid power, either beneficial or in trust, it is indispensable that

the object or objects to be benefited by its execution shall be specified in or be

clearly ascertainable from the instrument by which the power is attempted

to be created. For the creation of a valid power in trust, it is essential that

its execution be beneficial to some person or class of persons other than the

grantee of the power who can compel the due execution of the trust, which

person or class of persons must be designated in or be clearly ascertainable

from the instrument by which the power is created.¹⁴ Under the early techni-

cal rules as to conveyances, it was well settled that an estate could not be

created by means of a general power of appointment given in a covenant "to

stand seised" to uses, or in a "deed of bargain and sale."¹⁵

⁹ Anno: 50 LRA(NS) 636. As to the distinction between beneficial powers and powers coupled with a trust, see supra, § 3.

¹⁰ McKallip's Estate, 324 Pa 438, 188 A 343, 108 ALR 1095. The power of appointment given to each of his children over half the "original share" of each in the residuary estate, ex- cluding "any addition or accretion thereof from the distribution of any other share" of the residuary estate, by a testator who had given such residuary estate in trust to divide the same into as many shares as should be equal in number to his wife and children surviving and children deceased who should leave issue, such shares to be designated respectively by the names of the wife and children, to hold the share of the wife in trust for her during her life- time and upon her death to add it to the shares held in trust for the surviving chil- dren and the issue of deceased children, and likewise directed to be added to such shares the share of any child who should die without issue surviving, extends to half the amount by which the share of each child was augmented by reason of the death of testator's wife in his lifetime. Hepburn v. Winthrop, 65 App DC 309, 83 F (2d) 566, 105 ALR 310.

¹¹ Pottle v. Lowe, 99 Ga 576, 27 SE 145,

⁵⁹ Am St Rep 246. Remaindermen, as against the contention that the case is moot, may challenge an al- leged power of appointment under a codicil in the exercise of which a trust created by the will has been altered by segregating from the corpus a separate fund in the amount of the present worth of the re- mainders, to be accumulated for the re- maindermen during the life of the bene- ficiaries of the income, since by such rul- ing they are compelled to exchange cer- tainty for speculation. Re McKallip, 324 Pa 438, 188 A 343, 108 ALR 1095.

¹² Dutton v. Warschauer, 21 Cal 609, 82 Am Dec 765.

¹³ Barnes v. Irwin, 2 Dall(Pa) 199, 1 L ed 343, 1 Am Dec 278.

¹⁴ Wilce v. Van Anden, 248 Ill 358, 94 NE 42, 140 Am St Rep 212, 21 Ann Cas 153; Egleston v. Trust Co. of Georgia, 147 Ga 313, 93 SE 878, 3 ALR 295; Nichols v. Allen,

¹³⁰ Mass 211, 39 Am Rep 445; Clark v. Campbell, 82 NH 281, 133 A 166, 45 ALR 1433 (holding that a bequest to trustees of articles of personal property, with direc- tions to distribute them among such friends as they may select, as mementos of the testator, sell the residue, and add the proceeds to the estate, cannot be upheld as a power); Sweeney v. Warren, 127 NY 426, 28 NE 413, 24 Am St Rep 468. McIsaac v. Beaton, 37 Can SC 143, 3 Ann Cas 612. See also Gambell v. Trippe, 75 Md 252, 23 A 461, 15 LRA 235, 32 Am St Rep 388; Goodale v. Mooney, 60 NH 528, 49 Am Rep 334 (holding designation sufficient- ly definite). Anno: 3 ALR 297, s. 45 ALR 1440.

¹⁵ Doe ex dem. Smith v. Smith, 46 NC (1 Jones L) 135, 59 Am Dec 581.

41 Am Jur POWERS §§ ⁷, ⁸

A power may be created for any lawful purpose and to do any act which the

grantor might himself do.¹⁶

A power to lease, given with reference to a city where the prevailing system is to give leases for ninety-nine years, renewable

forever, has been held to include power to execute such a lease.¹⁷

§ 7. Power to Make Disposition Different from Testamentary Disposition.—

According to the weight of authority, a testator may, by testamentary instru-

ment, authorize a designated person to change the effect of the testator's will

or to make a disposition of the testator's estate different from that provided

for in the will. Such an authorization is held to confer a power of appoint-

ment.¹⁸ It has been held, however, that a provision in a will, following certain

devises in fee, purporting to give a designated person power to make changes

in the will after the testator's death was invalid as a power of appointment

or as a power to revoke the will or divest the fee devised thereby, on the

grounds that the provision indicated an intention to delegate the power to

make another or different disposition of the estate, that such an attempt vio-

lated the statute of wills, that the power to change is the power to revoke, and

that the attempt to delegate the power to revoke was in violation of the stat-

ute on wills.¹⁹

§ 8. Creation of Power of Sale.—

Where, in order to carry out a trust, a

power of sale is essential, such a power will be implied although not expressly

given.²⁰ And if a will directs that land shall be sold, but names no donee of

the power, and the proceeds of the sale are by the directions of the will or by

the rules of law to be distributed or paid out by the executor,¹ or by a trustee,

or other person, such executor, trustee, or other person will be invested with

the power of sale by necessary implication, unless there is some other inten-

tion to be gathered from the whole will.²

¹⁶ Re Kellogg, 187 NY 355, 80 NE 207, 13 LRA(NS) 288.

¹⁷ Collins v. Foley, 63 Md 158, 52 Am Rep 505.

¹⁸ Greenway v. White, 196 Ky 745, 246 SW 137, 32 ALR 1385 (recognizing the va- lidity of a provision of a will that every provision thereof, except a legacy to a named person, was made subject to the approval, alteration, or change in whole or in part by the testator's wife, and holding that the limitation upon the power to change or appoint, with the power to named person whose legacy was excepted from the power, did not extend to the property itself or the remainder interest devised to another, but merely to the inter- est or estate vested in the named person). McKallip's Estate, 324 Pa 438, 188 A 343,

¹⁰⁸ ALR 1095. Anno: 108 ALR 1098. A codicil by which a testatrix authorized a named person to change her will accord- ing to personal dictation, which represent- ed in lay fashion an intention to give a collateral power of appointment, has been held valid as a collateral power and not to violate the statutory requirement as to the exclusive methods for revocation of wills and not to amount to a delegation of the personal privilege to dispose of property upon death. McKallip's Estate, 324 Pa 438,

¹⁸⁸ A 343, 108 ALR 1095 (wherein the col- lateral power created by a codicil authoriz- ing a named person to change the will ac- cording to personal dictation, to which were subsequently added directions involv- ing other changes in the will, including a direction that the testatrix's sister was to receive income so long as she lived, was held, in view of the circumstances, the language, and punctuation, to refer to the life of the donee and not to be limited to the life of the sister, and wherein it was further held that the exercise of such power was timely although preceded by an award of distribution to trustees for pur- poses of the will).

¹⁹ Anno: 108 ALR 1101. A provision of a will, following a devise to the testator's daughter, C., that "all ref- erence to my daughter, C., in this will to be left to the judgment of my executors," was held to be too vague to cut down the clear gift already made to such daughter, and hence to be nugatory. Goffe v. Goffe,

³⁷ RI 542, 94 A 2, Ann Cas 1916B 240. And the court further observed that if any ef- fect could be given this provision, it would amount to vesting in the executors a pow- er to alter the will of the testator so far as it related to the interest of the daughter.

²⁰ See TRUSTS [Also 26 RCL p. 1285, § 136].

¹ See 21 Am Jur, EXECUTORS AND ADMIN- ISTRATORS, p. 769, § 689; p. 772, § 695.

² Rankin v. Rankin, 36 Ill 293, 87 Am Dec 205; Haggin v. Straus, 148 Ky 140, 146 SW 391, 50 LRA(NS) 642.

§§ ⁹, ¹⁰ POWERS ⁴¹ Am Jur

§ 9. Construction of Power of Appointment.—

An instrument, such as a deed

or will, creating a power of appointment is to be interpreted so as to ascertain

the intention of the donor and to give it effect unless some rule of law pre-

vents.³ Effect should, if possible, be given to every word or clause in the

instrument, so long as they are not inconsistent with the general intent of the

instrument as a whole.⁴ A will conferring a power of appointment by will,

and the will of the donee exercising such power, must be construed together.⁵

§ 10. Construction of Power of Sale.—

Many questions have arisen as to the

construction and extent of a power of sale,⁶ including the question whether a

power of sale includes a power to mortgage7 or to exchange.⁸ A power to sell

and exchange has been deemed to include power to partition,⁹ although a

power of sale does not.¹⁰ A general power of sale does not authorize a con-

veyance to a creditor in discharge of a debt,¹¹ nor does it include power to

grant an option, which is a surrender of the exercise of discretion during the

time of its duration.¹² Again, a power of sale or disposal given to a fiduciary

does not include a power to relinquish title thereto by abandonment.¹³ How-

ever, a power to sell and convey property has been deemed to include the right

to sell the timber thereon.¹⁴ A power of sale given by a husband to his execu-

tor does not affect his wife's right of dower, although she is the executor.¹⁵

Where land is conveyed to a wife and a child afterward to be born, with

power in the husband to superintend, and, with the wife's concurrence, to sell

and convey, the same, as husband, this power to the husband does not con-

template a conveyance by him directly to the wife, but only some conveyance

by him and her to a stranger, and then only of the wife's interest, and not

that of such child as had been born to her, and a deed by the husband directly

to his wife would be void.¹⁶

On the ground that the words "sell and convey," when employed in a power

of attorney, do not include authority to mortgage17 or dispose of the property

otherwise than by a sale and conveyance, it has been held that a power of

As to when a power of sale is impliedly given to an executor or administrator, see

²¹ Am Jur 769, EXECUTORS AND ADMINISTRA- TORS, §§ 689 et seq. As to a trustee's implied powers of sale, see TRUSTS [Also 26 RCL p. 1285, § 136].

³ Old Colony Trust Co. v. Richardson,

²⁹⁷ Mass 147, 7 NE(2d) 432, 121 ALR 1218; Hamburger's Will, 185 Wis 270, 201 NW 267, 37 ALR 1413.

⁴ Hamburger's Will, 185 Wis 270, 201 NW 267, 37 ALR 1413. A limitation upon the scope of the power and not a condition of its valid exercise is made by a provision in a will following the creation of a general power to appoint so much of the principal of a trust fund as remains at the death of the life beneficiary (donee) "provided only that at least one- half part thereof shall be given to my said daughter, if then living;" and disregard of that proviso does not prevent the uphold- ing of an attempted exercise of the power to the extent that it is valid. Old Colony Trust Co. v. Richardson, 297 Mass 147, 7 NE(2d) 432, 121 ALR 1218.

⁵ See infra, § 39.

⁶ As to whether a power to mortgage includes a power to insert in the mortgage a power of sale, see 37 Am Jur 109, MORT- GAGES, § 654.

⁷ See infra, § 11.

⁸ See infra, § 12.

⁹ Phelps v. Harris, 101 US 370, 25 L ed 855.

¹⁰ Re Carr, 16 RI 645, 19 A 145, 27 Am St Rep 773.

¹¹ Russell v. Russell, 36 NY 581, 93 Am Dec 540 (power given to executor). As to the extent of testamentary powers of sale given to executors, see 21 Am Jur 772, EXECUTORS AND ADMINISTRATORS, § 696.

¹² Trogden v. Williams, 144 NC 192, 56 SE 865, 10 LRA(NS) 867; Hickok v. Still,

¹⁶⁸ Pa 155, 31 A 1100, 47 Am St Rep 880 (power given to executor). Anno: 10 LRA(NS) 867.

¹³ Clarke v. Courtney, 5 Pet(US) 319, 8 L ed 140.

¹⁴ Gulf Red Cedar Lumber Co. v. O'Neal,

¹³¹ Ala 117, 30 So 466, 90 Am St Rep 22. As to whether a power of sale annexed to a life estate to be executed if necessary for the support of the life tenant author- izes a conveyance in the nature of a tes- tamentary disposition, see 33 Am Jur 734, LIFE ESTATES, REMAINDERS, AND REVERSIONS, § 250.

¹⁵ Lewis v. Smith, 9 NY 502, 61 Am Dec 706.

¹⁶ Powell v. Powell, 5 Bush (Ky) 619, 96 Am Dec 372.

¹⁷ See infra, § 11.

41 Am Jur POWERS § ¹¹

attorney authorizing the sale, transfer, or release of certain mortgages and

the indorsement and transfer of notes secured thereby, and the receiving of

payment of such notes and the giving of acquittances therefor, does not au-

thorize the borrowing of money or the pledging of the notes or mortgages for

any purpose.¹⁸

§ 11. —

As Including Power to Mortgage.—The weight of authority is to

the effect that a mere power of sale expressly conferred in an instrument does

not, by implication, confer authority to mortgage, in the absence of anything

in the instrument, read in the light of the surrounding circumstances, to indi-

cate a contrary intent.¹⁹ On the other hand, it has been held, or at least stated,

in a few cases that a power of sale in an instrument conferring such power,

particularly where the power of sale is unrestricted by other language in the

instrument, impliedly confers authority on the donee of the power to mort-

gage the property.²⁰ The question may be affected by the purpose of bestow-

ing the power of sale.¹ Thus, in some cases it has been held that power to

mortgage the estate will be implied from a power of sale where the purpose of

the power of sale is to pay debts or subject the property to a particular

charge.² In some other cases, however, such purpose has been held an insuffi-

cient basis for the implication of the power to mortgage.³ There is also no

uniformity of opinion on the question whether an express power of sale for

the support of beneficiaries of the trust or of the donee of the power impliedly

confers power to mortgage for that purpose.⁴ In a number of cases, implied

power to mortgage for such a purpose has been denied,⁵ but other cases have,

in view of the particular language in the instrument creating the power, as

well as of the circumstances involved, in arriving at what was considered to

have been the intent of the donor of the power, upheld the right to

mortgage.⁶ It has been held that a power of sale given for the purpose of

distribution of an estate does not impliedly authorize a mortgage.⁷ In some

cases, a power to mortgage has been inferred from a power to sell and invest

or reinvest,⁸ but in some other cases such an inference has not been made.⁹ A

¹⁸ Hawxhurst v. Rathgeb, 119 App Div 51, P 846, 63 Am St Rep 142. As to whether an authority to an agent or attorney to sell impliedly authorizes him to pledge, see 2 Am Jur 98, AGENCY, § 119.

¹⁹ Heiseman v. Lowenstein, 113 Ark 404,

¹⁶⁹ SW 224, Ann Cas 1916C 601; Chenault v. Metropolitan L. Ins. Co., 245 Ky 482, 53 SW(2d) 720, citing RCL (deed conveying life estate and giving life tenant power to sell and convey for reinvestment in land); Stump v. Warfield, 104 Md 530, 65 A 346,

¹⁰ Ann Cas 249, 118 Am St Rep 434; Wood v. Goodridge, 6 Cush (Mass) 117, 52 Am Dec 771; Stokes v. Payne, 58 Miss 614, 38 Am Rep 340; Price v. Courtney, 87 Mo 387,

⁵⁶ Am Rep 453; Greene v. Greene, 19 RI 619, 35 A 1042, 35 LRA 790; Jackson v. Templin (Tex Com App) 66 SW(2d) 666,

⁹² ALR 873; Bank of Greensboro v. Cham- bers, 30 Gratt(Va) 202, 32 Am Rep 661; Lueft v. Lueft, 129 Wis 534, 109 NW 652,

⁷ LRA(NS) 263, 9 Ann Cas 639. Anno: 92 ALR 882; 10 Ann Cas 255. As to whether an express authority to an agent to sell impliedly authorizes him to mortgage, see 2 Am Jur, AGENCY, p. 117, § 146; p. 125, § 157. As to whether the power of an executor or administrator to mortgage or otherwise encumber realty may be implied from a power to sell, see 21 Am Jur 509, EXECU- TORS AND ADMINISTRATORS, § 242. As to whether an express power to a life tenant to sell impliedly authorizes him to mortgage, see 33 Am Jur, LIFE ESTATES, RE- MAINDERS, AND REVERSIONS, p. 732, § 247; p. 733, § 251; p. 781, § 279; p. 733, § 281. As to whether a power of a trustee to mortgage may be implied from a power to sell, see TRUSTS [Also 26 RCL p. 1304].

²⁰ McCreary v. Bomberger, 151 Pa 323, 24 A 1066, 31 Am St Rep 760; Lancaster v. Dolan, 1 Rawle (Pa) 231, 18 Am Dec 625. Anno: 92 ALR 889.

¹ Anno: 92 ALR 891.

² Faulk v. Dashiell, 62 Tex 642, 50 Am Rep 542. Anno: 92 ALR 891. 3, 4 Anno: 92 ALR 895.

⁵ Stokes v. Payne, 58 Miss 614, 38 Am Rep 340; Jackson v. Templin (Tex Com App) 66 SW(2d) 666, 92 ALR 873. Anno: 92 ALR 895.

⁶ Kent v. Morrison, 153 Mass 137, 26 NE 427, 10 LRA 756, 25 Am St Rep 616; Faulk v. Dashiell, 62 Tex 642, 50 Am Rep 542. Anno: 92 ALR 897. 7, 8 Anno: 92 ALR 899.

⁹ Price v. Courtney, 87 Mo 387, 56 Am Rep 453. See also Stump v. Warfield, 104

§§ ¹², ¹³ POWERS ⁴¹ Am Jur

power given to an attorney in fact to sell and convey real estate does not

authorize the attorney to mortgage it.¹⁰ On the other hand, the view has been

taken that a power to sell includes a power to mortgage, if, in the circumstances, mortgaging will as effectually carry out the intention of the donor

and accomplish the purposes for which the power was created.¹¹ There is also

authority to the effect that the donee of a power of sale which is unlimited

and is to be exercised for his own benefit may execute a mortgage under the

power.¹²

§ 12. —

As Including Power to Exchange.—It is generally held, in the absence of qualifying words or special circumstances from which an intent to

confer a power of exchange can be inferred, that a power of sale does not include a power of exchange.¹³ This rule has been applied even to a power of

sale which gave discretion to the donee of the power.¹⁴ A power to sell upon

such terms as the donee of power deems best has been held not to authorize

an exchange.¹⁵ In some cases it has been held that a power of "disposition" or

a power to "sell and dispose of" includes a power of exchange,¹⁶ but in some

other cases the contrary is held.¹⁷ It is almost universally held that a power

of exchange is not included in a power of sale, where the power contains directions as to the investment or disposition of the proceeds; such a provision is

held to include only a sale for money.¹⁸ But a power to sell and buy other

real estate has been held to include a power to exchange.¹⁹

§ 13. Capacity of Married Persons to Give Power.20—

At common law a married woman may not give a power, and a power given by a feme sole is revoked by her marriage,1 unless the power is one which is coupled with an inter-

Md 530, 65 A 346, 118 Am St Rep 434, 10 Ann Cas 249. Anno: 92 ALR 899.

¹⁰ See 2 Am Jur, AGENCY, p. 117, § 146; p. 125, § 157.

¹¹ Morgan v. Meacham, 279 Ky 526, 130 SW(2d) 992, citing RCL; Pennebaker Home for Girls v. Pennebaker Home for Girls, 250 Ky 44, 61 SW(2d) 883, citing RCL.

¹² Kent v. Morrison, 153 Mass 137, 26 NE 427, 10 LRA 756, 25 Am St Rep 616; Grace v. Perry, 197 Mo 550, 95 SW 875, 7 Ann Cas 948; Ferrell v. Metropolitan L. Ins. Co. 211 NC 423, 190 SE 746, citing RCL; Hamrick v. Marion, 176 SC 361, 180 SE 213, citing RCL. The conveyance of land to a person to enable him to raise money authorizes him to mortgage the land for that purpose. Platt v. Union P. R. Co. 99 US 48, 25 L ed 424.

¹³ Woodward v. Jewell, 140 US 247, 35 L ed 478, 11 S Ct 784; Morrill v. Cone, 22 How (US) 75, 16 L ed 253 (dictum); Trimboli v. Kinkel, 226 NY 147, 123 NE 205, 5 ALR 1355 (holding that a power to sell and distribute the proceeds is not a power to exchange); Cleveland v. State Bank, 16 Ohio St 236, 88 Am Dec 445 (power to sell personal property). Anno: 63 ALR 1004. As to whether authority to an agent to sell includes authority to exchange, see 2 Am Jur, AGENCY, p. 98, § 119; p. 117, § 147. As to whether a testamentary power of sale given to an executor includes a power to exchange, see 21 Am Jur 772, EXECUTORS AND ADMINISTRATORS, § 696. As to whether a power of sale contained in a mortgage includes a power to exchange, see 37 Am Jur 109, MORTGAGES, § 651.

¹⁴ Hutchings v. Fanshier, 132 Wash 5, 231 P 14, citing RCL (power of sale given to executor together with power to rents and income until testator's daughter, who was given the property, reached the age of eighteen years).

¹⁵ Anno: 63 ALR 1008.

¹⁶ Phelps v. Harris, 101 US 370, 25 L ed 855; Killmer Paint & Glass Co. v. Davenport-Bethell Co. 136 Okla 252, 277 P 653, 63 ALR 997 (a transfer partly for cash and partly for other property). Anno: 63 ALR 1004.

¹⁷ Anno: 63 ALR 1004.

¹⁸ Woodward v. Jewell, 140 US 247, 35 L ed 478, 11 S Ct 784; Ringgold v. Ringgold,

¹ Harr & G(Md) 11, 18 Am Dec 250. Anno: 63 ALR 1006. In Phelps v. Harris, 101 US 370, 25 L ed 855, however, it was said that a direction as to proceeds refers to such proceeds as the donee thinks best to take, including other lands taken in exchange.

¹⁹ Anno: 63 ALR 1008.

²⁰ As to capacity of married persons to exercise a power, see infra, § 33. As to capacity of a married woman to give authority to an agent or, in other words, to appoint an agent, see 2 Am Jur 21, AGENCY, § 13. As to capacity of married woman to give a power to convey her real estate, see 26 Am Jur, HUSBAND AND WIFE, p. 770, § 144; p. 782, § 157.

¹ Anno: 84 Am St Rep 771, 860.

41 Am Jur POWERS § ¹⁴

est,² as in the case of a power to confess judgment.³ In so far as a married

woman either in equity or under statute can act as a juristic person, she can

give a power, but the creation of any such power is subject to any requirements governing her capacity to act directly.⁴

A married man may give a power as though unmarried.⁵

III. RIGHTS OF CREDITORS

§ 14. Generally; Unexercised General Power of Appointment.—

It is established by the great weight of authority, and may be regarded as settled, that

an unexercised general power of appointment does not render the property

subject thereto equitable assets of the donee, nor make it liable for his debts

or the debts of his estate, although his own property is insufficient to pay

them.⁶ A mere power of appointment is not an asset of the donee of the

power, and conveys no title to or interest in the property conveyed, and, unless exercised by the donee prior to his death, becomes wholly inoperative.⁷ Creating a general power of appointment is virtually an offer to the donee of the

estate or fund that he may receive or reject at will, and, like any other offer

to donate property to a person, no title can vest until he accepts the offer, nor

can a court of equity compel him to accept the property or fund against his

will, even for the benefit of creditors.⁸ A court of equity, although it may aid

a defective execution of the power, cannot cure the entire omission or failure

² Eneu v. Clark, 2 Pa St 234, 44 Am Dec 191. Anno: 84 Am St Rep 771.

³ See 27 Am Jur 227, HUSBAND AND WIFE, § 627.

⁴ Demarest v. Wynkoop, 3 Johns Ch (N Y) 129, 8 Am Dec 467; Weisbrod v. Chicago & N. W. R. Co. 18 Wis 35, 86 Am Dec 743.

⁵ Weisbrod v. Chicago & N. W. R. Co. 18 Wis 35, 86 Am Dec 743. As to whether a power given by a single man is revoked by his marriage, see infra, § 101.

⁶ United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461 (arguendo). Supreme Colony, U. O. P. F. v. Towne,

⁸⁷ Conn 644, 89 A 264, Ann Cas 1916B 181 (recognized); Patterson v. Lawrence, 83 Ga 703, 10 SE 355, 7 LRA 143; St. Matthews Bank v. De Charette, 259 Ky 802, 83 SW (2d) 471, 99 ALR 1146; Johnson v. Cushing,

¹⁵ NH 298, 41 Am Dec 694; Bentham v. Smith, 15 SC Eq (Cheves) 33, 34 Am Dec 599. Holmes v. Coghill, 7 Ves Jr 499, 32 Eng Reprint, 201, 12 Ves Jr 206, 33 Eng Reprint 79, 21 Eng Rul Cas 577. Anno: 59 ALR 1510, s. 97 ALR 1071 and

¹²¹ ALR 803. In this connection, see Am. Law Inst. Restatement, Property, Vol. 3, § 327. In Johnson v. Cushing, 15 NH 298, 41 Am Dec 694, where the donee exercised the power, and the rule which subjects the subject of the power to the claim of the donee's creditors was applied, the opinion said: "The court does not interfere unless the party upon whom the power has been conferred, or to whom it is tendered, has executed it, or done some act indicating an intention to execute it. This is also settled. Holmes v. Coghill, 7 Ves Jr 499, 508, 32 Eng Reprint 201 (12 Ves Jr 214, 33 Eng Reprint 81, 21 Eng Rul Cas 577, s. c. on appeal)." In reply to the objection that the distinction between the case where the power was exercised and the case where it was not was not very satisfactory, Parker, C. J., said: "The subject matter upon which the power is to act cannot be treated as the property of the party having the power to appoint, until he, by his appointment, acts as if it were his property. Where the owner, by some instrument, authorizes another to raise a sum out of an estate, or by way of charge upon an estate, and to dispose of it to such uses as he may appoint, nothing exists in the nature of property in him, or which can be treated as such, until he assents to what has thus been done, by an exercise of the right. Authorizing a party to create a charge upon an estate, if he pleases, does not of itself create one, nor give him any interest in it. But when he assents and creates the charge, within the terms of the power, if the power be general, he has, by the authority of the owner, exercised all the power over the estate to that extent that an owner could do. There is, then, in existence a fund over which he rightfully claims and exercises dominion, and equity interferes, and holds that this exercise of dominion is subject to the ordinary incidents of an exercise of dominion over property, so far that it cannot be given away to the prejudice of creditors."

⁷ Supreme Colony, U. O. P. F. v. Towne,

⁸⁷ Conn 644, 89 A 264, Ann Cas 1916B 181 (the point in this case, however, was merely argumentative, the question involved relating to the designation of beneficiary of a certificate of insurance). Anno: 59 ALR 1511, s. 97 ALR 1071 and

¹²¹ ALR 803.

⁸ Anno: 59 ALR 1512, 1513, s. 97 ALR 1071 and 121 ALR 803.

§ ¹⁵ POWERS ⁴¹ Am Jur

to exercise the power. Hence, while the donee's failure to exercise the power

may be morally as great a fraud upon his creditors as would an exercise of the

power by appointing volunteers, in the case of a nonexercise of the power,

there is nothing which the equitable powers of the court can grasp, since, as

already stated, they do not go to the extent of curing the entire failure to

exercise the power.⁹

§ ¹⁵. Where General Power Is Exercised—General Rule.—Although, as sub-

sequently shown,¹⁰ the principle has been vigorously assailed by a number of

eminent judges as unsound in principle and unfair in practice, it is established

by the great weight of judicial authority, both in this country and England,

that property, real or personal, which is the subject of a general power of

appointment, is in equity assets for the payment of the creditors of the donee's

estate, if his own estate is insufficient to pay them, where he exercises the

power by deed or will, or in other manner prescribed by the terms of the

power itself, and appoints the property to volunteers, and in some instances

to creditors.¹¹ The reasoning and argument by which the courts have sought

to justify the principle seem to rest upon the proposition that where the power

is general, so that the donee may appoint whomever he chooses, it is his duty,

if he exercises the power at all, to appoint his creditors, and that the appoint-

ment of volunteers amounts to a fraud upon his creditors which equity will

frustrate by holding the property equitable assets for the payment of his

debts or the debts of his estate, his exercise of the power having put the prop-

erty within the grasp of the court, which, it is conceded, would have been

⁹ Anno: 59 ALR 1512, 1513, s. 97 ALR 1071 and 121 ALR 803.

¹⁰ See infra, § 22. As to the rights of creditors of the donee where a general power of appointment is not effective to pass the property to the persons appointed, but is effective to pass the property to the donee or his estate, see infra, § 87.

¹¹ United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461 (ar- guendo); Manson v. Duncanson, 166 US 533, 41 L ed 1105, 17 S Ct 647; Brandies v. Cochrane, 112 US 344, 28 L ed 760, 5 S Ct

¹⁹⁴ (recognizing, but not applying, the rule, because the relief was not sought as against the estate created by the exercise of the power, but the lien was claimed on an antecedent estate displaced by the exer- cise of the power); Jones v. Clifton, 101 US 225, 25 L ed 908 (recognized); Jackson v. Franklin, 179 Ga 840, 177 SE 731, 97 ALR 1064; State Street Trust Co. v. Kissel, 302 Mass 328, 19 NE(2d) 25, 121 ALR 796; Slayton v. Fitch Home, 293 Mass 574, 200 NE 357, 104 ALR 669; Hill v. Treasurer,

²²⁹ Mass 474, 118 NE 891, LRA1918D 337; Vinton v. Pratt, 228 Mass 468, 117 NE 919, LRA1918D 343; Minot v. Treasurer (Minot v. Stevens) 207 Mass 588, 93 NE 973, 33 LRA(NS) 236 (arguendo); Johnson v. Cushing, 15 NH 298, 41 Am Dec 694. London Chartered Bank v. Lempriere, 9 Moore PCCNS 426, 17 Eng Reprint, 574, 21 Eng Rul Cas 553 (recognized). Anno: 59 ALR 1513, s. 97 ALR 1071 and

¹²¹ ALR 804; LRA1918D 347; 21 Eng Rul Cas 584. In this connection, see Am Law Inst Re- statement, Property, Vol. 3, §§ 329, 330. In Patterson v. Lawrence, 83 Ga 703, 10 SE 355, 7 LRA 143, the court expressly de- clared that it did not decide whether the execution of a general power of appoint- ment would convert an estate into assets in equity for the payment of debts, since the rule in any case was not applicable to the case at bar, for the reason that the ap- pointee was not a volunteer, and it did not appear that the donee of the power did not have sufficient assets to pay the plaintiff's claim. An additional reason was given that the proceeding was not an equitable one to subject the property to the payment of the donee's debts, it being an action to recover a demand against the donee's estate out of property alleged to be assets thereof. Anno: 59 ALR 1527. The following summary has been made of the English cases: "Property subject to a general power of appointment exercised by deed or will could be made available for payment of the testator's debts by proceedings instituted in chancery. It was considered contrary to good faith to permit a power to be exer- cised in favor of volunteers so as to defeat the creditors of the donee of the power. The court therefore intercepted the fund,— to use the language of Lord Hardwicke, 'stopped it in transitu,'—and, either by re- garding the appointee as trustee for the creditors, or by virtue of saying that in the circumstances the creditors had an equity against the fund, caused it to be ap- plied for payment of the debts; but the fund was not any part of the estate of the donee of the power, nor was it anywhere decided that it passed to the executor." Anno: 59 ALR 1514. The earliest English cases on the subject are inadequately and rather obscurely re- ported. Some of them seem to convey the impression that in the court's view, the donee of the power took an absolute estate, although they perhaps merely meant that

41 Am Jur POWERS § ¹⁵

helpless if the fraud (if it may properly be so characterized) had been perpe-

trated by failure to exercise the power.¹²

Where the donee dies indebted, having executed the power in favor of vol-

unteers, the appointed property is treated as equitable, not legal, assets of the

estate; and (in the absence of statute), if it passes to the executor at all, it

does so not by virtue of his office, but as a matter of convenience, and be-

cause he represents the rights of creditors.¹³

The principle, of course, presupposes that the donee possessed the power

which he attempted to exercise. Accordingly, it has been held that the rule

does not apply where one who had merely the power to sell and convey the

property without any purchaser being answerable for the application of the

purchase money undertook to make a gift of the property, and in so doing

exceeded his right under the power.¹⁴

The creditors entitled are to be ascertained as of the date of the death of the

donee.¹⁵ Where there is a general power of appointment by will, and an ap-

pointment is made, the appointee is a trustee for creditors, but it is not for

creditors at the time of the execution of the will, but at the death of the tes-

tator; and a certificate discharging the donee in bankruptcy after the execu-

tion of the will by which the power was exercised, but before the donee's

death, deprives the assignee in bankruptcy of all claims for the benefit of

creditors under the commission.¹⁶ But where the will of the bankrupt's father

directed that upon the death of a child, the share upon which he was entitled

to the income for life should be paid to the executor of the deceased child to

be disposed of in his will, or to his legal representative to be distributed under

the statute of descent and distribution, it was held that as against his credi-

tors, he could not derogate from his equitable remainder by the exercise of the

the property was to be treated for the pur- poses of the donee's creditors as if it were his absolute estate. Anno: 59 ALR 1517.

¹² Anno: 59 ALR 1514, s. 97 ALR 1071 and 121 ALR 804. In Hill v. Treasurer, 229 Mass 474, 118 NE 891, LRA1918D 337, involving a ques- tion as to succession tax, the court ob- served that, since the donee had exercised the power, the property appointed became in equity assets of the estate so far as need- ed to pay his debts, to the exclusion of the person appointed, but that the property was the property of the donor, the donee had no title to it, and the doctrine that the appointed property shall be regarded as as- sets of the estate of the donee who has exercised a general power of appointment is purely equitable. "It rests on the funda- mental idea that a man ought to pay his debts when he has the power to do so, rather than to give property to those who are not his creditors. It is not found- ed on the actual intent of the one who has exercised the power. This principle of equity disregards the desires of the donor in creating the power, deprives the donee of the untrammeled authority conferred up- on him in terms, and, to the extent of its scope, does violence to the manifest design of the donee in exercising the appointment. It would operate even in the face of his testamentary declaration to the contrary. Equity seizes the property on its way from the donor to the appointee, and applies it to the satisfaction of the obligations of the appointer." Parker, Ch. J., said, "Where the owner of property, who has the right to dispose of it in such manner and under such lim- itations as he pleases, confers upon an- other the general power of making such disposition of it as he pleases, or, in other words, invests him with all the attributes of ownership over it, and that other ac- cepts the power thus tendered to him, and undertakes to exercise dominion over the subject matter as if he was an owner, the original proprietor, having authorized the other to treat it as if it was the property of the latter, by exercising all the power over it which he could exert if it were actu- ally his property, and he having undertak- en to treat it as if it was his property, by making a disposition of it under such a power, a court of equity may well do what the parties have done, that is, treat it as the property of the appointer, and make it subject to the incidents attending such property. The court in such case do no more than to treat it as the property of the party, who, by the express authority of the owner, has the power and right to treat it as if it were his property, and who under- takes so to do." Johnson v. Cushing, 15 NH 298, 41 Am Dec 694.

¹³ United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461 (involv- ing a question as to a state tax). Anno: 59 ALR 1522, s. 97 ALR 1071 and

¹²¹ ALR 804.

¹⁴ Anno: 59 ALR 1521, s. 97 ALR 1071 and 121 ALR 804.

¹⁵ Vinton v. Pratt, 228 Mass 468, 117 NE 919, LRA1918D 343.

¹⁶ Anno: 59 ALR 1522, s. 97 ALR 1071 and 121 ALR 804. [41 Am Jur]—52 817

§§ ¹⁶, ¹⁷ POWERS ⁴¹ Am Jur

power, and that the right of the trustee in bankruptcy vested at once, rather

than that the whole matter be kept open for the benefit of those who might

become creditors of the bankrupt subsequent to his adjudication in bank-

ruptcy, and before the payment of his share in whole or part.¹⁷

A trustee in bankruptcy is not entitled to recover as assets of the bankrupt's

estate property which the bankrupt, at a time when he was free from debt,

conveyed to his wife, retaining in himself power of revocation and appoint-

ment, where no appointment or revocation was made.¹⁸

The rule is purely an equitable rule which is not applied in a court of law.¹⁹

Since appointed property is not part of the donee's estate,²⁰ it is not available

in law as part of his estate for the payment of his debts.¹ In the absence of

statute, if it passes to the executor of the donee at all, it does so not by virtue

of his office, but as a matter of convenience, and because he represents the

rights of creditors.²

§ 16. —

Necessity of Fraud.—The doctrine that property the subject of an

exercised general power of appointment is, in equity, assets for the payment

of the donee's debts if his own property is insufficient for the purpose is re-

ferred to the general power of equity to prevent fraud, it being conceived that

the failure of the donee under a general power to appoint his own creditors,

as he might do under a general power, is a species of fraud.³ However, none

of the cases makes proof of actual fraud a condition of the application of the

rule, or makes any distinction in this regard between the cases where there

was no apparent justification for the donee's failure to protect his creditors,

and cases where, in the circumstances, he might fairly be supposed to recog-

nize the superior moral claim of the volunteers whom he appointed.⁴

§ 17. —

Limited Powers; Manner of Exercise of Powers.—As implied in the

formulation of the principle that property the subject of an exercised general

power of appointment is in equity assets for the payment of the donee's debts

if his own property is insufficient for the purpose, the principle applies only

to general powers, and not to limited powers; that is, powers limited in the

sense of the persons or classes of persons who may be appointed.⁵ It has some-

times been urged that the power was limited in this sense so as to make the

rule inapplicable unless the donee had the right to exercise it for his own

benefit during his lifetime, and that the rule does not apply where the power

could be exercised only by will.⁶ This view has, however, been expressly repu-

¹⁷ Anno: 59 ALR 1522, s. 97 ALR 1071 and 121 ALR 804.

¹⁸ Jones v. Clifton, 101 US 225, 25 L ed 908, wherein the court observed that if the husband revoked the settlement, the prop- erty would revert to him, and, of course, be liable for his debts; and, should he ex- ercise the power of appointment for the benefit of others, the estate would be liable in equity for his debts. It is to be remem- bered that where the power can only be exercised by will, it is not deemed exer- cised until the death of the donee, when the will becomes effective. Anno: 59 ALR 1522, s. 97 ALR 1071 and

¹²¹ ALR 804.

¹⁹ United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461; Bran- dies v. Cochrane, 112 US 344, 28 L ed 760,

⁵ S Ct 194; Patterson v. Lawrence, 83 Ga 703, 10 SE 355, 7 LRA 143.

²⁰ See supra, § 2.

¹ Rhode Island Hospital Trust Co. v. An- thony, 49 RI 339, 142 A 531, 59 ALR 1501.

² United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461.

³ Anno: 59 ALR 1518, s. 97 ALR 1071 and

¹²¹ ALR 804.

⁴ London Chartered Bank v. Lempriere,

⁹ Moore PCCNS 426, 17 Eng Reprint 574,

²¹ Eng Rul Cas 553. Anno: 59 ALR 1518, s. 97 ALR 1071 and

¹²¹ ALR 804.

⁵ Johnson v. Cushing, 15 NH 298, 41 Am Dec 694. Bristow v. Warde, 2 Ves Jr 336, 30 Eng Reprint 660, 21 Eng Rul Cas 356. Anno: 59 ALR 1518, s. 97 ALR 1071 and

¹²¹ ALR 804.

⁶ Bentham v. Smith, 15 SC Eq (Cheves) 33, 34 Am Dec 599. See, in this connection, the discussion in Wales v. Bowdish, 61 Vt 23, 17 A 1000, 4 LRA 819. Anno: 59 ALR 1518, s. 97 ALR 1071 and

¹²¹ ALR 804.

41 Am Jur POWERS § ¹⁸

diated, and the rule has been frequently applied where, by the terms of the

power, it could only be exercised by the donee's will, which takes effect upon

his death, so that it was impossible for him to appoint for his own personal benefit.⁷ The other conditions of the principle being satisfied

(that is, the power being a general one, and the donee's estate being insolvent

and his own property exhausted), the principle has been applied indiscrim-

inately without regard to whether the power has been limited the means of its exercise

to a deed, to will, or to deed or will.⁸

§ 18. —

Appointments to Volunteers and Creditors; Persons Claiming under

Appointee.—Property appointed to a purchaser for value is not subject to

the claims of the creditors of the donee.⁹ The rule that appointed property is

subject to the claims of the donee's creditors is commonly stated in a form

that limits it to appointments of "volunteers," implying that it perhaps might

not apply where the appointment under the general power was made to a

particular creditor or particular creditors,¹⁰ but there is authority to the effect

that the attempt to confine the rule to volunteers cannot be supported when

speaking of powers to appoint by will, and that the rule extends to creditors

appointed by will.¹¹ Thus, it has been held that the exercise of a testamentary

power of appointment by an insolvent, by a will, in favor of one whom he has

undertaken to reimburse for money paid for corporate stock, renders the fund

so appointed assets of the estate for the benefit of creditors, in which the ap-

pointee must share pro rata, although the appointment was made in accord-

ance with a contract when the stock was sold.¹²

⁷ Johnson v. Cushing, 15 NH 298, 41 Am Dec 694 (stating that a power is general or not, within the meaning of the rule, ac- cording to the persons or uses to which the property may be appointed under it, and not according to the time when its exer- cise takes effect in possession, or the in- strument by which its exercise is to be manifested); Leigh v. Smith, 38 NC (3 Ired Eq) 442, 42 Am Dec 192. Anno: 59 ALR 1518, s. 97 ALR 1071 and

¹²¹ ALR 804.

⁸ Anno: 59 ALR 1519, s. 97 ALR 1071 and 121 ALR 804.

⁹ Patterson v. Lawrence, 83 Ga 703, 10 SE 355, 7 LRA 143. Anno: 59 ALR 1519, s. 97 ALR 1071 and

¹²¹ ALR 804. The exercise of a power of appointment by will, by one having a life interest in trust property, to confirm title to a person who had previously purchased it for a val- uable consideration from the appointor and trustee under an order from court, does not make the property assets of the appointor's estate and liable in equity for her debts. Patterson v. Lawrence, 83 Ga 703, 10 SE 355, 7 LRA 143.

¹⁰ Brandies v. Cochrane, 112 US 344, 28 L ed 760, 5 S Ct 194; Patterson v. Law- rence, 83 Ga 703, 10 SE 355, 7 LRA 143. Anno: 59 ALR 1519, s. 97 ALR 1071 and

¹²¹ ALR 804. In this connection, see Am. Law Inst. Restatement, Property, Vol. 3, § 330. A grantee in a deed executed by the trustee and the life beneficiary who had a general power of appointment, and who appointed the grantee in order to confirm his title, cannot be regarded as a volun- teer, and the rule, if otherwise applicable (which the court did not decide), does not apply. Patterson v. Lawrence, 83 Ga 703,

¹⁰ SE 355, 7 LRA 143.

¹¹ State Street Trust Co. v. Kissel, 302 Mass 328, 19 NE(2d) 25, 121 ALR 796, hold- ing that attempted exercise by will of a general power of appointment by an in- solvent debtor in favor of certain of his creditors, pursuant to his agreement to that effect, must be set aside and such creditors, as creditors and not as ap- pointees, take their places with the other creditors of his estate as regards the prop- erty which is the subject of the power at- tempted to be exercised in their favor, and stating that the rule that property in respect of which an insolvent debtor ex- ercises a general power of appointment constitutes equitable assets for the bene- fit of his creditors is the same whether the appointment is made voluntarily as a ben- efaction, or upon a consideration. Anno: 59 ALR 1519, s. 97 ALR 1071 and

¹²¹ ALR 804. In this connection, see Am. Law Inst. Restatement, Property, Vol. 3, § 329.

¹² Vinton v. Pratt, 228 Mass 468, 117 NE 919, LRA1918D 343, wherein, in reply to the contention that the rule applies only to gratuitous appointees, and that since the appointment in question had been made for value, the appointee was entitled to the bequest notwithstanding insolvency of the estate, the court said that he could not have maintained a bill in equity to compel specific performance of so much of the agreement as related to the exercise of the power, or enjoin revocation of the will. Anno: 59 ALR 1520, s. 97 ALR 1071 and

¹²¹ ALR 804. As to right of creditor of donee with whom the donee has made an agreement to exercise a power of appointment by will

§§ ¹⁹, ²⁰ POWERS ⁴¹ Am Jur

It has been declared that even those who would take in default of appoint-

ment, if appointed, are volunteers within the rule.¹³

It has been held that although a general power of appointment over a sum

of money to be raised under the terms of a trust is assets for creditors of the

donee if executed, the equity of an assignee of the appointee prevails over

general creditors having no specific charge.¹⁴

§ 19. —

Effect of Provisions as to Creditors in Instrument Creating Power.—

The view has been taken that the rule that property appointed under a gen-

eral power is subject to the claims of the donee's creditors applies in spite of a

provision in the instrument creating the power that the property covered

thereby shall in no circumstances be appointed to the donee's creditors or sub-

jected to their claims.¹⁵ In a recent case, the court, without intimating that

the preceding view was not a correct statement of the law, observed that it

went further than the court was required to go in this case, where the provi-

sion was not a specific one that the property should not be appointed to the

donee's creditors, but, following the grant of a general power of appointment,

in effect, prohibited the payment or appropriation of the appointed property

to or for any debts or liabilities of the donees, the testatrix's grandchildren.

The court held that a general testamentary power of appointment conferred

by will upon the beneficiary of a life interest in a trust does not lose its char-

acter as a general power by a subsequent provision that in no event shall any

part of the trust funds be liable for, or paid or appropriated to or for, any

debts or liabilities of the life beneficiary (donee), since that provision operates

as a restriction upon the trustees rather than a limitation upon the power to

appoint, and such intent cannot be given effect, and that after the creation of

a general power of appointment, the donor could not legally make a form of

spendthrift trust, to the end that the power having been exercised, the appoint-

ed property should remain beyond the reach of creditors.¹⁶

§ 20. —

Necessity of Exhausting Donee's Own Property.—It is held or as-

sumed in all the cases that the principle which treats the property as equitable

assets of the donee for the purposes of a creditor only applies where the donee's

own property is insufficient to pay his debts.¹⁷ Where the power is executed,

creditors of the donee can lay claim to the appointed estate only to the extent

that the donee's own estate is insufficient to satisfy their demands.¹⁸ His in-

dividual estate, including that which is made the subject of specific legacies or

devises, must first be exhausted in the payment of a debt before the creditors

can reach any part of the estate appointed.¹⁹ Property passing by the exercise

by making an irrevocable will in favor of the creditor, see infra, § 94.

¹³ Anno: 59 ALR 1520, s. 97 ALR 1071 and 121 ALR 804.

¹⁴ See Patterson v. Lawrence, 83 Ga 703,

¹⁰ SE 355, 7 LRA 143. Anno: 59 ALR 1521, s. 97 ALR 1071 and

¹²¹ ALR 804.

¹⁵ Anno: 121 ALR 805. Am. Law Inst. Restatement, Property, Vol. 3, § 330, Comment.

¹⁶ State Street Trust Co. v. Kissel, 302 Mass 328, 19 NE(2d) 25, 121 ALR 796. Anno: 121 ALR 805.

¹⁷ Jackson v. Franklin, 179 Ga 840, 177 SE 731, 97 ALR 1064; Patterson v. Law- rence, 83 Ga 703, 10 SE 355, 7 LRA 143; Slayton v. Fitch Home, 293 Mass 574, 200 NE 357, 104 ALR 669; Hill v. Treasurer,

²²⁹ Mass 474, 118 NE 891, LRA1918D 337. Anno: 59 ALR 1520, s. 97 ALR 1071 and

¹²¹ ALR 804.

¹⁸ United States v. Field, 255 US 257, 65 L ed 617, 41 S Ct 256, 18 ALR 1461 (ar- guendo). Anno: 59 ALR 1520, s. 97 ALR 1071 and

¹²¹ ALR 804.

¹⁹ Slayton v. Fitch Home, 293 Mass 574,

²⁰⁰ NE 357, 104 ALR 669, holding that specifically devised real estate of a testa- tor who is the donee of a general power of appointment must be exhausted by pay- ment of the debts of the estate before the property appointed by a general residuary clause can be used for that purpose. Anno: 59 ALR 1520, s. 97 ALR 1071 and

¹²¹ ALR 804.

41 Am Jur POWERS §§ ²¹, ²²

of a general power of appointment in the residuary clause of the will of the

donee of the power cannot be used to pay expenses arising out of the adminis-

tration of the testator's property, but any expenses arising out of the admin-

istration of the property subject to the power should be borne by that prop-

erty.²⁰

§ 21. —

Power Possessed by Married Woman.—There are some English de-

cisions holding that in the absence of fraud, the principle that property the

subject of an exercised power of appointment is in equity assets for the pay-

ment of the donee's debts, if his own property is insufficient for the purpose,

did not apply in case of a general power of appointment vested in a married

woman, for the reason that her debts at most made only a charge on her sep-

arate property, and could not bind her personally in the sense that debts gen-

erally bind the debtors.¹ But later cases support the view that the rule was

applied to such a power conferred upon a married woman so far as debts

which would be binding upon her separate property are concerned.²

§ 22. Minority Rule as to Rights of Creditors where General Power Is Ex-

ercised.—There is some direct authority opposed to the rule that property

which is subject to a general power of appointment is subject to the claims of

the donee's creditors where he has exercised the power by appointing volun-

teers or, in some instances, creditors, and the rule has been disapproved by

some eminent judges and other authorities.³ However the rule may be dis-

guised by emphasizing the unfairness of the donee in not appointing his credi-

tors, and the power of equity to frustate his fraudulent purpose in that regard,

the fact remains that in its practical operation, the rule substitutes for the

elective privilege which the owner of the property (donor) conferred upon

the donee of appointing the property to his (donee's) creditors or to other

²⁰ Slayton v. Fitch Home, 293 Mass 574,

²⁰⁰ NE 357, 104 ALR 669. Where a general power of appointment is exercised by the donee of the power in the residuary clause of his will, income accruing on the appointed property after the death of the testator passes, together with such property, to those in whose fa- vor the power is exercised, without de- duction for expenses of administration of the testator's individual estate or payment of his debts, where his individual proper- ty is sufficient for these purposes, although insufficient to pay the general pecuniary legatees. Ibid.

¹ Anno: 59 ALR 1521, s. 97 ALR 1071 and

¹²¹ ALR 804; 7 LRA 143.

² London Chartered Bank v. Lempriere,

⁹ Moore PCCNS 426, 17 Eng Reprint 574,

²¹ Eng Rul Cas 553. Anno: 59 ALR 1521, s. 97 ALR 1071 and

¹²¹ ALR 804.

³ St. Matthews Bank v. De Charette, 259 Ky 802, 83 SW(2d) 471, 99 ALR 1146; Re Howald, 65 Ohio App 191, 29 NE(2d) 575, citing RCL; Rhode Island Hospital Trust Co. v. Anthony, 49 RI 339, 142 A 531,

⁵⁹ ALR 1501. Anno: 59 ALR 1523, s. 97 ALR 1072 and

¹²¹ ALR 804. In Balls v. Dampman, 69 Md 390, 16 A 16,

¹ LRA 545, it was held that creditors of the donee of a general power of appointment by will had no claim upon the property covered by the power (and appointed to his daughters as volunteers), upon the ground that the donee could not appoint his creditors and so consume the property altogether for his own use. It did not ap- pear in this case, however, whether or not the court had in mind or had called to its attention the majority rule, as in a later Maryland case which recognized the exist- ence of the majority rule. Anno: 97 ALR 1073. The decision in Wales v. Bowdish, 61 Vt 23, 17 A 1000, 4 LRA 819, did not go be- yond the point of refusing to apply the rule in favor of creditors of the donee ex- isting at the time the power was conferred under a will giving an estate in trust for the brother of the testatrix during his life, and at his death to be conveyed to whom and in the manner he should direct. The opinion of Veasey, J., however, discussed the subject at considerable length, and ex- pressed the view that the power should not be regarded as a general one within the rule, when the donee cannot exercise it for his own benefit during his life. Anno: 59 ALR 1525. The exercise of general powers of ap- pointment given to the donee by a trust created under a will, and by a deed of trust executed by himself, does not, upon repre- sentation that his estate is insufficient for the payment of his debts and expenses of administration, render the appointed prop- erty equitable assets for the payment of the amount of his debts which are in excess of the assets of his individual es- tate. Rhode Island Hospital Trust Co. v. Anthony, 49 RI 339, 142 A 531, 59 ALR 1501.

§ ²² POWERS ⁴¹ Am Jur

persons,—who, he may feel, have a greater moral right to the property than

his own creditors,—an exclusive obligation to appoint his own creditors.⁴

Moreover, if the principle had been confined to the situation presented in the

early cases in which it originated, where the donee was also the donor, and his

appointment of volunteers had the effect to divert from his creditors property

which he had previously owned, there would be no serious criticism of it, at

least if the donee was insolvent at the time he undertook to convey the prop-

erty or his interest therein, with a reservation in effect of a power of appoint-

ment.⁵ The principle, however, soon passed beyond that point, and has been

most often applied in cases where the donee had no title to or interest in the

property other than a life interest, or some other limited interest, conferred by

the donor in connection with the power.⁶ As thus applied, in some circum-

stances it may operate to frustrate the donee's intention to restore the prop-

erty to persons who would have been the natural object of the donor's bounty,

if he could have foreseen their condition at the time the power is exercised,

and who, because of changed conditions or misfortunes after the donor's death,

find that the provision he (donor) made for them is inadequate.⁷ The prin-

ciple as now applied puts it beyond the power of the donee to remedy that

condition, or to recognize a moral obligation to return the property to the

line of the donor from whom it proceeded, greater than his obligation to pay

his own creditors out of property which he at no time owned.⁸ It has been said

that equity stops the property in transitu when a step has been taken to ap-

point it to the use of anyone else, and this arbitrary control of the direction

given by the testator to his bounty, through the agency of his proxy, is strange-

ly put upon the obligation of the proxy to pay his debts, the assumed violation

of which, in not paying them with money filched from his wife or child,—in

not robbing Peter to pay Paul,—is held to give his creditors a specific equity

against his appointee.⁹

The principle has sometimes been referred to as a rule of property, implying

that regardless of its fundamental soundness, it would be unjust to refuse to

apply it.¹⁰ It does not seem, however, that the principle could properly be

regarded as a rule of property in the sense that the creditors of the donee

would be entitled to rely upon it in their dealings with the donee, since they

knew, or were chargeable with knowledge, that the property did not belong

to the donee, and that he merely had general power of appointment in respect

of it.¹¹

⁴ Anno: 59 ALR 1523, s. 97 ALR 1072 and

¹²¹ ALR 804. In St. Matthews Bank v. De Charette, 259 Ky 802, 83 SW(2d) 471, 99 ALR 1146, the court, after a review of all the authorities upon this question, said that the question was an open one in its jurisdiction, which gave it the choice of following one or the other lines of authority built up in this country, and, in giving its reasons for taking the minority view, stated that the English courts, whose opinions were the source of the majority rule, went astray from and far beyond the case in which it originated, where there was a deed of ap- pointment in which the donor was also the donee, and the effect of the power of appointment and its exercise, if sustained, would have been fraudulently to divert his own property into a channel beyond the reach of his creditors; that the mischief in the law was the product of the psychology of the time; that the doctrine was born and cradled in an era when the law was made by creditors and for creditors, while poor debtors were travailing in various de- grees of affliction; that it was a classic example of an accumulation of precedents becoming a law to excuse a wrong rather than to justify a right; that reason did not have to lose its force to precedent; and that as the property was never the donee's, and the court could not have seized it while he lived, or compelled him to execute the power for his creditors or anyone else, or taken it in default of its exercise, it was a species of judicial tyran- ny to snatch it away from those for whom the creator of the power intended it. Anno:

¹²¹ ALR 804.

⁵ See Wales v. Bowdish, 61 Vt 23, 17 A 1000, 4 LRA 819. Anno: 59 ALR 1523, s. 97 ALR 1072 and

¹²¹ ALR 804. 6-11 Anno: 59 ALR 1523, 1524, s. in 97 ALR 1072 and 121 ALR 804.

41 Am Jur POWERS §§ 23-²⁵

In jurisdictions which take the minority view that the property covered by

the power of the appointment is not subject to the donee's debts, it is never-

theless the rule that the donee may appoint his creditors and thereby subject

the property to his debts.¹²

IV. EXERCISE

A. IN GENERAL

§ 23. Generally.—

In determining whether a power of appointment is validly

exercised, consideration must first be directed to the intention of the donor,

as found in the instrument creating the power.¹³

§ 24. Time.—

It has been stated that the donee of a general power of ap-

pointment may bring the property into the market whenever his necessities

or wishes may lead him to do so.¹⁴ No limitation of time is imposed upon a

power in the nature of a trust not limited in terms, unless the rule against

perpetuities is involved, or the power is controlled by an inherent quality in

the nature of the trust or in the object for which the power was granted.¹⁵

It is, however, the general rule that a power cannot be exercised before the

time in which it was the intention of the grantor of the power that it should

be exercised.¹⁶ Also, according to some courts, a power of sale given to be

exercised by the donee at his discretion, so long as it is executed within a

time limited, may be executed after the time limited, on the theory that a

provision as to time is directory and not a condition,¹⁷ but there is also au-

thority to the effect that a power cannot be so executed.¹⁸ Where, however,

a sale is made within the time limited, it is immaterial that a conveyance is

not executed until after the time has expired.¹⁹

§ 25. Power Dependent on Contingency.—

One who claims title under the

execution of a naked power must prove the performance of all conditions

precedent to the exercise of the power.²⁰ A power to sell, either in a will or

deed, to be exercised on the happening of a particular event, cannot by law be

exercised until the happening of that event; in fact, the power does not exist

¹² Re Howald, 65 Ohio App 191, 29 NE (2d) 575, citing RCL. Anno: 121 ALR 806. As to whether a provision in a will for the payment of debts is an appointment for the payment of debts, see infra, § 54.

¹³ Lewis's Estate, 269 Pa 379, 112 A 454,

¹³ ALR 1053. As to construction of power of appoint- ment, see supra, § 9. A decision in an earlier case to the ef- fect that a codicil recalled one's appoint- ment as cotrustee and executrix under the will is not res judicata as regards the va- lidity and effect of the exercise of a power of appointment created by the codicil where the power had not been exercised at the time of the earlier decision, the issues there involved did not concern it, and the interests presently raising the question were not then represented. McKallip's Estate, 324 Pa 438, 188 A 343, 108 ALR 1095.

¹⁴ See supra, § 4.

¹⁵ Morse v. Hackensack Sav. Bank, 47 NJ Eq 279, 20 A 961, 12 LRA 62.

¹⁶ Dunning v. Vandusen, 47 Ind 423, 17 Am Rep 709; Vinton v. Pratt, 228 Mass 468,

¹¹⁷ NE 919, LRA1918D 343. As to whether a power may be exercised by will or deed or only by will, and as to the time and mode of exercise of a power exercisable by will, see infra, §§ 36 et seq. As to whether a power is exercised by a prior will, see infra, § 40.

¹⁷ Shalter's Appeal, 43 Pa 83, 82 Am Dec 552.

¹⁸ Daly v. James, 8 Wheat.(US) 495, 5 L ed 670. As to the extinguishment of powers in- cluding extinguishment by cessation or ac- complishment of the purposes or objects for which the power was created, see infra, §§ 95 et seq.

¹⁹ Harlan v. Brown, 2 Gill (Md) 475, 41 Am Dec 436.