On appeal from the former Court of Chancery.
For affirmance: Chief Justice Vanderbilt, and Justices Case, Heher, Wachenfeld, Burling, and Ackerson. For reversal: None. The opinion of the court was delivered by Vanderbilt, C.J.
[1 NJ Page 161] The complainant has appealed from a decree of the former Court of Chancery dismissing a bill to partition premises in Newark originally owned by Rosa Buccino. The latter died in 1932, devising the land to her husband, Nicola Buccino, for life, with a remainder in fee to her son, Frederick Buccino, in trust, to sell the land and immediately to divide the proceeds equally among testatrix's ten children, one of whom was the trustee. In 1934 a judgment creditor of Frederick Buccino levied execution upon his interest in the land and his interest was thereupon sold by the Sheriff of Essex County in October, 1934, to the complainant's predecessor in title. The
life tenant, Nicola Buccino, died in 1935. In 1943 Frederick Buccino, as trustee, gave a deed purporting to convey full title to the land to a predecessor in title of defendants Donato Gradone and Filomena Gradone, his wife.
The bill of complaint for partition was filed by the complainant in 1946 against the defendants Gradone and the defendant Shepherd Savings and Loan Association, which holds a mortgage on the premises given by the immediate predecessor in title of the Gradones. In the bill the complainant claimed title in fee to an undivided one-tenth part of the premises, by virtue of the levy of execution and sheriff's sale in 1934. The learned Vice Chancellor on the pleadings determined that the complainant was not in laches, but declined to determine (1) whether or not the complainant had title to an undivided one-tenth part of the land and (2) whether or not the mortgage of the Shepherd Savings and Loan Association constituted a lien on that undivided part. Thereafter on the application of all parties an issue was framed and sent to the Supreme Court for its opinion on these two questions, a practice, it may be remarked in passing, that is no longer either necessary or proper under the new Constitution. It was thereupon certified to the Court of Chancery that, since a trust estate is not liable to seizure and sale on execution at law, complainant's title arising from an execution at law was not such as "will entitle her to partition." On the basis of this certification a decree was entered dismissing the bill.
The complainant appeals on the ground that since Frederick Buccino, who was the trustee of the remainder in fee, was also a beneficiary to the extent of one-tenth of the remainder, his equitable interest as beneficiary merged with his legal interest as trustee, thereby giving him full and complete legal and equitable title to an undivided one-tenth interest in the lands, which interest was subject to execution at law.
The gift of the remainder in trust, although merely to sell the land and distribute the proceeds, was an active trust, Martling v. Martling, 55 N.J. Eq. 771 (E. & A. 1896); Phillips v. Vermeule, 88 N.J. Eq. 500 (Ch. 1917); Christine v. Baldwin, 95 N.J. Eq. 83 (Ch. 1923); Riley v. Riley, 107 N.J. Eq. 372
(Ch. 1930); 1 Scott on Trusts, § 69.1; it was not therefore executed by the Statute of Uses (R.S. 46:3-9).
As has been noted, however, Frederick Buccino, the trustee of the remainder in fee, was also one of the ten beneficiaries of the trust. This raises a question as to whether there was a partial merger so as immediately to give to Frederick Buccino the complete legal and equitable title to an undivided one-tenth interest in the remainder in fee, thereby making his interest subject to levy and execution at law. Although the decisions in this State are in conflict, the precise question has never been considered in the court of last resort. Extending the sound rule that a sole trustee, who has also the entire beneficial interest, holds the property free of the trust, the earlier cases in this state held that where there were several trustees or beneficiaries and one or more of the trustees were also beneficiaries, a merger of the equitable interest of the trustee-beneficiary into his legal interest took place, Cooper v. Cooper, 5 N.J. Eq. 9 (Ch. 1845); Wills v. Cooper, 25 N.J.L. 137 (Sup. Ct. 1835); Bolles v. State Trust Co., 27 N.J. Eq. 308 (Ch. 1876); Bullis v. Pitman, 90 N.J. Eq. 88 (Ch. 1918). The later cases, on the other hand, while continuing to recognize the rule that one person may not be sole trustee and sole beneficiary, have adopted the more salutary view that there is no merger where one or more of the several beneficiaries is or are also a trustee or trustees. In re Vreeland, 66 N.J. Eq. 297 (Prerog. 1903); In re Thurston, 104 N.J. Eq. 395 (Prerog. 1929); Morgan v. Murton, 131 N.J. Eq. 481 (Ch. 1942); Savings Inv. and Trust Co. v. Little, 135 N.J. Eq. 546 (Ch. 1944). These later cases proceed on the theory that the substantive and procedural difficulties in enforcing a trust where the sole trustee is also the sole beneficiary (namely), that a man cannot owe legal duties to himself and that he cannot sue himself) are not present where there are multiple trustees or beneficiaries. The other trustees can enforce the trust and the other beneficiaries can sue for the breach thereof and there is no reason, therefore, for defeating the intention of the settlor of the trust, which inevitably ensues where the equitable title is merged into the legal estate by operation of law. See 1 Scott on Trusts, § 99.3 at p. 525:
"Such a view, however, is objectionable since it defeats the purpose of the settlor in creating the trust. He intended that the whole legal interest should be subject to the trust to the same extent as though a third person were trustee. There is no reason of public policy requiring that the intention of the settlor should be thus defeated. Moreover, as a matter of legal technique, the view is unsound. The trust property given to the trustee was the whole of the trust property, and not two undivided shares or successive interests. It is the equitable interest of the beneficiaries and not the legal ...