The object of the present action is to elicit a judicial construction of the will of Mabel Clair Hand, who died on September 19, 1947, and a declaration of the interest of James Gustave Speth in the residue of the decedent's estate. In re Ungaro , 88 N.J. Eq. 25, 102 A. 244 (Ch. 1917); R.S. 2:26-68, N.J.S.A.
The inquiry is primarily addressed to the second article of the will, which is here exhibited:
"Second: All of the rest, residue and remainder of my estate both real, personal and mixed of every kind and description and wheresoever situate which I shall own or be entitled to at the time of my death, I give, devise and bequeath to THE PLAINFIELD TRUST COMPANY and JAMES GUSTAVE SPETH, IN TRUST NEVERTHELESS, for the following purposes; to invest and reinvest the rest, residue and remainder of my estate both real, personal and of every kind and description and wheresoever situate, and to collect and receive the income thereon and to pay over the net income thereof to my brother, JAMES GUSTAVE SPETH of Orangeburg, South Carolina for a period of ten years on a quarterly basis and at the end of the ten year period of this Trust then such corpus and principal shall be paid in full to my brother, James Gustave Speth, as aforesaid.
"(a) I further direct my Trustees hereinbefore named that should some unusual circumstances arise, then my Trustees are directed to use in addition to the income, such portion of the principal for the benefit of my brother, James Gustave Speth."
It is at once observed that the interest of the plaintiff in the entire residue is undoubtedly vested both as to income and corpus. A gift to a trustee is regarded in equity as a gift to the cestui , and since the residuary estate vested in the trustee at the death of the testatrix, so it vested in the cestui que trust. Neilson v. Bishop , 45 N.J. Eq. 473, 17 A. 962 (Ch. 1889); In re Collins , 99 N.J. Eq. 333, 133 A. 188 (Prerog. 1926); Traverso v. Traverso , 99 N.J. Eq. 514, 133 A. 705 (Ch. 1926); affirmed, sub nom. Traverso v. McMillin , 101 N.J. Eq. 308, 137 A. 919 (E. & A. 1927); Byrne v. Byrne , 123 N.J. Eq. 6, 195 A. 848 (Ch. 1938); affirmed, 124 N.J. Eq. 273, 1 A.2d 464 (E. & A. 1938); Skovborg
v. Smith , 8 N.J. Super. 424, 72 A.2d 911 (Ch. 1950). It is also significant to notice that the sole beneficiary is not the sole trustee. Cf. Morgan v. Murton , 131 N.J. Eq. 481, 26 A.2d 45 (Ch. 1942).
The complaint alleges that the plaintiff has the entire beneficial interest in the residue of the estate held by the trustees and prays that the trust may be terminated and the corpus and accumulated income be forthwith transferred to him.
True, there are adjudications concluding that where in a trust estate the beneficiary, sui juris , has the entire vested interest, both in the income of property held by the trustees for his benefit and in the property itself, there being no limitation of the estate in any contingency to any other person, there being no discretion delegated to the trustees, and no provision that the income or estate shall not be alienable by the beneficiary or attachable by his creditors, equity may exercise the power to terminate the trust.
In displaying the state of the decisional law of New Jersey relative to the subject here projected, it is unnecessary to explore beyond the case of Huber v. Donoghue , 49 N.J. Eq. 125, 23 A. 495 (Ch. 1891), in which a testamentary trust created for the period of ten years was in the circumstances terminated. That decision manifestly recognized the opinion in Sears v. Choate , 146 Mass. 395, to be an influential precedent. In ascertaining the authoritative pertinency of the ruling in the Sears case , one must recognize that there the sole ownership became vested in the beneficiary by reason of an unanticipated occurrence subsequent to the death of the testator. Similar decrees were granted in Brooks v. Davis , 82 N.J. Eq. 118, 88 A. 178 (Ch. 1913), and in Pedrajas v. Bloomfield Trust Co. , 101 N.J. Eq. 105, 137 A. 86 (Ch. 1927); affirmed, 101 N.J. Eq. 803, 139 A. 18 (E. & A. 1927). Vide, Camden Safe Deposit & Trust Co. v. Guerin , 89 N.J. Eq. 556, 105 A. 189 (E. & A. 1918).
Next came the exceedingly pertinent comment of Vice-Chancellor Leaming in Martin v. Martin , 106 N.J. Eq. 258, 150 A. 338 (Ch. 1930): "The authorities are in harmony
to the effect that no doubt can exist as to the power and duty of this court to decree the termination of a trust, where all the objects and purposes of the trust have been accomplished, where the interests under it have all vested, and where all parties beneficially interested desire its termination. * * * But this will not be done where its effect will be to override and put an end to an active and irrevocable express trust and thus defeat a testator's or donor's intention, if the objects of the trust have not been fully accomplished and the trustee stands ready and able to execute the trust in good faith."
Then ensued the familiar decision in Newlin v. Girard Trust Co. , 116 N.J. Eq. 498, 174 A. 479 (Ch. 1934), in which it was resolved that a trust to pay the income to children and the corpus to their executors or administrators may be terminated before the period of distribution of the corpus in the circumstances there present. It is significant to note that the learned Vice-Chancellor was careful to state: "There is no discretion in the trustees, either as to the payment of the income or the principal. * * *"
The situation resulting in the merger of the life estate and the remainder in Dreyfuss v. Kahn , 137 N.J. Eq. 158, 43 A.2d ...