FUTURE INTERESTS - POWERS-FRAUD ON A SPECIAL POWER

H was co-trustee under a trust agreement executed by his father which provided for payment of a specified monthly sum to H for life and after his death to his wife W. The trust was to terminate upon the death of the survivor of H and W, and thereupon the other trustee was to deliver 20% of the corpus to each of three named persons, A, B, and C. The trust instrument further provided that H was to have absolute power, with approval of the co-trustee, to prescribe that the distribution of this 60% of the corpus should be made in different proportions than those provided. W predeceased H. H remarried and, desiring to secure a benefit for his second wife from the trust, proposed that each of the three beneficiaries, A, B, and C, agree to pay a sum equal to 7½% of the total trust fund to R, the second wife, on receipt of their 20% shares. A and B agreed to this proposal but C refused to assent. H thereupon purported to exercise his power and changed the percentages to read, 28% to A, 28% to B, and 4% to C. This change was approved by the co-trustee and shortly thereafter the trust was terminated by the death of H. C sought a declaratory judgment as to the effect of the attempted exercise of the power. Held, the attempted exercise was void as a fraud on the power, since it was made for the purpose of benefiting a non-object. Horne v. Title Insurance and Trust Co., (D.C. Cal. 1948) 79 F. Supp. 91

CONFLICT OF LAWS-ENFORCING TAX LAWS OF SISTER STATES

In the recent case City of Detroit v. Proctor, the defendant, a resident of Detroit, was owner of personal property located there in the year 1939. The city levied a tax on this property, which tax became a debt under the laws of Michigan on the first day of April, 1939, and became due and · payable on the 15th of July, 1939. During the month of June, 1939, the defendant removed both his person and his property from the state of Michigan and has since resided elsewhere. The treasurer of the city of Detroit, who is empowered by law to sue in the name of the city for the tax, filed an action in Delaware courts, obtained personal service on the defendant, and attempted to secure a judgment for the amount of the claim. In affirming a dismissal of the action, a superior court of Delaware followed the rule that one state will not enforce the revenue laws of another state. The court found the rule too well established to overthrow, and felt jurisdiction should be refused since the question involves vital interstate relations with which the courts are incompetent to deal without legislative mandate

CONFLICT OF LAWS-ENFORCING TAX LAWS OF SISTER STATES

In the recent case City of Detroit v. Proctor, the defendant, a resident of Detroit, was owner of personal property located there in the year 1939. The city levied a tax on this property, which tax became a debt under the laws of Michigan on the first day of April, 1939, and became due and · payable on the 15th of July, 1939. During the month of June, 1939, the defendant removed both his person and his property from the state of Michigan and has since resided elsewhere. The treasurer of the city of Detroit, who is empowered by law to sue in the name of the city for the tax, filed an action in Delaware courts, obtained personal service on the defendant, and attempted to secure a judgment for the amount of the claim. In affirming a dismissal of the action, a superior court of Delaware followed the rule that one state will not enforce the revenue laws of another state. The court found the rule too well established to overthrow, and felt jurisdiction should be refused since the question involves vital interstate relations with which the courts are incompetent to deal without legislative mandate

FUTURE INTERESTS - POWERS-FRAUD ON A SPECIAL POWER

H was co-trustee under a trust agreement executed by his father which provided for payment of a specified monthly sum to H for life and after his death to his wife W. The trust was to terminate upon the death of the survivor of H and W, and thereupon the other trustee was to deliver 20% of the corpus to each of three named persons, A, B, and C. The trust instrument further provided that H was to have absolute power, with approval of the co-trustee, to prescribe that the distribution of this 60% of the corpus should be made in different proportions than those provided. W predeceased H. H remarried and, desiring to secure a benefit for his second wife from the trust, proposed that each of the three beneficiaries, A, B, and C, agree to pay a sum equal to 7½% of the total trust fund to R, the second wife, on receipt of their 20% shares. A and B agreed to this proposal but C refused to assent. H thereupon purported to exercise his power and changed the percentages to read, 28% to A, 28% to B, and 4% to C. This change was approved by the co-trustee and shortly thereafter the trust was terminated by the death of H. C sought a declaratory judgment as to the effect of the attempted exercise of the power. Held, the attempted exercise was void as a fraud on the power, since it was made for the purpose of benefiting a non-object. Horne v. Title Insurance and Trust Co., (D.C. Cal. 1948) 79 F. Supp. 91