246 Mass. 312 | Mass. | 1923
This is an information by the Attorney General to declare and establish a public charitable trust and to compel the defendant to perform its obligations with respect thereto. By the will of Thomas Nesmith, late of Lowell, a gift of $25,000 was made to the defendant. The avowed purpose of the gift was to devote that sum in charity to aid, encourage and enable better to sustain themselves many struggling people “ who linger between competency and poverty — who from accidental misfortune, sickness, failure of employment, or other imperious cause, are temporarily in need of charitable assistance, but are not paupers, and who, by kindly assistance, sympathy and advice, may soon become self-sustaining and self-relyant not intending hereby to countenance or give encouragement to improvidence or idleness.” The gift was expressed to be “ upon the condition ” that before the payment of that sum by his executors to the treasurer of the defendant “ the proper and constituted authorities of said City, in a legal manner, shall well and truly and legally resolve and vote and make due record thereof to accept the said sum of money as a fund to be held for the said purposes and shall promise
The amount of the legacy was duly transferred to the defendant and thereafter interest at the rate of six per cent per annum was paid by it to the trustees under the will in equal semiannual payments of $750 until March 18, 1918. Since that date no payment has been made. The defendant does not now and never has held as a separate fund distinct from its general assets the Nesmith legacy, but apparently soon after its receipt expended it for general corporate purposes. All semiannual payments have been made by the city by annual appropriation presumably out of its tax levy. The officers of the city and the “ trustees considered and treated such payments as interest paid under said will.” These payments have been expended by the trustees in charity in accordance with the provisions of the will, except possibly a small balance remaining in hand. As matter of bookkeeping the auditor of the defendant has carried this $25,000 as an item of city debt.
The gift under the will was a valid public charity. Foundations for the relief or prevention of poverty are recog
The reference in a subsequent clause of the will to this bequest as a sum “ loaned to the City of Lowell ” falls far short of divesting this clause of its character as creating a public charity.
It is too late now to question the capacity of a city or town to accept a gift for a public charitable trust of the nature here involved and to act as trustee and to execute the trugt. Worcester v. Eaton, 13 Mass. 371. Drury v. Natick, 10 Allen, 169, 182. Quincy v. Attorney General, 160 Mass. 431. Higginson v. Turner, 171 Mass. 586, 591.
There are limitations upon the powers of cities and towns. They are creatures of the Legislature. They are territorial subdivisions of the State created as public corporations. They possess and can exercise only such powers as have been conferred upon them by express enactment or by necessary implication from undoubted prerogatives. They are rigidly restricted as to their faculty to raise and expend money to the purposes specified and through the officers and channels authorized by the law. They cannot transcend the bounds thus imposed. These principles are thoroughly established and are illustrated in numerous decisions dealing with a great'diversity of transactions by cities and towns. Spaulding v. Lowell, 23 Pick. 71. Somerville v. Dickerman, 127 Mass. 272. Greenough v. Wakefield, 127 Mass. 275. Wheelock v. Lowell, 196 Mass. 220, 223. Higginson v. Treasurer & School House Commissioners of Boston, 212 Mass. 583, 585. Whittaker v. Salem, 216 Mass. 483, 485. Duffy v. Treasurer & Receiver General, 234 Mass. 42, 50. Chelsea v. Treasurer & Receiver General, 237 Mass. 422, 432. Ducey v. Webster, 237 Mass. 497.
The defendant made full compliance in respect to form with every condition prescribed by the Nesmith will.
The concurrent resolution of each branch of the city
It is required by the will that this sum of money be accepted “as a fund to be held” forever for the purposes stated. That is a valid requirement which the defendant as well as any other trustee might lawfully perform. There is the further provision that a definite sum each year, amounting to six per cent on the principal of the fund, shall be paid by the city in lieu of income regardless of the amount which the fund might yield properly invested in accordance with the law governing the investment of trust funds. If this provision stood alone and the sum so specified was to be disbursed by officers of the city for the charitable uses designated, it might “ not invalidate the gift, nor forfeit the estate upon non-compliance.” Drury v. Natick, 10 Allen, 169, at page 183. This provision is coupled with the further requirement that such payments shall be made to the private individuals who from time to time may be trustees under the Nesmith will. The execution of the trust in this particular is not vested in public officers nor in officers elected, chosen or designated by the defendant or any of its officers, but in individuals holding no municipal office and not responsible to the city but owing responsibility and duty under the law to the court by whom they are appointed.
Doubtless when this fund was paid to the city in 1871 it was possible to invest trust funds in appropriate securities yielding six per cent. It is common knowledge that for some years, at least, before the great war such investments were not available. If the defendant had complied with its duty and kept the gift separate and distinct as a trust fund, $1,500 a year would not continuously have been received from its income. The only way in which the defendant could have made the required payments during such period was out of money raised by taxation. Money
This element of the trust cannot rightly be held to invalidate its general scheme. The dominant purpose of the testator was to afford assistance to the deserving poor so carefully described by him in the will. The words referring to six per cent interest with its semiannual payments of the named amounts are to be regarded as an estimate of the rate of interest to be expected at that time from conservative investments and a direction that the income should be applied as set forth in the will. The case on this point is governed by Quincy v. Attorney General, 160 Mass. 431. It was said by Mr. Justice Holmes in the opinion in that case, at page 435, “ We are not to assume, without necessity, that the testator either was ignorant of pretty obvious law, or defied it in shaping the conditions of a scheme which he was anxious to have carried out.”
The testator did not require by the terms of his will a special act of the Legislature to enable the defendant to accept and execute every detail of his trust. He simply demanded a resolution or vote passed “ in a legal manner ” accepting the gift, and a promise and pledge of the city in
If the portion of the will as to payment of interest in semiannual instalments be regarded as in form a condition, then, so far as it undertook to impose obligations upon the city for the future which it could not by law assume, it would be repugnant to the paramount and overbalancing testar mentary design to establish the charity and would yield to that supreme overruling purpose.
For reasons already stated the case at bar is distinguishable from cases like Bullard v. Shirley, 153 Mass. 559, and Teele v. Bishop of Derry, 168 Mass. 341.
The result is that the trust was accepted by the defendant. Being for a charitable purpose, it cannot afterwards be renounced or abandoned so as to defeat the charity. Drury v. Natick, 10 Allen, at page 183. It was a plain violation of the defendant’s obligation under the trust to spend the principal for any purpose. The defendant ought to have kept this bequest separate and apart as a distinct fund.
' The principal of the trust fund must be restored in full by the defendant. The defendant must also pay to the trustees under the Nesmith will interest on the principal of the fund from March 18, 1918, until the time when the principal of the trust fund shall be restored in full at the rate which shall be found by the single justice to be the rate fairly earned by trust investments during that period.. When the principal of the trust fund has been restored in full, it must be invested by the defendant in securities appropriate for trust funds and the income received paid over semiannually to the trustees under the Nesmith will. The details are to be fixed by a single justice.
Ordered accordingly.