First Presbyterian Church v. Dennis

186 Iowa 931 | Iowa | 1919

Weaver, J.

The plaintiff church is, and for many years has been, an organized society for religious work and worship in the town of Mt. Yernon. Among its adherents and supporters for a considerable period of time was the deceased, John B. Leigh. He was a man of some means, and manifested a spirit of liberality in sustaining the church of his choice. Some years prior to the transaction now in question, one Armstrong was also a leading member and elder of the local church. A son of this person, J. H. Arm-strong, having grown up in the community, made his way to Chicago, where he prospered and acquired a degree of Avealth.

About the opening of the year 1911, J. H. Armstrong visited Mt. Vernon, and while there, made a tentative suggestion to some members of the plaintiff church of his Avillingness, upon certain conditions, to furnish and install a pipe organ in the church building, at his own expense. After some discussion, the matter took the form of a definite proposal by Armstrong to furnish the organ, on condition that a permanent endowment fund was established, the income from which should be used in paying the expenses attendant upon the maintenance and use of the instrument.

Leigh does not appear to have been present when this offer was first considered on the part of the church, and ai a meeting of the session and trustees, a committee avrs appointed to lay it before him. After an interview with him. the committee reported that it had been authorized by Leigh to say to Armstrong that he (Leigh) “would take care of the endoAvment part of the proposition, and that the donor should govern himself accordingly.” At a meeting of the congregation, the above report Avas read, and a resolution adopted, approving the action of the session and trustees, and authorizing the board “to accept the offer and convey the thanks of the church to the donors.”

This action being reported to Armstrong, he Avrote to Leigh a letter, under date of January 19, 1911. After some Avords of a complimentary and reminiscent character, he said:

“A few years ago, I placed a large pipe organ in the chapel of Cornell College, in memory of my mother. This was before my father died. Knowing that the Presbyterian Church of Mt. Vernon is without an organ, and realizing how much that church was to my father and mother, as well as to me in the days of my youth, I have felt it to he a privilege, as well as a pleasure, to offer a pipe organ as a gift to the church, providing the officers of the church could assure me that a permanent fund from an endowment would he at their command, sufficient to provide for an organist, music, and upkeep of the organ. Today I am in receipt of copy of the official and church action of January 15, 3911, of which, no doubt, you have a copy, and I hasten to assure you of my keen appreciation of your cordial and generous response to the committee, wherein you assured them tliaiyou would take care of the endowment part of the proposition, and that I might govern myself accordingly. Now that you have made the way clear to provide a permanent endowment fund, the income from which is to care for the pipe organ, to pay for an organist, and to pay for appropriate music, I am ready to carry out my proposition to buy for the Presbyterian Church of Mt. Vernon, a pipe organ. * * * Your proposition, as above outlined, is certainly a most worthy one for establishing in perpetuity -a fund which will assure the' congregation of the Presbyterian Church music of a suitable and beautiful character, as a memorial ' that will honor your good name for all time to come; and while you live, not only the people of the church, but the citizens in general, will be proud of you, as well as of your carefully thought-out liberality.”

On February 2, 1911, Leigh responded to this letter, saying:

“Your most kindly letter of January 19th received, with thanks for your kind exi>ressions. It reminds me of old times. As regards the church, I will make this a perpetuity fund, as I told the church committee.”

The board of trustees also notified Armstrong in writing of the action of the church accepting his offer. Acting upon this arrangement, Armstrong did furnish and install the organ. Later, it being thought desirable to put the agreement into a more formal writing, the church, acting by its official representatives, entered into a written agreement with Leigh and wife, in substance as follows:

After reciting by way of preamble the offer of Armstrong to furnish the organ, on the assurance that a “permanent and adequate means should be provided in perpetuity for the upkeep of said organ and for appropriate music and accompanist,” and that Leigh and wife had given ■their assurance of willingness “to provide such necessary funds in perpetuity,” and that Armstrong, acting upon suc'h assurance, had placed the organ in the church, at his own cost and expense, it was therefore declared that:

“We, John B. Leigh and Elizabeth A. Leigh, his wife, in conformity with such assurance heretofore made, do hereby give, devise, and bequeath in perpetuity to the said board of trustees of the Presbyterian Church, the same to be a perpetual memorial to ourselves, the sum#of $8,000 for the purposes heretofore set forth, and upon condition that the said sum shall never at any time, as principal, be used for said purposes, but that the same shall at all times be invested in suitable and safe securities, such as real estate mortgages or securities of like character, but that the emoluments and profits thereof shall be used for the purposes and to the ends hereinbefore set forth, and for no other purposes whatsoever.”

To this writing an addendum was made, before its execution, by which Leigh and wife undertook to pay-to the church, for the purposes above specified, the sum of $400 per annum, during the life of John B. Leigh, and at his death, the principal sum of $8,000 was to be paid over to the board of trustees for the church. This paper was signed by Leigh and wife and by the president and secretary of the board of trustees for the church. This instrument having been sent to Armstrong for examination, he submitted it to counsel, who expressed the opinion that there was doubt whether the agreement would be legally effectual, so far as it related to the principal sum of $8,000, except, peibaps. as a testamentary provision. Counsel further advised that, to carry out the wishes of all parties, it would be better “that the endowment fund be conveyed now to the trustees, and surround the conveyance with the conditions imposed * * *. This would be a comparatively simple matter to

arrange. However, if the donors do not wish to turn over the principal until after their death,- they could insure the fund coming to the trustees better by executing their note and delivering the same to the trustees, which would become a proper charge against the estate of donors.”

This advice was transmitted by Armstrong to the officers of the church, asking them to lay it before Leigh, and saying:

“I know he is not only anxious, but will be determined to have this matter placed where there can be no question whatever abo'iit this endowment fund being placed in the hands of the trustees of the Presbyterian Church of Mt. Vernon. It would seem that either of the two suggestions of our attorney would meet the approval of Mr. and Mrs. Leigh. In case they should choose the latter, i. e., rather giving their note and delivering the same to the trustees now for $8,000, they could do so at 5 per cent interest until such Lime as one or both pass away. The interest would amount to just $400, the amount of the annual payment during their life.”

Thereafter, and to carry out the suggestions of Armstrong and his counsel, other papers were signed and delivered as follows: Leigh and wife made and delivered their note in the following form :

“In consideration of Frank H. Armstrong of Chicago. Illinois, having provided and installed at his cost a pipe organ in the Presbyterian Church of Mt. Yernon, Iowa, said pipe organ being established as a permanent memorial to the memory of the deceased father and mother of said Armstrong, therefore, the undersigned being- desirous that permanent and adequate means should be provided in perpetuity for the upkeep of said organ and all subsequent organs that may hereafter be installed in said church, and further for providing appropriate music and accompanist .for the Presbyterian Church of Mt. Yernon, Iowa, we, the undersigned, John B. Leigh and his wife, Elizabeth A. Leigh, hereby agree to provide a fund, the amount of which is hereinafter stated, and the income thereof only shall be available for the purposes above mentioned. Said fund and the income therefrom shall constitute a perpetual memorial to ourselves. ¡I

“We therefore each or either of us hereby on demand promise to pay to the order of the board of trustees of the Presbyterian Church of Mt. Yernon, Iowa, the sum of $8,-000, value received, with interest from date hereof at the rate of 5 per cent per annum.

“Dated this 1st day of January, 1912.

“Witness: J. B. Leigh

“W. E. Platner. Elizabeth A. Leigh.”

To this instrument the following receipt was attached: “The undersigned, being trustees of the Presbyterian Church of Mt. Yernon, Iowa, hereby acknowledge receipt of the sum of $8,000, from John B. Leigh and Elizabeth A. Leigh, in full settlement of the foregoing obligation.

“Dated at Mt. Yernon, Towa, this 1st day of January, 1912.

“Witness: John J. Smyth, Chairman

“W. E. Platner. W. H. Kelly, Sec. Board.”

Following the foregoing note and receipt was an instrument entitled:

“Acknowledgment of Receipt of Trust Fund.

“John B. Leigh, of Mt. Vernon, Iowa, hereby acknowledges receipt of the sum of $8,000 from the board of trustees of the Presbyterian Church of Mt. Vernon, Iowa, same to be held as a trust fund during the lifetime of the said John B. Leigh, said fund to be invested, and of the proceeds therefrom the sum of $400 shall be retained by the said John B. Leigh, it being mutually agreed that no additional charge be made for services as trustee. This trust shall continue during the lifetime of the said John B. Leigh. Upon termination of the trust, the principal sum shall at such be returned to the board of trustees of the Presbyterian Church of Mt. Vernon, Iowa.

“Dated at Mt. Vernon, Iowa, this 1st day of January, 1012.

“Witness:

“W. E. Plainer. J. B. Leigh.”

Also the following receipt:

“Received from the trustees of the Presbyterian Church of Mt. Vernon, Iowa, the sum of $8,000, -which I hold as trustee for said church.

“Witness:

“W. E. Plainer. J. B. Leigh.”

No actual cash was paid or turned over by or between the parties; but, as we understand the testimony, the deceased having given his note or written promise to pay, it was accepted by the board of trustees as the equivalent of money to that amount, and as such it was then redelivered to Leigh, who received it as money constituting the fund of which he declared or acknowledged himself the trustee. The validity of the transaction and the obligation of such trust are not shown to have been questioned or denied by him at any time during the remainder of his life. It does appear that, two years later, Leigh complained that his income was not sufficient to enable him to pay the stipulated annual charge of $400 without embarrassment, and he asked to be relieved therefrom. He also wrote Armstrong, asking him as a favor to take care of the installments for 1913 and 1914; but on neither occasion did he express any purpose to repudiate the trust, but impliedly, if not expressly, admitted his liability for the principal fund.

Leigh died in February, 1914, and the appellant herein became the executor of his will. The church, by its counsel, filed a claim against the estate for payment of the trust fund, as provided in the foregoing “Acknowledgment of Receipt of Trus’t Fund” and the attached receipt given by said Leigh.

The executor appeared to said claim, and denied that deceased had at any time received or become responsible for the alleged trust fund, or that his estate was in any manner indebted to the church.

A jury was impaneled for the trial of these issues, and the testimony offered disclosed the facts hereinbefore related, without any substantial dispute. At the close of the evidence, defendant moved for a directed verdict in his favor on the grounds:

1. That decedent is shown not to have received or held in trust any money belonging to the plaintiff, and at his death had in his possession no money or property of the plaintiff; and

2. • That the agreement or promise, if any, relied upon by plaintiff appears to have been without consideration, and there was no completed gift or declaration of trust.

The motion was denied, and error is assigned on the ruling. Plaintiff’s motion for a directed verdict in its favor was then sustained, and verdict returned accordingly, establishing the claim. Error is also assigned on this ruling. '

1. trial: method of trial: claims: trial without Jury. 2. appeal and error : waiver affecting right: mode of trial below.

I. Objection is first made that this is an action at law, and that plaintiff was allowed to recover as upon an accounting for an alleged trust, which is properly a matter of equitable cognizance. The poiüt is not well made. Without regard to the legal or equitable character of the claim, it was the plaintiff’s unquestionable right to present its claim to the court in the probate proceedings for allowance. If, when the issues were made up, either party desired to insist that the case should be tried in equity, it was open to him to raise the objection, and ask to have it set down for trial without a jury. No question of that kind appearing to have been raised, the objection must be regarded ’ J & as waived.

3. Appeal and error : review : presumptions : claim in probate : theory of claim. 4. evidence: relevancy, materiality, and competency: declaration of trust: consideration-II. The further point is made that, while plaintiff brought its action upon the declaration of trust executed by Leigh, it was, in fact, permitted to recover upon the promissory note which Leigh gave, but took back, in exchange for the declaration of trust extended by him. Such is not the record. The plaintiff’s alleged right of action was based on the theory that there was a completed or perfected trust, and that, upon the death of Leigh, his estate became chargeable with the amount of the trust fund in favor of the church as the beneficiary of the trust; and it was upon that theory that we must presume the claim was established. The note and the details of the transaction of trust were, however, admissible in evidence as having a bearing upon the issue of ° ° r consideration,

5. Contracts : consideration : maintenance fund for church orsanIII. The one proposition most strenuously contended for is that, as no money passed from the church to Leigh, and as no property or thing of value was delivered to him except his own note, there was no consideration for Leigh’s undertaking, and the trust was, at best, a mere promise to make a gift, and of no valid force or effect.

There are several good and sufficient ° reasons why the defense cannot prevail. In the first place, a very substantial consideration for Leigh’s undertaking is clearly shown. His undertaking to care for or provide the endowment fund was the express consideration or inducement for Armstrong to supply the church with a pipe organ. That consideration and inducement were acted upon, and the improvement of the church by the installment of the organ was accomplished. It is immaterial that the promised endowment was for the benefit of the church, rather than of Armstrong; for Armstrong could properly condition his gift of the organ upon the raising of the endowment, to secure its usefulness to the church; and the person or persons undertaking to supply the endowment, in order to induce the gift, are not in a position to raise the question of consideration. The pledge of an endowment was intended to induce Armstrong to part with his property, and at the same time to secure a desired improvement to the church building; and, such pledge having been acted upon, the obligation became enforci'ble, according to the most familiar principles of the law of contracts. The organ having been installed, and the obligation of Leigh to provide the endowment being complete, it only remained for him to pay over the amount he had agreed to contribute, or to evidence such obligation in such formal and businesslike manner as would, in due time, secure its payment. This, in evident good faith, he sought to do, and to that end executed first an instrument which was thought to be somewhat defective in form; whereupon the declaration of trust was substituted, under circumstances already detailed.

Trusts : construction and operation : .consideration : declaration of trust upon surrender of note.

In its final form, the declaration is supported- by the same consideration which supported the original promise- or pledge. Leigh had made himself a debtor upon a valid obligation to the church; and by agreement with the church, that obligation was to be met by his setting apart the required sum, which he was to hold in trust for the benefit of the church during the remainder of his life. His note, when made and delivered to the church, was property in the hands of the latter, and its return to him as trustee was a sufficient designation and setting apart of such sum as a trust fund, to be accounted for as provided in the declaration of trust, as much so, in fact, for all the purposes of the law as if, instead of the making and transfer of the note, Leigh had first paid and delivered the sum of $8,000 in actual money to the church, which thereupon returned it to him in trust for the purposes •named.

7. Trusts : coii struction and operation: complete voluntary trust: consideration not required. IV. Moreover, it is to be said that a consideration moving from the beneficiary is not necessary to a valid and euforcible voluntary trust. Even as a completed gift is valid in law and equity, so also is a completed trust, even though its sole purpose is to confer a voluntary benefit upon the ■cestui que trust. True, the court will not attempt to perfect an incomplete gift or incomplete voluntary trust, but it will not refuse to confirm the validity of either gift or trust, where nothing remains to be done to designate the subject of the gift or trust and set it apart for the use of the beneficiary. A “complete” voluntary trust is not one which has been performed, but is one which has been completely created: that is, the subject-matter has been designated, the trustee and beneficiary have been named, and the limitations and trusts are fully and perfectly declared. 3-9 Oyc. 28.

The terms “complete and incomplete,” and “executory and executed," as applied to trusts, have reference to the manner and perfection of their creation, rather than to the action of the trustee in administering the property. Bouvier defines a complete trust as one in which the estates and interest in the subject-matter of the trust are completely limited and defined by the instrument creating the trust, and require no further instruments to complete them. Applying these definitions to the case before us, it cannot be doubted that the trust declared is complete. The rule is made no less applicable 'by the fact that Leigh, who was the creator of the trust, was himself the trustee.

Mr. Pomeroy, in his work on Equity Jurisprudence (3d Ed.) Yol. 3, Sec. 996, speaking of the creation of voluntary trusts, says:

“While the maxim Ex mido facto non oritur actio, operates in equity even more strictly than at the common law, so that a promise without any valuable consideration has no binding efficacy, still a valid trjnst may be created without any valuable consideration; if a trust has been completely declared, the absence of a valuable consideration is entirely immaterial.”

The author quoted then proceeds to say, with reference to the modes in which the owner of property can transfer it for the benefit of another, that he may, first, convey or deliver it to the beneficiary directly; or, second, may make a transfer of it to a third person, upon trust declared in form of donee; or, third, may retain the title and declare himself trustee for the donee, and thus clothe the donee with the beneficial estate. Again, he says that, if the donor adopts this last method, “he need not use any technical words or language in express terms creating or declaring a trust, but he must employ language which shows unequivocally an intention on his part to create a trust in a third person, or to declare a trust in himself. It is not essential^however, that the donor should part with the possession in the cases where he thus creates or declares a trust.”

We think it would be very difficult for any candid and impartial reader of this record to doubt that the declaration of trust by the deceased measures fully and fairly up to the standard thus fixed by the authorities. The precedents for this holding are quite numerous. Many of them will be found collated in the article on Trusts in 39 Oye. 1. and in 28 Am. and Eng. Encyc. Law (2d Ed.) 848; also, in the footnotes to the sections quoted supra from Pomeroy’s Equity.

Indeed, we think no recognized authority is to be found, questioning the principles to which we here give our adherence. None of the cases cited by appellant announce any other or different doctrine. Many of them hold what we have conceded: that the court will not give effect to an imperfect gift or trust; but we are fully persuaded that the trust in this case is not of that description, and that it constitutes a valid claim against the estate of the deceased. Others of these cases consider the question of how far voluntary subscriptions and promises to pay for the benefit of churches and schools are valid and enforcible. It is probable that there has been some confusion in the decisions along this line; but if so, the rule, so far as this state is concerned, appears to have been settled in University of Des Moines v. Livingston, 57 Iowa 307; Brokaw v. McElroy, 162 Iowa 288; Board of Trustees v. Noyes, 165 Iowa 601.

Put the undisputed facts in this case conclusively negative 'the plea of want of consideration. Further discussion is unnecessary. We hold that there was no error in directing a verdict for plaintiff, and the judgment below is — Affirmed.

Ladd, C. J., Gaynor and Stevens, JJ., concur.