Haynes v. Carr

49 A. 638 | N.H. | 1900

The issue between the parties is upon the validity of a bequest for the creation of a charitable trust by the will of the late John H. Pearson. The plaintiffs ask that the bequest be declared void, and the executors pray the advice and direction of the court as to their duties in the premises.

In the first instance, the parties disagree as to the meaning of the language used by the testator. The clause in question commits the residue of the estate to three trustees, "to expend, in their discretion, in such sums, at such times, and in such manner as may seem to them advisable, the income of my said estate, . . . for the benefit of the poor and destitute in said state of New Hampshire, and for charitable and educational purposes therein." The contention arises upon the meaning of the words "in their discretion." On the one hand it is urged that they mean a discretion to expend or not to expend, and on the other, that the intent was to allow the trustees to exercise their judgment only in the details of the execution of the declared purpose as to the use of the income. The latter is manifestly the true construction. The trustees are specifically and imperatively enjoined to expend the income. The will is not "to expend the income or to add it to the principal, in their discretion." There is nothing in the language of this item, or in the will as a whole, or in any particular part thereof, evidencing any such purpose. If there had been such a design, the will would somewhere furnish evidence of it. Not only is this so, but by italicizing, as he did, the words "to expend" and "the income," the testator plainly emphasized his purpose and clearly set forth what he had in mind. He intended a present and continuing public benefaction; and the means he chose by which to accomplish the end in view was the expenditure of the income of this property by these trustees and their successors. The construction contended for by the plaintiffs is technical to an extreme, and leaves wholly out of view the connection in which the words were used. The expressions, "in their discretion, in such sums, at such times, and in such manner as may seem to them advisable," were all inserted to make sure that the trustees should be left unhampered in the administration of the trust, within the specified limits. None of these words were used for the purpose of giving the trustees power to defeat the object the testator had in mind. The discretion given is as to the manner of spending, and not as to spending or withholding. The command to expend the income is plain and easily understood. It leaves nothing to implication upon the question of the imposition of a positive duty. Upon this point we cannot but regard the evidence as persuasive, convincing, and decisive against the plaintiffs' contention.

The other grounds advanced for holding the devise invalid are, in the main, but various forms of the proposition that the whole scheme is too vague and indefinite to be capable of enforcement in a court of equity. It is argued that "the estate is hopelessly indefinite," in that there is no specification of what portion thereof shall go to each object. If this objection is of any force, it is not because the estate is uncertain, but because the beneficiaries are not definitely pointed out. It is evident that the income of the estate, after the payment of a small number of clearly defined charges, is a sufficiently specific subject-matter upon which to impose a trust. It is no objection to the validity of a charitable gift that it is made up of several parts which are to be administered together, the income to be divided according to the discretion of the trustee. Webster v. Sughrow, 69 N.H. 380, 383; Gafney v. Kenison,64 N.H. 354, 357.

The next, and apparently the principal, objection of the plaintiffs is that the objects of the testator's bounty are too indefinite; that the plan of distribution is so vague that it would be impossible for a court to determine whether it was executed as the testator intended, and therefore it cannot be carried out. But this argument is based upon a radical error. It assumes that the testator had in mind certain and definite beneficiaries, and that the court must be able to see to it that the property goes to them. Starting with this false basis, the whole argument is erroneous or inapplicable. What was the testator's intent? What did he have in mind when he made this will? What is the purpose which the court is to see that the trustees fulfill? What is it that the trustees are to be supervised in the execution of? Not details of distribution. Not the conferring of this sum on such a school, the giving aid to a certain poor widow, or the endowment of a free bed in a given hospital. The testator did not express any such minutiae in this will. They formed no part of his intent. What he intended was that these trustees and their successors should expend this income for such of certain specified charitable objects as to them seemed most worthy. This was his thought, as evidenced by his act. This, and this only, is the intent to be carried out. There is no practical difficulty in performing the judicial act of determining whether this intention is carried into effect, and the trust is not to be held invalid on this ground. "There is a wide distinction between a gift to charity and a gift to a trustee to be by him applied to charity. In the first case, the court has only to give the fund to charitable institutions, which is a ministerial or prerogative act; in the second case, the court has jurisdiction over the trustee, as it has over all trustees, to see that he does not commit a breach of his trust, or apply the funds in bad faith, or to purposes that are not charitable." 2 Per. Tr. (5th ed.), s. 719.

It is apparent that this distinction is well grounded in reason. The objections to vague and indefinite trusts for charity are that the courts cannot surely determine whether they are duly executed by the trustees in accordance with the intent of the donor; and that, in the absence of a trustee, the court cannot perform the ministerial act of dividing the gift among various beneficiaries. When these objections are avoided, there is no occasion to defeat the meritorious purpose of a testator. It is to be borne in mind that the rule as to declaring indefinite trusts void has not been put upon any ground of public policy. They are declared void because the nature and functions of courts are such that there is no power to carry out the aims of the donor. When the case is such that the purpose may be effectuated by a decree plainly within the power the court to make, the trust must be upheld.

It is the failure to apply this test that has led to a few erroneous decisions. These cases are predicated upon the failure to note that in such event the whole duty of the court is performed by seeing that the trustee applies the fund to uses within the designated class. It might be impracticable for this court to make a decree dividing the income of the fund in the present case; but no obstacle appears to prevent a speedy determination of any dispute which might arise in respect of whether the trustees were exceeding their powers. The remark of the Connecticut court in a somewhat similar case is applicable here: "The class to be benefited is a large one, for the testator has imposed no restrictions as to race or residence, but the number of possible beneficiaries under a charitable bequest is immaterial where a power of selection is given." Woodruff v. Marsh,63 Conn. 125, 129. "In all charitable uses, or nearly all, the persons ultimately to be benefited by the charity are uncertain, they are only to be ascertained by the general purpose; and if that be indicated sufficiently to bind the conscience of the trustee, as it is said, it is enough." Derby v. Derby, 4 R.I. 414, 437. "If the general object of the bequest is pointed out, or if the testator has fixed the means of doing so by the appointment of trustees with the power of selection vested in them, then the gift must be treated as sufficiently definite for judicial cognizance and will be carried into effect." Bullard v. Chandler,149 Mass. 532, 541; Darcy v. Kelley, 153 Mass. 433.

The general American rule is substantially the same. Hesketh v. Murphy,35 N.J. Eq. 23; Erskine v. Whitehead, 84 Ind. 357; Miller v. Teachout,24 Ohio St. 525; Sowers v. Cyrenius, 39 Ohio St. 29, — 48 Am. Rep. 418; Hunt v. Fowler, 121 Ill. 269; Quinn v. Shields, 62 Ia. 129; Clement v. Hyde,50 Vt. 716; Fox v. Gibbs, 86 Me. 87; Howe v. Wilson, 91 Mo. 45. "An examination of the authorities generally will show that in modern times instances of testamentary gifts being rendered void for uncertainty have been of much less frequent occurrence than formerly, and the courts are now quite uniformly reluctant to admit uncertainty as a ground for avoiding the formal disposition of property." Gafney v. Kenison, 64 N.H. 354, 356.

It follows that the question of the royal prerogative, which has been so extensively discussed by the plaintiffs, is not here involved. Conceding that there is such a power, as distinguished from the general equitable jurisdiction over trusts, and that it is not to be exercised by this court, the result here is not affected. There has been no failure of the scheme of the testator. The plan is for the trustees and their successors to exercise a continuing discretion, within the prescribed limits. The expression of the idea is not, imperfect. The bequest belongs to the class "of indefinite trusts where the trustees must exercise a continuing power and discretion in the selection of objects of the charity. Successors to the trustees appointed in the will . . . would have the right to exercise the power from the clear intent of the testator." 3 Per. Tr. (5th ed.), s. 721.

For the same reasons, it is unnecessary to examine the cy pres doctrine. The method of carrying out the testator's purpose is to be that laid down in the will. Whether a new method would be devised if that one should fail, is a question which is entirely immaterial as the case now stands.

It is also urged that this trust must fail because there are no specific beneficiaries pointed out in the will. The claim is that there must be some one capable of enforcing the execution of the trust, and if no one is named in the will the trust cannot be executed. It is true that cases may be found which uphold such a rule. It appears to be the law of New York and some other states. Its practical effect is to abolish all charitable trusts. Indefiniteness of beneficiaries is an essential element of a charitable use. Russell v. Allen, 107 U.S. 163. The benefit is not for specified persons, but for the public. If there is a breach of trust, the public can appear through its appointed officers. This rule is in force here to such an extent that no decree affecting such public right is effective unless the attorney-general is a party to the proceedings. Rolfe and Rumford Asylum v. Lefebre, 69 N.H. 238, 240, and cases cited. The means for enforcing the trust are ample. The rights are not individual, but public, and are to be protected by those whose duty it is to conserve the public interest. Any other construction would "subvert the foundation of all public charity." 2 Per. Tr., s. 732.

The plaintiffs also insist that the cases in several jurisdictions decide that a bequest like that under consideration is void, and that there is no case to the contrary in this state. It is conceded that there are such decisions, but they depend largely upon local statutes. Those which hold that a gift like this is too vague, that it is not enforceable because there is no certain beneficiary, and that it violates the rule against perpetuities, all depend upon the proposition that the statute of 43 Elizabeth, chapter 4, is not in force, and that there is no other source of equitable jurisdiction over trusts for charities. This is the position taken in New York. The statute of Elizabeth was there repealed in 1788, and the construction placed upon the repealing act was that if there had been equity jurisdiction over charities before the statute of Elizabeth was enacted, it was the intent of the legislature to take it away by the repeal of 1788. Levy v. Levy, 33 N.Y. 97, 110; Bascom v. Albertson, 34 N.Y. 584,602, et seq.; Holland v. Alcock, 108 N.Y. 312, 336. The New York view obtains in Virginia (Gallego's Ex'rs v. Attorney-General, 3 Leigh 450, — 24 Am. Dec. 650), in Maryland (Dashiell v. Attorney-General, 5 H. J. 392, — 9 Am. Dec. 572), in Michigan (Methodist Church v. Clark, 41 Mich. 730), and in Minnesota (Lane v. Eaton, 69 Minn. 141, — 38 L.R.A. 669), but has apparently ceased to obtain in Wisconsin. Harrington v. Pier, 105 Wis. 485, — 50 L.R.A. 307. These are the states upon whose decisions the plaintiffs chiefly rely. Depending, as these decisions do, upon local statutes for their force and effect, it is quite unnecessary to argue that they are valueless here. Cases from jurisdictions where the legislature has reduced charitable bequests to the level of legacies for private purposes throw no light upon the question of what constitutes a valid charity at common law. The plaintiffs' authorities are substantially all from states which, in effect, deny the whole doctrine of charitable trusts. From the first, such trusts have been recognized in this state, both in the decisions of the courts and the acts of the legislature. Union Baptist Society v. Candia, 2 N.H. 20; Laws, ed. 1830, p. 510; Duke v. Fuller, 9 N.H. 536; Webster v. Sughrow, 69 N.H. 380, and cases cited.

There is no statute in this state repealing the statute of Elizabeth; and the rule here is that, whether it has been adopted or not, "courts of equity have original and inherent jurisdiction over charities, independent of the statute." Goodale v. Mooney, 60 N.H. 528, 533; Webster v. Sughrow, supra. Furthermore, so far as the common law has been declared in this country, it has been held with substantial unanimity that such a trust as that under consideration is valid. 2 Per. Tr. (5th ed.), s. 748, and authorities there reviewed; 5 Eng. Rul. Cas. 575-580, American notes.

The claim is also advanced that the power to devote the income to educational purposes is too broad, that it would allow the trustees to apply the fund to purposes not charitable, and therefore the whole gift is void. "In the case of a charitable gift above all others, it is often said, the construction should be such as will preserve rather than destroy the gift." Goodale v. Mooney, supra, 534. It is undoubtedly the law in most states that where property is given to trustees, with power to apply it either to uses which are or those which are not within the classes included in charities, the whole must fail, so far as the application of the peculiar doctrines of charitable uses is concerned. Stratton v. Physio-Medical College, 149 Mass. 505. But that is not the present case. The gift is to educational purposes. It is not for the private gain of those who are engaged in educational work. A bestowal of the income upon the owners of a school conducted for private gain would not be putting it to a charitable use. Neither would it be an application thereof to educational purposes. Such a gift would enrich the educator, or the owners of an educational enterprise, but would not promote education in the sense intended by the testator, and is not within the power conferred upon the trustees. To come within the fair meaning of the phrase "for educational purposes," the use must be one which directly promotes the cause of education. This is a charitable use. Jackson v. Phillips, 14 Allen 539.

The trust created by this will contains all the requisites of a valid charity, as set forth in Goodale v. Mooney, 60 N.H. 528, 533. The words are imperative. The testator places the property in the hands of the trustees, with directions to care for and invest the same, and distribute the income. "The subject is the remainder of his estate and is certain." The object is the relief of the poor and destitute in the state of New Hampshire, and for educational and charitable purposes therein. The individual beneficiaries are uncertain, as they must always be in the case of a charitable trust; but the objects are clearly defined, and there can be no difficulty in determining whether a given purpose comes within the prescribed classes. "The class is certain, and the individuals to be selected from it may be made as certain by the election of the trustees. Were no mode of selection pointed out in the will, there might be force in the objection; but there is a mode. The beneficiaries are to be selected by the trustees, and when selected are to enjoy the charity in greater or less proportions from year to year, or in such form as the trustees may think best." Treat's Appeal, 30 Conn. 113, 116.

Finally, it is contended in the plaintiffs' behalf that the statute limiting the power of non-dividend-paying voluntary corporations to hold property (P. S. c. 147, s. 8) should lead to a decision that these trustees cannot hold a larger sum. The arguments advanced in support of this novel claim might with propriety be urged upon the legislature as reasons why the statute should be made applicable to all eleemosynary trustees, but they have no application here. Perhaps it would be better if the law were as the plaintiffs claim it should be; but the sufficient answer here is that the legislature did not entertain such views.

The plaintiffs' bill should be dismissed. The trustees should be advised, upon the settlement of their account as executors, to proceed with the execution of the trust, distributing the residue of the income of the property among the specified classes of beneficiaries. They are to make the division as to them seems best. If doubt shall hereafter arise as to whether a proposed object is within the classes specified, further advice can be had upon application. Gafney v. Kenison, 64 N.H. 354, 357. If any one desires to make complaint concerning the acts of the trustees, proceedings can be instituted through the intervention of the attorney-general. The Dublin Case, 38 N.H. 459.

Case discharged.

All concurred.