194 Mass. 280 | Mass. | 1907
This is a petition brought by the heirs of Stephen Salisbury, late of Worcester, deceased, for leave to file an information in the nature of a quo warranta against the respondent, under the R. L. c. 192, §§ 6-13. The Worcester Art Museum is a corporation, established under the provisions of the Pub. Sts. c. 115 (R. L. c. 125), “ for the purpose,” as set forth in its certificate of incorporation, “ of founding an institution for the promotion of art and art education in said Worcester; erecting and maintaining buildings for the preservation and exhibition of works and objects of art; making and exhibiting collections of such works, and providing instruction in the industrial, liberal and fine arts; for holding real and personal estate in the furtherance of this purpose; and for the holding and administering funds acquired by the corporation for these and kindred objects in accordance with the will of the donors. All of said property and funds of the corporation, however, are to be held solely in trust for the benefit of all the people of the city of Worcester.” By the will of Mr. Salisbury this corporation is made his residuary legatee, and if the intention of the testator is carried out, it will receive, under the will, real and personal estate amounting in value to between $2,000,000 and $3,500,000. By the R. L. c. 125, § 8, such corporations are authorized to “ hold real and personal estate to an amount not exceeding one million five hundred thousand dollars.” By the St. 1906, c. 312, enacted after the probate of the will, the right of this respondent to hold real and personal estate was enlarged to an amount not exceeding $5,000,000. The petitioners contend that, by reason of the limitation in the statute, the gift was void; that, as heirs at law of the testator, their rights in this part of his estate became vested on the probate of the will; that the St. 1906 is prospective in its operation, and
The statute under which the petition is brought has been considered in Goddard v. Smithett, 3 Gray, 116, in Hartnett v. Plumbers Supply Association, 169 Mass. 229, and in other cases. We will assume in favor of the petitioners, without deciding, that if they were right in their view of the questions of substantive law involved, it would be available to give them the remedy ■which they seek. We come directly to the effect of the residuary clause in the will.
The attack upon its validity may be considered from two points of view: first, in reference to the rights of testators, as against their heirs, to dispose of their property for charitable or other purposes; secondly, in reference to the provisions of the law giving this kind of corporations a right to hold property to an amount not exceeding a certain sum.
From the first point of view this gift is perfect and complete. Except for the protection of the statutory rights of a husband or wife, the power of a testator in this Commonwealth to dispose of his estate by a will is unlimited. There is nothing in our law to restrain one from giving free course to his charitable inclinations, up to the last moment of his possession of a sound, disposing mind. Making charitable gifts in this Commonwealth is not against public policy, and we have no legislation, such as has long existed in England and in New York and some of the other American States, putting obstacles in the way of such testamentary acts. The only ground of objection to this part of the will is not from the point of view of the .testator- or of his heirs, but on account of the provision of the statute regulating the rights of corporations as to the holding of property. We must, therefore, determine the meaning and effect of this statute on which the petitioners rely.
They contend that it is by implication an absolute prohibition against the holding, at any time, in any form, for any purpose, of a greater amount of property than that stated, and that any attempt of a corporation to hold more, or of any person to put more into the ownership of a corporation, is illegal and absolutely void. The respondent contends that this implied limita
In interpreting the act the history of earlier kindred provisions may be helpful. At common law, corporations were authorized to acquire and hold both real and personal property without limit. In re Mc Graws estafe, 111 N. Y. 66, 84. “ The creation of a corporation, gives to it, amongst other powers, as incident to its existence and without any express grant of such powers, that of buying and selling.” Bank v. Poitiaux, 3 Rand. 136. “A corporation has, from its nature, a right to purchase lands, though the charter contains no license to that purpose.” Leazure v. Hillegas, 7 S. & R. 313. See also Page v. Heineberg, 40 Vt. 81; Mallett v. Simpson, 94 N. C. 37, 41.
Under the feudal system, when land was given to a corporation, the chief lords of whom the land was held, and the king as ultimate chief lord, lost their chances of escheat, and various other rights and incidents of military tenure. During the middle ages, the accumulation of land in the ecclesiastical corporations was so great as to be thought a national grievance. Hence the English mortmain acts, which go back for their origin to Magna Charta, St. 9 Hen. III. c. 36, and which have continued with various modifications to this day. See 7 Edw. I. c. 2; 15 Rich. II. c. 5; Shelford on Mortmain, 2, 6, 8, 16, 25, 34, 39, 809, 812; Tyssen on Charitable Bequests, 2, 383. Under these acts the alienations were not void, so as to let in the grantors and their heirs; but they merely operated as a forfeiture which gave a right to the mesne lord and the king to enter after due inquest. This right to enter was often waived by a license in mortmain. See citations above, and Tyssen on Charitable Bequests, 383; St. 7 & 8 Will. III. c. 37. In form these licenses commonly authorized a holding of property “ not exceeding ” a certain value.
Another act, St. 9 Geo. II. c. 36, which is usually called “ The Mortmain Act ” but is called by Tyssen the “ Georgian Mort-main Act,” is of a very different nature. One of its purposes, as declared in the preamble, is to avoid “improvident alienations or dispositions made by languishing or dying persons, or by other persons, to uses called charitable uses, to take place after their deaths, to the disherison of their lawful heirs.”' Considered in reference to its purposes, it is not properly called a mortmain act. It applies only to gifts for charitable uses ; and under it all such gifts, unless made as the statute allows, are absolutely void.
We never have had any real mortmain acts in Massachusetts. The nearest approach to one was the Prov. St. 1754-5, c. 12; 3 Prov. Laws (State ed.) 778. This made deacons a corporation to take gifts for charitable purposes, limited the grants to such as would produce an income not exceeding three hundred pounds a year, and provided that they should be made by deed, three months before death, and that all bequests, devises or later grants should be void. This statute related only to gifts to deacons, and was repealed by St. 1785, c. 51 (February 20, 1786), which re-enacted a part of the law, but omitted the provision that gifts not authorized by the act should be void. Bartlet v. King, 12 Mass. 537, 545. See R. L. c. 37, § 1.
The significance of this reference to English law and to our legislation is, first, that, except for this short period, we have never had in Massachusetts any legislation prohibiting charitable gifts to trustees or corporations, or providing that any kind of conveyances, devises or bequests to corporations shall be void. On the other hand, the policy of the Commonwealth, as expressed both by legislation and the decisions of its courts, has been exceedingly liberal to testators and public charities. Sanderson v. White, 18 Pick. 328, 333, 334. American Academy v. Harvard College, 12 Gray, 582, 595, 596. Saltonstall v. Sanders, 11 Allen, 446. Jackson v. Phillips, 14 Allen, 539, 550.
We start with the inherent right, already referred to, of every corporation to take and hold property at common law, by virtue of the act of its creation. This right is recognized in our statutes by implication, without express mention. R. L. c. 109, §§ 4-6. What force is to be given to the words, “ may hold real and personal estate to an amount not exceeding one million five hundred thousand dollars ” ? The respondent contends that their meaning is as if words were added as follows: “and beyond that amount it shall have no right as against the Commonwealth ; and the Commonwealth may take proper measures, through action of the Attorney General or otherwise, to prevent or terminate such larger holding.” According to the argument, a taking and holding by a corporation, above the prescribed amount, is under its inherent right. As between it and the State as the guardian of the public interest, a provision as to amount is made, which does not affect its right as to third persons. As to the general legality of the holding, except when the State chooses to enforce the law for its own benefit, the condi
That this is the effect of such limitations in statutes of this kind where the title of the corporation is under a grant, as distinguished from a devise, seems to be the universal rule. Vidal v. Girard, 2 How. 127, 191. Runyan v. Coster, 14 Pet. 122. National Bank v. Matthews, 98 U. S. 621. Cowell v. Springs Co. 100 U. S. 55, 60. Jones v. Guaranty Indemnity Co. 101 U. S. 622. National Bank v. Whitney, 103 U. S. 99. Fritts v. Palmer, 132 U. S. 282. Leazure v. Hillegas, 7 S. & R. 313. Chambers v. St. Louis, 29 Mo. 543. Bank v. Poitiaux, 3 Rand. (Va.) 136. Fayette Land Co. v. Louisville & Nashville Railroad, 93 Va. 274. Mallett v. Simpson, 94 N. C. 37. Gilbert v. Hole, 2 So. Dak. 164. Barrow v. Nashville Charlotte Turnpike Co. 9 Humph. 304. Hough v. Cook County Land Co. 73 Ill. 23. Alexander v. Tolleston Club, 110 Ill. 65. Barnes v. Suddard, 117 Ill. 237. Hamsher v. Hamsher, 132 Ill. 273. Baker v. Neff, 73 Ind. 68, 70. This is a fair deduction from the decisions in this Commonwealth. Heard v. Talbot, 7 Gray, 113. Commonwealth v. Wilder, 127 Mass. 1, 6. Davis v. Old Colony Railroad, 131 Mass. 258, 273. West Springfield v. West Springfield Aqueduct Co. 167 Mass. 128. Slater Woollen Co. v. Lamb, 143 Mass. 420. Prescott National Bank v. Butler, 157 Mass. 548. Nantasket Beach Steamboat Co. v. Shea, 182 Mass. 147. National Pemberton Bank v. Porter, 125 Mass. 333. Atlas National Bank v. Savery, 127 Mass. 75. Bowditch v. New Fngland Ins. Co. 141 Mass. 292. Chaffee v. Middlesex Railroad, 146 Mass. 224.
The counsel for one of the petitioners says in his brief, “ It is fully conceded at the outset that where a corporation takes and holds property by conveyance, or by executed gift inter vivas, contrary to its charter rights, no one but the State can complain. This is settled by a practically unbroken line of decisions in all the States,” etc.
But if the statute were a prohibition that renders the holding
Some judges, in holding that such titles cannot be taken under wills, endeavor to found a distinction upon the executed character of a title by grant, and suggest that a devise or bequest is executory. It seems to us that there is no good reason for the distinction. When a will is proved and allowed, it takes effect immediately to pass all property affected by it. The provision in the law against large holdings by corporations has no relation to the probate of the will. The act of the testator in executing the will is confirmed and given effect as a complete and executed disposition of the property, by the allowance of the will. In this respect a recorded will does not materially differ from a delivered deed.' The heirs at law are bound by one as well as by the other.
The decisions upon the precise point at issue are conflicting. In Jones v. Habersham, 107 U. S. 174, a case similar to that now before us, it was held by the court, in an opinion by Mr. Justice
The leading case which presents the opposite view is In re Mc Graw's estate, 111 N. Y. 66. Although the decision necessarily puts a construction upon a statute of that State, this construction seems to be materially affected by the policy of New York in reference to charities. Said Judge Peckham, who delivered the. opinion, “ We have a decided mortmain policy. It is found in our statute in relation to wills, prohibiting a devise to a corporation unless specially permitted by its charter or by some statute to take property by devise.” In Chamberlain v. Chamberlain, 43 N. Y. 424, the court refers to the prohibition of devises, and to the N. Y. St. 1860, c. 360, still in force, which makes void all bequests or devises to charity in excess of one-half the testator’s property, where he leaves relatives. Other statutes have been passed, limiting the amount that can be devised to certain corporations by one testator, forbidding a devise or bequest to charities, by a person leaving relatives, of more than one fourth of his estate, and making void such gifts where the will was executed within two months before the death of the testator.
The doctrine of the New York court is stated as the law in Davidson College v. Chambers, 3 Jones Eq. 253, and adopted in Wood v. Hammond, 16 R. I. 98, 115, and House of Mercy v. Davidson, 90 Tex. 529. In the case in North Carolina the decision was by two of the three judges of the court, the Chief Justice giving an able dissenting opinion. The courts in Kentucky and Tennessee have expressed approval of the McGraw case in New York, but in terms that do not leave the grounds of their decisions entirely clear. Cromie v. Louisville Orphans' Home Society, 3 Bush, 365, 383. Heiskell v. Chickasaw Lodge, 87 Tenn. 668, 686. In reference to supposed errors in the opinion in the last case, see Pritchard on Wills, § 153, note, and Farrington v. Putnam, 90 Maine, 405, 433.
In the construction of our statute, when the question arises whether a different rule shall be established in regard to the taking and holding by a corporation under a will from that which is universally laid down in regard to a holding under a deed, we are much influenced by the policy of our law as to devises and bequests for charitable purposes. We are of opinion that, under the R. L. c. 125, § 8, a gift to a corporation under a will, to an amount in excess of the sum specially authorized, should be held no less valid than a similar acquisition of title under a deed. It is good as against every one but the Commonwealth. It follows that the St. 1906, c. 312, operated as a waiver of the Commonwealth’s right to terminate the holding, and a legislative declaration of the entire validity of the provision in the will.
If we are wrong in this conclusion, the petition must" be dismissed on an independent ground. The gift was to a public charity. The purposes of the Worcester Art Museum, as set forth in the agreement for its organization from which we have quoted, show the charitable uses to which all property held by it must be put. It is all held “ solely in trust, for the benefit of all the people of the city of Worcester.” We have no doubt that the property was given under the testator’s will with a general charitable intent, with which the Worcester Art Museum, as a
If the corporation, at the time of thé probate of the will, was incapable of taking the property and carrying out the general charitable intent of the testator, the court, applying the doctrine of cy pres, would appoint a trustee to act in its place. Inasmuch as the Legislature, by the St. 1906, c. 312, has removed the only ground of its disability, a direction to turn over the property to the corporation would accomplish perfectly the purpose of the testator. Baker v. Clarke Institution for Deaf Mutes, 110 Mass. 88.
In no view of the case have the petitioners any private right
Petition dismissed.