| New York Court of Chancery | Feb 6, 1909
The- right of the complainants to maintain this suit being challenged, that question will be examined before proceeding to the consideration of the cause upon its merits. Two grounds of objection are named in the answer, and for which the benefit of a demurrer is prayed, namely—first, that while the complainants may have an interest in the subject-matter of the suit, yet their hill should have been filed on behalf of themselves and all other persons residing in the neighborhood of the church who would come in and contribute to the expenses of the suit, and second, that they should not be allowed to proceed without making parties the respective pastors of the Presbyterian, Methodist, Baptist and Dutch Reformed churches, who supply the pulpit, and who, it is said, have a direct interest which may be affected by the decision of this cause. A third objection was urged upon the argument, and that is, that the attorney-general is a necessary party in this proceeding. These objections will now be considered together.
In several cases in this state bills were filed by a limited number of individuals who were interested in a charitable trust and
One of the latest eases in our reports in which this question is exploited is that of Lanning v. Commissioners of Public Instruction, 63 N. J. Eq. (18 Dick.) 1, in which the attorney-general was a party defendant. The bill was filed by the complainant on behalf of himself and all others similarly situated and interested in the matters exhibited in the bill, against the defendants as individuals and as commissioners of public instruction of the city of Trenton, who had succeeded a former public corporation as trustee under a will creating a trust for charitable uses, the purpose of the trust being to establish a library for the use of the teachers and pupils of the public schools, apprentices, me
The case of Attorney-General v. Heelis, 2 S. & S. 67, was an information and bill by the attorney-general in which ten persons were the relators on behalf of themselves and all the other tenants and occupiers of houses and other premises situate in Great Bolton subject to the rates or assessments, and entitled to the benefit of certain acts of parliament, and the defendants were the trustees under those acts.
In cases where the relator has an interest in the matter in dispute, in which case his personal complaint being joined to and incorporated with the information given to the court by the attorney-general, the pleading forms what is called an information and bill. Dan. Ch. Pl. & Pr. (6th Am. ed.) *10.
The rule is that where property affected by a trust for public purposes is in the hands of those who hold it devoted to that trust, it is the. privilege of the public that the state be entitled to intervene by its officers for the purpose of asserting on behalf of the public generally the public’s right and interest. Ibid. *8.
Where a bill has been filed by an individual of a numerous class in his own right, the court will generally allow an amendment to be made so as to make such individual sue on behalf of himself and the rest of the class, even on final hearing. Dan. Ch. Pl. & Pr. *245.
28 Am. & Eng. Encycl. L. (2d ed.) 1100. In the case under-consideration the cestuis que trustent are all the people of the neighborhood of the Cedar Grove church, and the trustees are the trustees of the First Presbyterian Congregation at Princeton. The pastors of the several Christian denominational churches who conduct the services at Cedar Grove are neither cestuis que trustent nor trustees under the Tulane deed; if they were either a decree could not be pronounced in this cause without their presence before the court. As it is, they are not necessary parties, and were rightly omitted from the bill.
The eoaclusions reached upon this branch of the case are that the bill should have been filed by the complainants on behalf of themselves and all others who were interested with them in the subject-matter; that the attorney-general should have been joined with them, in which case the pleading would have been a bill and information, or the attorney-general should have been made a party defendant. The result is that the bill will have to be amended so as to malee the complainants sue on behalf of themselves and the rest of the class who are interested with them, and the attorney-general will have to be made a defendant and brought into court by process before a decree can be pronounced.
The ease will be disposed of on the merits at this-time as between the parties to the record, and, if the attorney-general, after being brought in, should be satisfied that a right conclusmn has been reached, he may file a formal answer and submit to the judgment of the court. If, however, he should file a litigious pleading against the defendant trustees, the case wi'l be opened to afford him an opportunity to take proofs in addition to the testimony which is already in. In the event of this course being taken the view of the facts hereafter to be expressed will, of course, be put aside and the whole question will be considered open.
It was shown that the trust fund, originally $5,000, had accumulated, and Mr. Howe, one of the trustees and secretary of the board, stated that the full income had not been used by the defendants to keep the church in order and to pay the various salaries and encourage the work of the church, because Mr. Tulane, after giving the fund, stated that he wished to pay all the expenses of carrying on the work, and did so for the eleven succeeding years, before he died.
The average attendance upon the services of the church in Mr. Tulane’s time was from fifty to one hundred. It has gradually dwindled until during the last three or four years it has ranged from about five to twenty-five, occasionally going above the last number, the average being, perhaps, in the neighborhood of fifteen. Mr. Paul Martin, the secretary of the faculty of the Princeton Theological Seminary, was connected with the Cedar Grove church during the year 1905. He preached there steadily during the year on each Sunday when the pulpit was to be filled by the pastor of the First Presbyterian Church, and only found a congregation of six or seven people. • He thereupon made a canvass of the vicinity to ascertain the religious beliefs and church affiliations of the people and found that they were almost universally connected with some church. He inaugurated some social gatherings to encourage interest in the church, but his efforts were unavailing. The trouble appears to have been with the plan, namely, that of union services, so called, which are services conducted by pastors of various denominations, neither the services nor the congregation at any time being distinctively of a denominational or sectarian character, as I understand it.
The complainants contend that the conditions require the continued execution of the trust upon the plan and according to the intentions of the donor, but, failing that, that the trust property and fund should be applied cy pres.
My judgment is inclined to be against the complainants upon the first proposition, for its seems to me that the prevailing conditions are such that the plan and intention of the donor is not being and cannot be efficiently and effectually carried out. But this question is not decided because of the power and discretion of the trustees in the premises as hereafter stated.
As to the second proposition: I think the doctrine of cy pres does not apply, because the donor by the terms of the trust has precluded its application. In this connection it should be remarked that the complainants do not point out in what way the trust property and fund can be applied cy pres. Admittedly, in a proper case, the doctrine obtains in this state.
In MacKenzie v. Trustees of Presbytery, 67 N. J. Eq. (1 Robb.) 652, it was held that a trust for public worship and instruction for the benefit of an indefinite number of persons according to Presbyterian faith and policy, with certain added provisions, appeared to be good as a charity, and that such a trust is enforceable in this state either exactly or under the doctrine of cy pres approximately, and Judge Green, speaking- for the court of errors and appeals in that case (at p. 673), quoting from Chief-Justice Beasley in Hesketh v. Murphy, 36 N. J. Eq. (9 Stew.) 304, 310, said: “When a gift has been placed in the hands of a trustee to promote a charity, which, from the mutation of circumstances had become incapable of fulfillment, such gift was to be applied by the courts, exercising a purely judicial authority, to some cognate object.” And again (at p. 675) : “The sound rule now is, at least in America, that courts will not execute charitable trusts in a manner different from that in
Now, upon the authority of these cases, it is perfectly apparent that if the particular trust created by the donor is no longer capable of fulfillment owing to the changed conditions existing, the property and fund would be applied cy pres, were it not for the fact that the donor himself in the deed of gift has provided what shall be done with reference to the trust estate in the event of the failure of the object of charity which he endeavored to promote.
Of course, the doctrine of cy pres, that is, the doctrine that a fund for charity, being impossible of application according to the intention of the donor, shall be applied, as nearly as may be, according to his intention, can have no existence when the donor himself provides for the application of the fund in the event of the failure of the charitable use to which he- in the first instance directed that it should be devoted. In the deed under consideration Mr. Tulane provided that, upon failure of the trust, the •property should go to meet certain expenses of the First Presbyterian Church of Princeton. Therefore, surely, if the trust has failed, the property must be applied as the donor directed, and not upon any theory of cy pres.
The crucial point in the case is the plenary discretion given to the defendants, the trustees, to authorize and decide when to discontinue the plan of holding the property for the use expressed in the trust deed, and their action under that power.
Let it be remembered that the language of the déed is:
“Whenever hereafter the use of said Ohapel for the purposes aforesaid shall have been necessarily abandoned, or discontinued through the neglect of the people to attend upon the services; or through the failure of the several pastors to preach in said Chapel; or through the waste or destruction of said building; or whenever from any cause it shall seem to the said trustees, clearly expedient to discontinue the plan of holding the said property for such use, as aforesaid, they the said Trustees being the judges and fully authorized to decide such discontinuance, upon all or any cause whatever, then in such case of non*478 user, abandonment or discontinuance, the said Trustees shall hold the said land and all buildings thereon, as the property of the said Trustees for the use of the said First Presbyterian Church and Congregation of Princeton, with full power to sell the same and convert it into money and to hold the money arising from the sale thereof, forever, in fee. for the use of the Board of Trustees of said First Presbyterian Church and Congregation of Princeton aforesaid, of which they are the Trustees, for meeting and defraying the contingent and ordinary expenses of said Church and Congregation.”
As to the $5,000 trust fund given by Mr. Tulane to the trustees under the deed, at or about the time of the delivery of that instrument, it was provided by the donor, that whenever the church should have ceased to be used for preaching and holding religious services therein and should have been sold and abandoned for such use,‘then the $5,000 was to be held for the same use as the church and land, or the money arising from the sale thereof was to be held, namely, for defraying the contingent and ordinary expenses of the First Presbyterian Church and congregation of Princeton.
Where a power is given to trustees to do or not to do a particular thing at their discretion, the court has no jurisdiction to lay a command or prohibition upon them as to the exercise of that power, provided their conduct be bona fide and their de; termination is not influenced by improper motives. 2 Lew. Trusts *613, and note o.
Where absolute discretion is given to trustees as to the exercise of a power, the court will not compel its exercise unless it is improperly or unreasonably exercised. Tempest v. Lord Camoys, 21 Ch. Div. 571. See, also, Marquis of Camden v. Murray, 16 Ch. Div. 161.
Where trustees had power to apply the income of a fund in their “uncontrolled and irresponsible discretion,” the court, while expressing an opinion that the trustees were not acting judiciously, declined to interfere with their discretion, there being no proof of mala fides. Tabor v. Brooks, 10 Ch. Div. 273. See, also, Gisborne v. Gisborne, 2 App. Cas. 300; Attorney-General v. Governors of Harrow School, 2 Ves. 551; Brophy v. Bellamy, L. R. 8 Ch. App. 798; Collins v. Vining, C. P. Coop. 472.
'Where in a trust deed for the satisfaction of debts a discretion is vested in the trustees to refuse the benefit of that deed to any
In Cowley v. Hartstonge, 1 Dow. 361, Lord Chancellor Eldon remarked (at p. 378) that if a testator clearly manifested his intention on the face of the will that his trastees should have certain discretion,,the court would not control that discretion.
In Talbot v. Marshfield, 2 Dr. & Sm. 285, Vice-Chancellor Sir R. T. Kindersley said that the intention of the testator clearly was that if a certain exigency arose the trustees should, if they thought fit, in the exercise of their discretion, notwithstanding the gift in remainder, hand over the corpus of the fund to the persons entitled for life; and the court would not interfere with the honest exercise of such discretion.
Where a testator directed two trustees to apply certain rents, or such parts as they or he should in their or his discretion see fit, in the maintenance and education or advancement in life of his younger children, during the life of his wife, and one of the trustees having died, the court would not interfere with the discretion to be exercised by the surviving trustee. Livesey v. Harding, 1 Tam. 460.
In Gisborne v. Gisborne, 2 App. Cas. 300, Lord Cairns, speaking for the house of lords, said (at p. 305) : “The trustees are not merely to have discretion, but they are to have ‘’uncontrollable/ that is, uncontrolled, authority. Their discretion and authority,,always supposing that there is no mala fides with regard to its exercise, is to be without any check or control from any superior tribunal.”
In re Lofthouse, an infant, 29 Ch. Div. 921, Vice-Chancellor Bacon, referring to Gisborne v. Gisborne, ubi supra, remarked (at p. 926): “There the trustees had reposed in them an 'uncontrollable authority/ and their lordships refused to interfere with that authority.”
In Marquis of Camden v. Murray, 16 Ch. Div. 161, Vice-Chancellor Malins (at p. 170), speaking of the court’s exercise of control over trustees, remarked: “In certain cases—not in all cases because if their discretion is absolutely uncontrollable, I should not interfere—that I have recently decided, after full investiga
In this state the court of errors and appeals in Read v. Patterson, 44 N. J. Eq. (17 Stew.) 211, held: “Where a power is coupled with a trust or duty, a court of equity will enforce a proper and timely exercise of the power; but if it be given upon a trust to be exercised in the discretion or upon the judgment of the trustee, the court will not interfere with the trustee’s discretion in executing the trust unless he has exercised his discretion mala fide.” And cited with approval many English cases, among them Livesey v. Harding, Brophy v. Bellamy, Tempest v. Lord Camoys, In re Lofthouse, ubi supra.
This case is an appeal from the conscience of the trustees to the conscience of the court, and, assuming that the court, upon the facts, would be of the opinion that the complainants are entitled to the relief they pray, namely, that the defendants be enjoined and restrained from selling and conveying away any part or parcel of the Cedar Grove church property, and further, that they are entitled to have the trust property applied cy pres, -still, the court would be powerless to grant such relief unless the defendants had acted mala fides. There is no proof of bad faith in this case. On the contrary, the trustees, all honorable and intelligent men, appear to have acted in a way entirely warranted by the facts, and while not obliged under the terms of the trust to give reasons for their action in that regard, they have given some of them, which may be succinctly stated as follows: That certain of the pastors who supply the pulpit at Cedar Grove have recommended the discontinuance of the religious services carried on under the plan by reason of existing conditions; that the community in the vicinity of the church has changed since its establishment and that none of the people for whom the trust was originally created are now living at Cedar Grove; that almost without exception the religious people there are connected with other churches;
The result is that as the case stands the prayer of the complainants must be denied. The amendment above mentioned will be directed to be made, and the attorney-general must be made a party defendant. After he appears and answers ultimate disposition will be made of the case as above indicated.
As this proceeding is in good faith and requires a construction of the trust instrument under which the property is held, it would appear to be a case for the allowance of costs and counsel fees to both parties under the authority of Attorney-General v. Moore’s Executors, 19 N. J. Eq. (4 C. E. Gr.) 503, 519. I will hear counsel further on this question at any time before final decree.
Memorandum on application to settle decree.
This was a case concerning a trust arising under a deed. The opinion concluded thus, supra:
“As this proceeding is in good faith and requires a construction of the trust instrument under which the property is held, it would appear to be a case for the allowance of costs and counsel fees to both parties under the authority of Attorney-General v. Moore’s Executors, 19 N. J. Eq. (4 C. E. Gr.) 503, 519. I will hear counsel further on this question at any time before final decree.”
The authority upon which I predicated the allowance is that of Attorney-General v. Moore’s Executors, supra, in which case the court of errors and appeals (at p. 519) said:
“If reasonable grounds exist for coming into the court to obtain the construction of the instrument creating the trust, the practice is to allow the costs and expenses, as it respects all the parties, and as between attorney and client, out of the trust funds.”
Although the court in Attorney-General v. Moore’s Executors was dealing with a trust created by will, nevertheless, the award of costs and counsel fees to all parties was said to be the practice in cases where “reasonable grounds exist for coming into the court to obtain the construction of the instrument creating the trust.” Now, if the court meant that that practice obtained only with reference to contests arising under wills I believe it would have so stated. But, the observation that the rule obtains in cases where the “instrument creating the trust” has to be construed, strikes me as a deliberate decision to the effect that the rule is not confined to will cases, as a will is only one instrument under which a trust may be created, and a deed is certainly another one. I am not prepared to believe that the court of errors and appeals meant to confine allowances in cases of the kind under consideration. to trusts arising under wills, because if it did how easy it would have been to use the proper and apt expression “will” creating the trust instead of “instrument,” a term which comprehends “deed” as well as “will.”
In Bouv. Dict. (Rawle’s revision) 1064, “Instrument” is thus defined :
“A document or writing which gives formal expression to a legal act or agreement. * * *
“It includes bills, bonds, conveyances, leases, mortgages, promissory notes, and wills.”
There is, in my judgment, a peculiar equity in this case en titling the complainants to costs out of the trust property. This was not a suit brought immediately upon a trust being created to resolve doubts and ambiguities upon the face of the trust instrument in order that the trust might be settled and applied, but was a case in which the trust had been executed for a period of more than thirty years, and then the trustees, under power conferred upon them, determined that conditions subsequent had happened which rendered the trust property no longer available, or at least no longer required, for the purposes of the original trust, and thereupon determined to sell such of the trust property as consisted of land and hold the proceeds, together with certain moneys donated, upon a certain other trust, of which the complainants were not the beneficiaries. To say that in such a case the original cestuis que trust must defend at the peril of costs, although they have reasonable ground for defending, seems to me to be untenable. At least I think that costs in such a case may, in the discretion of the court, be awarded out of the fund. I adhere to my original view and will allow costs to the complainants and a counsel fee of $350, payable out of the trust estate. Defendants’ counsel does not ask for an allowance in the decree.