319 Mass. 444 | Mass. | 1946
This is a petition in the Probate Court by succeeding trustees under the will of Frank Wood, late of Boston, deceased, against the respondent Wood Memorial Home, Inc., a Massachusetts charitable corporation, for the restoration of assets and for an accounting; or, in the alternative, against the respondents executors of the will of Robert F. Herrick, deceased, and against “the estate of Lillian Neale (Wood) Bradway, late of Pasadena, California,” Robert F. Herrick and Lillian Neale (Wood) Brad-way having been .the original trustees under the will of Frank Wood, for the payment of an amount equal to the value of the property held by the corporation and the total of all sums expended by it. The Attorney General was also a party respondent. No service could be made upon representatives of the Bradway estate. The judge entered a decree, which ordered the corporation “to restore all assets now held by it,” and to account for its expenditures, to the petitioners. The decree made no reference to the executors of the Herrick will or to the Bradway estate. The corporation and the executors of the Herrick will appealed. The judge made a report of the material facts found by him, and the evidence is reported. G. L. (Ter. Ed.) c. 215, §§ 11, 18. We are not limited to the facts found by the judge, but from the evidence may find other facts, and may draw our own inferences, whatever may have been those drawn by the judge. Lowell Bar Association v. Loeb, 315 Mass. 176, 178. Malone v. Walsh, 315 Mass. 484, 490. Counelis v. Counelis, 315 Mass. 694, 696. Cooperstein v. Bogas, 317 Mass. 341, 345. Jurewicz, v. Jurewicz, 317 Mass. 512, 513. Ziegler v. McKinlay, 318 Mass. 765, 767. There is no question of
The testator died March 27, 1914. His will, which was executed January 15, 1914, and was allowed April 16, 1914, provided: “Nineteenth: I give, devise and bequeath to Lillian Neale Wood and Emma J. Fitz the sum of Twenty-five Thousand (25,000) dollars, but in trust nevertheless for the following purposes, namely: To safely invést and reinvest the same and to pay over the net income therefrom for the benefit of the Children’s Home located on North Street, Walpole, Massachusetts, but should the said Home at any time cease to exist, I direct that said principal sum shall be paid over to the trustees named in the Twentieth clause of this my will, to be held by the said trustees in the same manner and for the same uses and purposes set forth in said Twentieth clause. Twentieth: Believing that great good can be accomplished by the establishment of a home for needy ^nd indigent convalescents and a home for incurables, it is my desire to found such institutions in my life time, but should I for any reason fail in the accomplishment of this purpose, I hereby give, devise and bequeath to said Lillian Neale Wood and Robert F. Herrick of Milton, Massachusetts, all my land on Morton Street in Dorchester aforesaid, containing forty acres more or less, and the sum of Fifty Thousand (50,000) dollars in money, but in trust nevertheless for the following purposes, namely: To carefully and thoroughly consider the practicability of such organizations, and if, after full and careful consideration, they deem it practicable and desirable, they are to use said- money in founding and estabhshing institutions providing a home for destitute convalescents and a home for needy incurables, or either of them, upon the land above devised on Morton Street, under such rules and regulations as they deem wise and expedient, to be known as the Convalescents Home and the Home for Incurables. . . . Should said trustees deem it inexpedient and impracticable to establish such Home or v Homes as above provided, after taking time for full con
On April 16, 1914, Robert F. Herrick and Lillian Neale Wood, the testator’s widow, were appointed and qualified as executors. On February 14, 1916, they qualified as trustees under- the twentieth and twenty-first clauses. On February 29, 1916, the widow, who had married Charles A. Bradway, and was then known as Lillian N. Bradway, qualified as sole trustee under the nineteenth clause, Emma J. Fitz having declined to serve.
The testator in his lifetime did not found either of the “institutions” referred to in the twentieth clause. Before March 26, 1915, Mr. Herrick and Mrs. Wood carefully and thoroughly considered “the practicability of such organizations,” and “after full and careful consideration” deemed it “practicable and desirable” to form a corporation to provide the homes. On that date Wood Memorial Home, Inc., was incorporated. The incorporators were Mrs. Wood, Mr. Herrick, Stewart C. Woodworth and two other law associates of Mr. Herrick, as well as Alice T. Herrick (the wife of Mr. Herrick), and Emma J. Fitz. The charter recites that the corporation was “for the purpose of establishing, maintaining and operating a home for incurables, and for the further purpose of establishing, maintaining and operating a home for convalescents. For the purpose of doing all or any other acts necessary or proper in connection
The original board of trustees consisted of Mrs. Wood, Mr. Herrick, Mrs. Herrick, Mr. Woodworth, and Emma J. Fitz. Mrs. Wood (later Mrs. Bradway) was president from the beginning until her death in 1938. Mr. Bradway then became president. Mr. Herrick was treasurer for a time and was succeeded by Mr. Bradway, who early became a member of the board of trustees as well. Mr. and Mrs. Bradway moved to California in 1927, and in that year Edward Kronvall of Springfield became treasurer. Mr. Herrick ceased to be a member of the board of trustees in 1923. Mr. Woodworth served as secretary from the beginning. Other changes in the board and in the officers need not be recited.
On March 31, 1915, Mrs. Wood and Mr. Herrick by quitclaim deed conveyed to the corporation the testator’s real estate on Morton Street. Although they had not yet qualified by giving bond, the deed described the grantors as “Trustees, as designated by the twentieth and twenty-first clauses of said will.” Mrs. Wood also executed the deed in her individual capacity. The deed recited, “Whereas, Frank Wood of Boston, by his last will admitted to probate by the Probate Court of the County of Suffolk April 16, 1914, did by the twentieth clause of said will specifically devise to Lillian N. Wood, and Robert F. Herrick all his real estate situated on Morton Street, Dorchester, Massa■chusetts, in trust for the following purposes, viz: — to carefully and thoroughly consider the practicability of the foundation of a Home for Convalescents and a Home for Incurables upon the land devised on Morton Street; and Whereas, the said Lillian N. Wood and Robert F. Herrick
Between 1916 and June 7, 1920, the executors transferred direct to the corporation cash and securities to an amount in excess of $400,000. At some time before May 20, 1938, the Children’s Home referred to in the nineteenth clause of the will ceased to exist, and on that date Mrs. Bradway as trustee under that clause paid $80,897.88 to the corporation. Everything so transferred or paid may be traced into the hands of the corporation, and constitutes the entire assets of the corporation, which gave no consideration. As a result of judicious investment the assets at the time of the hearing amounted to $2,860,0QQ. The corporation incurred no expenditures except for taxes and administration expenses. The officers and trustees never received compensation.
The corporation did not erect nor acquire nor cause to be erected or acquired by it any home for needy and indigent convalescents or any home for incurables. Its main reason for not doing so was that it was not deemed wise to build until through accretions a sufficient sum was available which might be reasonably expected to support the homes. This policy had at least the informal approval of three successive Attorneys General. The answer of the corporation states that it “believes with careful management there are now sufficient funds to establish and maintain a home for destitute convalescents and a home for needy incurables or either of them if said home is erected near and maintained in collaboration with a good general hospital in the city of Boston. That this belief is based on a thorough study of
The executors filed five accounts, the last being a final account, which were allowed October 25, 1920. On July 19, 1938, the first and final account of the trustee under the nineteenth clause was allowed. The trustees under the twentieth and twenty-first clauses filed no inventory and rendered no account.
■ Mrs.. Bradway died at some time between July 9, 1938, and August 1, 1938, when her will was admitted to probate in Los Angeles County Probate Court. Mr. Herrick died October 13, 1942. The petitioners were appointed succeeding trustees under the testator’s will on May 5, 1943, qualified as such on May 10, 1943, and filed the present petition on June 23, 1943.
If the trustees were authorized to transfer the trust property to the corporation, any complaint against the administration of the trust after such transfer must come from the Attorney General exclusively. Dillaway v. Burton, 256 Mass. 568, 573-574. Judkins v. Hyannis Public Library Association, 302 Mass. 425, 427. Elias v. Steffo, 310 Mass.
The determination by the trustees within the specified three year period that it' was “practicable and desirable” to establish the homes constituted an acceptance of the trust. Drury v. Natick, 10 Allen, 169, 182-183. Cary Library v. Bliss, 151 Mass. 364, 375-376. Attorney General v. Lowell, 246 Mass. 312, 323. Thereafter they could not resign without court approval. R. L. c. 147, § 12. See now G. L. (Ter. Ed.) c. 203, § 13, as appearing in St. 1943, c. 201, § 1. The will made no provision for the appointment of their successors. Accordingly, that power rested with the courts. Mahoney v. Nollman, 309 Mass. 522, 526. R. L. c. 147, § 5. See now G. L. (Ter. Ed.) c. 203, § 5.
The respondents allege in their answers and in substance argue that “the incorporation of said Wood Memorial Home, Inc. constituted the founding and establishing of the homes provided for in said will and carried out the terms of said trust and the dominant intent of the testator.” On the other hand, the petitioners contend in general that the creation of a corporation was inconsistent with the testator’s intent as expressed in his will, and in particular that the actual corporation created was not in
From the outset, therefore, the two trustees named in the will, whatever may have been their actual influence as long as they served, were only a minority of the board of trustees. The judgment of the two individuals in whom
The respondents contend that the testator must have contemplated the formation of a corporation and must be taken to have known that there must be seven incorporators. See G. L. (Ter. Ed.) c. 180, § 1, formerly R. L. c. 125, § 1. The short answer to this is that, even assuming that some form of incorporation was allowable, there was nothing in the will permitting the effacement of the named trustees or the delegation of their powers. Indeed, notwithstanding the highminded purposes of the trustees, their own compliance with the mandate of the will was limited to the determination within the three year period that it was “practicable and desirable” to found and establish institutions. The mere formation of the corporation, even if permissible, would have been only one of the duties of the trustees, who further were to found and establish institutions providing homes “under such rules and regulations as they deem wise and expedient.” No rules or regulations were made by the trustees, or by anyone. The formation of the corporation cannot be treated as a compliance with that requirement, nor can the by-laws of the corporation. The “rules and regulations” contemplated by the testator had to do with the determination of such matters as the capacity of the homes, the selection of patients, the types of “incurable” diseases to be treated, the definition of "convalescents,” the permissible duration of the stay of patients in the homes, the charge, if any, to be made to patients, and the nature of the provision for medical, nurs
It is unnecessary to consider the petitioners’ further contention that the corporation did not conform to the testator’s intent on the ground that the charter, in the event of dissolution, undertook to confer upon the members the power to transfer the “ property of the corporation which may be legally so transferred” to such Massachusetts charitable corporations as they might designate. See Crawford v. Nies, 224 Mass. 474, 486.
The case at bar falls within the authority of numerous decisions in this Commonwealth and elsewhere. Harvard College v. Society for Promoting Theological Education, 3 Gray, 280. Stone v. Framingham, 109 Mass. 303. Fellows v. Miner, 119 Mass. 541, 545-546. Winthrop v. Attorney General, 128 Mass. 258. Morville v. Fowle, 144 Mass. 109. Cary Library v. Bliss, 151 Mass. 364. Harvard College v. Attorney General, 228 Mass. 396, 410. Eliot v. Trinity Church, 232 Mass. 517, 522. Trustees of Andover Seminary v. Visitors, 253 Mass. 256, 293-294, 297. Adams v. Plunkett, 274 Mass. 453. Jordan v. Landis, 128 Fla. 604, 615, 617. Garesche v. Levering Investment Co. 146 Mo. 436. Matter of Kirkman, 143 Misc. (N. Y.) 342, 347. Meck v. Behrens, 141 Wash. 676, 682, 683. Scott on Trusts, §§ 171.1, 379. Cases are distinguishable where the intent of .the testator permitted the type of corporation which was in fact formed. See Trustees of Phillips Academy v. King, 12 Mass. 546, 555; Sanderson v. White, 18 Pick. 328, 336, 337; Nelson v. Cushing, 2 Cush. 519, 527; Ware v. Fitchburg, 200 Mass. 61; Boston v. Curley, 276 Mass. 549, 557-558; Curtis v. First Church in Charlestown, 285 Mass. 73, 80. This is not a situation where literal execution of the testator’s design has become impractical or inexpedient. See Milton v. Attorney General, 314 Mass. 234, 238, and cases cited.
The respondent corporation contends that under the twentieth clause the trustees were under no duty to build a
The respondents argue that the allowance of the accounts of the executors is a bar to the present petition. This defence was not set up in the answers, and there was no error in failing to - uphold any contention based upon it. New York Bank Note Co. v. Kidder Press Manuf. Co. 192 Mass. 391, 404. Albiani v. Evening Traveler Co. 220 Mass. 20, 26. Coughlin v. Coughlin, 312 Mass. 452, 454, and cases cited.
As the trust property could be traced to the corporation, which gave no value and took with knowledge of the terms of the will, the decree was right in requiring restoration of the property and in ordering an accounting. Loring v. Brodie, 134 Mass. 453, 459. Morville v. Fowle, 144 Mass. 109. Otis v. Otis, 167 Mass. 245, 246. Woodard v. Woodard, 216 Mass. 1. Moore v. Mansfield, 248 Mass. 210. Tingley v. North Middlesex Savings Bank, 266 Mass. 337, 340. Jones v. Jones, 297 Mass. 198, 211. Tierney v. Coolidge, 308 Mass. 255, 259. Phelps v. Mattoon, 310 Mass. 97, 104. Am. Law Inst. Restatement: Trusts, §§ 288, 289. Scott on Trusts, §§ 288, 289.
The prayer for relief against the Herrick and Bradway estates is expressed in an alternative which, as the case eventuates, is inapplicable. The decree made no reference to those estates. The decree should be modified by including an express dismissal of the petition as against the respondents executors of the Herrick will and as against the Bradway
So ordered.