Summary
In Associate Alumni v. Theological Seminary (163 N.Y. 417) certain alumni of the defendant college raised a fund to endow a professorship.
Summary of this case from Smith v. ThompsonOpinion
Argued May 7, 1900
Decided June 12, 1900
William G. Choate and William H. Harris for appellant. William Rand, Jr., and Alexander T. Mason for respondent.
This controversy relates to the rights of the parties under the donation of a fund of some twenty-five thousand dollars, collected by the alumni of the defendant's seminary, to the defendant for the endowment in that seminary of a professorship, to be designated as the alumni professorship of evidences of revealed religion. This fund was transferred to the defendant by the alumni (at the time a voluntary association) on May 10, 1883, on certain specified conditions which related to the character of the professorship and the duration of the official term of the incumbent, and reserved to the alumni the right of nomination on the occurrence of any vacancy in the chair Disputes subsequently arose between the defendant and its alumni, the former wishing to change the term of the professor, and claiming to hold the fund as its own property, subject to application for the benefit of the institution in such way as the defendant's trustees might determine, while the alumni claimed that the defendant held the fund solely as trustee for the purposes and upon the conditions prescribed by the alumni when the fund was transferred. Conferences and negotiations were had between the parties, but no definite result or modification of the original conditions was reached, and meanwhile the professorial chair has been left vacant, the defendant either rejecting or failing to act upon the nominations of the alumni. Subsequently the voluntary association of the alumni became incorporated as the present plaintiff and brought an action against the defendant to enforce the trust in which suit issue was joined by the answer interposed by the defendant. Thereafter the parties agreed upon a statement of facts and submitted the controversy to the Appellate Division under section 1279, Code of Civil Procedure.
We entirely agree in the determination of the learned Appellate Division on the rights of the respective parties, and shall attempt to add nothing to the discussion on that subject found in the opinion below. We hold with that court that the plaintiff is the successor in rights and interest of the voluntary association which gave the fund to the defendant; that as between the plaintiff and the defendant the title of the fund prior to its transfer to the defendant was in the association, and the association was the donor of the fund to the defendant; that the defendant received the fund in trust to apply the same in accordance with the terms and conditions prescribed in the resolutions of the alumni made at the time of the transfer and accepted by the defendant's trustees; and that the defendant has committed a breach of duty in failing to comply with such terms and conditions.
We are of opinion, however, that the Appellate Division erred in the relief awarded. The judgment below directs the defendant to surrender and transfer the fund to the plaintiff. From the opinion of the Appellate Division it would seem that the character of the judgment granted was dictated by a feeling on the part of the court that its powers were somewhat circumscribed from the fact that the controversy was before it, not in an ordinary action in equity but on a submission under the Code. For this reason the court deemed it impracticable to direct a specific performance. At the time the judgment was rendered section 1281 of the Code forbade the granting of an injunction in a submitted controversy. By the amendment of 1899 the inhibition is limited to the granting of a temporary injunction. While the remedy of injunction is doubtless a most valuable adjunct to the enforcement of a decree of specific performance, we do not regard the want of power to grant an injunction as fatal to such a decree.
At the time of the gift of this fund to the defendant the doctrine of charitable trusts or uses was not part of the general law of this state. But by chapter 41 of the Laws of 1868, the defendant was authorized to receive real and personal property in trust among other purposes to found and maintain professorships. It was further provided that such trusts might be created subject to such conditions as might be prescribed by the grantor or donor and not in contravention of law. The trust on which the fund was received by the defendant was, therefore, in express terms authorized by the statute. No provision was contained in the gift that the fund should under any circumstances revert to the donors. The general rule is "If the trustees of a charity abuse the trust, misemploy the charity fund, or commit a breach of the trust, the property does not revert to the heir or legal representative of the donor unless there is an express condition of the gift that it shall revert to the donor or his heirs, in case the trust is abused; but the redress is by bill or information by the attorney-general or other person having the right to sue." (2 Perry on Trusts, sec. 744; Sanderson v. White, 18 Pickering, 328; Vidal v. Girard's Executors, 2 Howard [U.S.], 191; Mills v. Davison, 54 N.J. Eq. 659.) The judgment below practically abrogates the trust and restores the fund to the plaintiff. To such return the plaintiff was not entitled, though as donor and possessor of the right to nominate to the professorship, it had sufficient standing to maintain an action to enforce the trust. ( Mills v. Davison, supra.) It may be that a trust might entirely so fail, from the purpose for which it was created becoming impossible of accomplishment, that the fund ought to be returned to the donor. On this question we express no opinion as no such case is presented here. Therefore, if in this proceeding it was impracticable to grant a specific performance rather than abrogate the trust, the proceedings should have been dismissed and the plaintiff relegated to its action in equity. But, as already stated, we are of opinion that the court had power to decree a specific performance, and should have done so.
The judgment appealed from should be modified, so that instead of directing a return of the fund to the plaintiff, it should decree that the defendant hold said fund in trust to apply the same upon the terms and conditions specified in the resolutions of plaintiff's predecessors set forth in the agreed statement of facts; that the defendant in all respects specifically perform the terms, conditions and obligations of said trust; that in case the defendant fail to comply with the conditions of the judgment in these respects within a time to be fixed by the Appellate Division, then it forthwith pay over and surrender the fund, either into said court or to trustees to be appointed by the court for that purpose; and that thereafter the plaintiff may apply to the court for such disposition or application of the fund as may be proper under the circumstances; and that either party may hereafter apply to the Appellate Division for such other and further order or decree to be made at the foot of this judgment as shall be necessary or proper.
As the defendant is responsible for this litigation, though doubtless from an honest mistake as to its rights, the plaintiff must be awarded the costs of this appeal.
PARKER, Ch. J., GRAY, BARTLETT, MARTIN, VANN and WERNER, JJ., concur.
Judgment accordingly.