Opinion
14713
July 5, 1938.
Before FEATHERSTONE, J., Richland, March, 1938. Affirmed.
Suit by Loretta M. Porcher against F. William Cappelmann, as executor and trustee under the will of Elvira B. Wright, deceased, to have a trust created by will of deceased declared void and to require defendant to pay to the plaintiff as sole heir-at-law property devised to the defendant as trustee. From an adverse decree, plaintiff appeals.
Judge Featherstone's decree, requested to be reported, follows:
The matter came on to be heard before me in open Court upon a demurrer interposed by the defendant, the grounds of the demurrer being that the complaint failed to state a cause of action. The principal, and in fact the controlling question in the case, turns upon the construction of a certain trust clause in the will of Elvira B. Wright, a resident of Richland County, South Carolina, who died on May 8, 1936, leaving of force and effect her will dated the 14th day of March, 1933.
The plaintiff is a sister and the sole heir-at-law of the testatrix and the object of the suit is to have the trust created by the said will declared void and to require the defendant to pay over to the plaintiff as the sole heir-at-law the property which the said testatrix devised to the defendant as trustee. The plaintiff's claim is that the trust in question is void because it is too indefinite, uncertain, unlimited and incomplete to be effective as a disposition of property by the testatrix in any respect, and that hence all the property which the testatrix intended to devise to the defendant as trustee should be vested in the plaintiff as the sole heir-at-law. The entire will is attached to the complaint as an exhibit and is made a part of the complaint.
The clause in the will creating the trust in question is as follows: "Item 10. All the rest, residue and remainder of my estate, real, personal or mixed of whatsoever kind and wheresoever situated, which I may now own or to which I may in any manner hereafter become entitled, I give, devise and bequeath, after the payment of my debts, funeral expenses, expenses of my last illness, expenses of administering my estate and the bequests provided above, to said F. William Cappelmann, as trustee, however, to be used and expended by him in such manner as he may deem wise in assistance in the City of Columbia, S.C. to crippled children, in the provision of medical and surgical attention to such children, purchase of medicines, braces or other appliances or any other article to assist and benefit said children, said work for crippled children to be conducted in the City of Columbia, S.C. but assistance to be rendered not to be limited to children of the City of Columbia, said trustee to be authorized to make such plans and use and pay for such assistance in this work as he may deem wise, and he being authorized if he deems wise to call to his assistance in this enterprise any agency or agencies, individual or corporate, that he may consider fit and proper to promote this work and to pay for the same out of this fund, all subject to his discretion. Said trustee is authorized hereby to invest and reinvest the funds given for this purpose, to expend for this purpose interest and part or all of principal as he may deem wise, to make sale at public or private sale at such time and place as he may deem wise of any asset of said residue of my estate and to execute and deliver any necessary deed or bill of sale or other transfer of the same. Said trustee in the handling and promotion of this enterprise is to do the same as a memorial to my grandfather, Charles H. Manson."
The first question to be determined: Is the trust created by the will a charitable one as distinguished from a private trust? The distinction is important because trusts for public charitable purposes are upheld under circumstances under which private trusts would fail. See Shields, Attorney General, v. Jolly, 1 Rich. Eq., 99, 42 Am. Dec., 349. The most important distinction between a charitable and a private trust is that in the time of duration allowed and the degree of definiteness required.
A very clear statement of the essential difference between the two kinds of trusts is given in 10 Amer. Jur., Title, Charities, Section 6, which reads as follows: "The requisites of a valid private trust and of one for a charitable use are materially different. In the former there must be not only a certain trustee who holds the legal title, but a certain specified cestui que, trust, clearly identified, or made capable of identification, by the terms of the instrument creating the trust, while it is an essential feature of the latter that the beneficiaries are uncertain, a class of persons described in some general language, often fluctuating, changing in their individual members, and partaking of a quasi-public character. The most important distinction, however, between charities and other trusts is that in the time of duration allowed and the degree of definiteness required. Trusts for public charitable purposes, being for objects of permanent interest and benefit to the public, and perhaps being perpetual in their duration, are upheld under circumstances under which private trusts would fail."
That the present trust is for a public charity seems scarcely open to serious argument. A trust for the prevention, cure or treatment of disease, or otherwise for the promotion of health is charitable. 10 Amer. Jur., title Charities, Sec. 71.
Some suggestion was made during the argument that the trust was not charitable because under the terms of the trust clause the trustee could render assistance to children who had independent means as well as to those who are poor. Presumably the trustee would give the first consideration to those who are without financial means to secure the relief or aid contemplated by the testatrix. If those most in need are taken care of, what matters it if those who are able to pay should also share in the testatrix's bounty? Furthermore, a trust for the prevention of disease or otherwise for the promotion of health is charitable even if the carrying out of the trust benefits the rich as well as the poor. A trust of this character is none the less charitable in the eye of the law because incidentally it benefits the rich as well as the poor, as indeed every charity that deserves the name must do, either directly or indirectly. 10 Amer. Jur., title Charities, Sec. 52.
The plaintiff contends that the trust attempted to be established by the will is so indefinite, uncertain, incomplete and unlimited as to be impossible of enforcement by any Court and hence void. With this contention I do not agree. The main purpose of the trust is definite and certain; the clear purpose is to provide a means for rendering assistance to crippled children, the general nature of the assistance being definitely set forth by the testatrix. The details of carrying out the trust are to some extent left to the discretion of the trustee; this is usual in most charitable trusts created by will because the testator is attempting to provide for contingencies which will arise after his own death, and necessarily some discretion and power must be left to his trustee or trustees.
Even if the item of the will in question did not specifically vest certain discretionary powers in the trustee, nevertheless he would have the implied power and duty to formulate a plan for carrying out the trust, the only limitation on such power being that the plan must not deviate from the main purpose of the trust. It was expressly so held by our Court in Dye v. Beaver Creek Church, 48 S.C. 444, 26 S.E., 717, 59 Am. St. Rep. 724, a leading case in the United States upon this subject. In that case the devise was to Beaver Creek Church (an unincorporated association) "for poor children, for their tuition." The contention was there made that the devise was so vague, indefinite and uncertain as to the objects and beneficiaries of the use, that it was void. These objections were held to be unfounded and the trust upheld, the Court saying ( 48 S.C. 444, at page 457, 26 S.E., 717, at page 722): "We shall not attempt to review the many and conflicting authorities bearing upon the question under consideration, but state the following principles deducible from them: First. If a trustee is appointed by the testator, and the will shows that the object of the devise, though expressed in general terms, is for a charitable use, the trust will be declared valid. In such a case the duty devolves upon the trustee of devising a scheme for carrying the trust into effect. Second. If a trustee is not appointed by the testator, and the will does not declare the manner in which the devise is to be made effectual, equity will not administer the trust. The reason a trustee is allowed to enforce a trust, the object of which is only expressed in general terms, is that in exercising his discretion he carries out the intention of the testator. But, when there is no trustee appointed to exercise this discretion in devising a scheme for the execution of the trust, the Court of equity can look alone to the will, and, if it does not show the intention of the testator, parol testimony is inadmissible, and the trust must fail."
It will be observed that the devise in the Dye case, supra, was in the most general terms, that is "for poor children, for their tuition", and yet the Court concluded the trust was valid and that the power of selecting the beneficiaries as well as formulating a plan to carry out the object of the testator was vested in the trustee. Practically all the objections raised by the plaintiff here are fully met by this case and little else need be said.
The case of City of Columbia v. Monteith, 139 S.C. 262, 137 S.E., 727, relied upon by the plaintiff, is not controlling. That case involved the will of Elizabeth D. Carroll, widow of Chancellor Carroll. The basis of that decision was the conclusion reached by the Supreme Court that the plan for carrying out the trust proposed by the trustee was a perversion of the real purpose of the testatrix. The Court also concluded that the object which the testatrix had in mind — to wit, the foundation of the "Carroll Memorial Orphanage" for the children of indigent white persons living in or near the City of Columbia who should be trained for domestic service so as to enable them to earn a livelihood when employed in families — was impossible of execution. The Court therefore concluded that to uphold the plan proposed by the trustee would require the application of the cy pres doctrine which is not in force in this State.
Plaintiff also urges as another objection to the trust that the trustee apparently has power to select the beneficiaries from wherever he pleases and thus the scope of benefaction of the trust may be worldwide, and not confined to citizens within the jurisdiction of the Court. This, if true, would not render a charitable trust, otherwise valid, void simply because its scope is worldwide.
The general principles governing the designation of beneficiaries are set forth in 10 Amer. Jur., title Charities, Section 91, as follows: "Restrictions as to either locality or numbers included in a class of beneficiaries are not necessary to the validity of a charitable bequest. A charitable gift is good where there is no limit of space expressed, and it is none the less so when the benefit of the gift is confined in terms, as it must be in fact, to a particular locality. It is equally good when the limit although real, is not geometrically exact. Hence, so long as the class for whose benefit the trust is created is definite the geographical limitations of the operation of the charity are unimportant."
Moreover, the evident intention of the testatrix was that while the work was to be carried on in the City of Columbia, the beneficiaries were not to be confined to those crippled children living in the City of Columbia, but the trustee might furnish assistance to other crippled children living within a reasonable radius of the city. Acting under the discretion lodged in him by the terms of the will the trustee must himself determine what rules and regulations shall govern and control the giving of the assistance which the testatrix contemplated. Cf. Harter v. Johnson, 122 S.C. 96, 115 S.E., 217.
We must bear in mind that charitable trusts "are entitled to peculiar favor"; that "they are construed to give them effect if possible and carry out the general intention of the donor."
In 5 R.C.L., pages 252-3, we find the following statement of the rule applicable to charitable trusts: "Legacies or devises to the uses of charity are entitled to peculiar favor and are regarded as privileged testaments, and will not be declared void if they can by any possibility, consistent with law, be considered as good. So Courts of equity go to the length of their judicial power rather than that such a trust should fail, applying the maxim, ut res magis valeat, quam pereat. They are construed so as to give them effect if possible, and to carry out the general intention of the donor when clearly manifested, even if the particular form and manner pointed out by him cannot be followed. If two modes of construction are fairly open, one of which would turn the gift into an illegal trust, while by following the other it would be valid and operative, the latter mode must be preferred."
Another contention of the plaintiff is that under the terms of the will the trustee is given such wide latitude of discretion as to both the selection of the beneficiaries and the details of carrying out the trust that it would be impossible for a Court of equity to enforce the trust. The general purpose of the trust, aid to crippled children, and the scope of the aid, are clearly set forth by the testatrix. The fact that by the will the trustee is given broad discretionary powers in arranging the details of a scheme of administration to carry out the testatrix's expressed general purpose does not make the trust so indefinite or uncertain that it should be declared void. As pointed out by the Supreme Court in Dye v. Beaver Creek Church, supra: "The reason a trustee is allowed to enforce a trust, the object of which is only expressed in general terms, is that in exercising his discretion he carries out the intention of the testator."
While a Court of equity would have no power to control the discretion vested in the trustee by the testatrix, nevertheless the Court would have jurisdiction of the trustee in this case as it has over all trustees, to see that he does not depart from the terms of his trust or apply the funds in good or bad faith to purposes foreign to the charity. 2 Perry, Trusts, Section 719. "If, after the charity is established and is in process of administration, there is any abuse of the trust or misemployment of the funds, and there are no individuals having the right to come into Court and maintain a bill the Attorney General, representing the sovereign power and the general public, may bring the subject before the Court by bill or information, and obtain perfect redress for all abuses." 2 Perry, Trusts, Section 732.
Where the bequest is for a particular charity, even though expressed in general terms, the Court will sustain the charity when the plan and scheme for its management is left to the discretion of a trustee or trustees, and will if necessary formulate a scheme for the conduct of the charity or uphold the plan and scheme which the trustee or trustees, in his or their discretion, may adopt and formulate, and will prevent any interference therewith. Shields, Attorney General, v. Jolly, 1 Rich. Eq., 99, 42 Am. Dec., 349; Gibson v. McCall, 1 Rich., 174; 2 Perry on Trusts, Sec. 720.
The plaintiff relies upon the case of Brennan v. Winkler, 37 S.C. 457, 16 S.E., 190. The distinction between that case and Dye v. Beaver Creek Church, is pointed out in the latter case where the Court said: "This case is different from the case of Brennan v. Winkler, 37 S.C. 457, 16 S.E., 190, in two important particulars: (1) The words which it was contended created a trust in that case were merely precatory; and (2) There was no trustee appointed by the testatrix, and, as the will did not disclose the manner in which the trust was to be administered by the Court, it was declared a nullity."
The Court is of the opinion that the case under consideration is controlled by the principles announced in Dye v. Beaver Creek Church rather than by those stated in Brennan v. Winkler.
So far the Court has considered the validity of the trust without regard to Section 9053, Vol. 3, Code of Laws of South Carolina, 1932. The Court is of the opinion that the trust is valid without regard to the statute but when the statute is considered any doubt as to its validity is removed. The Act says: "No gift, grant, bequest, or devise, whether in trust or otherwise, to religious, educational, charitable or benevolent uses or for the purpose of providing for the care or maintenance of any part of any public cemetery, shall be invalid because said instrument confers upon the trustee or trustees discretionary power in the selection and designation of the objects or beneficiaries of such trust or in carrying out the purpose thereof, or by reason of the same contravening any statute or rule against perpetutities. If a trustee or trustees are named in the instrument creating such a gift, grant, bequest or devise, the legal title to the property given, granted, bequeathed or devised for such purposes shall vest in such trustee or trustees and its or their successor or successors duly appointed in accordance with the terms of such instrument. If no trustee or trustees be named in said instrument, or if a vacancy or vacancies shall occur in the trusteeship, and no method is provided in such instrument for filling such vacancy or vacancies, then the Court of Common Pleas of the proper county shall appoint a trustee or trustees to execute said trust in accordance with the true intent and meaning of the instrument creating the same. Such trustee or trustees when so appointed shall be vested with all the power and authority, discretionary or otherwise, conferred by such instrument." Code of Laws of S.C. 1932, Vol. 3, Sec. 9053.
The plain language of this statute would seem to meet all the objections to the trust which have been urged by the plaintiff.
Since the Court has concluded that the trust is valid it is unnecessary to consider the other ground of the demurrer — that is, that since the plaintiff has elected to take the specific legacy provided for her under the will she is thereby barred from setting up any claim which would defeat the full operation of the will.
It is therefore ordered, adjudged and decreed as follows:
(1) That the trust is not indefinite, uncertain, unlimited or incomplete, but that it is valid and must stand; that the plaintiff has no interest in or title to the property referred to in Item 10 of the will; that the title to said property is in the defendant, F. William Cappelmann, as trustee, for the purpose set forth in the trust.
(2) That the demurrer be and it is hereby sustained and the complaint dismissed and the costs of this action be taxed against the plaintiff.
(3) That the defendant is entitled to have his attorneys paid a reasonable fee out of the trust fund, the amount thereof to be hereinafter ascertained.
(4) Leave is hereby given the parties to apply at the foot of this decree for such other and further relief and orders as may be necessary.
Messrs. Herbert Dial and Thomas, Lumpkin Cain, for appellant, cite: Public charity defined: 5 R.C.L., 293; 122 S.C. 96; 37 S.C. 463; 95 N.Y., 76; 130 Mass. 211; 125 N.Y., 581; 17 S.C. 50. As to indefinite trust: 137 S.E., 727.
Messrs. C.T. Graydon and Nelson, Mullins Grier, for respondent, cite: Valid charitable trust: 1 Rich. Eq., 99; 48 S.C. 444; 5 R.C.L., 339; 10 A.J., 657. Intention of testator: 70 S.C. 555; 67 Am. Dec., 160; 107 S.E., 238; 107 U.S. 163; 27 L.Ed., 397. Public charity: 11 C.J., 340; 226 U.S. 126; 57 L.Ed., 152. Charitable trust not invalid because of scope of beneficiaries: 142 Kan., 352; 47 P.2d 63; 160 A., 884; 75 S.W. 210; 62 L.R.A., 398; 99 A.L.R., 657; 122 S.C. 96; 115 S.E., 217; 96 N.E., 925; 37 L.R.A. (N.S.), 1023; 157 N.E., 747; 184 S.E., 199.
July 5, 1938. The opinion of the Court was delivered by
Plaintiff brought this action for the purpose of having the Court to construe the will of Elvira B. Wright and to declare that the trust created in "Item 10" thereof is void and ineffective as a disposition of the property of testatrix in any respect. She asks also that the Court declare that she, as sole heir-at-law, is entitled to the entire estate of testatrix after the payment of specific legacies. Defendant's demurrer to the complaint was heard by Honorable C.C. Featherstone, Circuit Judge, who signed a decree sustaining the demurrer and dismissing the complaint. From that decree plaintiff appeals.
In our opinion Judge Featherstone in his well-considered decree has correctly decided all issues in the case that are now before this Court. All exceptions are therefore overruled and the decree and judgment of the Circuit Court affirmed. Let Judge Featherstone's decree be reported.
MR. CHIEF JUSTICE STABLER and MESSRS. JUSTICES BONHAM, BAKER, and FISHBURNE concur.
MR. JUSTICE CARTER did not participate on account of illness.