Opinion
No. 3807.
Decided February 1, 1949.
The question of whether a trustee of a public charity may sell a certain tract of land acquired as a site for a public park in compliance with the testator's bequest but which has never been used for that purpose, where the testator's direction and the deed of acquisition provided that the land should forever be kept for a public park, does not involve the application of the cy pres doctrine but rather whether a deviation should be permitted from the trust provisions. In such case, where owing to circumstances not known to the testator nor anticipated by him compliance with the trust provisions would defeat or substantially impair the accomplishment of the purposes of the trust the court may permit a deviation and authorize the sale. However, the finding that the public use of the tract acquired by the trustee under the terms of the trust for a public park is more beneficial to the town as a site for a school building than its mere retention without improvement or development is insufficient to authorize a deviation from the trust provisions.
BILL IN EQUITY, by a trustee of a public charity for leave to sell real estate. The plaintiffs are members of the Kelley Park Commission and the town trustees of the town of Bristol. The defendants are the selectmen of the said town, the school district of the town of Bristol and the New Hampshire Orphans Home.
By the will of William G. Kelley, which was probated October 13, 1902 in Grafton County, a trust was established as follows: "all the rest, residue and remainder of my estate in trust to Marshall W. White, Charles Boardman and George H. Hammond all of Bristol, to be used and expended for the benefit of the Town of Bristol if the said Town sees fit to accept it on the conditions herein provided; otherwise, to the New Hampshire Orphans Homes in Franklin, New Hampshire. My wish is to provide a public park or common in said Town and for this purpose the trust is established." The will provided as conditions that the town must vote to accept the bequest within three years of the death of said Kelley, appoint a committee, buy suitable land and vote to keep and maintain it. The will did "not limit or restrict the town in the matter of use to be made of the land beyond the one general condition that whatever land is purchased with said money or any part thereof shall forever be kept for a public park." All the conditions of the bequest were complied with by said town.
December 16, 1902 a tract of land was purchased on which Kelley Park was established and is now used for that purpose. Later a second tract that adjoins the first on one side was acquired and both have been administered by the Kelley Park Commission. The balance of the bequest is held by said town trustees.
Since the acquisition of the second tract, only a small portion in its northeasterly corner has been improved and used for park purposes. The remainder has been used for gardens, grazing cattle and snow disposal, but has never been improved, kept up or otherwise used by the Kelley Park Commission for any purposes of the trust. There is a serious public need for a school building site and the defendant School District is desirous of purchasing a part of the remainder of said second tract; and members of the Kelley Park Commission are willing to sell for a fair consideration.
Lampron, J. made certain findings and reserved and transferred without ruling all questions of law raised by the pleadings.
Hazen K. Sturtevant, for the plaintiffs.
James B. Godfrey, for the defendant New Hampshire Orphans Home.
Ernest R. D'Amours, Attorney-General, and Warren Waters, Law Assistant (Mr. Waters orally), for the State.
Since title to the real estate that the plaintiffs propose to sell is in the town of Bristol and the members of the Kelley Park Commission and the town trustees purport to be acting for it, it is assumed that the town will be made a party plaintiff. Stone v. Cray, 89 N.H. 483.
The second tract of land was not purchased for purposes of investment of trust funds but as a site for carrying out the purposes of the trust created by the Kelley will. The deed contained the following wording: "Said tract to be forever kept by said Town of Bristol as a part of a public park according to the provisions of the will of William G. Kelley."
The proposed sale is an act of administration of the trust rather than one involving a change in its purpose. Exeter v. Robinson Heirs, 94 N.H. 463, 466. The tract to be sold has never been used for a public park since it was acquired in 1903, and accordingly has not promoted the said purposes. From the record it is understood that there is no reasonable prospect of using this property as a park and that the land already used is considered by the commission sufficient for carrying out the intention of the testator. Under these circumstances, the doctrine of cy pres need not apply, but the question is whether a court of equity may permit a deviation from the terms of the trust.
The test for permitting a deviation from the trust provisions has been stated as follows: "The courts will direct or permit a deviation from the terms of the trust where compliance is impossible or illegal, or where owing to circumstances not known to the settlor and not anticipated by him compliance would defeat or substantially impair the accomplishment of the purposes of the trust. Thus it has been held in numerous cases that the court may authorize the sale of property although such sale is not authorized or is forbidden by the terms of the trust." 3 Scott, Trusts, s. 381. See also, Exeter v. Robinson Heirs, supra; Smart v. Durham, 77 N.H. 56; Asylum v. Lefebre, 69 N.H. 238; Society v. Harriman, 54 N.H. 444.
The finding that "Public use of the above described tract of land site for a school building is actually more beneficial to the citizens of the Town of Bristol than mere retention of the land without improvement, development, or public use," is insufficient for the desired authorization. Nor is the finding that there is a serious need for a school building site for the defendant school district a reason for departing from the terms of the trust.
It could well be found that the purchase of more land than was needed for carrying out the trust provisions was not anticipated by the settlor. A finding is within reason that the retention of this tract would substantially impair the accomplishment of the purposes of the trust. Whether the Trial Court can so find depends in part upon consideration of any loss of income to the trust by the retention of the tract instead of the sale. This involves the price to be obtained and the use that could be made of it in furthering the benefits of the park to the public. It is pointed out in 168 A.L.R. 1018, 1024, that equity will authorize a sale of property contrary to the directions of the settlor of the trust if it is required to avoid "pointless losses." If the evidence warrants the application of these principles, the Trial Court may authorize the proposed sale.
Neither the will nor the deed contains any forfeiture or reverter clause that is applicable as such after the acceptance of the bequest by the town of Bristol. If facts are found that permit a deviation, no interest of the defendant New Hampshire Orphans Home can interfere with its allowance. Exeter v. Robinson Heirs, supra, 466, 467.
If the Superior Court cannot find any substantial impairment of the accomplishment of the purposes of the trust as indicated above, then recourse must be had to condemnation proceedings for the acquisition of the desired school site. The resulting proceeds would accrue to the Kelley Park trust fund. State v. Corporation, 89 N.H. 538.
Case discharged.
All concurred.