Attorney General v. Old South Society , 95 Mass. 474 ( 1866 )

Gray, J.

This case turns mainly upon questions of fact, and requires more investigation of records and accounts than discussion of legal principles. After a thorough scrutiny, in the light of the elaborate arguments of counsel, of the evidence detailed in the full and careful report of the master, we are unable to concur in his conclusions.

The gift of Dr. Sewall, and the various bequests for the poor of the town, or of the parish or church, were clearly public charities, and to be applied by the ministers and deacons according to the intentions of the donors. Tudor on Charitable Trusts, (2d ed.) 6. Rex v. St. Matthew’s, Burr. Sett. Cas. 574. Rex v. Clifton, Ib. 697. Saltonstall v. Sanders, 11 Allen, 455-461, and cases cited.

But the sacramental contributions are not shown to have been so exclusively and absolutely devoted to the poor as to be impressed with the character of a public charity. County Attorney v. May, 5 Cush. 357, 358. The appropriations from time to time, out of such contributions, for the expenses of administering the sacrament, and the expenses of delegates of the church, were according to the common usages of religious societies in this state. These payments, as well as those for lighting the church and other incidental expenses, and that towards the salary of ministers in 1747, (which does not appear to have .ever been refunded,) tend to show that those contributions were not considered or treated as having been devoted exclusively to the reliei of the poor. The reasons assigned by the deacons in 1849 for discontinuing such collections show no more than that the sums so collected had been usually given to the poor. It is to be presumed that the small portions of them, specially designated at the time of their contribution as intended for the poor, were immediately so applied.

The mingling of the fund for the poor with the other fund of the church did not entitle the poor to the whole of the church fund. This is not the case of an individual mingling his own private moneys undistinguishably with funds held by him in trust; but of the officers of a religious society intermingling funds neld by them upon distinct trusts, some of which are charitable, and others, although not strictly charitable, are in the nature of religious uses, the property belonging to which is not to be-forfeited by the neglect of the trustees to keep it separate from other trust funds. And there is evidence by which the amount of each fund can be approximately ascertained. It becomes necessary therefore to determine, with as much accuracy as the antiquity of the sources and the imperfection of the evidence will admit, what portion of the funds in question was impressed with the charitable use of relieving the poor.

The earliest piece of evidence upon this question is the statement in the church books in 1766 of “ the church stock,” which is copied in the master’s report. Assuming, as most favorable to the claim of the attorney general, that the “ pious and charitable fund,” and the fund for the support of' the widows and fatherless children of ministers of the church, are to be included in the fund for the poor, derived from charitable bequest and gift, that statement shows that at that time the charity was entitled to the sum of £568.0.1¿; that the “ sacramental stock ” of ¿£186.19.5¿, and the interest accrued thereon of £119.14.8j, (which is carried out in the statement as part of the “ sacramental stock,” and there is nothing in the master’s report to show that any interest had previously accrued on the other funds,) amounted to the sum- of £306.14.1§; and the whole “church stock” to £874.4.13. This last sum was therefore to be divided between the two funds in the proportion which these sums (£568.0.1¿, and £306.14.1|) bear to one another, being very nearly thirteen twentieths to the charity, and a little over seven twentieths to the church. The only addition to the charitable fund which is proved to have been made before 1800 is of £50 by Thomas Hubbard’s bequest in 1773.

In 1800 the whole church stock, estimated at the par value of the securities in which it was invested, amounted to the sum of $16,062.71, and at the market value of these securities to somewhat more. Even if we assume its whole value in 1809 to háve been $18,000, the proportion of it belonging to the char<' ity would not have exceeded $11,700, and, even adding Hubbard’s legacy of ¿650, in lawful money of the Province at six shillings to the dollar, or $166.67, and the further sum of $650 received from the Thursday Evening Charitable Society in 1808, would amount to but $12,516.67. The poor’s fund therefore appears to have received all that belonged to it by the sum of $12,783.75 invested in building two parsonage houses on land of the society in Milk Street under the agreement of the ministers and deacons with the society in December of that year. If we more particularly follow the transactions between 1800 and 1809, the result is substantially the same.

On the 3d of April 1800, a committee of the society recommended the erection of five brick stores on their land on Washington Street, and the borrowing of money of the society for the purpose, the committee being of opinion that, after paying the same interest upon the sum borrowed as it was then producing, there would be a surplus of rents which might be applied towards the support of an additional minister, “ in doing which,” it was the opinion of the committee, “ the views of the donor not only of the land, but those who have left legacies from time to time, will be fully answered, as the poor of said society will have as much as they now receive, and the other will be laid out in pious uses for the support of public worship.” Another committee, appointed at the same meeting to examine into the funds of the church and congregation, their sources, and the intentions of the donors, made a report showing the amount of legacies and gifts for the poor as ¿6435.10.2, or about ¿665 less than in 1766; the fund for ministers’ widows and children, apparently including the “ pious and charitable fund,” at the same amount as those two funds in 1766, ¿666.19.2 ; the balance arising from sacramental collections, as in 1766, at ¿6186.19.5; and three other sums, supposed to belong to the church or congregation, at ¿6191.2.3; (omitting any mention of interest on sacramental collections, which had probably been expended since 1766;) showing the whole amount at ¿6880.11.0; of which, according to the classification above applied to the church stock of 1766, £502.9.4 belonged to the charity, and £378.1.8 to the church. As this statement is less favorable to the charity than that of 1766, we have assumed the earlier one as the basis of apportionment.

On the 11th of May 1800 the. society voted that the minister and deacons be requested and authorized to pay out of the moneys of the church and congregation the sums necessary to build the stores ; and be entitled to receive annually out of the rents thereof six per cent, upon the amount so invested, to be appropriated by them “ in like manner as the interest of said moneys has heretofore been appropriated according to the pious intentions of the donors thereof.” Pursuant to this vote, there was paid to the society out of the fund the sum of $14,000, of which $8,755 was soon afterwards reimbursed. As the whole amount of the church stock was then estimated at about $16,000, of which the charity was not entitled to more than thirteen twentieths, or $10,400, it is evident that the whole $14,000 borrowed from the church stock did not come from that part of it which belonged to the charity. In the absence of any evidence to the contrary, it may be presumed that the $14,000 so invested, and the surplus of $2,061.71, each belonged proportionally to the charity and to the remaining funds of the church. The charity then would be entitled to thirteen twentieths of the $14,000 invested in the stores, or $9,100, being very little more than the $8,755 which was immediately reimbursed; and nearly the whole of the $5,245, which was not reimbursed, would belong to the church absolutely. The vote of 1807 recognizing this sum of $5,245 as “ due to the church and congregation fund for the poor,” so far as it expressed the right of the poor to this amount, was therefore erroneous, as the society appear in 1809 to have discovered. In May 1809 the fund appropriated to the use of the poor is stated to consist of bank shares of the par value oí $9,000, (which substantially corresponds with the proportion contributed by the charity towards the building of the stores, and with the sum reimbursed immediately after they had been built,) and really worth $11,250. Adding to this sum thirteen twen-. tieths of the surplus of $2,062.71, which had not before been invested in land, or §1,340.76, and the sum of §650 received from the Thursday Evening Charitable Society in 1808, would malee §13,240.76, a sum not exceeding by five hundred dollars the sum of §12,783.75 invested in the parsonage houses under the agreement of 1809.

The court is therefore unanimously of opinion that this sum of §12,783.75 may fairly be taken as the principal sum belonging to the charity and invested in real estate at that time; and the remaining question is of the amount of interest and income thereof with which the defendants should be charged. The agreement of 1809, under which this principal sum was paid by the minister and deacons to the society, recited that “in times past there have been legacies, bequests and donations made to the Old South Church, to be placed at interest for the benefit of the poor of said church, and of the church and congregation,” (that is, one part for the poor of the church, and another for the poor of the. church and congregation, as appears by the terms of the original gifts,) and the interest arising thereon to be distributed among them according to the directions of the minister and deacons of said church, trustees for the purpose; ” and also recited the votes, passed in May and Tune 1809, for building the two parsonage houses, and obtaining from such trustees so much of the capital stock as might be required for that purpose, “ upon condition that the interest be punctually paid and the buildings be insured to secure the said payment.” Instead of the interest on the sum so appropriated and invested, the rent of the easterly parsonage house, from the time of its completion until 1845, was annually paid by the society and received by the minister and deacons, for the use of the poor. In 1845 the society passed a by-law to pay annually to the deacons, for the use of the poor, the sum of §600, which has been regularly paid ever since.

The length of time for which a court of chancery will require the trustees of a charity to account for income which has not been applied according to the intentions of the donors is much affected by the particular circumstances of each case. An arrangement made in good faith and acted upon for many years will not be lightly disturbed. But the statute of limitations affords no absolute bar or limit; and when trustees, with lcnowl edge of the charitable use, and no reasonable excuse for mistake, have misappropriated the whole or part of the income, they will be held to account for it during the whole period of misappropriation, unless grave inconvenience or hardship would be caused by so doing. Tudor on Charitable Trusts, 341, 342, and cases cited. Man v. Ballet, 1 Vern. 44. Attorney General v. Mayor &c. of Stafford, Barnard. Ch. 36. Attorney General v. Mayor, &c. of Newbury, 3 Myl. & K. 647. Applying these principles to this case, we are of opinion that the rent of one of the two houses built with the aid of money of the charity on land of the society, which rent was paid and received annually for a period of more than thirty years ending in 1845, instead of interest upon that money, although for the greater part of that period less than such interest at the common rate would have been, yet must, in the absence of any evidence of bad faith oi unreasonableness in an arrangement which was acted upon so long and terminated more than twenty years ago, be deemed a substitution for and satisfaction of such interest during the same period; but that since 1845, when the payment and receipt of such rent ceased, to the time of the filing of this information in 1859, and since, the charity is entitled to interest at the rate of six per cent, annually, deducting therefrom the yearly payments of $600 made by the society to the deacons for the use of the poor.

The principal sum of $12,783.75, with so much of the interest thereon since 1845 as thus remains unpaid, together with the further principal sum of $1,947.50, belonging to the charity, which is admitted to have been in the hands of the treasurer of the society in January 1861, with interest on that sum also from that time to the date of the decree, will constitute the amount due to the charity. The defendants’ exceptions to the master’s report are therefore sustained.

A decree may be entered for the payment of that amount by he society to the ministers and deacons of the church to be neld by them for the use of the poor, according to the intention* of the donors. The ministers and deacons being a corporation established by law, with' authority to receive the fund for this purpose, it is not necessary or usual to prescribe a scheme for its application, before ordering it to t—■ paid to them. Gen. Sts. c. 31, §§ 1, 2. Society for Propagation of the Gospel v. Attorney General, 3 Russ. 142. Walsh v. Gladstone, 1 Phillips R. 290.

As the intermingling by the defendants of the fund of the charity with other funds has aEorded ground for this information, and the information is sustained in part, the costs incurred in support of it, taxed as between counsel and client, are to be paid out of the charity fund ; and the defendants will bear their own costs. Attorney General v. Brewers’ Co. 1 P. W. 376. Attorney General v. Mayor, &c. of Stafford, Barnard. Ch. 37. Attorney General v. Kerr, 4 Beav. 303.

Decree accordingly.