Bissell v. Butterworth

The sole reason of appeal is the ruling of the court on the demurrer to the specified paragraphs of the special defense. The sufficiency of these paragraphs can be determined only by considering them in connection with the other parts of that defense, which were not denied, and all of which constitute a single plea of justification. Molineux v. Hurlburt, 79 Conn. 243,64 A. 350. Although the Governor, Treasurer and Attorney-General of the State, as members of the Board of Control, and the Attorney-General as the representative of certain beneficiaries of the trust fund provided by the Act of 1919, have been made codefendants in the suit, they have not been pursued in the amended complaint nor involved in the judgment of injunction. Nor is any attempt made to restrain the Board of Control in any respect, although by the terms of the Acts of 1919 and 1921 it is constituted a board of trustees to administer the fund created by those Acts. The amended complaint attacks only the acts of the defendant The American Legion, Connecticut Department, and its treasurer, the defendant Butterworth, because the former has paid and the latter withdrawn from the interest accumulations of the trust fund certain sums of money as compensation for his personal services in the performance of his duties in disbursing such accumulations, and because both defendants threaten to continue to do so; and the plaintiff claims that they be restrained from such action. These defendants admit these charges and set up in defense undisputed facts to justify their conduct. The plaintiff claims that these facts are insufficient to constitute a justification, because the Acts of 1919 and 1921 prohibit any expenditure from the trust fund (1) for the expense of maintaining The American Legion, Connecticut Department, and (2) for the administration of the fund and the payment of salaries.

We assume that the accumulations of the trust fund, rather than the principal of the fund, are intended in these pleadings. As to any expense for maintaining the Connecticut Department of The American Legion, it will be noted that it is a corporation chartered under a statute of the United States for specific purposes of its own, which it was organized to pursue independently of any legislation by the General Assembly of this State, and that to carry on such purposes it has chosen a treasurer to perform such duties and services as the corporation may require. Such work is done to keep up the corporation, and whatever it pays its treasurer for such work may properly be called an expense of maintaining the Legion. But our State laws and the by-laws which they required this corporation to adopt, when it had been selected as the organization to disburse the interest accumulations of the trust fund created for certain objects, imposed upon the person holding the office of treasurer the additional duty and service of receiving, disbursing and accounting for large sums of money, under exacting requirements and with burdensome details, and to furnish a large bond for the faithful performance of that particular duty. It does not appear that this extra work is necessary or adapted to keep up the Legion, or is done for its benefit, or that any compensation that may be paid for it will diminish in any measure the compensation paid by the corporation for the work it requires from its treasurer. It is true that the defendant Butterworth was called on to render these services because he was the person who then held the position of treasurer of the defendant corporation; but that fact does not affect the relations between the corporation and its treasurer, nor give the Legion any interest in or right to any part of the compensation for work done by Butterworth for another person and outside of the work required by the Legion. Indeed, it is asserted in the complaint and in the answer that he received the payments named for his personal services for the State, in administering and disbursing the money of the State, and to accomplish the purposes of the State. These facts dispose of any claim that Butterworth used any of this money for maintaining the Legion, and remove the ground of this reason of demurrer.

In the second reason, it is asserted that the Acts of 1919 and 1921 prohibit any expenditure of the income from the trust fund for the administration of the fund and the payment of salaries. Referring to the terms of these Acts, we find that the Board of Control is constituted a board of trustees of this fund, but it shall administer the fund as required by the provisions of those Acts. Those provisions require that so much of the interest accumulations of the trust fund as shall be found necessary by this Board to carry out the purposes of these Acts shall be paid to the treasurer of an organization of soldiers, sailors and marines approved by the Board, and this organization shall distribute these interest accumulations and expend all moneys paid to and received by it for the benefit of certain soldiers, sailors and marines, under authority of by-laws adopted by such organization and approved by the Board. The Acts make no express provision to pay any expenses of the prescribed disbursements and administration. But the by-laws which have been adopted and approved, as required by the Acts, provide that a special committee of The American Legion shall co-operate with the Board of Control to carry into effect the purposes of the trust fund, and that its judgment, in such co-operation, shall be final and conclusive in the disbursement of all moneys that may be paid to the Legion for such purposes. Those purposes are evident, and unquestionably they cannot be accomplished without expense. The General Assembly did not impose this expense upon the board of trustees or upon the organization approved to devise the necessary methods, supervise the details and carry on this great service which the State had undertaken to supply. But certainly it did not intend that the trust should fail for lack of provision to pay the necessary expenses of its execution. Every Act of the legislature should be so construed as to give it force and effect to accomplish the manifest intention of the legislature. In this case, therefore, it must be held that the General Assembly intended that its agents should be allowed out of the income of the fund all reasonable charges and expenses necessary to carry out its directions concerning the trust and to prevent its failure. For it is a general principle of law, long prevailing in this and nearly all of the United States, that a trustee is entitled to be reimbursed for all costs which he properly incurs in the execution of a trust, and to fair compensation for his time and trouble in managing the trust fund and performing the duties of an office he has undertaken for the benefit of others; and it is immaterial that no express provision for such charges and expenses has been made by the creator of the trust. Kendall v. New EnglandCarpet Co., 13 Conn. 383; Clark v. Platt, 30 Conn. 282; 3 Pomeroy's Eq. Jur. (4th Ed.) §§ 1084, 1085; 2 Perry on Trusts Trustees (6th Ed.) §§ 910, 912, 918; 39 Cyc. 480; Lewin on Trusts (12th Ed.) pp. 785-788;Schriver v. Frommel, 183 Ky. 597, 210 S.W. 165. Justice Story has said: "Nor can any one reasonably expect any trustee to devote his time or services to a very watchful care of the interests of others when there is no remuneration for his services, and there must often be a positive loss to himself in withdrawing from his own concerns some of his own valuable time. . . . The policy of the law ought to be such as to induce honorable men, without a sacrifice of their private interest, to accept the office, and to take away the temptation to abuse the trust for mere selfish purposes as the only indemnity for services of an important and anxious nature." 3 Story's Eq. Jur. (14th Ed.) § 1676, note p. 312.

We discover nothing in the Acts creating this trust that indicates that it was the intention of the General Assembly that these well-known general principles of law should not be effective in the administration of this trust. On the contrary, it is admitted that after the Legion had been designated under the Act of 1919 to disburse the income of this trust fund, normally notified the board of trustees that it would undertake to perform the duty with the understanding that all necessary expenses would be taken out of the fund itself, and it appears that that course was followed for more than a year. Then, with these facts within its knowledge, the General Assembly passed the Act of 1921, in which it did not change the provisions concerning the payment of this income to the Legion and its expenditure by the Legion. Furthermore, § 2 of the Act of 1921, which in this particular is identical with § 2 of the Act of 1919, requires that "all moneys so paid to and received by" the approved "organization shall be expended by it in furnishing food, wearing apparel" and other relief to certain soldiers, sailors or marines, or to their widows or certain children "who may be in need of the same." The language "in furnishing food, wearing apparel" and other relief intends much more than merely buying and paying for these necessaries. "Furnishing," in this context, means supplying those in need with what they need. It includes investigation to determine what persons are in need and entitled to aid, and what each person needs, and how and when he can be supplied. It requires not only the selection and purchase by a well-qualified person of a sufficient quantity of needed supplies, but also the distribution and delivery of these supplies in a shape fit for the use and relief of those who deserve them. We know that there are more than 83,000 persons who may become beneficiaries of this trust, and that they are scattered in many towns of the State. The necessary investigations must therefore be numerous, and each must be thorough and painstaking, in order to be just to the State and fair and helpful to every person in need. To do this work properly will require offices, typewriters, stationery, postage, telephones, travel, transportation, and other incidentals, and also the time and labor of agents and clerks, and perhaps most imperatively the services and supervision of a competent superintendent. That notwithstanding the voluntary services of members of the Legion, these necessaries to the execution of the trust cannot be obtained without considerable expense, was a fact within the intelligent comprehension of the General Assembly when it passed these laws, and we assume that since it made no express provision to the contrary, it intended that out of the income of the trust fund which it established should be paid such charges and expenses as would be indispensable to carry on the trust it created in a manner which would accomplish its charitable objects and express in some measure the gratitude of the people of the State to their soldiers, sailors and marines in the World War. Under no other interpretation will these Acts be effective; for these burdens of administration can neither legally nor justly be imposed upon the American Legion, and it is not reasonable to expect that they be borne by a few private citizens who may be importuned to complete the work and discharge obligations which belong to all citizens in common and which the State has properly undertaken. It is the duty of courts to make every presumption of intendment in favor of the manifest object of the legislature and against the failure of this beneficent trust.

We do not find in these Acts, thus fairly construed, any express or implied prohibition against the payment out of the interest of this fund of the reasonable charges and expenses of its administration, including a fair compensation for the personal services of any person or persons charged with the duty of disbursing its interest accumulations. Whether this compensation be called salaries or by another name, is immaterial. It is in fact a proper item to be reckoned in the charges and expenses of executing the trust. The paragraphs of the answer to the amended complaint against which the plaintiff's demurrer was directed were sufficient. Upon the pleadings and admitted facts as they appear in the record, the defendants were entitled to judgment.

There is error, the judgment is set aside, and the cause remanded to be proceeded with according to this opinion.

In this opinion the other judges concurred.