Allen, Admr. v. City of Bellefontaine

This case comes to this court on appeal from the Court of Common Pleas of Logan county, Ohio.

The action was originally commenced on the 8th day of September, 1928, under favor of Section 10857, General Code, asking the direction and judgment of the court respecting a certain trust created under the will of Sarah Ellen Covington, deceased, the property to be administered, and the rights of the parties in interest.

Certain physicians and surgeons, and certain other persons not physicians and surgeons, of the city of Bellefontaine, who are designated in said will as members of committees or trustees, the city of Bellefontaine, the Women's Literary Club of Bellefontaine, and the persons who are the heirs at law and next of kin of the said Sarah Ellen Covington, deceased, are made parties defendant in the petition.

The physicians and surgeons, and the other persons designated in said will as members of committees or trustees, filed their joint answer and cross-petition to said petition; and Nettie A. McClain, one of the next of kin and heirs at law of said Sarah Ellen Covington, deceased, filed her second amended answer to the petition, and her separate answer to said cross-petition; and said cross-petitioners filed their reply to the answer of the said Nettie A. McClain to their cross-petition. No pleading was filed by the city of Bellefontaine, or by any of the other defendants. The case was submitted in this court on the pleadings mentioned, the stipulations and statements of counsel, and the evidence.

Upon the case as submitted the paramount question to be decided is: Whether, the literal execution of the trust provided for in said will being inexpedient and impracticable, the equitable doctrine of cy pres is applicable to such trust.

Sarah Ellen Covington, a resident of Bellefontaine, Logan county, Ohio, died on the 26th day of April, 1927, and her last will and testament was probated and admitted to record in the Probate Court of Logan county, Ohio, on May 5, 1927. Said will was executed under date of August 9, 1926, and, with the interlineations and italics appearing on the original thereof, is in the words and figures following, to-wit:

"Bellefontaine, Ohio, August 9th, 1926.

"To all whom this may concern, Be it known, this is my last will. To the City of Bellefontaine, I give in trust as a memorial to my late husband Dr. P.D. Covington, my home and grounds two lots except 40 feet off east end, all buildings thereon. The proper officials shall turn all this property over for the exclusive use of reputable physicians and surgeons of Bellefontaine and Logan Co. for all time. To be used as a place to hold their meetings carry on research work and as a private lying-in hospital and for treatment of other special cases if so desired. Books now here which belonged to the late Dr. Covington shall be kept in the home, all of my oil paintings except two, and other pictures not otherwise disposed of. I give this much loved, hard earned home, to be used for the purposes above named. With the request that it shall always be called The Dr. CovingtonGolden Rule Clinic, and that everything be managed accordingly, and that a fair per ct of all fees received by physicians surgeons c for care treatments operations servises of all kinds rendered here. Be placed in a trust fund to be used by committees or trustees herein after named and their successors for upkeep Taxes insurance c improvements c of above described property. $2,000 in bonds may be used at once to fit the home for the uses above named. Should additions be needed in the future I desire that they be placed on east or north side or both that the present front remain as it is. To Iva A. Allen and Ellen Louise her daughter, I bequeath the entire income from my two business rooms and grounds fronting on south Main St. all ground in rear to Swertzers east line and to Millers south line to be divided equally between them. Provided I have leased the above described property, for a term of years, for $100 per month in advance, or the sum agreed upon, Or have sold it, the amount received and balance secured by 1st mortgage, shall be invested in governments bonds, or equally safe securities. If not sold it may be entire income from price recd shall be paid to Iva A. Allen and Ellen Louise her daughter as agreed upon between them and interest as it comes due, this income shall be paid to Iva and Louise as above stated, during their life time, at the passing of either, the one left shall receive all of above described income during her life time, Provided she needs it. After the passing of both Iva and Louise, the above described business property shall be sold, and the amount received for it be invested in government bonds placed in trust fund income from same to be used as before stated for upkeep c I further will that Iva A. Allen and Ellen Louise her daughter receive half the income from bonds except $2,000 moneys notes or other securities which I may leave including my 3 lots in Florida if disposed of. If not, they must be sold the amount received for them shall be invested in government bonds, half the income from same to be paid to Iva A. Allen and Ellen Louise Allen during their life time, other half to be placed in trust fund used for upkeep c. I give to Iva A. Allen and Ellen Louise her daughter, the following named articles and the right of full and immediate possession, my automobile two of my oil paintings their choice except the largest one, my bedroom pictures, China, cut glass, silver, Jewelry tabel linen beding clothing, my furniture they may want, west half of my cemetery lot, this my last will shall not be published, contents made known to those concerned only, (No administrator) I trust the two committees named below and their successors, will carry out my wishes fully, not forgetting whose name and memory it is to perpetuate. To this end I ask that memorial services be held here Sept 15th every year, and that members of The Womans Literary Club be invited to share in these services. Five dollars shall be paid to sexton of Cemetery Sept 15 each year out of trust fund provided he keeps plants blooming there in seasonalways and cares for the lot according to the golden rule.

"Dr. Carrie Richardson E. Pat. Chamberlin

"Dr. F.B. Kaylor C.S. Allen

"Dr. A.J. McCracken Wesley Askren

"Dr. Gail Stinchcomb Oak Newell

"Dr. C.K. Startzman

"Witness Andy G. Carter

"Witness Ed. W. Kalb

"Sarah Ellen. Covington."

Iva A. Allen, mentioned in said will, died in April, 1928, leaving surviving her, her husband, Chester S. Allen, and her daughter, the defendant Ellen Louise Allen, who is her only living descendant.

At the time of her death Sarah Ellen Covington was the owner of certain real estate, which she refers to in her will as "my home and grounds two lots except 40 feet off east end, all buildings thereon." This real estate was situated at the corner of South Main street and Auburn avenue in the city of Bellefontaine. There were at the time of the death of testatrix, and are now, located on this real estate a brick dwelling house, which she had occupied as a home, and two frame dwelling houses. The brick dwelling house is and was located at the corner of said premises, fronting on South Main street. She also owned a parcel of real estate on South Main street in Bellefontaine, upon which some frame business blocks are located. She also owned three lots in Florida, two of which have been or are to be sold to satisfy mortgages on the same. It is not clear from the pleadings and statements of counsel whether the remaining Florida lot has been disposed of, or is still a part of her estate; it being recited in the pleadings that this lot is unincumbered and is a part of her estate, while in the statements of counsel it is assumed that all Florida real estate has been disposed of.

The inventory filed in the Probate Court shows that the property located at the corner of South Main street and Auburn avenue was appraised at $8,010; and the real estate on which the two business rooms are located was appraised at $3,500. The inventory also shows the following personal property: Household goods, furnishings, and fixtures, $200; one Buick automobile, $250; Peoples-Commercial Bank investment certificates, $1,200; United States bonds $5,200. However, it is indicated in the statements of counsel that the property now remaining unadministered consists of two parcels of real estate referred to in the inventory, United States bonds in the sum of $5,000, and some personal property of nominal value.

It appears from the evidence that the city of Bellefontaine has failed to take any steps toward the acceptance of the devise made to it in said will; that the administrator, since his appointment, has taken charge of the two parcels of real estate located in the city of Bellefontaine and has collected the rents and income therefrom and paid the taxes and the necessary maintenance expenses thereof.

It further appears from the evidence that at the time testatrix made her said will, and ever since, there has been maintained in the city of Bellefontaine, pursuant to a charitable trust created in the will of one Mary Rutan, a fully equipped public hospital, with a separate department located upon the third floor of the hospital allocated and devoted to confinement cases; that the real estate provided in the will of the decedent, as a place to hold the meetings of the reputable physicians and surgeons of Bellefontaine and Logan county, and to carry on research work, and as a private lying-in hospital, and for the treatment of other special cases if so desired, is unsuitable for such purposes unless the buildings on said real estate, and particularly the brick dwelling house, are remodeled; that the funds provided in said will for said purposes are insufficient to pay for the remodeling, equipping and maintaining of such place for the purposes aforesaid; and that the physicians and surgeons of Bellefontaine and Logan county will not agree that a percentage of fees received by them for care, treatments and operations, and services of all kinds rendered at such place, be placed in a trust fund to be used by committees or trustees named in said will, and their successors, for the upkeep, taxes, insurance, improvement, etc., of said property, and that there are no sources other than the trust fund provided for in said will from which means can be derived for the remodeling, keeping and maintaining of said place; and that the physicians and surgeons of Bellefontaine and Logan county do not desire to and will not use said place as a place to hold their meetings, carry on research work, as a private lying-in hospital, and for the treatment of other special cases.

It further appears that the committees composed of physicians and surgeons, and composed of persons other than physicians and surgeons, as mentioned in said will, propose to secure a release from Ellen Louise Allen of her right to one-half of the income of the bonds, exclusive of the two thousand dollars in bonds specifically bequeathed, and to use the said two thousand dollars in bonds specifically bequeathed and the balance of the bonds owned by testatrix remaining after the payment of the costs and expenses of administration, amounting to approximately twenty-four hundred dollars, as an endowment for the maternity department of the Mary Rutan Hospital; and to place a metal plate in such department commemorating Dr. Covington, said plate to bear the inscription of "The Dr. Covington Golden Rule Clinic," or other suitable inscription; and to arrange for memorial services to be held at said hospital on September 15th of each year, in which the members of the Women's Literary Club of Bellefontaine will be invited to share, perpetuating the name and memory of said Dr. Covington.

Said committees further propose to convey the real estate located at the corner of South Main street and Auburn avenue, which was devised to the city of Bellefontaine, for the purposes hereinbefore mentioned, and the real estate upon which said business blocks are located, which is subject to the life estate of Ellen Louise Allen therein, to said Ellen Louise Allen, in consideration of her executing to them a release of her half interest in the income of said bonds (other than the two thousand dollars in bonds specifically bequeathed) and executing and delivering to them her note in the sum of three hundred dollars.

These proposals are considered and advanced by said committees as being an application of the doctrine of cy pres to the trust created in the will.

While there was some evidence offered on behalf of the defendant Nettie A. McClain, tending to prove that the execution of the trust created under the will is expedient and practicable, the overwhelming evidence is to the effect that the literal execution of the trust as created in the will is inexpedient, impracticable and impossible.

The rule relating to the cy pres doctrine is as follows:

"Where the literal execution of the trusts of a charitable gift is inexpedient or impracticable a court of equity will execute them, as nearly as it can, according to the original plan. The general principle upon which the court acts is that, if the testator has manifested a general intention to give to charity, the failure of the particular mode in which the charity is to be executed shall not destroy the charity; but, if the substantial intention is charity, the law will substitute another mode of devoting the property to charitable purposes, though the formal intention as to the mode cannot be accomplished." 7 Ohio Jurisprudence, 175 and 176.

It will be noted that under the rule above quoted, the doctrine is applied only in cases where the testator has manifested a general intention to give to charity.

This limitation on the application of the doctrine of cy pres is set forth in Pomeroy's Equity Jurisprudence (4th ed.), Vol. 3, page 2308, in the following words:

"A limitation upon the generality of the doctrine seems to be settled by the recent decisions, that where the donor has not expressed his charitable intention generally, but only by providing for one specific particular object, and this object cannot be carried out, or the charity provided for ceases to exist before the gift takes effect, then the court will not execute the trust; it wholly fails."

This limitation was applied in the case of Teele v. Bishop ofDerry, 168 Mass. 341, 47 N.E. 422, 38 L.R.A., 629, 60 Am. St. Rep., 401.

In that case the testatrix bequeathed a sum to trustees to be executed in purchasing a lot and building a chapel in her native place, Carndrine, Ireland, the title to be vested in the bishop, in trust to be forever used for public worship under the auspices of the Roman Catholic Church. It was found to be impracticable to carry out the scheme, for the reason that the bishop refused to assist in maintaining a chapel or support a priest, and without his help the people could do neither. It was held that the testatrix's purpose was limited to the purchase of a lot and the building of a chapel at Carndrine for the benefit of the inhabitants, that a general intent to advance religion in the parish could not be inferred, that hence the doctrine of cy pres could not be invoked, and that the bequest failed.

It is also applied by the Supreme Court of Maine in the case ofAllen v. Trustees of Nasson Institute, 107 Me. 120, 77 A. 638, in which it was held that a testamentary gift to provide funds to establish and maintain an institution for the education of young women, to promote their moral, intellectual and physical education, provides for a school of an entirely different type than a high school for the education of young women only, and does not authorize the use of the funds in whole or in part in assisting in maintaining a town high school, or other school for both sexes, though the funds be insufficient to effect the donor's purpose.

It was also applied by the Supreme Court of Massachusetts in the case of Bowden v. Brown, 200 Mass. 269, 86 N.E. 351, 128 Am. St. Rep., 419.

In that case the testatrix bequeathed eight thousand dollars to a town "toward the erection of a building for the sick and poor, those without homes," but the town refused to accept the legacy so given for the specific charity stated in the will, and it was held that the court could not apply it to some other similar charity under the doctrine of cy pres.

It was also applied by the Court of Chancery of New Jersey in the case of Brown v. Condit, 70 N.J. Eq. 440, 61 A. 1055.

In above case testatrix, having no knowledge of the work conducted for the benefit of sick seamen in the Brooklyn Navy Yard, but having previously given small sums to Wood, a missionary working there, bequeathed the surplus of her estate, if any, to "the hospital fund for sick seamen at Navy Yard, Brooklyn, New York, care of Mr. John M. Wood, chaplain." Wood was not chaplain of the Navy Yard, died before testatrix, and there was no fund maintained for the benefit of such seamen, and it was held that a court of chancery, under the cy pres doctrine, could not decree such bequest to another institution conducting religious and charitable work among the sailors of larger scope than that conducted by Wood, but that the bequest lapsed and passed to the testatrix's next of kin.

In the opinion in this case, at page 446, the court quotes with approval from the opinion in the case of Telle v. Bishop ofDerry, supra, as follows:

"If the charitable purpose is limited to a particular object, or to a particular institution, and there is no general charitable intent, then if it becomes impossible to carry out the object, or the institution ceases to exist before the gift has taken effect, and possibly in some cases after it has taken effect, the doctrine of cy pres does not apply, and in the absence of any limitation over or other provision the legacy lapses."

It is therefore necessary to inquire whether there was any general charitable intent on the part of Sarah Ellen Covington in connection with the trust created in her will. Her intention governs, and in determining such intention the conditions surrounding her at the time of the execution of the will, as well as the phrasing of the will itself, may be considered. Among such conditions was the existence in the city of Bellefontaine of the Mary Rutan Hospital, furnishing the services and equipped in the manner hereinbefore set forth.

The principal clauses of her will relating to the creation of the trust are as follows:

1. "To the City of Bellefontaine, I give in trust as a memorial to my late husband Dr. P.D. Covington, my home and grounds two lots except 40 feet off east end, all buildings thereon."

2. "The proper officials shall turn all this property over for the exclusive use of reputable physicians and surgeons of Bellefontaine and Logan Co. for all time."

3. "To be used as a place to hold their meetings, carry on research work and as a private lying in hospital and for the treatment of other special cases if so desired."

4. "Books now here which belonged to the late Dr. Covington shall be kept in the home, all of my oil paintings except two, and other pictures not otherwise disposed of."

5. "I give this much loved, hard earned home to be used for the purposes above named. With the request that it shall always be called The Dr. Covington Golden Rule Clinic, and that everythingbe managed accordingly, and that a fair per ct. of all fees received by physicians and surgeons c for care treatments operations servises of all kinds rendered here Be placed in a trust fund to be used by committees or trustees herein after named and their successors for upkeep Taxes insurance c improvements c of above described property."

6. "$2,000 in bonds may be used at once to fit the home for the uses above named."

7. "Should additions be needed in the future I desire that they be placed on east or north side or both that the present front remain as it is."

8. "I trust the two committees named below and their successors, will carry out my wishes fully, not forgetting whose name and memory it is to perpetuate. To this end I ask that memorial services be held here Sept 15th every year, and that members of The Womans Literary Club be invited to share in these services."

As the Mary Rutan Hospital was in existence at the time of the execution of the will, it would appear that it was the intention of the testatrix not to adopt that hospital as the beneficiary of her bounty, but to create an institution separate and distinct from and furnishing services of a different class and character from those furnished by such hospital.

The first quotation from the will above set forth clearly shows the intention of the testatrix that the identical home and grounds described, adapted to the use thereafter mentioned, should constitute the memorial to her husband, and that there was no general intention that they should or could be used for any other purpose, and quotation 2, providing for the turning over of this property for the exclusive use of reputable physicians and surgeons of Bellefontaine and Logan county for all time, and quotation 3 relating to the use of the property, and quotation 4, with reference to books, oil paintings and other pictures to be kept on the premises, and quotation 5, with reference to the name by which it shall be called and the manner in which it shall be managed and the methods of its upkeep, and quotation 6, relating to the use of $2,000 bonds to fit it for the uses named, and quotation 7, with reference to the location of additions to the property, and quotation 8, with reference to memorial services to be held in the property, serve to make this intention free from any uncertainty or doubt.

Quotation 2 from the will, providing for the exclusive use of the premises by the reputable physicians and surgeons (in contradistinction to any portion or class of the sick or ailing public who would be the beneficiaries of a general trust for public hospital purposes), constitutes such physicians and surgeons the beneficiaries of the trust, and this limitation as to the beneficiaries is further emphasized by provisions contained in quotation 3 as to the uses of the premises, the specified uses being peculiar and by their nature limited to physicians and surgeons, in contradistinction to any class of the general public, and the only use that might partake of a general public character, to-wit, a lying-in hospital, being expressly made private; and is further emphasized by the name adopted in quotation 5 and the provision as to a fair percentage of all fees received by physicians and surgeons for services rendered on the premises being placed in a trust fund to be used for upkeep, taxes, insurance and improvements, and so forth, of the premises.

From the provisions of quotation 5 it is clear that the testatrix was aware that the trust funds provided in her will were insufficient to carry out the purposes designated in her will and that the trust was created with the expectation, if not upon the express condition, that additional funds would be provided by the physician and surgeon beneficiaries in the manner mentioned for carrying out such purposes at the place designated by her.

To sum up, the testatrix had no general charitable intention, her charitable intention being limited to constituting her identical home and grounds, described in her will, adaptable for use as a memorial to her husband, as specified in her will. The beneficiaries of the charitable trust created by her were the reputable physicians and surgeons of Bellefontaine and Logan county, and not any other portion or class of the public, and the uses provided for were for the benefit of such physicians and surgeons and not for the benefit of any other portion or class of the public; further, that such trust was created with the expectation that the beneficiaries thereof would in the manner specified in the will provide necessary additional funds to make the carrying out of the trust expedient and practicable, and the mode provided for the execution of the trust was of the essence of the trust.

The proposed endowment of Mary Rutan Hospital does not come within the charitable intent of the testatrix as the charitable intent of the testatrix is not general, but is limited to the mode of execution prescribed in the will, and, further, the intended beneficiaries of the trust created by her will are a different class than the portion of the public who would be the beneficiaries of the proposed endowment of Mary Rutan Hospital, and the character and class of facilities and services provided for in said will differ from those proposed to be furnished under such endowment.

As the testatrix had no general charitable intent, and the mode of carrying out the trust is of the essence of the trust, the doctrine of cy pres cannot be applied, and the execution of the trust in the mode provided in the will being inexpedient, impracticable and impossible, the devises and bequests made for the purposes of the trust lapse, and the property covered thereby passes by inheritance to the next of kin. This applies both to the real estate specifically devised for the purpose of the trust and to the bonds bequeathed for the remodeling and upkeep thereof, and to the income from bonds and real estate, and to the interest in real estate devised and bequeathed for the upkeep and maintenance of the property, as well as the personal property directed to be kept in said home.

As the trust has lapsed as to the real estate described by the testatrix in her will as "my home and grounds", and there is sufficient personal property, as shown by the evidence, to pay all the indebtedness of said estate, the heirs at law and next of kin of the testatrix are entitled to the immediate possession of said real estate; and, as all necessary parties are before this court, and final determination of their respective rights can be made herein, and a multiplicity of suits be thereby avoided, leave will be granted to Nettie A. McClain, one of such heirs at law, who filed her answer and cross-petition herein, to amend the same so that partition of said premises may be awarded herein.

Under said will the defendant Ellen Louise Allen is entitled to an estate for life, and to the possession during the existence of such life estate of the business blocks described in the petition herein, with the rights and privileges ordinarily enjoyed, and subject to the obligations ordinarily imposed on a life tenant in real estate. The clause in said will, "Provided she needs it", relating to the income from said real estate during her lifetime, means, as used in the will, that she shall receive such income as long as she cares to receive it, or does not waive it; and the heirs at law and next of kin of the testator are entitled to the remainder of said real estate subject to said life estate.

Any funds in the hands of the administrator derived from rents of the property described as "my home and grounds" remaining after the payment of taxes, insurance and other necessary expenses of maintenance of said property, is the property of and shall be paid to said heirs at law and next of kin; and any funds in the hands of the administrator derived from rents of the business blocks remaining after the payment of taxes, insurance and other necessary expenses of maintenance of said property is the property of and should be paid to the defendant Ellen Louise Allen.

If there is a lot remaining of the Florida real estate of which the testatrix died seized, the defendant Ellen Louise Allen is entitled to the half of the income of said lot, or, in case of sale thereof, is entitled to half the income from government bonds purchased with the proceeds thereof.

The trust provided for in the will having lapsed, the $2,000 in bonds directed to be used in fitting the home for the trust purposes are assets in the hands of the administrator for distribution among the heirs at law and next of kin of the testatrix.

The bonds, or proceeds thereof, remaining in the hands of the administrator after the distribution of said $2,000 in bonds, shall, after payment of the balance owing of the costs and expenses of administration, and debts of the testator, be delivered or paid to a trustee to be appointed by the court, who shall hold the same together with the funds that may be derived from the Florida real estate, which the trustee is hereby authorized to sell on terms approved by the court, and invest (if not already invested) in United States government bonds, and such trustee shall pay one-half of the income therefrom to said Ellen Louise Allen during her lifetime, and the other half to the heirs at law and next of kin of decedent; and at the death of said Ellen Louise Allen said trustee shall pay all the funds remaining in his hands to said heirs at law and next of kin.

Decree accordingly.

KLINGER, J., concurs.