Opinion ID: 2109914
Heading Depth: 1
Heading Rank: 2

Heading: The Residents' Appeal

Text: The Residents stake their hopes on the argument that the Fire Company is a charitable corporation, that gifts to such a corporation created a charitable trust, susceptible of enforcement by ascertainable beneficiaries, and that it was beyond the Fire Company's powers either to amend the purpose clause of its articles of incorporation or to relocate its firehouse. While we are unwilling to accept the idea that a charitable trust was created, there is no question in our minds that the case law dealing with gifts to corporations organized for charitable, educational, or religious purposes is equally applicable to gifts to a non-profit corporation, formed to advance the public good, such as a volunteer fire company which performs services usually regarded as a function of government, see Williams v. Rescue Fire Company, 254 F. Supp. 556 (D. Md. 1966); Fire Ins. Patrol v. Boyd, 120 Pa. 624, 15 A. 553 (1888); 15 Am.Jur.2d Charities § 146, at 155 (1964); 2 Restatement, Trusts 2d § 373 a, at 256 (1959). In Sands v. Church of the Ascension, Etc., supra, 181 Md. 536, two vestrymen had given the church bonds in an aggregate principal amount of $20,000 with a letter: It is our wish that the income from these bonds be used only for the payment of the Ground Rent as it becomes due and said income is not to be used for any other purpose whatsoever, neither must the income of the bonds or the bonds be used to borrow money on. Further if at any time the Vestry can buy out or extinguish the Ground Rent at a price satisfactory to them, they can sell the bonds and apply the proceeds to said extinguishment of the Ground Rent. Also, if at any time the Vestry can sell the bonds and buy other securities that they may deem better or more profitable, they can do so, but must replace the securities so purchased in place of those sold. In 1932, the church property was sold, and in 1941, an accountant found the letter. Suit was brought by the residuary legatees under the donors' wills, who contended that the bonds were impressed with a trust, and that when the church property was sold and the bonds were no longer needed for the purpose intended, a resulting trust arose in favor of the donors' estates. The Church of the Ascension's position that it was entitled to retain the bonds was upheld, both in the lower court and on appeal. The case is a source of authority for several propositions which are apposite here: first, that an express trust cannot exist where the same person has both legal title to and beneficial enjoyment of the property, Brandt, Inc. v. Y.W.C.A., 169 Md. 607, 182 A. 452 (1936); second, that where property is given to a corporation for such uses as are within its corporate powers, no trust is created, Baltzell v. Church Home, 110 Md. 244, 274, 73 A. 151 (1909), and finally, that in the absence of a clear reservation of a reversion, what might otherwise be construed as a condition will be regarded as the donor's expression of confidence that the property will be used for the intended purpose so far as may be reasonable and practicable, Columbia Bldg. Co. v. Cemetery of Holy Cross, 155 Md. 221, 229, 141 A. 525 (1928). Later cases have refined these principles. Inasmuch Mission v. Merc. Tr. Co., 184 Md. 231, 239, 40 A.2d 506 (1945) held that the fact that a charitable institution to which a bequest has been given is under a different ownership and management from that which the testator knew does not work a forfeiture, especially when the change is for the purpose of insuring continued existence. Gray v. Harriet Lane Home, 192 Md. 251, 64 A.2d 102 (1949) held that a bequest for the treatment of diphtheria and scarlet fever patients could be used in support of other corporate purposes when the incidence of the two diseases declined. Loats Asylum v. Essom, 220 Md. 11, 150 A.2d 742 (1959) permitted the sale of real estate devised to a home for orphan girls, and the use of the sale proceeds in support of girls in foster homes. Gordon v. City of Baltimore, 258 Md. 682, 267 A.2d 98 (1970) upheld the power of the trustees of the Peabody Institute to transfer the Institute's library to the Enoch Pratt Free Library. It is imprecise to characterize any gifts to the Fire Company as creating a charitable trust: first, because it held both legal and equitable title, and second, because the assets of the Fire Company represent the accumulation of funds given to or raised by the Fire Company in support of its corporate purpose, Gordon v. City of Baltimore, supra, 258 Md. at 702-03; Howard, Charitable Trusts in Maryland, 1 Md. L. Rev. 105, 121 (1937). Our prior decisions make it clear that when a gift is made to a charitable corporation, even though it be made for a particular purpose and it proves impossible or impractical for the donee to perform the donor's desires, no condition subsequent will be implied unless there is a clear expression of the grantor's intention that there be a gift over on default, Gordon v. City of Baltimore, 258 Md. at 704; Gray v. Harriet Lane Home, 192 Md. at 264; Sands v. Church of the Ascension, Etc., 181 Md. at 542, all supra. If there were an intimation that the Fire Company was about to suspend operations or substantially deviate from its corporate purpose, different considerations might come into play, compare Peter v. Carter, 70 Md. 139, 16 A. 450 (1889) with Bryan v. Board of Education, 151 U.S. 639, 14 S.Ct. 465, 38 L.Ed. 297 (1894) and Paterson v. Paterson Gen. Hospital, 97 N.J. Super. 514, 235 A.2d 487 (1967). Such is not the case, however. There was testimony that the Fire House was dilapidated and unsanitary, giving rise to complaints by the paid firemen, and that a new building in a different location might not only make possible the recruitment of badly needed volunteers but also permit the scheduling of a variety of income-producing social events. A map was admitted in evidence showing that the present location of the firehouse was at the edge of the Fire Company's first due area and of its first alarm area. [5] There was testimony that the proposed location, although in the county, and outside the first due area, was in the center of the first alarm area, and as close to about one-half of the first due area as is the present firehouse. A table was introduced showing that the Fire Company responded to far more calls in the county than it did in the city. [6] The chancellor found    nothing in the evidence to indicate that the    [charter] purpose  [`   the more effectually to protect the property of the Citizens of Anne Arundel County, especially that portion thereof known as West Annapolis and the territory lying adjacent and contiguous thereto   '] will not be substantially or, perhaps, better served, by the proposed relocation. nor do we. The Residents make much of the fact that in March 1970, some two months after suit was instituted, the Fire Company amended its articles of incorporation, rewording the purpose clause to read    to enable the members to more effectively protect the property of the citizens of Anne Arundel County, especially that portion thereof known as the Sixth and Second Assessment Districts, from loss and damage by fire   . If, as we understand, the Sixth Assessment District comprises the City of Annapolis, and the Second District, that portion of the county lying generally to the west and northwest of the city, the distinction complained of is one without a difference, and is nothing more than a more precise delineation of geographical boundaries. Decrees of 30 December 1970 and order of 10 February 1971 affirmed, costs in each case to be paid by appellants.