Court Opinion

ID: 6376700
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:55:56.702823+00
Date Added: 2024-06-11T15:50:12.240469
License: Public Domain

Gest and Van Dusen, JJ.,
dissenting.
— The Auditing Judge held, after his discussion of the Act of April 26, 1855, P. L. 328, that the trustee under the will of Charles E. Ellis is authorized to take and hold, for the charitable purposes therein set forth, such a sum only as will produce $50,000 yearly, or, roughly speaking, $1,000,000, but that it may be authorized to hold a larger sum upon showing, after notice to the Attorney-General, that such larger sum can be efficiently employed for the benefit of the community, and, unless this can be shown, this court is directed to award the income from the excess of the capital sum cy pres.
The vital question in this case concerns the applicability of the Act of 1855, and other statutes, to testamentary trusts such as the present, so as to limit the annual income to be derived from the estate, so devised in trust, for the charitable purposes of the will. We do not think that they have this appli*791cation, and as the question raised by these exceptions has never been raised. before during the seventy years which have elapsed since the passage of the statute, and is of vital importance, we will state the reasons for our opinion, but as briefly as we can.
The Act of April 26, 1855, P. L. 828, is entitled “An act relating to corporations and to estates held for corporate, religious and charitable uses.” It is evident from a perusal of it that it is intended to provide numerous and diverse regulations; some civil, others penal or criminal; some enabling; some restrictive; some substantive in character, and others merely administrative. The act is a collection of sections upon the most diverse subjects and framed to remedy most diverse conditions, as appears from a perusal of its sections seriatim.
The Auditing Judge definitely holds that a testamentary trust for charitable purposes is regulated by sections 4, 8, 9, 10, 12 and 15 of the act. We are of opinion, on the contrary, that the only one of these sections that has anything to do with such a testamentary trust is section 10, and that section has not the effect ascribed to it. Section 4 in terms applies only to unincorporated literary, religious or charitable societies and church associations and congregations, and prohibits them from acquiring, either in their associate name or that of trustees, real or personal property of a greater yearly value than, if incorporated, it would be allowed to hold under the general laws. Clearly this has nothing to do with such a charity as that established by the testator in this ease. The trustees referred to in this section are trustees for unincorporated associations, etc., and not trustees under a will to whom is devised property for charitable purposes. Section 8, likewise, refers only to literary, religious, charitable or beneficial societies, congregations, associations or corporations which have capacity to take and hold real and personal estate, and limits their capacity to the clear annual value of $5000 and to no greater extent, without express legislative sanction. This section, likewise, has no application whatever to testamentary trusts for charity. Section 9 is in pari materia with the foregoing, and provides for an escheat, where the preceding sections have been violated, of property held beyond the prescribed limit. Section 10, quoted in full in the adjudication, is the only section which refers to testamentary trusts for charities, and its clear intention with respect to them is to prevent the failure of the charity by reason of the lack of a trustee, of the objects being indefinite, uncertain, or ceasing, or depending upon the discretion of a last trustee, when the court having jurisdiction is given ey pres power to carry the intent of the donor or testator into effect. This section applies generally to any disposition of property, and the inclusion of the words “in excess of the annual value hereinbefore limited” must necessarily have reference to those cases in which the annual value had been before limited, and the prior sections which limit such annual value can, reddendo singula singulis, refer only to literary, religious or charitable societies, congregations, associations or corporations. This section, indeed, is said by Justice Paxson in Frazier v. St. Luke’s Church, 147 Pa. 256, to be merely declaratory of the law as it had existed and been enforced in the Courts of Chancery in England for hundreds of years. At any rate, this section, so far as testamentary trusts are concerned, is distinctly enabling and not restrictive
As other sections of this act, and other acts, are mentioned in the adjudication, a few words should be added with respect to them. Section 12, likewise, refers to the same classes of subjects, religious, charitable, literary or scientific societies, associations or corporations, and forbids the accumulations of income into capital so that the clear annual value shall exceed the limita*792tion “hereinbefore contained,” which, as has been shown, does not apply to testamentary trusts for charity, and, even if it does, the income is to be expended ey pres, under the authority of the legislature. Hillyard v. Miller, 10 Pa. 326, cited in this connection by the Auditing Judge, should be read in the light of Philadelphia v. Girard, 45 Pa. 9, and it will, moreover, be observed that the provisions of the Act of April 18, 1853, § 9, P. L. 507, against accumulations do not apply to a trust for charity. The subsequent Act of April 22, 1889, P. L. 42, which, in the same phraseology, raises the limit of annual income to $30,000, has clearly no bearing on the present question. The subsequent Act of June 1, 1915, P. L. 701, which raises the limit to $50,000, is also in pari materia, and, in any event, having been passed since the death of Ellis in 1909, cannot affect the case. The Act of May 9, 1889, P. L. 173, was evidently, and the Act of May 23, 1895, P. L. 114, was expressly, intended to supplement or amend section 10 of the Act of 1855, and what has been said with reference to that section applies to the later statutes.
The law of Pennsylvania has always favored bequests for charitable purposes, and has often gone beyond the English chancery precedents in sustaining them. The liberal doctrine laid down by Gibson, C. J., a century ago, in Witman v. Lex, 17 S. & R. 88, has been consistently followed ever since. The Statute of 43 Eliz., ch. 4, for example, although never in force in Pennsylvania, has always been recognized in principle more broadly than in England, and this statute expressly enumerates, among other charitable purposes, the education and preferment of orphans.
In Vaux’s Appeal, 109 Pa. 497, where the charitable trust was for the establishment of an industrial home for orphan girls, the Supreme Court said it was a broad and noble charity. To hold at this late date, over seventy years since the Act of 1855 was enacted, that a few words in one section of it limit a testamentary trust for charity to an income of $5000 a year, even though it may be increased to $50,000, is a step that we are not prepared to take unless required so to do by the decision of a higher court.
If we are correct in our construction of the acts of assembly, the foundation of the adjudication is undermined and the exceptions should be sustained without the necessity of further discussion. But, inasmuch as voluminous testimony, about 900 pages, was produced before the Auditing Judge and fully commented on by him and discussed at length in the arguments before the court in bane, we should make some comment on it, irrelevant as we think it is.
The adjudication of the Auditing Judge contains some strictures upon the management of the trust by the trustee, and the argument of the amicus curiae contains numerous others, alleging, for example, the indifference of the managing board to suggestions to increase the usefulness of the institution, the failure of the members of the board to obtain personal knowledge of its operation and their delay in establishing the home. If the trustee has been negligent in the discharge of its fiduciary duty, the remedy is by a petition to the court, asking for its removal and the appointment of a substituted trustee, but the remedy is not the taking of the assets of the trust estate away in order to devote them to a purpose which might be thought more beneficial to the community. The Auditing Judge criticises the trustee for sending many of the children to schools in Philadelphia, yet this is one of the recommendations of the Carson-Ellis Report, which recommends this very thing to be done in order that the girls may have contacts with the outer world, while, in other respects, the trustee is criticised for not having followed other recommendations of the same report.
*793The burden of the testimony, as summarized in the adjudication, was that public “need for institutional care of white fatherless girls is slight;” that “the great demand to-day is for support and maintenance” (of children) “in their own homes with their mothers or other near relatives;” that, “in enacting the legislation for the Mothers’ Assistance Fund, 1913, it has been the policy of the Commonwealth to keep the widowed mother and her family together,” and, consequently, the Auditing Judge, having concluded that the acts of assembly above discussed apply to this case, further found that the income in excess of $50,000 and the accumulated income on hand should be applied cy pres, according to the home-care plan, such as is followed by the Mothers’ Assistance Fund and by the John Edgar Thompson School, and directed the accountants to prepare and submit to him a detailed plan to carry into effect the directions of the adjudication.
In our opinion, the time is not ripe for any consideration of the application of the cy pres doctrine to this trust. The objects of the trust, as set forth in the will of the testator, are not indefinite or uncertain, nor have they ceased to exist. They are distinctly charitable and have by no means been shown to be impracticable. They are not contrary to public policy, but, on the contrary, were warmly approved by the Supreme Court in Vaux’s Appeal, above quoted. The trust should be carried out according to the direction of the testator: Hunter’s Estate, 279 Pa. 349. Impressed by the testimony of the social workers, who were called by the amicus curias, the Auditing Judge said, in his adjudication: “It should be pointed out that there is a vast difference between those needing institutional care and those needing home care. In the former class would come the abnormal, deficient, defective, incorrigible, etc., while the latter would comprise the normal fatherless girls. Ellis College is not equipped for the former, and under our public policy, the latter should have home care.” According to this, there is no use for Ellis College at all, and yet, one of the most distinguished of the witnesses, Dr. Ellen C. Potter, then the Secretary of Welfare of the Commonwealth, admitted in her testimony, page 359, that there was some place for institutional work, and in her letter to Mr. Morgan, president of the trustee corporation, was highly commendatory of Ellis College, and gave it, in her classification of “points,” forty-one out of a possible forty-two, her sole objection being that there was no woman on the board.
It may be that present-day social workers are of the opinion that home care is better than institutional care for children, but, even though this roughly stated proposition should be admitted to be correct, it does not follow from this that the carefully devised plan of a philanthropic testator is to be set aside and his estate diverted from the trusts of the will simply because social workers think he should have made another will. Girls may be better off at home if their home happens to be better than an institution, but it is easier to bring c fildren forth than to bring them up, and it does not follow because a woman has borne children that she is endowed with good principles, good sense and good temper that form the trinity of qualifications necessary to make that home a happy one and to afford the proper training for the children in it.
We must also dissent from the opinion of the majority of the court recommitting the adjudication to the Auditing Judge, in order that the trustee may have further opportunity of being heard concerning the disposition of the trust estate. The fundamental question of law, which should first be settled, is the applicability of the Act of 1855, and until the Supreme Court decides this question, all further testimony or discussion is premature and worse than useless.
*794We would, therefore, sustain the exceptions and award the balance shown by the account to the trustee for the uses and purposes of the will. If, in the course of time, it definitely appears that the income of the estate is more than can be used for the purposes of the will, it will be time enough to consider the question whether this court can or should deal with the excess under the doctrine of cy pres.