Court Opinion

ID: 3491297
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:59:43.55439+00
Date Added: 2024-06-11T14:14:22.930642
License: Public Domain

By the will of Marilla Griswold, a trust was created, the income from which was to be used for the maintenance of the Griswold room and bed at the John Robinson Hospital, a corporation organized and existing for charitable purposes. The land on which the present hospital stands was originally conveyed by other persons, the deed therefor providing the purposes for which the hospital was to be used and particularly that it should be operated "in no manner directly or indirectly for private profit or dividend-paying to anyone" and that in the event the hospital should cease to be operated for the purposes stated, the land was to revert to certain named persons. The corporation ceased to operate the hospital in 1923, and for a short period the county took it over. In March, 1924, the hospital evidently closed for a very short period and the land reverted to the parties named in the deed. The latter sold the hospital to William Kopprasch who took possession of the building and operated it for his own private profit. He filed an assumed name certificate showing that he was doing business as the John Robinson Hospital and continued to do business in this manner from 1924 until *Page 414 
1930, whereupon Dr. Kopprasch and his two nonresident brothers incorporated the hospital as a nonprofit corporation, the three brothers being named as trustees and officers. There was introduced in evidence the decree in a previous case rendered in 1926 in which the persons named in the reverter clause of the above mentioned deed were plaintiffs and Dr. Kopprasch was defendant and wherein the court, in accordance with the reverter clause in the original deed, definitely determined that the hospital was no longer being run for charitable purposes. While the defendant in the instant case was not a party to the previous case, nevertheless the pleadings and decree were properly admitted in evidence to show the finding of the court that the hospital ceased to be run for charitable purposes in 1924.
The decisive question is: What was the intention of the testatrix? Did she intend to maintain a room as a monument or memorial in an institution run by an individual for private profit, or did she intend to maintain and name a room in a charitable institution? The latter was plainly her intention and the will must be construed accordingly. At the time the will was executed as well as when it was probated, the John Robinson Hospital was a charitable institution. It seems extremely unlikely that the testatrix would have left a trust for the benefit of the private business of an individual whom it is possible she did not even know at the time.
A somewhat similar question arose in Stoepel v.Satterthwaite, 162 Mich. 457, where the court said:
"The important question is What is the meaning of the language used by Mrs. Sutton? Was she interested in Dr. Jones as an individual, or was it the charitable work he was doing which she thought *Page 415 
was important? Was the money to be used by him for his own personal use, or was it to be used to carry on the charitable work of relieving suffering humanity? To ask these questions is to answer them. It is clear the gift could be used only for the purpose of relieving suffering, if the will of the testator was to be given effect. For this reason, the gift must fail under the authorities cited."
We hold, therefore that the gift to the John Robinson Hospital, as the testatrix knew it, failed in 1924 when the institution was taken over for private profit, there being no longer any charitable purpose.
The opinion for reversal seems to indicate that a trust for a hospital, conducted primarily for private profit, would be valid. A trust is not a charitable trust if the property or the income therefrom is to be devoted to a private use. See 2 Restatement of the Law of Trusts, § 376. The record shows that from 1924 to 1930 the hospital was operated primarily as the private business of Dr. Kopprasch. The general rule is that all trusts, except charitable trusts, must have definite beneficiaries who can enforce them. Trusts for charity, however, are intended to benefit large groups of persons and their enforcement is left with the attorney general. A trust for a noncharitable purpose and where no definite beneficiary is designated is sometimes termed an "honorary trust." In such cases, payment by the trustee, while permitted, is not enforceable at law or in equity because there is no beneficiary who can compel the enforcement of the terms of such a trust. Section 124, 1 Restatement of the Law of Trusts, provides as follows:
"Where the owner of property transfers it upon an intended trust for a specific noncharitable purpose, and there is no definite or definitely ascertainable *Page 416 
beneficiary designated, no trust is created; but the transferee has power to apply the property to the designated purpose, unless he is authorized by the terms of the intended trust so to apply the property beyond the period of the rule against perpetuities, or the purpose is capricious."
Assuming the trust in the instant case may be regarded as an "honorary trust" and not void under the rule against perpetuities nor made for a capricious purpose, nevertheless the trustee cannot be compelled to carry out its terms if he does not choose to do so. We quote from 1 Restatement of the Law of Trusts, § 124, comment (a):
"Where property is transferred to a person upon an intended trust for a specific noncharitable purpose, and there is no definite or definitely ascertainable beneficiary, the transferee is not under a duty and cannot be compelled to apply the property to the designated purpose, since there is no beneficiary to enforce the intended trust. It is not enforceable as a charitable trust by the attorney general, or other officer of the State, since the purposes are not charitable purposes."
In comment (b) it is said:
"If he (the trustee) refuses to apply it (the property) to the designated purpose, he will be compelled to hold it upon a resulting trust for the settlor or his estate."
When the John Robinson Hospital ceased to be operated as a charitable institution in 1924, the gift for the maintenance of the Griswold room and bed failed and there arose a resulting trust to the residuary estate. Inasmuch as the bequest was restricted to a particular purpose in a designated charitable institution *Page 417 
which ceased to function in 1924, the legacy ended. We do not believe it is a situation where the doctrine of cy pres is applicable when for six years the corporation was run as a business by a private individual, notwithstanding the fact that at the end of the six years, the proprietor of the business, together with his brothers, brought their organization under Act No. 84, Pub. Acts 1921 (2 Comp. Laws 1929, § 9943 et seq.), as a trustee corporation.
Plaintiff stresses the fact that his conduct of the hospital both as an individual and through the corporation was unprofitable and that as a matter of fact hospitals as a rule are run at a loss. The indirect benefits accruing to the physician owning a private hospital or being associated with one and the exemption from taxation extended to charitable institutions incorporated under the laws of this State are not shown by the record. We believe, however, that the running of the hospital as a private business by an individual and then by him and his two brothers as a trustee corporation, did not constitute the present entity a successor of the John Robinson Hospital, the charitable corporation to which the testatrix specifically intended to leave the income from the trust. It having been thus left specifically for one purpose, the doctrine of cy pres is not involved. Under the facts as presented, a charitable bequest that has lapsed for six years cannot be revived.
The decree of the lower court should be affirmed, with costs to defendant.
WIEST, J., concurred in the result. *Page 418