Court Opinion

ID: 3609965
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:54:24.774544+00
Date Added: 2024-06-11T12:48:42.298639
License: Public Domain

George Doheny, deceased, was an attorney at law residing at Syracuse, N.Y. The plaintiff is a charitable corporation located at Syracuse. The seventh paragraph of Mr. Doheny's will provided:
"Seventh: All the rest, residue and remainder of my estate, both real and personal, I give, devise and bequeath to St. Joseph Hospital, the Syracuse Memorial Hospital, the House of Providence, St. Vincents Asylum and School (Madison Street), the Syracuse Free Dispensary, the Syracuse Homeopathic Hospital, St. Mary's Maternity Hospital and Infants Asylum, the Onondaga Orphans Home and the Syracuse Home Association, (commonly known as the Old Ladies Home) all of Syracuse, N.Y., share and share alike, one ninth to each to be held as an endowment fund and the income used for the ordinary expenses of maintenance."
The plaintiff accepted the bequest and segregated the funds, kept them invested, and used the income for *Page 124 
"ordinary expenses of administration." The property of plaintiff is encumbered by a real property mortgage of $175,000. This action is for a declaratory judgment decreeing that the gift to plaintiff was absolute and that it may legally use the fund to pay off the mortgage and for other purposes of the corporation. The Special Term so decided and the judgment was affirmed by the Appellate Division, one justice dissenting. The Attorney-General contends that the funds bequeathed constitute a trust fund that must be held "as an endowment fund and the income used for the ordinary expenses of maintenance," as stated in the will.
It is a familiar principle of law that when a will in the first place makes an absolute gift such gift cannot be cut down by later words of the will unless the later words express as clear an intent to cut down the absolute gift as the prior words do to make the gift. In Matter of Hayes (263 N.Y. 219, 226) we said: "Here we have words constituting an absolute gift followed by words in the same sentence which do not disclose a clear intention to cut it down. Under such circumstances, courts favor giving effect to the absolute gift. (Clark v. Leupp, 88 N.Y. 228; 1 Perry on Trusts [6th ed.], p. 162, § 115.) The question always is whether the maker of the will by the language used, intended to impose an obligation on the legatee to carry out an expressed purpose or having expressed a wish intended to leave it to the legatee to act in accordance therewith or not in his discretion." In that case we were discussing the question whether the words used in the will created a trust.
The courts have found great difficulty in determining whether words which are claimed to have the effect of cutting down words of absolute gift have that effect in particular cases. The cases throughout the country are in conflict. In this State the tendency seems to be to hold that where there are words of absolute gift such gift will not ordinarily be cut down by subsequent words. The donor was a well-known, experienced lawyer who presumably knew the law applicable as announced by this *Page 125 
court in various opinions. In seeking his intent as expressed in the language used, we must assume that he used it having in mind the construction placed upon similar language by this court and other courts of the State.
It should be noted that the bequest here in question is not under any construction a bequest for a specific purpose, as for instance a bequest with which to build a hospital to be called Doheny Memorial Hospital. A bequest to be held and income to be used for "ordinary expenses of maintenance" constitutes a bequest at most for a very general purpose, leaving a very wide discretion to the corporation. What constitutes "ordinary expenses of maintenance" may cover a very wide field. It may in certain circumstances justify the use of the income on the fund to build a new addition to the hospital. Wherever a will does not in express terms create a trust and the question is whether the words used shall be construed as precatory or as creating a trust the fact that the purpose expressed is not specific must be considered and the inference is that the words were used not for the purpose of creating a trust. (Bogert on the Law of Trusts [Hornbook Series], p. 48.)
The will does not name a trustee to hold the fund. It is true that a charitable corporation holds all of its funds in trust for the charitable purpose for which it was organized. That does not however, create a trust in a legal sense or make applicable rules of law governing trusts to private persons. (Bird v. Merklee,144 N.Y. 544.) Such a corporation holds its funds in a sort of public trust, in a trust as provided in its charter, not in a trust created by a donor. (Sherman v. Richmond Hose Co.,230 N.Y. 462.)
The gift was direct to the hospital, not as trustee for the benefit of another. (Matter of Griffin, 167 N.Y. 71, 75.) The hospital cannot be a trustee for itself in a legal sense. (Brayton v. Rector of Christ Church, 249 App. Div. 290; affd., 275 N.Y. 631.) The will does not provide for any forfeiture or gift over in case of a breach. It was not made to perpetuate the donor's name or that of any one else. It was an absolute gift for a charitable purpose *Page 126 
unless the language must be construed as imposing a trust. It seems to us that Justice UNTERMYER has stated the law accurately in Corporation of the Chamber of Commerce v. Bennett (143 Misc. Rep. 513). In that case funds had been given to the corporation for the relief of members who may have been reduced to poverty, and their widows and children. He wrote: "A gift to a corporation to be used for one of several corporate purposes does not constitute a trust. `Nor is the donation rendered the less absolute, or converted into a trust, because the donor specifies that the donation shall be employed for one of the uses or purposes for which the corporation was chartered.'" (p. 517.) There can be no doubt that the cases cited by Justice UNTERMYER and relied on by him fully support his statement. Those were cases decided prior to 1932. Certainly we have not expressly overruled those cases, and we would not intend to overrule them by implication. Attention is called to a few of those cases.
In Wetmore v. Parker (52 N.Y. 450, 459) the will of testatrix bequeathed to the Utica Orphans Asylum $25,000 to be invested by the trustees and the income expended in their discretion "for the support and maintenance of said asylum." Chief Judge CHURCH, writing for the court, said: "It does not create a trust in any such sense, as that term is applied to property. The corporation uses the property, in accordance with the law of its creation, for its own purposes; and the dictation of the manner of its use, within the law by the donor, does not affect its ownership or make it a trustee."
In Bird v. Merklee (supra, p. 548) the will bequeathed to the Methodist Episcopal Church a part of the residuary estate "to buy coal for the poor of said churches." There was no direction to invest and use the income. Judge EDWARD T. BARTLETT said: "We * * * are of opinion that the testator contemplated no trust, but made a valid bequest to the churches" (citing Wetmore v.Parker, supra). "The fact that the testator has designated the purpose for which this legacy must be used does not *Page 127 
indicate a desire upon his part to create a trust." (p. 550.)
In Matter of Griffin (167 N.Y. 71, 75, 84) the will gave funds to The Round Lake Association "to be devoted and applied by said association to the support and maintenance of the school at said Round Lake known as the Round Lake Summer Institute." CULLEN, J., said, "Such a gift, though the corporation may be instructed to maintain the principal intact and use the income only for a specific purpose, does not create a trust" (citingWetmore v. Parker, supra, and Bird v. Merklee, supra).
In Matter of Durand (194 N.Y. 477, 479) the will gave a fund to the trustees of the University of Rochester "to be held by them as a perpetual fund, and the income thereof to be devoted to the objects named" (female education). HISCOCK, J., wrote the opinion in this court and it was decided that there was an absolute gift instead of a trust (citing Matter of Griffin,supra, also Wetmore v. Parker, supra, and Bird v.Merklee, supra).
The will involved in Sherman v. Richmond Hose Co. (230 N.Y. 462,466) bequeathed $10,000 to the Richmond Hose Company "to be kept at all times intact and the income * * * to be devoted to the reasonable and proper uses of said company for whatever purposes its members acting as an organization may see fit to direct." The city organized a paid fire department and the Richmond Hose Company was dissolved and a question arose as to where the $10,000 bequest should go. This court held that the bequest did not impose a trust, but that as the hose company was a charitable corporation, section 12 Pers. Prop. of the Personal Property Law applied. Therefore, that the cy pres doctrine applied and the fund should go to the city as the gift was a gift to charity impressed with a public trust. That case pointed the way for the decision in Matter of Neher (279 N.Y. 370) where the will gave a home in the village of Red Hook to the village to be used as a hospital. The village, being without necessary resources, petitioned the court to apply the cy pres doctrine. This court held that principle applicable under section 113 Real Prop. of the Real Property Law as the gift was *Page 128 
for a charitable purpose impressed with a public trust as in theRichmond Hose case (supra).
Appellant argues that the intent of the testator should control and that his intent is clear. Assuming that the intent is clear as contended by appellant, nevertheless the intent to be effective must be a legal intent enforceable under applicable principles of law.
It is urged by the Attorney-General that decisions made since 1873, when the case of Holmes v. Mead (52 N.Y. 332) was decided, and the passage of the Tilden statute (so called) in 1893 (L. of 1893, ch. 701), now embodied in section 113 Real Prop. of the Real Property Law and section 12 Pers. Prop. of the Personal Property Law, should no longer be followed as those decisions were made in an effort to avoid the effect of that decision and in all cases where possible to sustain charitable bequests as absolute gifts. That argument overlooks the fact that many of the cases heretofore cited were decided long after the passage of the Tilden Act.
An absolute bequest to a charitable corporation of a fund which a testator directs shall be held in trust by the corporation and used for a special purpose is, under the decisions of this court, in fact an absolute gift to the corporation, and the request or direction that it be used or held in trust for a special purpose are precatory words which do not in law compel the corporation to use the fund in the way directed by the testator. That is the law of this jurisdiction as announced in many decisions. It has become a rule of property and should be followed.
The order of the Appellate Division should be affirmed, with costs.
LEHMAN, LOUGHRAN and RIPPEY, JJ., concur with FINCH, J.; HUBBS, J., dissents in opinion, in which CRANE, Ch. J., concurs; O'BRIEN, J., taking no part.
Judgments reversed, etc. *Page 129