Court Opinion

ID: 6820526
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:06:39.927846+00
Date Added: 2024-06-11T08:46:20.634521
License: Public Domain

Holt, J.,
dissenting.
Abram T. Litchfield, a churchman of Methodist' Episcopal ecclesiastical affiliations, was born in Abingdon, Virginia, and lived there for quite a time. He then left this State, and, after wandering in divers places, settled in Missouri and lived in his Missouri home until his death.
In his will of date May 22, 1915, among other provisions appears this, numbered section 5:
“5. I will and bequeath to my sister Mrs. John D. Cosby the sum of Two Thousand Dollars, in trust however, the interest only to be used in keeping in repair ‘Litchfield Hall’ on the campus of ‘Martha Washington *146College’.for young ladies, located at Abingdon, Virginia, and being • the . property of the Methodist Episcopal Church, South. ...
“If my sister should not be living at my death, then said sum-of Two- Thousand Dollars shall be paid to the trustees, curators or other persons having the legal management and control of said Martha Washington College for young* ladies, or who may be legally authorized to receive said trust fund, to be held and used for the purpose aforesaid.”
Said section 5 was revoked by codicil of date October 25, 1918. Mr. Litchfield himself died at his Missouri home in March, 1919.
In June, 1919, the trustees of Martha Washington College conveyed its property to Emory & Henry College but that deed-was withheld from recordation until 1929. Martha Washington College, however, continued to function as an independent institution until 1931, at which time it-closed its doors and, as a girls’ school, was seen no more. Emory & Henry College, which held under the dead of June, 1919, recorded in 1929, leased its property to the Barnville Hotel Corporation for a term beginning in 1937 and ending in 1962, and under this lease this one-time college is now being conducted as an ordinary commercial enterprise.
So far as this record shows, neither Mr. Litchfield nor those claiming- under him had actual knowledge of the deed of 1919 and no constructive knowledge until 1929, when it was recorded. And, assuming that they had constructive knowledge from that date, there was nothing to indicate a change in management or control until 1931.
When clause 5 was revoked, Mrs. Emma Reed, a sister-in-law of Mr. Litchfield, who likewise lives in Missouri, was made residuary legatee and so passed to her the $2,000 which under said clause would have gone to said Martha Washing-ton College. Mrs. Reed, with a purpose both commendable' and unusual, undertook to carry out what she believed her brother-in-law in fact desired *147and to perpetuate Ms name, and to that end she set apart the sum which Mr. Litchfield had himself originally set apart, $2,000. This is made plain hy the evidence. She was asked:
“Q. You intended by that to give effect to the provision which Mr. Litchfield had originally put in Ms will?
“A. Yes.
“Q. For the benefit of ‘Litchfield Hall?’
“A. Yes.”
With the will before her, Mrs. Reed knew exactly what Mr. Litchfield at one time intended to do. She was further asked:
“Q. And your sole reason for letting them have it-was to carry out the intention-expressed in his will.
“A. Yes.
“Q. And no other?
“A. That is right.”
Her purpose was plain and cannot be misunderstood.
On May 14, 1920, Mrs. Reed paid over this fund to Mrs. John D. Cosby, the trustee named in clause 5 of the testator’s will. Mrs. Cosby died in 1921 and control of this fund then passed to her daughter, complainant here, who is a niece of Mr. Litchfield. Her grandfather, George Victor Litchfield, was one of the founders of Martha Washington College, and his son, George Victor Litchfield, Junior, was one of its trustees.
The principal fund was deposited in- the First National Bank at Abingdon, wMch paid over the interest thereon to complainant, who in turn paid it over to Mr. R. M. Honaker, a lawyer of standing in Abingdon who was a trustée of Martha WasMngton College and its treasurer. This situation continued for a period of from “eight, ten, fifteen years,” and until Mr. Honaker’s death. She never paid anything over to Emory & Henry College. Later on Mrs. Penn, who had acted as trustee but who had never been appointed, wished for proper purposes to borrow this fund. For reasons indicated *148by her she did not think'it right to make a loan to herself, and therefore on her motion and in April, 1934, Mr. Irven M. Keller was' appointed trustee. She did borrow $355.00 and $1,145.00, evidenced by her notes and secured by a lien on her home.
Mr. Keller paid over the interest to Emory & Henry College, and it was not until then that this fund was dealt with as belonging to that institution. Up to this time, certainly, those who claim under Mrs. Reed’s donation had no knowledge of the character of its claim. The balance of the trust is in the form of a claim against the bank which has failed and whose affairs are now in the process of liquidation.
Mrs. Penn is a niece of Mrs. Reed, the residuary legatee, and this residuary legatee transferred to this niece her interest in this fund. As assignee she claims to own it. To enforce that claim this suit was brought.
The lower court was of opinion that her claim was without merit.
That Mr. Litchfield intended this- bequest to be used “in keeping in repair ‘Litchfield Hall’ on the campus of ‘Martha Washington College’ for young ladies, located at Abingdon, Virginia,” is too plain for argument. It is also perfectly clear that he desired that in the event that the sister predeceased him that “said sum of Two Thousand Dollars shall be paid to the trustees, curators or other persons having the legal management and control of said Martha Washington College for young ladies, or who may be legally authorized to receive said trust fund, to be held and used for the purposes aforesaid. ’ ’
Here, in terms too definite to be misunderstood even by the most captious, it was to be used for the purposes aforesaid.
Litchfield Hall is a detached building on the campus of this college. On its upper floors were dormitory rooms used by girl students at this woman’s college. On its lower floor is an assembly room, well suited for use by *149the student body for devotional services or for purposes connected with college activities. The college has been closed; the charter has been dissolved, and its properties are now used for hotel purposes.
Now, in the lessee’s advertisement, it is designated as M. W. Tnn New Ball Boom. In it is held the annual tobacco ball, with a floor show and other dances. It is used for commercial purposes; in it a Democratic Convention has been held; a State liquor dealers’ convention might be. A more complete perversion of the purposes for which it was intended is hard to picture. The purpose of the trust has definitely failed.
In Restatement of the Law, Vol. 2 on Trusts, p. 1244, it is said:
“A resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein and where the inference is not rebutted and the beneficial interest is not otherwise effectively disposed of. Since the person who holds the property is not entitled to the beneficial interest, and since the beneficial interest is not otherwise disposed of, it springs back or results to the person who made the disposition or to his estate, and the person holding the property holds it upon a resulting trust for him or his estate.”
In the recent (1939) comprehensive work of Scott on Trusts, Vol. 3, p. 2195, it is said:
“Where property is given to a trustee in trust to apply it to purposes which include charitable purposes and other purposes for which a trust cannot be created, the intended trust may fail altogether, in which case the property is held upon a resulting trust for the settlor or his estate.”
In 10 American Jurisprudence, 674, it is said:
“On the other hand, where the estate is granted on condition that it shall be used for a certain charitable *150purpose, the estate granted may be defeated at the option of the grantor or his heirs if the condition is not complied with, and as a general proposition, it may be stated that where a person creates a trust fund for the benefit of a particular charity or organization and it is impossible to distinguish any general charitable intent, the fund or property will revert to the donor where it becomes impossible to carry out the purpose of the trust, even in the absence of an express provision for reverter.”
“On the termination of a trust the trustee.can not rightfully do any further act under the trust, unless it be that of executing some transfer to the persons equitably entitled thereto. ’No such transfer, however, seems to be necessary, because on the occurrence of the contingéncies which terminate the trust his title must be regarded as at an end and the whole title, both legal and equitable, as vested in the person for whose benefit the property has been held in trust, or as having returned to the creator of the trust or his heirs or other successor in interest. But where a trust on which real estate was conveyed has failed and the trust becomes impossible of performance, it is the duty of the trustee to reconvey to his grantor, and a court of equity, if applied to, will compel a reconveyance.” 26 R. C. L. 1213, section 56.
To the same effect is a note’ in 91 A. L. R. 119, citing cases from Michigan, Illinois, Kentucky, California and Pennsylvania.
In Hopkins v. Grimshaw, 165 U. S. 342, 17 S. Ct. 401, 41 L. Ed. 739, it appears that there was a deed from a private person to three trustees for the use and benefit of a burial ground and for no other purpose. There the cemetery was abandoned, and it was held that the grantor’s heirs or assignees were entitled to recover the land by way of a resulting- trust.
Teele v. Bishop of Derry, 168 Mass. 341, 47 N. E. 422, 60 Am. St. Rep. 401, 38 L. R. A. 629, it appears that there was a bequest for the purchase and erection of a Eoman *151Catholic Church. Por reasons unnecessary to detail, the execution of this trust was impossible. The court said:
“But, if the charitable purpose is limited to a particular object, or to a particular institution, and there is no general 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 more 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. There are many cases which, it has been held, fall within this rule.”
Other authorities might be cited but these suffice. I shall not catalogue them lest I be open to the charge of belaboring the obvious.
We are not here dealing with a case in which a donor, who had parted with dominion and control over her gift, is seeking to cancel the trust because of maladministration, nor of one who is seeking to break a trust by a recapture of its assets. Many cases are cited which deal with these phases of this subject but they are beyond the mark. In this case the trust is in substance dead by operation of law. It can no longer function for it is impossible to do those things contemplated when it was created. Since it is dead its corpus must go somewhere and to somebody. The cy pres doctrine has no application, and so both in law and in good conscience it should go back to its donor, who is in no wise responsible for conditions which have made its administration impossible. She takes it as a resulting trust.
The defendants, appellees here, cite and reply upon Clark v. Oliver, 91 Va. 421, 22 S. E. 175. That cause sheds no light at all upon our problem. What it does do is to approve and apply a rule of law not here challenged. The court itself tells us what it undertook to decide. “Does the bill state a case entitling* the plaintiffs to the relief prayed for?” This, of course, brings us to the bill itself and to the record upon which the opinion rests.
*152From that hill it appears that certain individuals living in Virginia and elsewhere became interested in negro industrial education and were anxious to have for its benefit an industrial school or institution established in the city of Richmond for the education of young negroes and by voluntary subscriptions a fund of about $8,000 was raised. At that time there was in being in that city a negro church known as the Moore-Street Missionary Baptist Church which had purchased a lot at the price of $5,500. This $5,500, the bill charges, was paid out of the $8,000 contributed for the establishment of an industrial school. The school trustees were dissatisfied with this situation and finally to quiet them a part of the lots so purchased and paid for was conveyed to these school trustees. The deed itself recites the fact that there had been paid on account of this purchase price “much the larger part thereof by the Moore-Street Industrial Society or School.”
The bill further charges that the land conveyed to the school for the purpose of satisfying- its claim was the less valuable part of it. Misappropriation was charged, and in the prayer for relief it is asked that title to all of the property be declared to be in the plaintiffs, who were to continue to hold it in trust until there had been incorporated the Moore-Street Industrial Institution and that all conveyances which constituted a cloud upon its title be cancelled and for general relief.
It will be noted that these complainants asked nothing for themselves. They complain of maladministration. The court rested its decision upon Ludlam and others v. Higbee and others, 3 Stock. 342, and vouched this statement from that case:
“ * * * the contributors to a fund creating- a trust for mere charitable purposes, cannot call the trustees of that fund to an account for misapplication of the funds, or any other breach of the trust. There must be something peculiar in the transaction, beyond the mere fact of contribution, to give a contributor to a charitable fund a *153foothold in court to enable him to question the disposition of the fund.”
With it I have no quarrel.
The court did, however, say: “There is no such thing as a resulting trust with respect to a charity.”
Plainly the court here undertook to cover too much territory and, as I see it, overstated the law.
Throughout the law of charitable trusts, in varying phraseology and under varying conditions, like some leitmotif, runs this constantly recurring note: A donor who has unconditionally established a charitable trust cannot control its administration.
It is also true that where a donor has lost interest in the purposes for which a trust was created and seeks to repossess the fund she must fail. In neither of these cases is there “such thing as a resulting trust with respect to a charity.” Beyond this the cases do not go.
Plainly were a fund given to a trustee to be used for the education of a daughter’s children and were that daughter to die childless, it is inconceivable that the trustee would be allowed to hold the- fund or to devote it to other purposes.
Plaintiff should prevail for other reasons also.
Mrs. Reed, a resident of Missouri and then in'that State, undertook to carry out the original provisions in the Litchfield will. She undertook to establish a trust to keep in repair “Litchfield Hall on the campus of Martha Washington College for young ladies located at Abingdon, Virginia. ’ ’ Since her purpose was unambiguous there is nothing to construe. What she had in mind was Litchfield Hall on the campus of Martha Washington College for young ladies located in Abingdon, Virginia. The Litchfield clan had no interest in any other memorial, institution or eleemosynary undertaking. She did not know that Martha Washington College had been absorbed by Emory & Henry College, for the unrecorded deed effecting this absorption bears date June 16, 1919, and was not recorded for ten years. The trust itself was created in 1920.
*154When this gift was accepted, Martha Washington College and its trustees knew from whence it came and why: To ask one to believe that they then thought it could be used for purposes other than that designated is to ask too much. This conclusion is supported, if support be needed, by the fact that Mrs. Cosby, during her lifetime, and Mrs. Penn for many years afterwards continued to pay interest as it accrued, not to Emory & Henry College, but to Martha Washington 'College, or to its trustees ; and they accepted it in that capacity, although they were, of course, aware of the existence of the deed of June 16, 1919.
This trust was established for a clear-cut purpose and for it alone. If it was so accepted by the donee and its executive board that ends this case.
Were we to concede for the sake of argument that it was accepted in the belief that it might lawfully be applied not only to that purpose but to others, then the minds of the parties never met.
If in its acceptance this board cherished a latent intention to give it to Emory & Henry College, to Randolph Macon College, or to some other worth-while institution, it was guilty of fraud, which is not to be presumed for its members were honorable gentlemen.
Campbell/ C. J., and Eggleston, J., concur in this dissent.