Margaret WILSON et al., Plaintiffs,
v.
FIRST PRESBYTERIAN CHURCH, REIDSVILLE, N.C., et al., Defendants, and
The Trustees of Orange Presbytery of the Presbyterian Church, Additional Parties Defendant, and
Robert Morgan, Attorney General of North Carolina, Additional Party Defendant.
No. 15.
Supreme Court of North Carolina.
December 12, 1973.*775 Griffin, Post & Deaton by Hugh P. Griffin, Jr., and William F. Horsley, Reidsville, Wharton, Ivey & Wharton by Richard L. Wharton, Greensboro, for defendant appellants.
Dalton & Long by W. R. Dalton, Jr., Burlington, for plaintiff appellees.
Russell G. Walker, Jr., Asst. Atty. Gen., Raleigh, for Robert Morgan, Atty. Gen., Intervenor.
LAKE, Justice.
The first question for our consideration arises upon the contention of First Presbyterian that the properties belong to it free and clear of any trust.
Nothing in the consent judgment rendered in 1961, or in the stipulations of the parties upon which that judgment rested, supports this contention. On the contrary, the parties, including First Presbyterian, then expressly stipulated that the will of Miss Pinnix "provided * * * for the creation of a trust fund to build a church."
Dr. J. A. Pinnix, the sole life tenant of the lot on which the testatrix intended that the new church be built, died in 1931. Thereupon, the right of possession of this lot passed to First Presbyterian. The trust created for the support of Nannie Ralph in shares of stock of the Bank of Reidsville and in the account of the testatrix in that bank terminated in 1932, if not earlier, and, thereupon, this personal property also came into the hands of First Presbyterian. Other properties subsequently came into its hands, under the will, for addition to the fund and were added thereto. Thus, for approximately thirty years, First Presbyterian held these properties intact and then, pursuant to the consent judgment, delivered them over to a "Successor Trustee" (the Presbytery). First Presbyterian made no claim to be the owner of these properties, free from trust, until forty years after it first came into the possession of them, more than fifty years after the death of Miss Pinnix.
Thus, the claim of First Presbyterian finds no support either in the judgment to which it consented or in the actions of its members and officers who were the contemporaries of the testatrix. The claim of *776 First Presbyterian must, therefore, stand or fall upon the legal construction of the will of Miss Pinnix.
It is elementary that a will must be construed so as to carry out the intent of the testatrix, unless that intent be contrary to public policy or to some rule of law, and that her intent is to be determined by examining the entire will in the light of all surrounding circumstances known to the testatrix. Y.W.C.A. v. Morgan, Attorney General, 281 N.C. 485, 189 S.E.2d 169; Bank v. Home for Children, 280 N.C. 354, 185 S.E.2d 836; St. James v. Bagley, 138 N.C. 384, 50 S.E. 841. It is equally clear that the express use of the word "trust" or "trustee," or of any other technical terminology, is not necessary to engraft a trust upon a devise or bequest made in language sufficient per se to pass the absolute, unencumbered interest in the property. Stephens v. Clark, 211 N.C. 84, 189 S.E. 191; Witherington v. Herring, 140 N.C. 495, 53 S.E. 303; King v. Richardson, 136 F.2d 849 (4th Cir. 1943); 54 Am.Jur., Trusts, § 40; 15 Am.Jur.2d, Charities, § 8; Scott on Trusts, 3d Ed., § 351.
Since the problem for the court in each case is to ascertain the intent of the particular testator and the circumstances surrounding each testator vary, decisions reached in other cases, whether by this Court or by courts of other jurisdictions, are informative but not controlling. Professor Scott says in his treatise on Trusts, 3d Ed., § 25.2, "[W]here the question is one of ascertaining the intention of the testator, any hard and fast rule is inappropriate," and "[S]ince each will differs from every other will, the decisions are of importance only in showing how somewhat similar situations have been dealt with by the courts." Similarly, Professor Atkinson in his treatise on Wills (1937 Ed.), § 265, says: "It should be noticed that the court in this process [of construing a will] is determining only a question of fact as to what the testator intended. Hence in cases of this nature precedents are of little value for no matter of law is decided. This is probably what the courts mean when they say that `no will has a brother.'"
Pertinent circumstances are: Miss Pinnix was not a Presbyterian, but a Baptist. She obviously had a deep affection for her brothers, living and deceased. She desired the construction of a lasting memorial to her deceased brother, a former sheriff of the county, from whom she inherited much of the property disposed of by her will. She was a resident of Reidsville, acquainted with the area in which she proposed that the church be built and with the inhabitants of that area and their needs.
Nothing in the will, the pertinent portions of which are quoted above, or in any other circumstance set forth in the record, indicates that Miss Pinnix had more than a casual interest in the general religious or charitable program of First Presbyterian or of the Presbyterian denomination. Her two-fold purpose was to establish a memorial to her brother at the specified location and to promote religious activities in this part of her native city. A reasonable inference is that she believed the inhabitants of this area of the city would remember affectionately their former sheriff and, for reasons not disclosed in the record, a Presbyterian church was more likely to be constructed and to succeed therein than a church of her own denomination would be. There is nothing in the will, or elsewhere in the record, to indicate the remotest possibility that she contemplated that First Presbyterian, itself, would remove to this location and occupy the proposed building. Thus, the design of the testatrix was not to confer a benefit upon First Presbyterian, but to use the good offices of First Presbyterian in the establishment in this area of a kindred but separate church.
G.S. § 36-21 provides, "No gift, grant, bequest or devise, whether in trust or otherwise, to religious, educational, charitable or benevolent uses * * * shall be invalid by reason of any indefiniteness or uncertainty of the objects or beneficiaries *777 of such trust * * *." See also G.S. § 36-23.1.
It is true that the mere statement in the will of the purpose for which a bequest or devise is made does not show per se an intent to create a trust for the accomplishment of that purpose. Y.W.C. A. v. Morgan, Attorney General, supra; Bogert, Law of Trusts and Trustees, 2d Ed., § 46. On the other hand, the fact that the testator used words which, literally, express a request, hope, desire or recommendation that the property given will be used for a specified purpose does not necessarily preclude the establishment of a trust by such bequest or devise. As Chief Justice Gray said in Hess v. Singler, 114 Mass. 56, "It is a settled doctrine of Courts of Chancery that a devise or bequest to one person, accompanied by words expressing a wish, entreaty or recommendation that he will apply it to the benefit of others, may be held to create a trust if the subject and object are sufficiently certain." See also: 2 Pomeroy on Equity, pp. 1015-1016; Scott on Trusts, 3d Ed., §§ 25.2 and 351; Bogert, Trusts and Trustees, 2d Ed., § 324.
The leading case on this question in North Carolina is St. James v. Bagley, supra, in which Justice Henry G. Connor, speaking for the majority of the Court, said, "The real test is whether the language is imperative or leaves the use and disposition of the property to the discretion of the donee." Likewise, Chief Justice Bigelow, in Warner v. Bates, 98 Mass. 274, said, "[T]o create a trust it must clearly appear that the testator intended to govern or control the conduct of the party to whom the language of the will is addressed, and did not design it as an expression or indication of that which the testator thought would be a reasonable exercise of a discretion which he intended to repose in the legatee or devisee." Professor Scott, in § 25.2 of his treatise on Trusts, 3d Ed, likewise says: "Where a testator uses language expressive of desire rather than of command, the question in each case is whether he intended to impose a legal duty upon the legatee to carry out the desired purpose, or whether he intended to leave the legatee free to carry it out or not as he should choose, even though the testator hoped that he would carry it out. In each case, in reaching its determination the court will examine the whole of the will, and examine it in the light of all the circumstances." See also, 54 Am.Jur., Trusts, § 56; Annot., 107 A.L.R. 896, 898.
Taking into account the facts that in the present case the testatrix was a member of a church of a different denomination and that her purpose was to establish a memorial to her brother, we are unable to conclude that her intent was to leave it to the discretion of the members or directing officers of First Presbyterian as to whether a new church would be built on the designated lot, or the lot and the proceeds of the other properties would be used for some other purpose deemed by them to be preferable.
The present case is readily distinguishable from St. James v. Bagley, supra, in which a conveyance was held absolute. There, the owner of property conveyed it to the Vestry and Wardens of the St. James Church by a deed which provided that the land was so conveyed "for the purpose of aiding in the establishment of a Home for Indigent Widows or Orphans, or in the promotion of any other charitable or religious objects to which the property hereinafter conveyed may be appropriated by the said parties of the second part." (Emphasis added.) Quite clearly, the grantees were given a discretion as to what use they would make of the property.
Y.W.C.A. v. Morgan, Attorney General, supra, is also distinguishable from the present case. There, the husband of the tatrix had bequeathed to the Y.W.C.A. of Asheville a large sum of money, which bequest was conceded to have been absolute and free from a trust. His bequest was actually used by the legatee to construct a building which bore his name and *778 which was used as a boarding house for young women. Thereafter, the testatrix left a bequest to the association "to be used by it exclusively for the upkeep and maintenance of Morehead House." Notwithstanding her use of the word "exclusively," this Court held the wife's bequest was an absolute gift to the association and did not create a trust. As we noted, the building which the testatrix desired to have kept up and maintained was the absolute property of the legatee and was used by it in carrying on the principal activity for which the legatee, itself, was organized. In the present case, on the contrary, the building contemplated by the testatrix was not for the use of the legatee, First Presbyterian, itself. In that case, the testatrix sought to benefit the legatee by relieving it of a financial burden incident to its carrying on its major function. In the present case, the testatrix did not seek to benefit the legatee but sought to aid a different group, and to memorialize her brother. To that end she sought the aid of the legatee and imposed a burden upon it. In that case, we observed, "Nor is there any limitation as to the expenditure of the principal of the fund." In the present case, the principal of the bequest and the subject of the devise were to be used in the construction of the new church.
We conclude that it was not the intent of Miss Pinnix to give her property, real and personal, to First Presbyterian to be used by it for its own purposes and in its discretion, but to create a trust which was charitable in nature. Consequently, we find no error in the Superior Court's rejection of the belated claim of First Presbyterian to be the absolute owner of the property.
The second question to be considered is whether the trust established by the will of Miss Pinnix may be modified pursuant to the cy pres doctrine.
Pursuant to the consent judgment entered in this action in 1961, the lot intended by the testatrix to be the site of the proposed church and devised by her upon trust for that purpose has been sold and conveyed and the proceeds of its sale added to the trust fund. We are not called upon in this proceeding to determine whether the Superior Court had authority so to order. The validity of the conveyance is not here attacked. It is conceded by all the parties that the construction of a church upon that lot was not practicable at the time of the entry of the consent judgment and is not practicable now. It is also undisputed that neither First Presbyterian, the original trustee, nor the Presbytery, the substitute trustee, has commenced the construction of a church, as contemplated by the testatrix, either upon that lot or upon any other site, in compliance with the will or in compliance with the terms of the consent judgment. The substitute trustee states unequivocally that it does not contemplate undertaking such construction. Thus, the specific purpose of the testatrix in establishing this charitable trust has failed and there is no intent on the part of the substitute trustee to carry out such purpose.
The cy pres doctrine came into the law of North Carolina in 1967 when G.S. § 36-23.2 became effective. The pertinent provision of the statute is:
"(a) If a trust for charity is or becomes illegal, or imposible or impracticable of fulfillment or if a devise or bequest for charity, at the time it was intended to become effective is illegal, or impossible or impracticable of fulfillment, and if the settlor or testator, manifested a general intention to devote the property to charity, any judge of the Superior Court may, on application of any trustee, executor, administrator, or any interested party, or the Attorney General, order an administration of the trust, devise or bequest as nearly as possible to fulfill the manifested general charitable intention of the settlor or testator." (Emphasis added.)
*779 Under this doctrine, the Superior Court does not have authority to modify every charitable trust when it becomes impracticable to carry out the original purpose of the settlor or testator. Such power is conferred upon the Superior Court only where the instrument creating the trust, interpreted in the light of all the circumstances known to the settlor or testator, manifests a "general intention to devote the property to charity." This is indispensable to a proper application of the cy pres doctrine under this statute. Y.W.C.A. v. Morgan, Attorney General, supra. It is equally so in those jurisdictions where the cy pres doctrine developed without legislative action. Scott on Trusts, 3d Ed., § 399; Bogert, Trusts and Trustees, 2d Ed., § 436; 15 Am.Jur.2d, Charities, § 135; Annot., 74 A.L.R. 671.
The rule is thus stated by Professor Scott:
"It is not true that a charitable trust never fails where it is impossible to carry out the particular purpose of the testator. In some cases, as we shall see, it appears that the accomplishment of the particular purpose and only that purpose was desired by the testator and that he had no more general charitable intent and that he would presumably have preferred to have the whole trust fail if the particular purpose is impossible of accomplishment. In such a case the cy pres doctrine is not applicable."
Thus, again, we are required to return to the will of Miss Pinnix and to interpret it in the light of the circumstances. The cy pres doctrine "may not be used to turn a narrow and particular charitable intent into a general charitable intent." Bogert, Trusts and Trustees, § 431. Here, again, no two cases are exactly alike since it is the intent of the particular testator a question of fact, not law which is to be determined. Consequently, it is not possible to reconcile all of the decisions of the various courts, even where the circumstances are quite similar.
In Rhode Island Hospital Trust Co. v. Williams, 50 R.I. 385, 148 A. 189, 74 A.L. R. 664, the Court said, "If a gift to a specific charitable corporation lapses, it may not be applied cy pres unless from the will or extrinsic evidence the court may find a general charitable intent beyond that shown by the gift to the specific charitable corporation." (Emphasis added.) There, such a general charitable intent was found and the doctrine was applied. In Teele v. Bishop of Derry, 168 Mass. 341, 47 N.E. 422, a bequest to trustees for the purpose of purchasing a lot and building a chapel in a village in Ireland, to be used forever for the purposes of public worship under the auspices of a Roman Catholic Church, was found to be impracticable of fulfillment because the population of the place was too small and the people too poor to maintain such chapel. It was held that the purpose of the testatrix was limited to the purchase of a lot and the building of a chapel and no general intent to advance religion in the designated area could be inferred. Consequently, the cy pres doctrine was not applied. In 15 Am.Jur.2d, Charities, § 136, it is said, "[I]f the gift is specifically for a memorial building to be erected for a designated purpose in the donor's home community, it is difficult to discover any broader charitable intention which can sustain its cy pres application to a different purpose."
Here, the testatrix appears clearly to have had in mind a memorial to her brother in a specified part of her home community and the benefit of the inhabitants of that portion of the community through the establishment therein of a new church. Her charitable intent was specific and limited, both as to location and as to the nature of the benefit. Consequently, we find no error in the ruling of the Superior Court that the cy pres doctrine has no application to this case.
*780 The third and final question to be determined is, Are the heirs of Miss Pinnix necessary parties to this proceeding?
In St. James v. Bagley, supra, the owner of land conveyed it to the Vestry and Wardens of St. James Church who, in turn, contracted to sell and convey to Bagley. The proceeding was a controversy without action to determine whether such grantee held the property in trust or could convey a good, unencumbered title to the defendant. The Court held, Chief Justice Clark dissenting on this point, that the heirs of the original grantor were not necessary parties.
In Shannep v. Strong, 160 Kan. 206, 160 P.2d 683, suit was brought against the trustee of a testamentary charitable trust by the residuary devisee, who contended that the trust failed when the local church, which was the beneficiary, disbanded and that the property thereupon passed to her. The Court held that the cy pres doctrine being inapplicable, the property would have passed to the heirs of the testator had there been no residuary clause, but, since there was a residuary clause, it passed to the residuary devisee.
The Restatement of the Law, Trusts, 2d, § 411, says that the following is the general rule where an express trust fails:
"Where the owner of property gratuitously transfers it and properly manifests an intention that the transferee shall hold the property in trust but the trust fails, the transferee holds the trust estate upon a resulting trust for the transferor or his estate, unless the transferor properly manifested an intention that no resulting trust should arise or the intended trust fails for illegality."
In Comment c upon this rule the Restatement says, "If real and personal property is devised or bequeathed upon a trust which fails and there is a provision in the will effectively disposing of the residue of the testator's real and personal property, the devisee or legatee, if he takes title to the property, holds it upon a resulting trust for the residuary devisee or legatee." Comment k states, "The rule stated in this Section is applicable not only where an intended trust fails at the outset but also where a trust is created which subsequently fails."
There is authority to the effect that if a testamentary trust never becomes operative the provision lapses and the property passes to the residuary legatee or devisee, if the will contains a residuary clause, but if the trust once becomes operative and then fails, the resulting trust is for the benefit of the testator's heirs. Industrial National Bank v. Drysdale, 84 R.I. 385, 125 A.2d 87, 62 A.L.R. 2d 756; Annot., 62 A.L.R. 2d 763; 15 Am.Jur.2d, Charities, § 128. We find no basis for this distinction. If the creator of the express trust were still living, the resulting trust would be for his benefit. The question is, Who is his successor in interest?
Where the will creating the trust contains a residuary clause, as here, it is apparent that the creator of the trust favored the residuary legatee or devisee over his general heirs at law. This is especially true where, as here, the residuary legatee and devisee was a close relative for whom the testator obviously had affection. Cases in which the trust which failed was, itself, created by a residuary bequest or devise, are distinguishable. See: Waterbury Trust Co. v. Porter, 131 Conn. 206, 38 A.2d 598; Rohiff v. German Old People's Home, 143 Neb. 636, 10 N.W.2d 686.
We find in this record no basis for doubt that Miss Pinnix, after making the bequests and devises to First Presbyterian, and other dispositions of her properties, intended by the residuary clause to provide that all other property interests which she might have, whether known to her or not, would pass to her surviving brother, the *781 residuary legatee and devisee. He, in turn, named the original plaintiff in this action as his residuary legatee and devisee, thereby passing his interest to her. The present plaintiffs are her successors in interest by virtue of the residuary clause in her will.
We find no error in the conclusion of the Superior Court that the heirs at law of Susan E. Pinnix are not necessary parties to the present proceeding.
No error.
SHARP, J., did not participate in the consideration and decision of this case.
BRANCH, Justice (dissenting).
I am of the opinion that the property devised and bequeathed to the First Presbyterian Church of Reidsville by the will of Susan E. Pinnix created estates in fee simple, unencumbered by a trust.
In Williams v. Thompson, 216 N.C. 292, 4 S.E.2d 609, certain real property was devised to the Methodist Episcopal Church, "to be used by the stewards or legal representatives of the said Church in the Town of Plymouth, as a parsonage for the minister and for no other purpose. . . ." The Court held that this will devised a fee in the land and reasoned that the effect of the language in the will was only to express the wish of the testatrix as to the future use of the land.
In Hall v. Quinn, 190 N.C. 326, 135 S.E. 18, certain lands were conveyed to the Trustees of the James Sprunt Institution, an institution controlled by the Wilmington Presbytery, "to be used for the purposes of education and for no other purposes." This Court held that the language of this conveyance created an estate in fee.
In the landmark case of St. James v. Bagley, 138 N.C. 384, 50 S.E. 841, a deed was executed to the Vestry and Wardens of St. James Church containing the following language:
". . . the said parties of the first part, for the purpose of aiding in the establishment of a Home for Indigent Widows or Orphans or in the promotion of any other charitable or religious objects to which the property hereinafter conveyed may be appropriated by the said parties of the second part,. . . do by these presents grant, bargain and sell to the said parties of the second part, . . . ."
This Court held that such language did not create a trust, and, in part, stated:
". . . By all of the canons of construction and the rules laid down by the courts for ascertaining the intention of the donor, we are brought to the conclusion that no trust is created by the language in this deed. . . ."
It is recognized, however, that no particular words are necessary to create a trust if the intent to create a trust is evident. Ultimately, construing a will involves finding the intent of the testator, and when found, giving this intent effect unless contrary to public policy or some rule of law. Y.M.C.A. v. Morgan, 281 N.C. 485, 189 S.E.2d 169.
Examination of the provisions of this will in light of the circumstances known to the testatrix reveals an intent on her part to memorialize her brother. Such examination, however, reveals no intent to restrict the gifts or any indication that the testatrix wished to abandon her desire to *782 commemorate the memory of her brother if it could not be accomplished by the erection of a church on the site indicated in the will.
The will of Susan E. Pinnix was obviously drawn by a competent lawyer. Yet, the pertinent items of the will do not contain language generally used by the legal profession in creating a trust. Further, the scrivener could have easily made the bequests and devises defeasible upon failure to perform conditions which testatrix might have imposed. The will, nevertheless, contains no clause of forfeiture upon conditions broken or clause of reentry.
I believe that the testatrix intended to devise and bequeath the property to the First Presbyterian Church, Reidsville, North Carolina, in fee simple, to express the motive which prompted her to make the gifts, and to indicate her wishes concerning the future use of the property.
With knowledge of the primary motive of the testatrix, the church, in all probability, would use the property to memorialize her brother in some appropriate way.
Finally, we note that the Consent Judgment entered in the Superior Court of Rockingham County on 6 October 1961 did not attempt to adjudicate the rights of the parties or to construe the will of Susan E. Pinnix. This judgment did no more than continue the cause for a period of ten years and provide that in the event defendants did not within that time erect a church in memory of M. F. Pinnix within a radius of five miles of the Burton Street property, that the plaintiff be "authorized by motion in this cause to reaffirm her claim to the corpus of the trust." In the present action, plaintiffs seek "to reaffirm their claims", if any they have.
I vote to reverse and remand to Rockingham Superior Court for entry of judgment declaring the First Presbyterian Church of Reidsville to be the absolute owner of all of the property, both real and personal, which was devised or bequeathed to it by the will of Susan E. Pinnix.
BOBBITT, C.J., joins in this dissenting opinion.