Marilla Griswold of Allegan, who died February 27, 1918, made the following bequest in her last will and testament:
"To Orien S. Cross as trustee for the use and benefit of the Griswold room and bed at the John Robinson Hospital, the sum of five thousand dollars. Same to be invested by him and the income used according to his best judgment to maintain said Griswold room and bed."
The plaintiff is a corporation organized in 1930 by Dr. William A. Kopprasch who in 1924 took over the 25-bed John Robinson Hospital formerly operated by Dr. A.L. Robinson, the son of John Robinson for whom it is named. The hospital had been conducted through a similar corporation by Dr. Robinson until 1924. In the interval between 1924 and 1930, Dr. Kopprasch operated the hospital and maintained the same name for the institution registering it under the assumed name act, 2 Comp. Laws 1929, §§ 9825-9829.
While Dr. Robinson was in charge of the operations of the John Robinson Hospital Corporation, the defendant trustee supplied funds for the maintenance of the Griswold room to a Mrs. Wilder, who has been connected with the administrative work of the hospital since 1912. She testified that the premises have been operated as a hospital during the entire time. Judge Cross, the trustee, testified that he paid Mrs. Wilder all the income from the trust until Dr. Kopprasch "took the hospital over * * * none of the fund has been paid to anyone since Dr. Kopprasch took possession of the hospital."
The instant action is to construe the meaning of the provision of the will heretofore quoted, to require an accounting of the income of the trust and *Page 409 to require the trustee "to pay over to the hospital authorities such sum as, under the construction of said will, is now due to this plaintiff."
Defendant says plaintiff has no claim to the trust funds or income and "that said hospital having ceased to exist as a charitable institution, the provisions of said will have ceased to be valid and are unenforceable and void in that they violate the law as to perpetuities," etc.
The trial judge filed an opinion in which he reviewed the history of the operation of the hospital from 1916 and referred to a bill in chancery filed in 1926 to quiet title to the land, in which cause the circuit court entered a decree upholding the reverter clause in the deed to the former John Robinson Hospital Corporation. In that matter, the court found that the hospital had ceased to be operated as a charitable institution and because of the language of the deed forbidding its operation directly or indirectly for private profit, there was a reversion of the title to the original grantees.
We quote a part of the opinion upon which the present decree is based:
"The question is, what effect did these transactions have upon the bequest by Marilla Griswold to Orien S. Cross in trust for the use and benefit of the Griswold room and bed at the John Robinson Hospital and for the maintenance thereof, it appearing that such a room was so maintained at the hospital at the time of the execution of the will by the testator and also at the time of her death, and at such time the John Robinson Hospital was being conducted as provided in the deeds of conveyance of the land?
"It is apparent that the John Robinson Hospital mentioned in the bequest is not the John Robinson *Page 410 Hospital plaintiff here, it is also true that the first corporation had in effect ceased to function and had lost, according to a decree of this court, all interest in the hospital property.
"It is also apparent by a decree of this court that the hospital ceased to be conducted as a charitable institution in 1924, and was thereafter conducted and is now conducted by Dr. Kopprasch for his personal profit if any there may be.
"It is also apparent that after the execution of the will and the death of the testator the hospital picture entirely changed, and to such an extent that the testator, if she were alive today, would no longer recognize it.
"After due consideration of the evidence and the able briefs of counsel the court is of the opinion that when the hospital was no longer operated as a charitable institution the bequest lapsed and became and is a part of the residue of the Marilla Griswold estate. No costs are allowed herein."
Both Dr. Robinson and Dr. Kopprasch operated the institution under the same name and their respective corporations were organized under Act No. 242, Pub. Acts 1863 and the general corporation act of 1921 (see 2 Comp. Laws 1929, § 10086), the present statute being Act No. 327, § 157 et seq., Pub. Acts 1931. Act No. 84, Pub. Acts 1921 (general corporation act of 1921) repealed Act No. 242, Pub. Acts 1863. Both corporations, according to Mrs. Wilder, accepted patients who were charged for services and some county patients whose bills were paid by the board of supervisors. The Griswold room has always been used for both as well as for private cases for which neither management received any payment.
Mrs. Griswold was a stranger to the title to the property although she was "a very close friend" *Page 411 of Mrs. Chichester, the mother-in-law of Dr. A.L. Robinson, Mrs. Chichester and the Robinsons being at one time joint owners of the property. When the hospital was built, Mrs. Chichester and others also furnished rooms therein for patients.
The testimony of the testamentary trustee, who was called for cross-examination by the plaintiff, indicates that he is not in sympathy with the manner in which the hospital is now being operated; but the language of the trust is silent as to any restrictions upon the use of the income so far as ownership of the enterprise is concerned.
The will of Mrs. Griswold contains many bequests indicating much care on the part of the testatrix in disposing of her property. She established the following worthy memorials to the Griswold name. To the Congregational Church of Allegan, $10,000 for the Marilla Griswold Memorial Fund; to the University of Michigan $10,000, the income to be used to help needy students, preferably those from Allegan county; to the State Agricultural College at Lansing, $2,000 for the same purposes; to the city of Allegan, $2,000, the income to be used to purchase books and the money earmarked as the Marilla Griswold Library Fund; to the Children's Home of St. Joseph, $5,000, the income to be used for its support; to the Lucy Thorley Lyons Home for Crippled and Delicate Children, $2,000 for the same purpose and to the city of Allegan, $100,000 for the purpose of erecting a hall to be known as the Griswold Auditorium. She also created two educational funds of $5,000 each for certain children who are specifically identified therein by name.
The only bequest in which Mrs. Griswold named an individual trustee was the one in question and the only restrictions imposed were the designation of *Page 412 the room, the name of the hospital in which it was to be maintained and the imposition therein of the exercise of "his best judgment" on the part of her trustee.
Appellee does not argue that the withholding of income is solely in the exercise of his best judgment. He takes the positive position that the legacy has lapsed and the trial court agreed with this view.
There is no connection between the will and the litigation concerning the title to the land on which the hospital is erected. Mrs. Griswold desired to provide funds for the maintenance of a specifically designated room in a certain hospital. The John Robinson Hospital, which she identified, is still operating; the Griswold room was located therein before the death of the testatrix and although no trust funds have been used for this purpose for some years, the Griswold room has been maintained as such ever since the establishment of the trust. The settlor did not require that the John Robinson Hospital be operated in a certain manner; it was sufficient so far as she was concerned that it contained a room bearing the Griswold name. The only conditions she imposed have been continuously met and the legacy has not lapsed by a change in ownership or management.
A charitable bequest should be liberally construed.Wansted v. Fisher, 278 Mich. 68, and see 3 Comp. Laws 1929, §§ 13512, 13513 quoted therein.
The broad intent of the testatrix (for hospital purposes) has been defeated by the narrow position taken by her trustee (for nonprofit purposes) and the subsequent decree of the circuit court was based upon the trustee's incorrect understanding of his trust. The validity of the bequest is not questioned *Page 413 and the suggested violation of the law as to perpetuities is not raised in the statements of questions involved and we do not pass upon that matter. The trustee should carry out the terms of his trust.
The decree is reversed and the cause remanded for further proceedings in the nature of an accounting and for the entry of a decree below in conformity to this opinion. Costs to appellant.
FEAD, C.J., and NORTH, SHARPE, POTTER, and CHANDLER, JJ., concurred with BUSHNELL, J.