First National Bank v. American Board of Commissioners

66 N.E.2d 446, 328 Ill. App. 481, 1946 Ill. App. LEXIS 270
CourtAppellate Court of Illinois
DecidedApril 24, 1946
DocketGen. No. 43,420
StatusPublished
Cited by7 cases

This text of 66 N.E.2d 446 (First National Bank v. American Board of Commissioners) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank v. American Board of Commissioners, 66 N.E.2d 446, 328 Ill. App. 481, 1946 Ill. App. LEXIS 270 (Ill. Ct. App. 1946).

Opinion

Mr. Presiding Justice Kiley

delivered the opinion of the court.

This is an action by the Trustee Bank for, among other things, instructions upon the disposition of a charitable legacy under a will to the New England Congregational Church. That Church was out of existence when the first annuity due it was to be paid. The defendant, Chicago Congregational Union, also a beneficiary under the will, seeks the legacy under the cy pres doctrine. Several other defendants, likewise beneficiaries, seek the disputed legacy for the benefit of themselves and the other charitable legatees under the will. The trial court found against the Congregational Union and it has appealed.

Emaroy June Smith died April 22, 1941. In her will she created among other trusts the Emaroy June Benevolent Fund containing the residuary estate. She named 19 charitable residuary legatees. The N. E. Congregational Church was one of these. To it she bequeathed an annuity of $1,000. The Church structure was destroyed by fire in 1936 and was never rebuilt. The Church Corporation was formally dissolved January 7, 1942. Since payment of annuities were not to commence until one year from the death of the testatrix, the Church was extinct when the first payment was due.

The decree found that the legacy to the Church had lapsed, to become part of the Benevolent Fund; that the cy pres doctrine did not apply; and that the intention of the testatrix was, that should any charitable residuary legatee cease to function, that legacy should inure to the benefit of the remaining charitable residuary legatees. The trustee was instructed to dispose of the annuity accordingly. The only defendants whose interests will be affected in this controversy are the remaining 18 charitable residuary legatees named in the will. Three of these do not oppose the claim of the Congregational Union. Six are joined as appellees. The Trustee Bank although indifferent in the controversy has filed a brief giving its views on the issue to this court as it gave them to the trial court.

The Congregational Union contends that the legacies to the Church vested upon the death of the testatrix before the dissolution of the Church Corporation, and could not lapse. The appellees say that whether the legacy did or did not lapse is not important, if the court correctly found on the question of the intention of the testatrix. They contend that if that finding is correct the annuity must inure to the benefit of the remaining charitable residuary legatees. The Bank’s suggestions are in support of the finding of the trial court on the question of the intention of the testatrix. It says that cy pres doctrine is designed to prevent the failure of a charitable bequest and that, since under the court’s construction of the will there is no question of a charitable bequest failing, the doctrine is inapplicable.

The will, in the first several Articles, disposes of personal and real property and makes educational gifts and bequests of money. In Article VII several trusts are created. From one income for life is given to a beneficiary, at whose death the corpus is to be paid into the Benevolent Fund. From another several annuities are to be paid and as each terminates the part of the corpus from which that annuity came is also to go to the Benevolent Fund. In Article VIII a trust of $250,000 is established, known as the June Family Fund. The income from this fund is payable in annuities to members of the family of testatrix. As each annuity terminates that part of the corpus ' which produced it is, likewise, to be paid into the Benevolent Fund.

In Article IX, Section 1, the Benevolent Fund is established, consisting of the residuary estate and lapsed legacies. Section 2 provides annuities in perpetuity, from the income of the Benevolent Fund, of $1,000 to the X. E. Congregational Church and $500 to each of two colleges in foreign States. If the income from the Benevolent Fund, aS originally constituted, be insufficient to pay these in full, it is to be prorated among the three.

Article X provides for 16 additional annuities “in perpetuity” in amounts ranging from $200 to $5,000 to charitable institutions. These annuities are to be paid out of the Benevolent Fund as and when “augmented” from the various trusts theretofore established in the will. These 16 beneficiaries are to receive payment “in full out of the first available income”, in the order in which they are named. The Congregational Union is named third to receive an annuity of $5,000. In Section 2 of this Article the testatrix expressed her intention to dispose of the entire income of the Benevolent Fund. Under this section, after all “augmentations” are made, payments to the 19 charitable institutions are to be increased or decreased proportionately as the income is greater or less than the annuities specified. Payments under Articles IX and X were to commence one year from the death of the testatrix.

Assuming, without deciding, that the bequest did not lapse because the Church was in existence at the time of the death of the testatrix, nevertheless, when the payments were to begin, the Church was not in existence. If the bequest vested, to whom should the annuity be paid? The Congregational Union answers that it should have the annuity under the cy pres doctrine.

In Board of Education v. City of Rockford, 372 Ill. 442, the Supreme Court approved the following definition of the cy pres doctrine as of “admirable clarity”: “If property is given in trust to be applied to a particular charitable purpose and it is or becomes impossible or impracticable or illegal to carry out the particular purpose, and if the settlor manifested a more general intention to devote the property to charitable purposes, the trust will not fail but the court will direct the application of the property to some charitable purpose which falls within the general charitable intention of the settlor.” The doctrine, however, does not apply if the settlor provides for the application of the fund in the event of the failure of the purpose first intended. 14 C. J. S. p. 516. If the annuity, therefore, can be disposed of according to the intention of the testatrix, there is no need for the court to apply the doctrine. Her intention, if not in contravention of some established rule of law or public policy, must be given effect. 40 Gyc. 1386.

The will makes provision to cover lapsed legacies, but no express provision to cover the event which has occurred. If there is an intention reasonably implied, however, that will suffice. If we can see in the terms of the will the implied intention that where one of the charitable residuary legatees should cease to exist, the remaining charitable residuary legatees should be beneficiaries of that annuity, there is no fear that the general charitable purpose of the testatrix' will suffer through failure of the particular bequest.

The Congregational Union points out that the will provided the annuity “to the following- charitable enterprises”, then naming the Church. It says that this indicates the intention of the testatrix was that the charitable enterprise of the Church, and not the Church, was the beneficiary. If this were so it would add weight to the main contention of the Congregational Union. Appellees say that if the purpose of the testatrix had. been to benefit Congregationalism and not the Church, the gift would have been to the Congregational Union.

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66 N.E.2d 446, 328 Ill. App. 481, 1946 Ill. App. LEXIS 270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-v-american-board-of-commissioners-illappct-1946.