In re the Accounting of United States Trust Co.

171 N.E.2d 326, 8 N.Y.2d 419, 208 N.Y.S.2d 984, 1960 N.Y. LEXIS 835
CourtNew York Court of Appeals
DecidedDecember 1, 1960
StatusPublished
Cited by19 cases

This text of 171 N.E.2d 326 (In re the Accounting of United States Trust Co.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Accounting of United States Trust Co., 171 N.E.2d 326, 8 N.Y.2d 419, 208 N.Y.S.2d 984, 1960 N.Y. LEXIS 835 (N.Y. 1960).

Opinions

Van Voorhis, J.

This appeal by St. Thomas Church in New York City is from an affirmance of a decree of the Surrogate’s Court construing the will and codicil of the late George S. Scott and applying the cy pres doctrine thereto. It raises questions whether a bequest to this religious corporation was absolute, and, if not, whether the purposes of the testator as expressed in his testament have been followed or ignored in the variance which has been made by cy pres in the disposition of the gift which the decedent directed. Inasmuch as the subject assets have been transferred to New York where St. Thomas Church was incorporated, both sides have treated the law of New York State as controlling. Upon the death of the last life income beneficiary, in default of lineal descendants, the testator gave the remainder to the Rector, Church Wardens and Vestrymen of St. Thomas’ Church in the City of New York, for the purpose of erecting and maintaining, in such place as they may select, a building or buildings for the care of persons suffering from tuberculosis, to be called the Scott Memorial Home.”

[424]*424The petition by the corporate testamentary trustee alleges that the last income beneficiary died December 18, 1957 and that a question is presented concerning the construction and effect of the will and codicil relative to whether the said property vests in St. Thomas Church absolutely and without restriction. A letter from St. Thomas Church is incorporated in the petition stating that its position is that the fund vested absolutely in the church and that the language of the bequest is precatory only that a building or buildings be erected and maintained for the care of persons suffering from tuberculosis. In addition St. Thomas Church stated in this letter that the need for home's for the care of persons suffering from tuberculosis has precipitously declined during the course of the years since the death of George S. Scott in 1912, and that the principal of the said residuary would not in any event be sufficient at this time to cover the cost of erecting and maintaining such a building. The letter concludes by stating that it is accordingly the belief of the vestry that, consistent with the intent of George S. Scott, the church should use the fund by expending not to exceed $600,000 for the purpose of adorning and completing the Fifth Avenue facade of the church’s gothic building, the carillon tower and the 53rd Street side, placing a Scott memorial plaque at the Fifth Avenue entrance; and by holding the balance of the principal as part of the church endowments in a separate fund to be known as the Scott Memorial Fund, expending so much of the income therefrom as might be needed from time to time for the proper maintenance and repair of the said improvements to the church building and the balance to be devoted to general charitable uses in the discretion of the vestry. The present value of the fund is approximately $1,600,000. The answer of St. Thomas Church stated its position as thus expressed in its letter to the testamentary trustee incorporated in the petition, and further alleged absolute and unconditional assignments to St. Thomas Church by the lineal descendants of George S. Scott, their distributees, devisees and legatees. This answer further alleged that, if it were to be held that the church is not at liberty to use this fund for its general corporate purposes, the cv pres powers of the court should be exercised as stated in the letter inasmuch as it has become impractical and impossible to use the principal of the residuary trust for the purpose stated.

[425]*425The assignment to St. Thomas- Church of all right, title and interest by the beneficiaries of George S. Scott and their successors may have indicated what they thought to have been his intent, but could not supersede the responsibility of the Attorney-General to act under sections 12 of the Personal Property Law and 113 of the Real Property Law. Although the legacy vests in St. Thomas Church under the will and codicil, it must be devoted to the uses stated in the testament unless modified by cy pres (St. Joseph’s Hosp. v. Bennett, 281 N. Y. 115; Matter of Lawless, 194 Misc. 844, affd. 277 App. Div. 1045, motion for leave to appeal denied 302 N. Y. 949). Situations where a charitable gift fails on account of lack of qualified beneficiaries (Holmes v. Mead, 52 N. Y. 332, overruling Williams v. Williams, 8 N. Y. 525, insofar as it upheld the law of charitable uses as it existed in England at the time of the Revolution), are not to be confused with decisions such as Wetmore v. Parker (52 N. Y. 450), where the gift is to a religious or charitable corporation. The difference is between charitable gifts that fail for lack of beneficiaries and those which are upheld by reason of the identifiable nature and capacity to take of a corporation. Where a charitable gift was to a corporation but restricted to designated uses, the restriction has always been enforced (Bird v. Merklee, 144 N. Y. 544; Matter of Griffin, 167 N. Y. 71, see opinion by Cullen, J., pp. 82-84, concurred in by the majority; Matter of Durand, 194 N. Y. 477). The cy pres rule, to be sure, went out of existence with the charitable trust doctrine, but was reinstated with it by the Tilden Act in 1893 (L. 1893, ch. 701; Allen v. Stevens, 161 N. Y. 122), and applies to gifts to charitable corporations as well as to what are charitable trusts in the technical sense (Sherman v. Richmond Hose Co., 230 N. Y. 462; Matter of Gary, 248 App. Div. 373, affd. 272 N. Y. 635).

In sustaining the contention of the Attorney-General, however, that the intention of the testator was ‘ not to benefit either St. Thomas Church or to devote such remainder to the advancement of the religious functions or objectives of St. Thomas Church,” we think that the Surrogate exceeded the powers conferred upon him by sections 12 of the Personal Property. Law and 113 of the Real Property Law. The testator would not have named St. Thomas Church in this capacity unless part of his intention was to advance its objectives. The circumstances [426]*426called for the cy pres rule, but these statutes require that the direction made shall be such as “ will most effectually accomplish the general purpose ” of the testament, where due to change in circumstances a literal compliance has become ‘ ‘ impracticable or impossible ’ In the construction of wills ‘ ‘ ‘ where the intent of the testator is to be ascertained from his language alone, or from his language and surrounding circumstances about which there is no dispute ’ ”, the intention of the testator is “ a question of law and not one of fact ” (Matter of Potter, 307 N. Y. 504, 515, italics from original, quoting from Underhill v. Vandervoort, 56 N. Y. 242, 247; Matter of Burk, 298 N. Y. 450, 455; Williams v. Jones, 166 N. Y. 522; Ruiz v. Renauld, 100 N. Y. 256; Matter of Hier, 205 App. Div. 215, 217). In a cy pres proceeding the way may be open to more than one practical substitute for a direction by a testator which can no longer be executed, but the circumstance that there may be more than one alternative in deciding what disposition most nearly resembles that which was made by the testator does not preclude a question of law from arising concerning whether the Surrogate has exceeded his powers by overriding or failing to give effect to basic purposes of the testator as expressed in the instrument. We think that this has happened here.

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Bluebook (online)
171 N.E.2d 326, 8 N.Y.2d 419, 208 N.Y.S.2d 984, 1960 N.Y. LEXIS 835, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-accounting-of-united-states-trust-co-ny-1960.