In re the Trust U/W of Brooke

82 Ohio St. 3d 553
CourtOhio Supreme Court
DecidedAugust 12, 1998
DocketNo. 97-1089
StatusPublished
Cited by39 cases

This text of 82 Ohio St. 3d 553 (In re the Trust U/W of Brooke) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Trust U/W of Brooke, 82 Ohio St. 3d 553 (Ohio 1998).

Opinions

Moyer, C.J.

This dispute arises from a declaratory judgment action brought to construe certain language contained in two trusts of which the appellant is the trustee.1 For the reasons that follow, we hold that the trusts grant exclusive [557]*557power to the trustee to control and distribute the net income from the trust, subject to the requirements for distribution as stated in the trusts. We also hold that the words of the trusts indicate that the net income from the trusts is to be expended on behalf of the residents of Eaton, Ohio, for a use that the trustee, exclusively, determines to be a worthy legal municipal purpose, so long as that purpose is of a substantial and permanent nature, benefits the residents of Eaton, and perpetuates the name of the settlors in some way. Accordingly, we reverse the judgment of the court of appeals.

When construing provisions of a trust, our primary duty is to “ascertain, within the bounds of the law, the intent of the * * * settlor.” Domo v. McCarthy (1993), 66 Ohio St.3d 312, 314, 612 N.E.2d 706, 708. The express language of the trust guides the court in determining the intentions of the settlor. Casey v. Gallagher (1967), 11 Ohio St.2d 42, 40 O.O.2d 55, 227 N.E.2d 801. Any words used in the trust are presumed to be used according to their common, ordinary meaning. Albright v. Albright (1927), 116 Ohio St. 668, 157 N.E. 760.

Applying those principles to the trusts at issue, it is evident that these trusts are charitable trusts. The language of the trusts indicates that the benefits of the trusts are “intangible advantages to the public or to some significant class thereof which improve its condition mentally, morally, physically, or in some' similar manner.” Bogert, Trusts & Trustees (2 Ed. Rev.1991) 19-20, Section 362. Additionally, it is clear that the money paid out of the trusts is “not for the personal benefit of the donees, but rather to secure for society certain advantages.” Id. at 20. Indeed, no party disputes that Edith Gould and Mary Brooke clearly contemplated that the use of their trusts would inure to the public benefit.2

POWERS OF THE TRUSTEE

The powers and duties of a trustee are determined by the terms of the trust. Daloia v. Franciscan Health Sys. (1997), 79 Ohio St.3d 98, 102, 679 N.E.2d 1084, 1089. Applied to the trusts in dispute, the words conferring power to the trustee give to the trustee “sole discretion” in distributing the net income. The trusts also state that distributions are to be made for a ‘Worthy Legal Municipal Purpose or Purposes” as “said Trustee may deem advisable.” (Emphasis added.) Thus, the words of the trusts plainly allow the trustee, solely, to determine when and for what purposes monies shall be distributed from the trust. The words “sole discretion,” taken in their common and ordinary meaning, [558]*558are clear and unambiguous. By the use of those words, the settlors clearly intended that the trustee be the lone decisionmaker in determining both the timing and the purpose of trust distributions.

However, the trustee must also fulfill certain duties in making distributions under the terms of the trusts. In exercising his or her discretion, the trustee must comply with the standards guiding the timing and use of the distributions as also set forth in the language of the trusts. The trusts require the trustee, in exercising his discretionary power, to make a distribution of the net income at least every twenty years “[a]fter the death of * * * Harold Brooke Ressler.” The trusts require that any distribution of income from the trusts must be for a purpose that is of a “substantial and permanent nature and be a benefit to said Village,” and perpetuate the names of the settlors in some way. Thus, any distribution must be used for a purpose that achieves a meaningful, lasting benefit for the community.

The trusts also provide that the trustee shall make each distribution for “such Worthy Legal Municipal Purpose or Purposes as said Trustee may deem advisable.” The city interprets the trustee’s power to determine ‘“worthy legal municipal purpose” by stating, “[t]he settlors intended to have the governmental entity, through its elected officials, ie. City Council, select the use or uses for the income earned by the Trusts, while the Trustee, presumably a respected member of the business community, would operate as a non-partisan advisor to the City with ultimate authority to determine whether the. Trusts’ income was being used for a Worthy Legal Municipal Purpose.’ ” (Emphasis added.) We cannot agree.

We recognize that the city council may be perceived as an appropriate entity in determining how funds can be applied for the common good of the community, but as settlors of their trusts, Mary Brooke and Edith Gould could reasonably have held a different view. A plain reading of the language of the trusts indicates that the trusts confer “sole discretion” on the trustee and the power to make distributions for such worthy municipal purposes “as said Trustee may deem advisable.” The common meaning of these terms used by the settlors can only suggest that the trustee has lone decisionmaking power over the timing and purpose of distributions, subject to the standards established in the remaining language of the trusts. The language of the trusts does not give the city any authority in the administration of these trusts.

Further, the city’s position is internally inconsistent. The city states that the trustee is confined to serving as a “non-partisan advisor to the City with ultimate authority to determine whether the Trusts’ income was being used for a Worthy Legal Municipal Purpose.’ ” By this statement, the city suggests that the trustee may only advise the city on its uses of the trusts’ income, but that somehow the [559]*559trustee retains “ultimate authority” to determine the propriety of the use, after a distribution has been made.

This view by the city cannot be reconciled with the language of the trusts. The trusts state, “[the] Trustee shall * * * give the net income * * * for such Worthy Legal Municipal Purpose or Purposes as said Trustee may deem advisable.” (Emphasis added.) The word “shall” is a verb used to indicate simple future time. Webster’s Third New International Dictionary (1986) 2085. The language “as said Trustee may deem advisable” confirms the discretionary power of the trustee to assure that funds will be used for a worthy legal municipal purpose. The trustee, duly authorized to carry out the wishes of the settlors, may determine what proposed uses best meet those wishes. By the use of the word “shall,” as well as a plain reading of the trusts, it is evident that the settlors clearly intended for the trustee to make this determination in advance of any distribution. Such an intention is sensible in light of the duty of any trastee to ensure that the interests of a settlor or settlors are protected prior to any distribution of funds.3

The language “as said Trustee may deem advisable” clearly allows the trustee to make distributions for uses which the trustee, in the trustee’s discretion, determines to be of a worthy legal municipal purpose.

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Cite This Page — Counsel Stack

Bluebook (online)
82 Ohio St. 3d 553, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-trust-uw-of-brooke-ohio-1998.