Lair v. Jerseyville Community Hospital

294 N.E.2d 313, 10 Ill. App. 3d 460, 1973 Ill. App. LEXIS 2653
CourtAppellate Court of Illinois
DecidedMarch 21, 1973
Docket11789
StatusPublished
Cited by9 cases

This text of 294 N.E.2d 313 (Lair v. Jerseyville Community Hospital) 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
Lair v. Jerseyville Community Hospital, 294 N.E.2d 313, 10 Ill. App. 3d 460, 1973 Ill. App. LEXIS 2653 (Ill. Ct. App. 1973).

Opinion

Mr. PRESIDING JUSTICE CRAVEN

delivered the opinion of the court:

This is an appeal by the Jerseyville Community Hospital and the Boyd Memorial Hospital from an order of the circuit court of Calhoun County construing the will of Barbara Ammott Fuller. The action was originally brought by Lucille Lair and the Commercial National Bank of Peoria, as co-executors of the will of testatrix, for a construction of the residuary clause. The trial court .found that a proper construction of the will required that one-third of the residuary estate should pass to Passavant Memorial Area Hospital Association. The trial court noted that the doctrine of cy pres, although unimportant to this decision, could be employed to obtain the same result if it were held impossible to carry out the specific wish of testatrix. The trial court has filed a comprehensive opinion.

Clause VI of the testatrix’s will reads as follows:

“All the rest, residue and remainder of my property, of every kind and nature whatsoever, real or personal, I direct my Executor to convert into cash and divide the same into three (3) equal parts, giving one (1) part to the JERSEYVILLE COMMUNITY HOSPITAL of Jerseyville, Illinois; one (1) part to the OUR SAVIOUR’S HOSPITAL of Jacksonville, Illinois; and one (1) part to BOYD MEMORIAL HOSPITAL of Carrollton, Illinois.”

Testatrix’s will was executed May 17, 1962, and two codicils were added in 1965. Barbara Fuller died on February 6, 1969. At the time of the execution of the will, Our Saviour’s Hospital and Passavant Memorial Area Hospital Association were operating acute care facilities in the City of Jacksonville, Illinois. Subsequently, Our Saviour’s Hospital changed its name to Holy Cross Hospital. Then, in June 1968, articles of merger were executed, and Holy Cross agreed to merge with Passavant as of July 1, 1968. Thereafter, Holy Cross ceased to operate as a separate corporate entity. Passavant was tire surviving corporation, and Holy Cross was renamed the Frank A. Norris Hospital. The two hospitals are now operated by Passavant as one unit. Boyd Memorial and Jerseyville Community Hospital argue on appeal that the portion of the residuary estate left to Our Saviour’s Hospital lapsed since it was not in existence at the time of the testatrix’s death. It is contended that this portion should pass to the remaining residuary legatees under the Anti-Lapse statute. (Ill. Rev. Stat. 1967, ch. 3, par. 49.) The issue on appeal is whether or not the trial court was justified in finding that one-third of the residuary bequest designated for Our Saviour’s Hospital should pass to Passavant Memorial Hospital Association.

The Anti-Lapse statute refers to persons rather than corporations. However, the parties agree that Illinois Revised Statutes, 1967, ch. 131, par. 1.05, supports a construction of the word “person” or “persons” as applying to bodies politic and corporate as well as individuals.

After the merger, Passavant used the buildings of Holy Cross Hospital and operated as a single unit. Passavant had complete managerial control. Ninety-four per cent of the employees of Holy Cross remained in the employment of Passavant. The director of nurses at Holy Cross remained although the majority of sisters engaged in the operation of that hospital left. The administrator of Passavant took over the duties as director of each hospital after the merger. Holy Cross Hospital maintained its x-ray unit, pharmacy, and dietary facilities. The food service catering to both hospitals before the merger remained afterward. Patients continued to have their choice of selection between the hospitals.

Section 42(d) of the Illinois General Not-For-Profit Corporation Act (Ill. Rev. Stat. 1967, ch. 32, par. 163(a)41(d)) provides for the effect of merger as follows:

“Such surviving or new corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises of each of the merging or consolidating corporations; and all property, real, personal and mixed, and all debts due on whatever account, and all other choses in action and all and every other interest, of or belonging to or due to each of the corporations so merged or consolidated, shall be taken and deemed to be transferred to and vested in such single corporation without further act or deed; and the title to any real estate, or any interest therein, vested in any of such corporations shall not revert or be in any way impaired by reason of such merger or consolidation.”

The statute was construed in Chicago Title & Trust Co. v. Zinser, 264 Ill. 31, 105 N.E. 718, where the testator in his will named the Real Estate Title and Trust Company as executor with power to sell. After the execution of the will and before the death of the testator, Real Estate Title and Trust consolidated with the Chicago Title and Trust Company. The new corporation was known as the Chicago Title and Trust Company. The supreme court of Illinois considered the effect of the consolidation on the powers granted in the will. In upholding the power of Chicago Title and Trust to act as executor, the supreme court said:

“A corporation is without personality, and if it is selected as trustee or executor there can be no reliance upon individual discretion or even upon the continuance of the same administration. Etta Nelson, in naming the Real Estate Title Company as executor and trustee, knew that its directors, officers and stockholders might change from time to time, and that the statute authorized a change of name or place of business, enlargement or change of the object for which the corporation was formed, an increase or decrease of capital stock or change in the number of shares or par value, increase or decrease of the number of directors, and the consolidation of the corporation with any other corporation then existing or that might thereafter be organized. She therefore contemplated that these changes might occur and that the Real Estate Title and Trust Company might be consolidated with some other corporation such as the Chicago Title and Trust Company, and that it would thereby cease to exist and become a component part of a new corporation. A consolidation took place and a new corporation was created from the original corporations, with an enlarged capital stock and unimpaired franchises. The appellee was entitled to execute the trust * # pp. 35,36.

The appellate court of Indiana later construed the statute in Bible Institute Colportage Ass’n v. St. Joseph B. & T. Co., 118 Ind.App. 592, 75 N.E.2d 666, where the testatrix left the residue of her estate in trust to the Bible Institute Colportage Ass’n of Chicago for the “publication and dissemination of Evangelical Christian literature”. Prior to the testatrix’s death, a merger occurred between Colportage and the Moody Bible Institute. The name of the new corporation was Moody Bible Institute. The court affirmed the ruling of the trial court, holding that the Moody Bible Institute had the power to execute the trust established in the residuary clause of testatrix’s will. The court cited Zinser stating that the expressed intention and charitable purpose of the testatrix could be carried out by the new corporation.

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Bluebook (online)
294 N.E.2d 313, 10 Ill. App. 3d 460, 1973 Ill. App. LEXIS 2653, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lair-v-jerseyville-community-hospital-illappct-1973.