Montclair National Bank & Trust Co. v. Seton Hall College of Medicine & Dentistry

217 A.2d 897, 90 N.J. Super. 419, 1966 N.J. Super. LEXIS 417
CourtNew Jersey Superior Court Appellate Division
DecidedMarch 5, 1966
StatusPublished
Cited by2 cases

This text of 217 A.2d 897 (Montclair National Bank & Trust Co. v. Seton Hall College of Medicine & Dentistry) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montclair National Bank & Trust Co. v. Seton Hall College of Medicine & Dentistry, 217 A.2d 897, 90 N.J. Super. 419, 1966 N.J. Super. LEXIS 417 (N.J. Ct. App. 1966).

Opinion

Herbert, J. S. C.

Plaintiffs Montclair National Bank and Trust Company, Terence J. McHugh, and Thomas A. Cullen, executors under the will of Francis M. Crawley, deceased, have sued for instructions concerning payment of a fractional share of the residue of the estate.

Mr. Crawley, a resident of Montclair, died on May 21, 1963, leaving a last will and testament dated March 20, 1962, which was duly probated on June 7, 1963. After a number of gifts, absolute and in trust, to various beneficiaries (about which there are no questions), the will provides as follows for the disposition of the balance of the estate:

“SEVENTEENTH: All the rest, residue and remainder of my estate of whatsoever nature and wheresoever situate, I give, devise and bequeath as follows:
1. One-Eighteenth (1/18) to Seton Hall University Medical School [sic] at Jersey City, New Jersey.
2. One Eighteenth (1/18) to Seton Hall University at South Orange, New Jersey.
3. One-Ninth (1/9) to my sister, Mary Amelia Crawley.
4. One-Ninth (1/9) to my niece, Eileen Crawley Phelan.
5. One-Ninth (1/9) to my nephew, Francis Thomas Crawley.
6. One-Ninth (1/9) to the Caldwell College for Women.
7. One-Ninth (1/9) to the Roman Catholic Diocese of Newark, New Jersey.
8. One-Ninth (1/9) to New York Province of the Society of Jesus of New York City, New York.
9. One-Ninth (1/9) to the Little Sisters of the Poor, of Newark, New Jersey.
10. One-Ninth (1/9) to be equally divided among St. Joseph’s Hospital, in Paterson, New Jersey, St. Mary’s Hospital in Orange, New Jersey, and St. James Hospital in Newark, New Jersey.
In the event that any of the residuary beneficiaries herein named shall predecease me, I give, devise and bequeath his or her said fractional share equally to surviving residuary beneficiaries.”

It is the legacy to “Seton Hall University Medical School,” item No. 1 of this list of ten residuary legacies, which raises questions that need to be answered here. Seton Hall College of Medicine and Dentistry was incorporated in 1954. Although the testator did not use the full corporate title, there can be no question that he identified this corporation sufficiently by the name he used in his will.

[425]*425Until some time in the spring of 1965 Seton Hall College of Medicine and Dentistry was actively engaged in medical and dental education, carrying on its activities at Jersey City. It was the only medical school in the State, and only one other New Jersey dental school was in operation. On May 3, 1965, beset by financial difficulties that threatened to close its doors, it made an agreement in writing with New Jersey College of Medicine and Dentistry, a public corporation created by the New Jersey Medical and Dental College Act of 1964. L. 1964, c. 231 (N. J. S. A. 18:22-150 el seq.) By the agreement Seton Hall College of Medicine and Dentistry sold its assets, tangible and intangible, to the State’s corporation. There was no transfer of responsibility for existing debts.

Without attempting to describe a rather complex situation, for present purposes it is enough to say that by the agreement of May 3, 1965 Seton Hall College of Medicine and Dentistry formally gave up all possibility of continuing as an operating educational institution.

The executors on May 25, 1965 were ready to pay out each of the shares provided for in paragraph Seventeenth of the will. On that date each 1/9 share had a value of $87,052.11, and each 1/18 share had a value of $43,526.05. About December 10, 1964, when Seton Hall College of Medicine and Dentistry was still functioning, $1,500 was paid to it on account of its legacy. Allowing credit on account of a 1/18 share for that partial payment leaves a balance of $42,026.05. Though Seton Hall College of Medicine and Dentistry no longer is carrying on the educational functions for which it was formed, its corporate existence continues, and if it were now to receive moneys under the Crawley will, they would be put to good use in paying some of its debts.

The executors and Seton Hall College of Medicine and Dentistry argue that the existence of the college as a functioning unit at the testator’s death vested the legacy in it and that nothing has happened since to cause a divestiture. This argument would treat the legacy in question like a bequest to [426]*426an individual who, though living at the testator’s death, does not survive long enough to receive payment from the executor. Such a private bequest would vest in the short-lived legatee and would be collectible by his personal representative. 96 C. J. 8. Wills § 1203, p. 1044 (1956). The authorities, however, show that control over charitable gifts has been extended beyond the point of vesting and even beyond actual payment.

Unlike an ordinary private bequest, a gift to a charitable corporation without use restrictions does not give the corporation license to use the bequest as it pleases. Rather, it is a gift to a charity in trust, to be employed in such manner as the corporation sees fit for the accomplishment of its proper corporate purposes. 4 Scott, Trusts (2d ed. 1956), § 348.1, p. 2553; De Camp v. Dobbins, 29 N. J. Eq. 36, 50 (Ch. 1878), affirmed 31 N. J. Eq. 671 (E. & A. 1879); American Bible Society v. American Tract Society, 62 N. J. Eq. 219, 220 (Ch. 1901); Rowe v. Davis, 138 N. J. Eq. 122, 125 (Ch. 1946); Fidelity Union Trust Co. v. Ackerman, 18 N. J. Super. 314, 326 (Ch. Div. 1952). In effect, the public is the beneficiary of a charitable bequest or devise; the named recipient is merely chosen to administer the property. Recognizing this, our courts seek to preserve the social benefit deriving from charitable gifts by sustaining them whenever possible. Howard Savings Institution v. Peep, 34 N. J. 494, 501 (1961); Mirinda v. King, 11 N. J. Super. 165, 173 (App. Div. 1951).

The fact that a gift vested in a charitable corporation at a testator’s death, or upon termination of a life estate, does not govern the making of actual payment. Nor is continuing corporate existence of controlling significance. In Nichols v. Newark Hospital, 71 N. J. Eq. 130 (Ch. 1906), testator bequeathed the residue of his estate to the Newark Hospital. The hospital was incorporated in 1857 with the object of erecting and maintaining a general hospital in the City of Newark. When testator executed his will in 1861, and at his death in 1866, the corporation still existed but its plan had never been put in operation. The time for payment hav[427]*427ing come, the vice-chancellor referred the matter to a master to ascertain whether Newark Hospital was able to function according to its stated purposes to execute the “trust” imposed on the fund. If Newark Hospital could not perform, the direction was that it be supplanted as beneficiary by one or more of the active hospitals of Newark. Reference may also be made to In re Harrington’s Estate, 151 Neb. 81, 36 N. W. 2d 577 (Sup. Ct. 1949);

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Related

Tp. of Cinnaminson v. First Camden Nat. Bk. & Tr.
238 A.2d 701 (New Jersey Superior Court App Division, 1968)
Montclair Nat. Bk. & Tr. Co. v. SETON HALL COL.
217 A.2d 897 (New Jersey Superior Court App Division, 1966)

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Bluebook (online)
217 A.2d 897, 90 N.J. Super. 419, 1966 N.J. Super. LEXIS 417, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montclair-national-bank-trust-co-v-seton-hall-college-of-medicine-njsuperctappdiv-1966.