Richards v. Wilson
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Opinions
Cox, C. J.
— This action was brought by appellees Medford B. Wilson, John Perrin, Alfred A. Barnes, Charles Latham and Frank E. Gavin as trustees against the Winona Agricultural and Technical Institute, The Winona Technical Institute, Charles A. Bookwalter, receiver, and many others, to have determined the character and purpose of the trust under which they had, as such trustees, acquired and then held title to a tract of land in the city of Indianapolis known as the “United States Arsenal Grounds”. The purpose to buy the ground from the Federal government to preserve it intact as a site for a manual labor school, and to raise a fund by popular subscription to cover the purchase price was averred in the complaint. The proposal of a certain group of men known as the “Winona Group” to establish, liberally endow, and maintain a school for the education of boys and girls in trades and handicrafts on the site, if the public would so buy it, was shown. They were to incorporate the Winona Agricultural and Technical Institute to conduct the school. The raising of the amount necessary for the purchase by popular donations and subscriptions from many persons for the purpose of keeping the grounds intact as a site for such a school was set forth at length. • It was then averred that when the donations and subscriptions had reached the amount necessary to make the purchase it was learned that the “Winona Group” had failed to provide any endowment; that then the appellees named, as trustees of the fund, called a meeting on January 8, 1903, of the larger subscribers, representatives of the proposed Winona corporation, and others interested to consider the matter of making the pur[342]*342chase from the Federal government at the sale which was to occur shortly. At this meeting it was arranged that the trustees should buy the tract, take the title to themselves and hold it until an endowment of at least $154,000, a sum equal to the probable purchase price, should be provided by the Winona corporation; and. it was then determined that the grounds should be forever devoted to and held in trust for educational purposes in the city of Indianapolis, and that no conveyance should be made to the institute until such endowment should be provided. Pursuant to the conclusion reached at that meeting the trustees on January 15, 1903, sent a letter through the mails, which subsequently became known as the “blue letter,” to each subscriber stating substantially the arrangement made at that meeting and requesting payment. The collection of the money, the purchase of the tract, the conveyance by the Federal government to appellee’s trustees, as trustees of the Winona Agricultural and Technical Institute, were all averred in detail. It was then shown that the promised endowment failed but that the trustees granted to the institute permission to occupy the premises, but to have no title and to surrender possession upon the demand of the trustees; that it went into possession and had so continued, but was insolvent and in the hands of a receiver for that reason, owing debts to many people in a large sum. It was further shown in the complaint that the number of donors to the purchase fund was so great that it would be impossible to make them all parties to the suit; that the number of creditors to the institute was so great that it was impracticable to make them all defendants. Finally it was stated in the complaint that the trustees, without desiring to espouse the cause of anybody making claims to [343]*343any interest in the property, the title to which was held by them as trustees, did desire to maintain and uphold the trust and to see that its purpose was carried out. And they prayed the court to ascertain and determine the trust, the rights of all the parties, and the duty of the trustees with reference to the property so held by them; and, in ease a deed should be made to any one,, the provisions to be stated therein for the protection of the trust and, its preservation for educational purposes in the city of Indianapolis.
Many others than those named in the complaint came in as parties and many pleadings of great length were filed, mainly in the nature of answers to the complaint, and cross-complaints between the many parties defendant. Three of the donors of large sums, Fletcher S. Hines, William E. Hayward .and Edward C. Fletcher, by their answers and cross-complaints, took the position that, as the “Winona Group” had failed to raise either a promised endowment of $2,000,000 and provide an annual income of $50,000 as originally contemplated when thesubscriptions weremade, or to raise $154,000 as provided when the subscriptions were paid in response to the “blue letter,” the trust was never consummated but had failed and that the property held by the trustees should be sold by the court and the proceeds divided among the donors who were about 4,000 in number, to the exclusion of the creditors of the institute, in the ratio that the gift of each should bear to any sum for which the property might sell. The creditors of. the Winona Technical Institute, made up in the main of those who had loaned it money to fit the buildings and carry on the schools, after it had entered into possession claimed, through that corporation as their common debtor, that the property stood charged in equity with their several demands [344]*344and they asked that it be sold and the proceeds applied to the payment of their several debts against the insolvent corporation. Mr. Addison C. Harris, a donor to the fund of a large sum, in behalf of himself and those like him desiring to establish the trust as a public charitable trust and to protect and preserve it against all those parties who were antagonistic, filed an answer and a cross-complaint in which facts were averred on which it was maintained that the purpose in securing the donations to the fund and the purchase of the tract from the Federal government was to keep those grounds intact like a public park to be used as a site for a trade school for boys and girls and held for uses in Indianapolis as a public educational charity. Other attorneys in the case, among them Mr. Ferdinand Winter, representing Hugh McGowan and other large donors, and Mr. William Bosson, representing Dr. B. C. Light, appeared and adopted the pleadings of Mr. Harris. And Andrew J. Brunt, a contributor of a large sum, personally appeared and did the same. The board of school commissioners of the city of Indianapolis was made a party and answered. As no question is made in this appeal as to the sufficiency of any pleading none need be more particularly set out than as above stated.
The court found the facts specially and stated conclusions of law thereon favorably to the position taken by Mr. Harris and others and against the contentions of the donors Hines, Fletcher and Hayward, and the creditors of the institute; and, following motions for a new trial, rendered judgment accordingly. From that judgment the three donors last mentioned and the creditors have brought this appeal. The errors assigned and relied on for reversal by the donors who have appealed and also the creditors are: (1) That the court erred [345]*345in overruling their respective motions for a venire de novo; (2) in overruling their motions for a new trial; and (3) that it erred in its conclusions of law.
The vital questions in the case make it essential to set out the facts, in substance, as the court found them to be established by the evidence to the extent that they are involved in the questions raised by the assignments of error.
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Cox, C. J.
— This action was brought by appellees Medford B. Wilson, John Perrin, Alfred A. Barnes, Charles Latham and Frank E. Gavin as trustees against the Winona Agricultural and Technical Institute, The Winona Technical Institute, Charles A. Bookwalter, receiver, and many others, to have determined the character and purpose of the trust under which they had, as such trustees, acquired and then held title to a tract of land in the city of Indianapolis known as the “United States Arsenal Grounds”. The purpose to buy the ground from the Federal government to preserve it intact as a site for a manual labor school, and to raise a fund by popular subscription to cover the purchase price was averred in the complaint. The proposal of a certain group of men known as the “Winona Group” to establish, liberally endow, and maintain a school for the education of boys and girls in trades and handicrafts on the site, if the public would so buy it, was shown. They were to incorporate the Winona Agricultural and Technical Institute to conduct the school. The raising of the amount necessary for the purchase by popular donations and subscriptions from many persons for the purpose of keeping the grounds intact as a site for such a school was set forth at length. • It was then averred that when the donations and subscriptions had reached the amount necessary to make the purchase it was learned that the “Winona Group” had failed to provide any endowment; that then the appellees named, as trustees of the fund, called a meeting on January 8, 1903, of the larger subscribers, representatives of the proposed Winona corporation, and others interested to consider the matter of making the pur[342]*342chase from the Federal government at the sale which was to occur shortly. At this meeting it was arranged that the trustees should buy the tract, take the title to themselves and hold it until an endowment of at least $154,000, a sum equal to the probable purchase price, should be provided by the Winona corporation; and. it was then determined that the grounds should be forever devoted to and held in trust for educational purposes in the city of Indianapolis, and that no conveyance should be made to the institute until such endowment should be provided. Pursuant to the conclusion reached at that meeting the trustees on January 15, 1903, sent a letter through the mails, which subsequently became known as the “blue letter,” to each subscriber stating substantially the arrangement made at that meeting and requesting payment. The collection of the money, the purchase of the tract, the conveyance by the Federal government to appellee’s trustees, as trustees of the Winona Agricultural and Technical Institute, were all averred in detail. It was then shown that the promised endowment failed but that the trustees granted to the institute permission to occupy the premises, but to have no title and to surrender possession upon the demand of the trustees; that it went into possession and had so continued, but was insolvent and in the hands of a receiver for that reason, owing debts to many people in a large sum. It was further shown in the complaint that the number of donors to the purchase fund was so great that it would be impossible to make them all parties to the suit; that the number of creditors to the institute was so great that it was impracticable to make them all defendants. Finally it was stated in the complaint that the trustees, without desiring to espouse the cause of anybody making claims to [343]*343any interest in the property, the title to which was held by them as trustees, did desire to maintain and uphold the trust and to see that its purpose was carried out. And they prayed the court to ascertain and determine the trust, the rights of all the parties, and the duty of the trustees with reference to the property so held by them; and, in ease a deed should be made to any one,, the provisions to be stated therein for the protection of the trust and, its preservation for educational purposes in the city of Indianapolis.
Many others than those named in the complaint came in as parties and many pleadings of great length were filed, mainly in the nature of answers to the complaint, and cross-complaints between the many parties defendant. Three of the donors of large sums, Fletcher S. Hines, William E. Hayward .and Edward C. Fletcher, by their answers and cross-complaints, took the position that, as the “Winona Group” had failed to raise either a promised endowment of $2,000,000 and provide an annual income of $50,000 as originally contemplated when thesubscriptions weremade, or to raise $154,000 as provided when the subscriptions were paid in response to the “blue letter,” the trust was never consummated but had failed and that the property held by the trustees should be sold by the court and the proceeds divided among the donors who were about 4,000 in number, to the exclusion of the creditors of the institute, in the ratio that the gift of each should bear to any sum for which the property might sell. The creditors of. the Winona Technical Institute, made up in the main of those who had loaned it money to fit the buildings and carry on the schools, after it had entered into possession claimed, through that corporation as their common debtor, that the property stood charged in equity with their several demands [344]*344and they asked that it be sold and the proceeds applied to the payment of their several debts against the insolvent corporation. Mr. Addison C. Harris, a donor to the fund of a large sum, in behalf of himself and those like him desiring to establish the trust as a public charitable trust and to protect and preserve it against all those parties who were antagonistic, filed an answer and a cross-complaint in which facts were averred on which it was maintained that the purpose in securing the donations to the fund and the purchase of the tract from the Federal government was to keep those grounds intact like a public park to be used as a site for a trade school for boys and girls and held for uses in Indianapolis as a public educational charity. Other attorneys in the case, among them Mr. Ferdinand Winter, representing Hugh McGowan and other large donors, and Mr. William Bosson, representing Dr. B. C. Light, appeared and adopted the pleadings of Mr. Harris. And Andrew J. Brunt, a contributor of a large sum, personally appeared and did the same. The board of school commissioners of the city of Indianapolis was made a party and answered. As no question is made in this appeal as to the sufficiency of any pleading none need be more particularly set out than as above stated.
The court found the facts specially and stated conclusions of law thereon favorably to the position taken by Mr. Harris and others and against the contentions of the donors Hines, Fletcher and Hayward, and the creditors of the institute; and, following motions for a new trial, rendered judgment accordingly. From that judgment the three donors last mentioned and the creditors have brought this appeal. The errors assigned and relied on for reversal by the donors who have appealed and also the creditors are: (1) That the court erred [345]*345in overruling their respective motions for a venire de novo; (2) in overruling their motions for a new trial; and (3) that it erred in its conclusions of law.
The vital questions in the case make it essential to set out the facts, in substance, as the court found them to be established by the evidence to the extent that they are involved in the questions raised by the assignments of error. In 1902, the United States Government owned, and for many years theretofore had owned, a tract of land, much of it wooded and substantially in a primeval state, which comprised slightly less than eighty acres in the city of Indianapolis. It had been devoted to use by the government as an arsenal site and small military post and, at the time named, there were on it a small number of old but substantial buildings which had been erected for that use. During the years of the government’s ownership, the city in its growth had completely surrounded the tract so that in 1902 it lay near the heart of the city. It then became known that the government proposed selling the tract. Thereupon a concerted movement was initiated by the press, civic and educational organizations, public officials and public-spirited citizens to procure the tract by purchase from the government and to hold and preserve it intact for park and educational uses in the city. While this movement was gathering force and taking shape, a group of men of large means who were connected with or interested in the Winona Assembly and Summer School Association, a corporation conducting a chautauqua and summer school at Winona Lake, Indiana, proposed that they would endow and manage a technical institute to be located on the arsenal grounds, if the citizens of Indianapolis and vicinity would secure for them those grounds and buildings, the management of [346]*346the proposed technical institute to be largely in the hands of a local committee of the' citizens of Indianapolis. These men possessed large fortunes and were well able to endow such a school in a manner to insure its success which fact was well known to the citizens of Indianapolis. This proposal from them was made at a public meeting in the city of Indianapolis by an agent of the group of men who called themselves the Winona Agricultural and Technical Institute, but who were not then constituted a corporate entity. This agent, one Dr. S. C. Dickey, was empowered by this group to act for them in connection with the citizens of Indianapolis to secure donations from the citizens of Indianapolis and others interested, of sufficient money to purchase the arsenal grounds and buildings for a technical school as a department of the Winona Agricultural and Technical Institute. At the public meeting at which this proposal was made, which was held April 22, 1902, which was made up of representative citizens, members of various civic bodies and representatives of the press of the city, it was determined to abandon all other efforts to purchase the property for other purposes, and to unite in an effort to raise a fund to purchase it as a site on which such technical school might be permanently located. Other meetings looking to this purpose were held, at which representatives of the “Winona Group” were present and at one of them a committee was appointed which was to have charge and direction of the effort to secure a fund for the purchase, as were, also, solicitors to secure subscriptions and trustees to hold the funds. Mr. Harris was made chairman of this committee and Dr. Dickey was a member of it. At the latter’s suggestion George W. Brown and Albert Sahm were selected as special solicitors for subscriptions [347]*347to the purchase fund. The canvass 'for subscriptions to the fund was prosecuted during several months by the.solicitors and their verbal statements were supplemented and aided by printed matter of the nature, purpose and progress of the movement consisting in the main of matter printed in the local and in the editorial columns of the newspapers, prospectuses and subscription blanks. The newspaper matter urged the public to subscribe to the fund, to the end that if a sum sufficient to purchase the site was raised, the men of large wealth before mentioned would endow a national technical school thereon, and that a sum was then in sight sufficient •to erect necessary buildings and to pay the expenses of the operation of the school for a period óf ten years, and that an ample endowment was assured to continue its operation permanently as a national school, which would bring large numbers of students from all parts of the country. Many of these newspaper articles and items were furnished by Dr. Dickey and the solicitors, some of which purported to be interviews with them and some were signed by them. None of this newspaper aid was repudiated, denied or criticized. Among the publications appearing in one of the newspapers was the following, which was authorized by Dr. Dickey as representative of the Winona people and without consultation with the committee or the chairman thereof, to-wit:
“This is to be a national school, national as to its officers, its teachers, and the territory from which it will draw its students.
“This directory is a unit in regarding Christian character as the foundation for all real success in life, non-sectarian, but strictly evangelical, religious teaching will be impressed upon the heart and conscience of every pupil, [348]*348and the Bible will be given its proper place as the most important text-book.
“There will be no charity students and- no free tuition. The most precious possession any boy has or can have is his manhood, and we believe that no boy can retain his manhood unimpaired and obtain and accept things for nothing. We do not believe that the state of society or the church owes any man or boy either a living or education. But every boy is entitled to a chance to obtain an education, and also that which is just as important, the chance to pay for it either in money or in labor.
“If a boy’s parents or friends want to pay in full for his education, he will be paid in cash for his physical labor, but he must work just as many hours as the boy who pays for his education by labor alone.
“The statement, endowment and place of collection of subscriptions will be made by the trustees as soon as they can hold a meeting. The Technical Institute will be dedicated with a fixed annual income of not less than $50,000 aside from the money received from tuition.
“As ample security to the subscribers, trustees will not only hold the collected funds, but also a deed to the property until they and the subscribers are thoroughly’ satisfied that the school can have a sufficient inauguration and maintenance through a fixed and ample endowment.”
A prospectus was prepared for use in the canvass for donations to the fund to purchase the real estate which prospectus was approved by Dr. S. C. Dickey and the chairman of the canvassing committee. The prospectus was printed and used by the solicitors canvassing, and by them presented to each person solicited. It contained a statement of the plans and purposes in which was this sentence:
“One thing we may assure — the men who compose the board of the Winona Agricultural [349]*349and Technical Institute will be satisfied with nothing less than the best faculty that can be secured, and that we will not rely upon tuition of the students for means with which to meet the salaries of the teachers. Men who are heart and soul in this movement will supply such expenses by generous contributions. They have already taken up the work and signified their intention, so we are not building a fabric of plans on a foundation lacking substantial qualities.”
The name S. C. Dickey was printed at the close of the statement containing the foregoing sentence. It also contained a list of the men constituting the officers and directors of the Winona Agricultural and Technical Institute. The following statement also appeared in it:
“The press of Indianapolis has unanimously endorsed and favored the purchase of the Arsenal site and the establishment of a technical institute, and at the conference on July 8th of the joint committees representing the press, Commercial Club, Board of Trade, University of Indianapolis, Woodruff Place, Winona Assembly, and the citizens of Indianapolis Hon. A. C. Harris, presiding, the following resolutions were adopted unanimously:
“ ‘Believing that the United States Arsenal grounds of this city should be preserved intact and used for educational purposes, we, as members of a conference committee, representing the board of trade, Commercial Club, University of Indianapolis, The Winona Agricultural and Technical Institute, the press and citizens of Indianapolis, and Woodruff Place, endorse the project of the Winona Agricultural Institute to purchase the grounds for the purpose of establishing thereon a National Technical Institute. We commend the plan proposed for raising the necessary funds by subscription, [350]*350the money thus secured to be held by five trustees, citizens of Indianapolis, in trust for the object named, it being understood that the grounds when purchased will be deeded to The Agricultural Institute, which has, by resolution, pledged itself to manage and endow the institute. It is further understood that the detailed management of the school shall be placed in the hands of a local committee, who shall work in conjunction with the executive committee of the Winona Agricultural and.Technical Institute.
“ ‘We recommend the appointment of an executive committee of five members to have full power in the conduct of the canvass for funds and in the negotiations with the Government for the purchase of the grounds.
“ ‘Resolved, that we commend to the attention of the people of the city of Indianapolis the opportunity here offered to secure not only the national technical institute, but an Army Post, the site for which by Act of Congress may be purchased at the option of the Secretary of War, with the funds realized from the sale of the Arsenal Grounds.’
“The committee as called for in the resolutions was agreed upon as follows: Addison C. Harris, Hilton U. Brown, representing' the University of Indianapolis, Frank E. Gavin, President Commercial Club, John J. Appel, President of Indianapolis Board of Trade, Dr. Sol C. Dickey, representing Winona Agricultural and Technical Institute, Mayor Bookwalter, representing the City of Indianapolis.
“The following were named as Trustees to hold the fund that may be subscribed: Medford B. Wilson, President Capitol National Bank; Charles Latham, Cashier Fletcher National Bank; John Perrin, President American National Bank; A. A. Barnes, Director Columbia National Bank, and Judge Frank E. Gavin, President Commercial Club.
“The special solicitors with the knowledge [351]*351and approval- of said canvassing committee prepared a blank form for those who made donations to sign, in form following:
“ ‘Winona Agricultural and Technical Institute.
Indianapolis, Indiana,-1902.
“ ‘In consideration of the promise of the proposed organizers of the Winona Agricultural and Technical Institute to duly incorporate said institute under the laws of Indiana and to establish the technical department of said institute upon the United States Arsenal site at Indianapolis, Indiana, if the amount hereinafter mentioned, my subscription included, shall be subscribed thereto and said arsenal site can be purchased, I promise upon demand to pay to Medford B. Wilson, John Perrin, Charles Latham, A. A. Barnes and Prank E. Gavin, Trustees, or their successors or order, the sum of- dollars, to be used in the purchase of said arsenal site for said Winona Institute’s technical department and the establishment of said department, provided that, and this subscription is subject to the condition that,'valid bona fide subscriptions of like purport with this subscription to the amount of $150,000.00 shall have been made, and provided further that the sum by me hereby subscribed shall not be demanded or payable until such aggregate amount shall be subscribed.
The trustees whose names appear in said subscription blank were selected pursuant .to the resolution set forth above at one of the public meetings held at the inception of the movement to raise said funds, and the fact of their selection as said trustees was, at the time, published in the Indianapolis News, and a copy of said blank was published daily in said paper for a long period of time, with a request to its readers to make their subscriptions on such blank and forward the same to the In[352]*352dianapolis News, or to the soliciting committee. And a number of subscriptions were made in that way without any other solicitation than that appearing in the columns of the News. Other subscriptions were taken on a blank in the following form:
“Technical Institute Fund.
Indianapolis, Indiana,-, 1903.
I promise to pay upon demand to Medford B. Wilson, John Perrin, Charles Latham, A. A. Barnes and Frank E. Gavin, Trustees, or their successors or order the sum of - dollars for the purpose of the purchase of the Arsenal Site for the Technical Institute (the amount paid hereon to said trustees to be returned to the undersigned in case the said Technical Institute shall not be located on said Arsenal Site).”
About 4,000 different persons, some of whose names were at the time unknown to the solicitors, made contributions to the fund in sums ranging from five cents to $15,000. Of the sum thus donated by parties whose names were known about three-fourths thereof was donated by parties who signed one or the other of the foregoing forms of subscription blanks, only a comparatively small number of them signing the second form, it being used near the close of the canvass. About one-fourth of the fund was paid in by donors who did not sign, any form of subscription blank. In addition to those whose names were known a great number of individuals donated small sums by contributing to collections taken in large manufacturing plants and business houses employing large numbers of men and women, in which cases the total collection for each house or manufacturing plant was turned in to the soliciting committee in the name of some -one of the contributors and the names of [353]*353the others so contributing were never known to the soliciting committee or any one connected with the collection of the fund or the promotion of the enterprise. Of the 4,000 persons contributing to the fund of $154,000, the names of about 2,600 of them were in evidence, and the amount contributed by them, including $15,000 paid in by the Winona Assembly and Summer School Association, amounted to about $150,000. Appellant Fletcher S. Hines subscribed $5,000 to the fund on a subscription blank of the form first above set out.. Appellant Edward C. Fletcher subscribed $2,500 on a blank of the same form, which he had cut out of the Indianapolis News and mailed, and he had no other information at the time of the effort and purpose of raising the fund than that which he obtained from the columns of that paper. Appellant William E. Hayward first subscribed $500 on a blank of the first form and later $100 on a blank of the second form. Still later, about March 12, 1903, he sent a letter to the trustees of the fund, when the sale of the tract was drawing near, and it seemed that the enterprise might fail, in which he pledged $3,400 more, and two days later he sent a cheek for $4,400, thus raising his total subscription to $5,000, he having paid his $500 subscription January 14, 1903, and the $100 on March 13, 1903. August 6, 1902, certain things were done towards incorporating the Winona Agricultural and Technical Institute. About the first of the year 1903, when it was believed that a sum practically sufficient to purchase the property had been subscribed, it began to be considered among some of the subscribers of the larger sums and the trustees of the fund and others that some definite understanding should be reached before the money was [354]*354paid in, as to the exact nature of the trust to be created. Some of the subscribers were contending that there should be a more definite and substantial step taken by the parties who had proposed to establish and endow the school towards the accomplishment of that purpose before the contributors should be asked to pay their several pledges. This resulted in a meeting in the city of Indianapolis January 8, 1903, which was attended by a majority of the trustees of the fund, Mr. Harris, the chairman, and a majority of the canvassing committee of citizens, Dr. Dickey and his attorney representing the Winona people and a number of subscribers of amounts aggregating $40,000 or $50,000. As a result of this meeting and embodying the essential judgment of it as expressed in a resolution then passed, a circular letter known as the “blue letter” was prepared by the trustees and mailed to all of the known subscribers. The resolution was as follows:
“Resolved, that it is the belief of the Board of Trustees that the deed of conveyance for the arsenal grounds to the Winona Agricultural and Technical Institute, should contain clauses limiting the property to educational uses, prohibiting its being mortgaged and providing that it might be sold should the Institute deem it wise only on condition that the proceeds should form a trust fund to be forever invested in real estate in Indianapolis to be used for educational purposes in said city; with a provision of reversion to the city of Indianapolis should said real estate or the proceeds of the same at any time cease to be used for educational purposes in said city of Indianapolis.
“Resolved, further, that the deed should not be delivered to said Institute until it shall have obtained in cash or in bona fide collectible subscriptions, an amount equal to the purchase [355]*355price of the real estate to be used for Institute at Indianapolis.
“Resolved, further, that upon said Institute’s having secured such sum for such purpose in cash or subscriptions as above it shall be deemed entitled to such conveyance and the same shall be accordingly made.”
Appellants Hines, Fletcher and Hayward had no knowledge of the meeting or of this resolution. Omitting the date, which was January 13, 1903, the “blue letter” reads as follows:
“The undersigned trustees for the Technical Institute fund hereby inform you that valid and bona fide subscriptions to the full amount of $150,000 have been secured for the purchase of the Arsenal Site from the Government for the purpose of establishment of the proposed Technical Institute thereon.
“That the object may be certainly fulfilled it has been determined by your trustees and agreed to by the representatives of the Institute that the deed of conveyance to the institute limit the property and all its proceeds to educational uses in the city of Indianapolis, and the deed to the Arsenal Site property shall not be delivered by the trustees to the Institute corporation until it shall have in cash or bona fide collectible subscriptions a sum at least equal to the purchase price of the real estate. In order, therefore, that the Trustees may be in position to promptly submit their offer for the property, you are kindly requested to co-operate by making immediate payment of your subscription at the bank designated in the enclosed notice.”
After the subscribers had been thus specifically advised of the limitations and conditions upon which a deed would be made to the Institute, payments were made by the subscribers, and on these terms some additional donations were’ secured. [356]*356On March 16, 1903, the trustees bought the Arsenal property from the government for 1154,000, paid for it, and received a deed running to them as trustees of the Winona Agricultural and Technical Institute fund and to their successors as such trustees. April 15, 1903, the trustees executed the following written agreement which was signed by them and by the institute by Dickey, its president:
“This article of agreement between Med-ford B. Wilson, John Perrin, A. A. Barnes, Chas. Latham, and Frank E. Gavin, Trustees, as parties of the first part and the Winona Agricultural and Technical Institute, parties of the second part witnesseth, that:
“Whereas, Said Trustees have purchased and paid for the land near Indianapolis, Marion County, Indiana, known as the Arsenal Grounds, being the east one-half of the northwest quarter of section six (6) township fifteen,. Range four and as such trustees now hold the title thereto, and
“Now, therefore, it is hereby agreed that said Technical Institute shall take possession of, _ care for and manage said property at its own' expense and without any power to make or create any charge therefor, or open any account against said Trustees and shall hold the same until possession thereof may be demanded by said Trustees upon the order of the majority thereof. It is further expressly stipulated that upon such demand being at any time made, all right of said Technical Institute under this contract, and all persons holding through or under them, shall at once cease and be at an end, and said Institute shall deliver and surrender possession thereof to such trustees.
“It is further expressly understood and agreed that any possession of said property which said institute may take and hold is under and by virtue of this contract, and not otherwise, and until it shall obtain a deed therefor from said Trustees.”
[357]*357Thereupon Dr. Dickey acting for the Winona Agricultural and Technical Institute entered into possession of the property under the agreement which continued in full force and effect, and the trustees never authorized any one to occupy the premises or become possessed of any part thereof under any other agreement or arrangement whatever. In the fall of 1903, a school, consisting of two or three departments, was opened upon the premises and managed by the Winona Agricultural and Technical Institute until the incorporation or attempted incorporation of the Winona Technical Institute at Indianapolis in April, 1904, at which time the Winona Technical Institute at Indianapolis, by S. C. Dickey, its president, assumed the control and management of the school and conducted the same until a - receiver was appointed for the institute and school on March 28, 1910. In the fall of 1904, additional departments were added to the school, the faculty was enlarged, and repairs and improvements were made from time to time thereafter on the buildings and equipments of the school, and the same was kept open through the entire school year, each year, and attended by a considerable body of students from all parts of the country; and during the time from the opening of the school until the appointment of the receiver there were about 2,000 different students in attendance at the school; and about 1,000 graduated from the several departments in courses covering from four weeks to two years. The Winona Agricultural and Technical Institute had no connection with the school or the property after April, 1904, and in no way exercised any control or supervision over the same. The Winona Agricultural and Technical Institute has had no property or assets of any kind since that date, arid has at all times [358]*358since been and now is wholly insolvent and unable to establish and maintain a technical institute on the site, never having had any endowment. The Winona Technical Institute at Indianapolis is now, and for more than five years has been, wholly insolvent and is not financially able and will not be able to manage, conduct and support said Technical Institute nor any technical institute on the site. It never had any endowment subscribed or paid to it except as herein otherwise found. The tuition received by it has never equaled the amount paid to instructors in the conducting of the various departments of said school. In the meantime no request had been made of the trustees to make a deed to the institute until in 1908, when Dr. Dickey informed them that the $154,000 had been raised and requested that a deed be made. A deed to the Winona Technical Institute in trust was prepared, which limited the property, and all of its proceeds, to educational uses in the city of Indianapolis. The delivery of this deed was deferred until an audit of the books of the institute could be made and a report entered, showing that the money had been raised. This audit showed that the Winona Technical Institute was insolvent. Later, in 1909-, another deed was agreed upon between the trustees and the institute by which the property was to be conveyed to the institute in trust for educational uses in the city of Indianapolis, and whereby it was provided that, in the event the institute as trustee or any successor of it should fail to use the site for educational purposes, it should be conveyed to the school city of Indianapolis, as trustees, to be held upon the same terms and conditions as were imposed by the deed on the institute. This deed was not finally executed but, while it was under consideration, a receiver was appointed March 28, [359]*3591910, to take charge of the Winona Technical Institute, the property and the school conducted thereon. Appellees, trustees, were not made parties to the action in which the receiver was appointed until long after this action was begun. The receiver, upon order of the court appointing him, in order to carry on the school and preserve the property, issued and sold receivers’ certificates to a large amount. Prior to the appointment of the receiver the Winona Technical Institute, out of donations and borrowed money, had expended $62,000 in repairing, remodeling and equipping the premises for the school. It had paid, out $2,685.19 on municipal assessments for street improvements, $6,176.13 for insurance on buildings and $2,258.73 for insurance on equipment. It had received cash donations from various persons for use in maintaining the school the sum of $73,892.47; and it had also received donations in the nature of equipment and supplies, such as machinery, to the value of $48,869.48. It had also received cash as scholarship donations, which was paid in to be used in paying the tuition of boys who could not themselves pay, in the aggregate sum of $33,722.12. The findings stated in detail .the specific sums due to various general creditors of the Winona Technical Institute at Indianapolis, most of them for borrowed money, and all amounting in the aggregate to more than $200,000; and that these various debts were created by that concern in the establishment and maintenance of a technical or trade school on the Arsenal site.
Certain of the court’s findings are specifically assailed in certain errors assigned by the donors who have appealed. These are the eighth finding, relating to the meeting of January 8, 1903, preceding the sending out of the “blue letter,” set [360]*360out in substance above, and the tenth and twenty-second findings.
The tenth finding, so far as is material, is as follows: “And at the time said donations were pledged, and at the time they were paid in, the donors understood and intended that said fund so donated and paid should and would be used by said trustees in purchasing such real estate to be held in trust by said trustees or some corporation or persons selected by them in perpetuity as a site for a National Technical School, and that the said real estate should be retained intact for such purpose. And said trustees when they accepted such trust and received said funds and said conveyance to said lands so understood the intentions of said donors. The principal object and purpose in the minds of the various donors in making their subscriptions, payments and donations to said fund, were the establishment and maintenance upon said arsenal grounds of trade schools, the preservation of said grounds intact and its permanent dedication to educational uses in said city of Indianap olis. ’ ’
The twenty-second finding is as follows:- “The School City of Indianapolis is ready and willing to accept the real estate in controversy in trust and establish and maintain a technical school thereon, open to all students residing in said school city, as students are admitted to other schools in said city.”
Those of the conclusions of law stated by the court which are assailed, in this appeal are, in substance, as. follows:
(1) The real estate described in the complaint and the findings herein and known as the arsenal grounds in Indianapolis, Indiana, is held by the plaintiffs as trustees of a public charitable trust, in trust to be forever kept intact and dedicated to [361]*361educational uses in the city of Indianapolis and to be forever used as a site for the purpose of the maintenance thereon of an industrial or trade school or schools for education and instruction and training of both males and females in the various mechanical and manual trades, arts, and sciences, and of such other educational institutions as may be established and maintained thereon, together with all the machinery, buildings and appliances which may be used in connection therewith, the right of attendance not to be limited to pupils residing in Indianapolis but to be open to pupils resident elsewhere under proper rules and regulations to be made by the trustees from time to time to effectuate the purposes of this trust. (2) That the Winona Agricultural and Technical Institute and the Winona Technical Institute at Indianapolis are each insolvent and incapable of executing such trust or of maintaining a technical or trade school thereon, and are not entitled to have said real estate conveyed to them, or either of them, as trustees, or otherwise. (3) That neither the Winona Agricultural and Technical Institute, nor the Winona Technical Institute at Indianapolis, has any right, title or interest in or to said real estate, or any claim or lien thereon. (4) That none of the creditors of the Winona Technical Institute at Indianapolis, to whom the court found large sums to be due, has any right or title to, or any interest or claim or lien upon, the real estate involved or any part thereof. (5) That the trust under which appellees, trustees, held the real estate in question has not failed, so as to create a resulting trust in favor of the donors, and that none of them have any interest in the real estate involved or right to have it partitioned and sold or conveyed in any portion to them. (6) That the receiver of [362]*362the Winona Technical Institute has only such right to, interest in, or claim on the property as stated and about which no question is raised in this appeal. (7) That the trustees are entitled to an order of this court ascertaining and determining the character and scope of said trust and directing them as to the disposition of such trust property and to be exempted from any personal liability of any kind in connection with the property, or said trust, or with the administration of said trust. (8) That the board of school commissioners of the city of Indianapolis is a proper trustee to execute said trust and is willing and able to do so. (9) That the plaintiffs shall convey'the said real estate to the board of school commissioners of the city of Indianapolis as trustees to be by it held in trust to be forever kept intact and dedicated to educational uses in the city of Indianapolis, and to be forever used as a site for the purpose of maintaining, or causing to be maintained, thereon such school, or schools, for the education, training and instruction of both males and females in the various manual and mechanical trades, arts and sciences and such other educational institutions, as such trustees may establish or cause to be established and maintained thereon to effectuate the trust, together with all the machinery, buildings and appliances which may be used in connection therewith, and for the furnishing of places of residence1 for the instructors and students in such schools and as a campus or yard, to be used in connection therewith, with a provision in said deed that the said grantee shall have no power in any manner to create a lien or to incumber or create any debt, charge, or lien against said real estate, and with the further provision that in the event the said grantee [363]*363should, for a period of five years from this date, fail to put in operation on said real estate, such a school for such instruction in the mechanical trades, or arts, and sciences, or in case it should at any time thereafter, for a period of twelve consecutive months, fail to maintain or cause to be maintained thereon such a school, then its rights in such real estate and its services as trustee thereof shall cease and terminate upon the decree of any court having jurisdiction of the proper parties and the subject-matter of the trust, said conveyance to the board of school commissioners to be made subject to the liens and charges herein declared against said real estate.
On the other hand appellant donors assert in their pleadings that no public trust was within the [367]*367purpose of the subscribers to the fund, but only a proposed gift of the money subscribed to a particular corporation for a particular purpose on precedent conditions, which had not been performed, and that thereby the object had failed; that therefore the fund in the hands of the trustees was the money of the donors, and that a trust had resulted to them in the land in the hands of the trustees.
The issues thus raised compelled an inquiry into the common purpose in the minds of the donors in making gifts to the fund, and the capacity in which appellee trustees took and held the fund and the title to the real estate purchased with it. It seems to have been assumed and conceded by all who tendered these issues that the subscription blanks did not fully illuminate the intent and purpose of the donors or any of them at the time they actually paid their money. The cross-complaints of appellant donors did not, and manifestly could not, rely solely on the terms of the subscription blank. They based their claims on the “blue letter” and on “representations, publications, statements, conditions, agreements and understandings both oral and written.” The cross-complaint of the only one of them who signed the subscription blank of the second form (for $100 only) showed that he thereafter subscribed and paid $4,400 additional without signing any kind of a subscription form, and his letter accompanying this gift is full of tbe purest charitable spirit. And it appears and is found by the court that many contributed to the fund who subscribed to no paper. So it was assumed that resort must be had to parol testimony to uncover the common purpose of all who contributed to the fund. Much of such evidence was given. Much of it by appellant donors, and some of it by appellee trustees at the request of appellant donors. It is [368]*368not now claimed by the latter that at the time it was given they objected to any of it, or asked that its consideration be limited in any way. Under such circumstances, whatever limitations on the right to resort to parol evidence to ascertain the intent and purpose of the donors of the fund might have been insisted on at the time, it is now too late to press objection to the consideration of it in support of the court’s finding. But in any event in view of the issues tendered and the theory upon which the trial proceeded, certain parol evidence was not only proper but also inevitable.
The evidence shows without contradiction that no stockholder of the proposed corporation was to profit from the school. It was to be established and maintained by men of large means who were actuated solely by motives of good works towards the boys and girls and the public generally in the form of education in trade and technical schools. While tuition would not be free, yet provision was to be made for those lacking money to go through the schools to work their way through; and provision was to be made for night schools for those whose necessity compelled them to work in the day time. It was recognized, and several times expressly stated by Dr.’ Dickey, that the Winona people were to hold the tract in trust for this proposed school. In addition to evidence of the character here detailed there was much direct testimony of donors of their intent and purpose in giving their money all going to support the tenth finding.
There is no doubt from all this and other evidence that the donors, when they made their subscriptions, had it in mind that, when the legal title to the land [375]*375in question should be bestowed on the proposed corporation, it should be coupled with a limitation of the use for educational purposes. The “blue letter”, only expresses directly what was circumstantially evident before. From these circumstances in connection with the incompleteness and indefiniteness of the subscription paper the court properly found the inferential fact involved in the tenth finding that a trust was intended and created. “There is another important class of express trusts, which are not directly and expressly declared by the terms of the instrument, but which are inferred by a construction of all the terms and dispositions. They are all cases where the court infers that it was the intention of the party to create an express trust for some purpose, although he has not expressed that intention in unequivocal and direct terms, and the court is forced to gather it from his general expressions, or from the objects and purposes of his gift. When such a trust is found by the court to have been intended by the party, it is in every respect an express active trust. * * * It is, in fact, an express trust which the donor did not unmistakably declare, but which the court has helped out by interpretation and inference. * * * These trusts ordinarily arise •from a construction of the language of wills; but there is no reason, on principle, why they may not also arise from conveyances and agreements inter vivos.” -3 Pomeroy, Eq. Jurisp. (3d ed.) §1010.
Even if it be conceded that the original purpose was to make an absolute gift to the institute, it is nevertheless evident that at any time before the subscriptions were completed by payment the donors could have restricted the purpose by limiting the use. And if it were necessary to avoid appellant donors’ contentions that they purposed making a [376]*376gift, the “blue letter,” pursuant to which each of them paid his money and on which each of them relied in his pleadings, clearly evinces an intention to create a trust, limited to educational uses, in the city of Indianapolis. The evidence shows that new, additional subscriptions were made by reason of the specific limitation of the use contained in the “blue letter.” There is no room for doubt under the evidence and facts found that if the “Winona Group” through the proposed corporation had fully qualified itself to administer the trust and had been invested by deed with the legal title to the real estate in question, such corporation would have held the title merely in trust that the tract should be held intact for educational purposes in the city of Indianapolis. It was never intended that it should have title except with this limitation on it. Perhaps the very narrowest claim that could be made upon either the evidence, or the facts found, would be that the gift was not to be absolute upon the performance of conditions, for that would leave the corporation a free hand in dealing with the property as it pleased after acquiring the legal title. It could not have diverted the property to other or private uses, for such obviously was never in the minds of any donor or any one concerned in the movement. If the corporation so formed had then failed as an administrator of the trust property, it could not have divided' the land into small lots for a residence district and sold them, for that would have been a manifest violation of a fundamental purpose of every donor to have the tract preserved as a whole. It could not have sold the tract entire and devoted the proceeds to the support of the Winona Assembly, or any elsewhere, for the tract would have been theirs only that they might preserve it' intact and devote it to educational [377]*377uses in the city of Indianapolis. The tract was to be kept for its beauty, and for utility it was to bear on its bosom technical schools for the education of youth. It could not well have been in the mind of any one that an untrammeled gift to the proposed corporation was to be made. Under no reasonable view of the evidence or the facts found can a purpose be found to give the fund to acquire the tract for the proposed corporation that is not bound up with an enduring and underlying purpose that it should be preserved for educational purposes of a public character. Even working through the proposed corporation, that corporation was not to be the beneficiary in any sense, except that it was to be given, with thé legal title, the use of the site in a co-operative way for the purpose of benefiting an undesignated and unknown number of boys and girls who were to be educated in a school of a public, and, in the legal sense as will hereafter appear, of a charitable character.
The thing that gave rise to the desire in the minds of the public to secure and preserve this tract was the beauty and situation of it, its parklike nature and its adaptability for public educational purposes. The desire of the public to possess it and its willingness to contribute to a fund for its purchase was not raised in the first instance by the proposal of the “Winona Group.” The latter did not come to the city of Indianapolis merely to present to its people as something entirely new a proposition to establish a great technical school if the citizens would give a site, but they came offering themselves as instruments to aid in carrying into effect a broadly charitable purpose already existing to secure and devote to educational purposes this particular site and keep it parklike as a campus. This they did, it is obvious, with knowledge that the public interest [378]*378in the acquisition of the tract then existing would aid their efforts to establish such a school. The proposed corporation was presented as an instrument only to execute and carry out the unique and beautiful charity with a dual object which was then in the minds of' the people and which remained patently primary and fundamental considerations in the minds of the donors as. a common purpose. That such a corporation never qualified as the administering trustee cannot affect this fundamental purpose. The fact that the fund was given to acquire the land from the government for- this purpose would persist over any failure whether it might occur before or after any effort to carry out the particular or secondary purpose which existed to use the proposed corporation as the instrument for preserving the tract and using it as a site for technical schools after the purchase from the government had been made.
. The donors gave their money into the hands of appellee trustees to execute a charitable purpose then in their minds. And with it they charged the trustees with the duty to purchase the arsenal site for a general charitable purpose of devoting it to educational uses in the city of Indianapolis and coupled with this was the further duty to convey in trust, when it should qualify as contemplated, to the corporation which proposed to carry out the particular object of the gift. The trust was then created. There was nothing more for the donors to do and certainly they could not revoke the gift or demand a return of the money before the day of the sale. Of course, if the government had withdrawn the property from sale or if some other interest had outbid the trustees, or, if for any such reason they could not accomplish the purchase, in such ease the whole purpose, general and particular, would have [379]*379failed and the trustees would have been bound to return the fund to the donors. But onee the purchase was made the object was accomplished, and the trustees took the title from the government for the beneficiaries, who were not only that unnamed and indefinite body of youth in being and yet to be born who were to be educated in the trade and technical schools which were contemplated, but the existing and future generations of citizens of Indianapolis who were to take joy and benefit from the schools, the woods and open spaces of the tract, which were to serve always as a campus. That it does not appear that the appellee trustees were to be the very instruments for establishing and conducting the schools does not deprive them of the character of trustees of an express trust. And it is of no particular moment that they were not specifically given authority to find such instrument. That authority they must impliedly have, or at least authority to apply to a court of equity for aid in such a function, where it has never been doubted such authority does exist. That they did have express authority to convey to the particular corporation then in contemplation' for carrying out the particular purpose, when it should qualify in the manner proposed, is not denied; and under the rules of law hereafter to be explained, on the failure of that administering trustee, another might be appointed by a court of equity. After the acquisition of the tract with the charitable purpose impressed upon it there could be no failure of the trust created so as to cause a reverter to the donors so long as a court of equity could find means to carry out the purpose of using the site as one for technical or manual schools, as near as possible like the particular purpose — to establish and conduct the particular school contemplated.
[380]*380
In Winona Technical Institute, etc. v. Stolte (1909), 173 Ind. 39, 89 N. E. 393, there is a dictum, based [383]*383on Thiel College v. County of Mercer (1882), 101 Pa. St. 530, suggesting, but not deciding, that the Winona Technical Institute, then conducting trade schools on the tract in question,. was not- strictly a charitable institute. It is enough to say that this mere suggestion so supported is without force” when it is found that the Thiel case was subsequently practically overruled by' Northampton County v. Lafayette College, supra; Philadelphia v. Women’s, etc., Assn., supra; and Episcopal Academy v. Philadelphia, supra. In the latter case it was said of Philadelphia v. Women’s, etc., Assn.: “In that case it was said that the character of- the association as a charity was not destroyed if to some extent it received a revenue from the recipients of its bounty. We are now disposed to go further, and say that an institution that is in its nature and purposes a' purely public charity does not lose its character as such under the tax laws if it receives a revenue from the recipients of its bounty sufficient to keep it in operation.”
In Martin v. McCullough, supra, this court quoted approvingly the following: “Where one ‘clearly * * * manifests an intention to make a present gift * * * to another, and in consummation of his intention makes a delivery to a third person for the use of the intended donee, as he is then capable of making, considering the character and situation of the property, the person to whom delivery is thus made will be presumed,' . * * * to take the property as trustee for the intended donee, and not merely as agent of the donor’ ”. In Grant Trust etc., Co. v. Tucker, supra, it was said: “The ultimate question as to whether the bank occupied the position of agent or trustee is one of fact to be determined from the intentions of the donor, the writing on the envelope containing the bonds, the situation and relation of the parties, the kind and character of the property, and the things said and done in regard thereto, all as disclosed by the evidence.”
[390]*390
[392]*392
The court’s findings and the application of the law thereto are in the broad spirit of the rule of equity that where a charitable purpose, as here [399]*399indicated, is the very essence of what the donors intended, a court of equity will see to it that such purpose shall prevail rather than be destroyed, and will lend its aid to carry out that purpose, if not with exactness as to details as outlined, then as near as may be.
What has been said necessarily answers much of the brief of appellant creditors. Their reliance was placed first on the proposition that the Winona Technical- Institute of Indianapolis, their debtor, was the beneficiary of the donations and, as such, was the owner of the property purchased with the donations and, as such owner, is liable for the debts due appellants as any other debtor is liable. This contention fails with the conclusion reached as to the relation of their debtor, the Winona Technical Institute, to the property. The gift was not to that corporation, but to those whom its use of the property was designed to benefit.
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112 N.E. 780, 185 Ind. 335, 1916 Ind. LEXIS 58, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richards-v-wilson-ind-1916.