Attorney Gen. ex rel. Nesmith v. City of Lowell

• Decision Date: 24 September 1923
• Parties: ATTORNEY GENERAL ex rel. NESMITH et al. v. CITY OF LOWELL.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

246 Mass. 312

141 N.E. 45

ATTORNEY GENERAL ex rel. NESMITH et al.

v.CITY OF LOWELL.

Supreme Judicial Court of Massachusetts, Suffolk.

Sept. 24, 1923.

Case Reserved from Supreme Judicial Court, Suffolk County.

Suit by the Attorney General, on the relation of Thomas Nesmith and others, as trustees under the will of Thomas Nesmith, deceased, against the City of Lowell, to declare and enforce a public charity. Reserved by a single justice on the information and answer, for the determination of the full court. Ordered in accordance with the opinion.

The information alleged the facts as stated in the opinion, and prayed that the court would declare and establish the trust to be a public charity, and decree its enforcement, and order the city of Lowell to pay the trustees interest on the trust fund due since March 18, 1918, and semiannually thereafter, or, in the alternative, order the city to pay the sum of $25,000 to such trustees. The answer admitted the facts alleged, but further alleged that the board of aldermen and common council had no legal power or authority to accept the sum involved for the purposes named in the will, nor to promise and pledge the city and its inhabitants to pay the trustees 6 per cent. interest thereon.

Nesmith, Stone & Grant and Fisher H. Nesmith, all of Boston, and Arthur C. Spalding, of Lowell, for relators.

Jeremiah J. O'Sullivan, City Sol., Kerwin & Reilly, and James H. Gilbride, all of Lowell, for respondents.

RUGG, C. J.

This is an information by the Attorney General to declare and establish a public charitable trust and to compel the defendant to perform its obligations with respect thereto. By the will of Thomas Nesmith, late of Lowell, a gift of $25,000 was made to the defendant. The avowed purpose of the gift was to devote that sum in charity to aid, encourage and enable better to sustain themselves many struggling people ‘who linger between competency and poverty, who from accidental misfortune, sickness, failure of employment, or other imperious cause, are temporarily in need of charitable assistance, but are not paupers, and who, by kindly assistance, sympathy and advice, may soon become self-sustaining and self-reliant, not intending hereby to countenance or give encouragement to improvidence or idleness.’ The gift was expressed to be ‘upon the condition’ that before the payment of that sum by his executors to the treasurer of the defendant ‘the proper and constituted authorities of said city, in a legal manner, shall well and truly and legally resolve and vote and make due record thereof to accept the said sum of money as a fund to be held for the said purposes and shall promise and shall pledge the said city and the inhabitants in due form of law, to ever thereafter pay to the trustees hereinafter named, and to their successors, 6 per cent. interest upon the said sum of twenty-five thousand dollars annually, in semiannual payments of $750 for each and every half year forever, thereafter, commencing in six months after said executors shall have paid the said sum of $25,000 to the treasurer of said city.’ It further was provided in the will that trustees therein named and their successors should receive said semiannual payments so to be made by the city and ‘appropriate the same for the charitable assistance as is herein described and to the persons described being residents of the city of Lowell without distinction of nationality, color, or religious sect, in such manner and at such times, as may to them seem most urgent and appropriate.’ In December, 1870, the city council of the city of Lowell by both branches in concurrence adopted by unanimous vote a resolution accepting ‘the bequest of the late Mr. Nesmith in the interest of the poor of the city.’

The amount of the legacy was duly transferred to the defendant and thereafter interest at the rate of 6 per cent. per annum was paid by it to the trustees under the will in equal semiannual payments of $750 until March 18, 1918. Since that date no payment has been made. The defendant does not now and never has held as a separate fund distinct from its general assets and Nesmith legacy, but expended it apparently soon after its receipt for general corporate purposes. All semiannual payments have been made by the city by annual appropriation presumably out of its tax levy. The officers of the city and the ‘trustees considered and treated such payments as interest paid under said will.’ These payments have been expended by the trustees in charity in accordance with the provisions of the will, except possibly a small balance remaining in hand. As matter of bookkeeping the auditor of the defendant has carried this $25,000 as an item of city debt.

The gift under the will was a valid public charity. Foundations for the relief or prevention of poverty are recognizedas valid charitable trusts. It is indubitable that the gift under the Nesmith will belonged to this class. Saltonstall v. Sanders, 11 Allen, 446, 455 et seq.; Attorney General v. Old South Society, 13 Allen, 474, 491;Norris v. Loomis, 215 Mass. 344, 102 N. E. 419;Bowditch v. Attorney General, 241 Mass. 168, 176, 134 N. E. 796;Sherman v. Shaw, 243 Mass. 257, 259, 137 N. E. 374.

The reference in a subsequent clause of the will to this bequest as a sum ‘loaned to the city of Lowell’ falls far short of divesting this clause of its character as creating a public charity.

It is too late now to question the capacity of a city or town to accept a gift for a public charitable trust of the nature here involved and to act as trustee and to execute the trust. Worcester v. Eaton, 13 Mass. 371, 7 Am. Dec. 155;Drury v. Natick, 10 Allen, 169, 182;Quincy v. Attorney General, 160 Mass. 431, 35 N. E. 1066;Higginson v. Turner, 171 Mass. 586, 591, 51 N. E. 172.

There are limitations upon the powers of cities and towns. They are creatures of the Legislature. They are territorial subdivisions of the state created as public corporations. They possess and can exercise only such powers as have been conferred upon them by express enactment or by necessary implication from undoubted prerogatives. They are rigidly restricted as to their faculty to raise and expend money to the purposes specified and through the officers and channels authorized by the law. They cannot transcend the bounds thus imposed. These principles are thoroughly established and are illustrated in numerous decisions dealing with a great diversity of transactions by cities and towns. Spaulding v. Lowell, 23 Pick. 71;Somerville v. Dickerman, 127 Mass. 272;Greenough v. Wakefield, 127 Mass. 275;Wheelock v. Lowell, 196 Mass. 220, 223, 81 N. E. 977,124 Am. St. Rep. 543,12 Ann. Cas. 1109;Higginson v. Treasurer of Boston, 212 Mass. 583, 585, 99 N. E. 523,42 L. R. A. (N. S.) 215;Whittaker v. Salem, 216 Mass. 483, 485, 104 N. E. 359, Ann. Cas. 1915B, 794;Duffy v. Treasurer and Receiver General, 234 Mass. 42, 50, 125 N. E. 135;Chelsea v. Treasurer and Receiver General, 237 Mass. 422, 432, 130 N. E. 397;Ducey v. Webster, 237 Mass. 497, 130 N. E. 53.

The defendant made full compliance in respect to form with every condition prescribed by the Nesmith will.

The concurrent resolution of each branch of the city council of the defendant was acceptance of the bequest ‘in a legal manner.’ It bound the defendant so far as under the law it could be bound to the performance of all the provisions of the will. Plainly the defendant was empowered under the general laws of 1871 to accept and execute a charitable trust of a general nature like that established by the Nesmith will.

It is required by the will that this sum of money be accepted ‘as a fund to be forever held’ for the purposes stated. That is a valid requirement which the defendant as well as any other trustee might lawfully perform. There is the further provision that a definite sum each year, amounting to 6 per cent. on the principal of the fund, shall be paid by the city in lieu of income regardless of the amount which the fund might yield properly invested in accordance with the law governing the investment of trust funds. If this provision stood alone and the sum so specified was to be disbursed by officers of the city for the charitable uses designated, it might ‘not invalidate the gift nor forfeit the estate upon noncompliance.’ Drury v. Natick, 10 Allen, at 183. This provision is coupled with the further requirement that such payments shall be made to the private individuals who from time to time may be trustees under the Nesmith will. The execution of the trust in this particular is not vested in public...