Bank of Delaware v. Buckson

Decision Date17 June 1969
Citation255 A.2d 710
PartiesBANK OF DELAWARE, a banking corporation of the State of Delaware, Trustee under the Will of Joseph P. Pyle, Plaintiff, v. David P. BUCKSON, Attorney General of the State of Delaware, Defendant.
CourtCourt of Chancery of Delaware

Henry N. Herndon, Jr., and Jay P. James, of Morris, James, Hitchens & Williams, Wilmington, for plaintiff.

Ruth M. Ferrell, Deputy Atty. Gen., for the Attorney General.

Richard F. Corroon, Wilmington, amicus curiae, and Michael D. Goldman, of Potter, Anderson & Corroon, Wilmington, on the brief.

DUFFY, Chancellor.

A complaint for instructions was filed by Bank of Delaware, trustee under the will of Dr. Joseph P. Pyle, who died on April 7, 1917. 1 The residuary clause of his will, dated February 13, 1914, provides in part as follows:

'Whereas the prosperity, stability and well being of any Community or State depends on the character and intelligence of its Citizens, and whereas I believe that the education, training and experience to be obtained by a course at one of our leading Colleges or Universities is calculated to broaden the mind, develop the character, and give to our young men a wider scope to their views of life, its duties and responsibilities, therefore I direct my said trustee, as soon as practicable after the death of the said Ella I. Smith aforesaid, to establish a series of Scholarships to be known as the 'Dr. Joseph P. Pyle Scholarships,' for the benefit of the young men of Wilmington; the object being to provide each year for the maintenance and education of One young man at one of the leading Colleges or Universities of this Country, to the end that they may become men of character and capability, useful members of Society and creditable citizens.

'To carry out this purpose I direct my said 'Trustee to appoint a committee consisting of the principal of the Wilmington High School, the Chief Justice of the State of Delaware, and the President of The Equitable Guarantee and Trust Company, the trustee aforesaid, and their successors in their respective offices, who shall receive the applications and decide the merits of the applicants for the scholarships.

'In the event of any one or all of the above named officials being unable or unwilling to serve, I nominate as alternates the following:--the President of Delaware College, the Chancellor of the State of Delaware and the Vice-President of The Equitable Guarantee and Trust Company, the president of Delaware College to take the place of the principal of the Wilmington High School, the Chancellor of the State of Delaware to take the place of the Chief Justice of the State of Delaware and the Vice-President of The Equitable Guarantee and Trust Company to take the place of the President of that Company.

'If at any time a committee of three cannot be obtained from the six persons named, I direct that my said trustee appoint such persons available to fill the vacancies, as may be in its judgment best qualified for the purpose. Applications may be made by white youths or young men residing in the City of Wilmington who shall have attained the age of seventeen years and whose age shall not exceed twenty-one years, who shall have graduated at the Wilmington High School or at any other school in the City of Wilmington at which young men are prepared for college.

'* * * In making its decision it is my wish that the Committee shall be governed not only by the proficiency of the applicant in Scholastic matters but by his physical condition, his fondness for manly out-of-door exercises, his moral force of character, his manhood, truth and courage and such qualities mental and physical as the possession of which, constitute a man of high character and condition.'

Since its first meeting in 1933 the scholarship Committee has at all times been composed of successive Chief Justices of the State of Delaware, principals of Wilmington High School, and officers of the Bank of Delaware. 2 The Committee, carrying out what it considered to be the mandate of the trust, has accepted applications from white youths only; on at least one occasion a non-white applicant was rejected. Now the Trustee seeks instructions as to the effect to be given the language in the will providing that 'Applications may be made by white youths or young men residing in the City of Wilmington.' In short, the Trustee wants to know if applications from non-whites may be accepted.

The Trustee argues that the trust is not subject to the Fourteenth Amendment and that the restriction is valid. 3 The amicus attacks the restriction on two grounds. First, he argues that the scholarship and its administration violate the Equal Protection Clause of the Fourteenth Amendment. Alternatively, he contends that the doctrine of cy pres should be applied because continued enforcement of the restriction will impair the testator's primary purpose.

I

There are several facets of the case which have a particular significance. These are: (1) Dr. Pyle's intention as expressed in his will; (2) the impact on administration of the trust of the Fourteenth Amendment's prohibition against 'state discrimination'; and (3) the changes in racial population since Dr. Pyle died. I should also note a limitation upon the Court in giving the instructions which the Trustee seeks. This is not determinative but it underscores the legal necessity for avoiding discriminatory action.

A.

First, as to Dr. Pyle's will--who could doubt his intention to benefit this community? After small bequests to a few friends and relatives and provisions for modest life estates, he left his art collection to The Wilmington Society of the Fine Arts and the residue of his estate for the Pyle scholarships. I have no hesitancy saying as a matter of law that there is a general charitable purpose and intention in Dr. Pyle's will.

As to the scholarships, his language is both informative and instructive. He believed that the well-being of 'any' community depends on the character and intelligence of 'its Citizens,' and he believed that a college education develops character and gives 'young men' a wide view of life and its responsibilities. And this is no narrow view limited to one color group in the community. He then directed the establishment of a 'series of Scholarships' for the 'benefit of the young men of Wilmington.' His stated objective was to provide for the education of 'one young man' at a leading college. He then provided with specificity and in detail for creation of the selection Committee. Thereafter, he directed that 'Applications may be made by white youths or young men' living in Wilmington.

It is only in this one place, in this one word, that color or race is referred to in any way throughout the will. And even here, whether as a result of careless draftsmanship or other reason, the reference is in the disjunctive: applications may be made by 'white youths' Or 'young men' residing in Wilmington.

I need go on no further. These provisions of Dr. Pyle's will must be construed with due regard for the obvious motive which prompted him to create the scholarships. Compare Woodlen Brodnax, 30 Del.Ch. 227, 57 A.2d 752 (1948). And, in my judgment, that motive, the primary purpose of it all, was the creation of scholarships to benefit young men in the community. And the will establishes with almost equal persuasion an intention to have the selection of the young men made by a Committee, the majority of which would be persons holding important public offices. 4 The single reference to 'white youths' must be read against this background of purpose.

B.

Second, the Court must consider the current state of the law, particularly the Fourteenth Amendment as it relates to this trust. As I have said, the amicus argues that both the trust and its administration violates that Amendment. At minimum, he has demonstrated that on both counts the case presents a serious constitutional question. There are two views about whether 'state action' is involved. But for present (instruction) purposes I do not have to make a definitive ruling on the constitutional question.

The sweep of the Fourteenth Amendment extends to all state action denying equal protection of the laws and that includes officers who exercise state powers. Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401, 3 L.Ed.2d 5 (1958). And state action is found wherever there is 'state participation through any arrangement, management, funds or property.' Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961). The fact that conduct is 'formally private' does not insulate it from the Amendment; if it is 'impregnated with a governmental character' the Amendment applies. Evans v. Newton, 382 U.S. 296, 86 S.Ct. 486, 15 L.Ed.2d 373 (1966).

It was Evans on which the District Court relied in finding that the refusal to admit Negroes to Girard College violated the Federal constitution; and the Court of Appeals affirmed on the same basis, thus bringing that long controversy to an end. Commonwealth of Pennsylvania v. Brown, 392 F.2d 120 (3 Cir. 1968). And it was the decision in the Girard College case which prompted the Trustee to seek instructions here.

In Quillory v. Administrators of the Tulane University, 212 F.Supp. 674 (D.La.1962) the Court, in discussing state action where state officers were on Tulane's Board of Trustees said, 'Were the Tulane Board made up solely of state officers, without doubt there would be state action.' It went on to say that 'If a principal can be distilled from the Girard College case it is that there is state action when state officials are the sole trustee of private funds.'

In this case there is no fair comparison in fact between the deep involvement of the City of Philadelphia in Girard College and 'state participation' in this trust. But, three points can be made with assurance about the Pyle trust and its administration: (a) the membership of state officials on...

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    ...Cy. Tex.Dist.Ct.1964). Racial restrictions have been removed from trust instruments under the cy pres doctrine in Bank of Delaware v. Buckson, 255 A.2d 710 (Del.Ch.1969) (scholarships); Dunbar v. Board of Trustees of George W. Clayton College, 461 P.2d 28 (Colo.1969) (orphanage); and Wooten......
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