Barnard v. Adams

• Decision Date: 16 September 1893
• Docket Number: 136.
• Citation: 58 F. 313
• Parties: BRANARD et al. v. ADAMS et al.
• Court: U.S. District Court — Northern District of Iowa

58 F. 313

BRANARD et al. v. ADAMS et al.

No. 136.

United States Circuit Court, N.D. Iowa, Central Division.

September 16, 1893

G. S Kloch and M. C. Matthews, for complainants.

P Finch and R. M. Wright, for respondent trustees.

N. J Prouty and D. F. Coyle, for respondent college.

WOOLSON District Judge.

Upon July 16, 1877, David White and wife, as party of the first party, of the state of New York, duly executed an instrument of conveyance, wherein they conveyed, assigned and transferred unto certain persons therein named, trustees of the First Congregational Church and Society of Humboldt, Iowa, and their successors in office, as party of the second part, certain real estate situated in the state of Iowa, also real-estate mortgages and notes thereby secured, and also a certain judgment recorded in the United States circuit court for the district of Iowa----

'To have and to hold the same, unto the said party of the second part, their successors in office, or substitutes appointed as hereinafter specified, and assigns, forever; in trust, nevertheless, for the purpose of creating out of or with the proceeds of said sale, or other disposal of said property, a trust fund to the called and known as the 'David White Fund,' and to be securely and profitably loaned at, or invested at, annual interest, or semiannual, by the party of the second part, their successors in office, or substitutes appointed as hereinafter specified, who shall be responsible for both principal and interest, and shall collect and receive such interest accruing on said fund, and annually pay one-half thereof to the said Congregational Church and Society, for its support, and the other one-half thereof to Humboldt College, located at Humboldt, Iowa, for the purpose, primarily, of affording of said college educational facilities to poor, worthy young men, who desire to go into the gospel ministry, without regard to Christian denomination. And said trustees shall have the right to annually designate who shall be the beneficiaries of said fund, by issuing to such persons as they may select, or deem worthy to receive the same, untransferable yearly scholarships in said college, equaling in amount, at the regular rates of tuition, the amounts of said fund paid in for that year; and, in case said fund is not exhausted in the manner above specified, said trustees may issue scholarships, as aforesaid, to any other persons they may select thereof. Should said trustees fail to so designate the beneficiaries of said fund, or any part thereof, for any year, as aforesaid, the right to make such designation shall devolve upon, and be exercised by, the executive committee of the board of trustees of said Humboldt College for the time or amount unappropriated by said trustees. [Then follow directions to convert the property into money, and that trustees shall serve without compensation out of the fund.] And to the end that said trust shall not fail for want of trustee, and that the purposes thereof may, in any event, be fully and completely effectuated and carried out, said party of the second part shall annually report their doings herein to the district court of Humboldt county. [Here follows provision authorizing said court to appoint trustees, when necessary, and that, until trustees do accept, J. N. Prouty shall act as trustee.]'

This conveyance bears the written acceptance of the trustees of said church, as provided for in the deed of trust.

The said First Congregational Church and Humboldt College, named in this deed, had been incorporated under the laws of the state of Iowa. (Formerly, the town of Humboldt was called Springvale.) Such proceedings were duly taken by the party of the second part with reference to the property named in the deed, and in accordance therewith, as that the same was reduced to money, and amounted, in the hands of the trustees, (principal of fund,) to the sum of $4,800. This sum became the David White fund. It appears from the evidence--and the briefs of counsel on either side state the fact with words of hearty commendation--that this fund has been guarded and attended to with prudent care, so that the same has been annually productive. As directed in the deed, the trustees have annually reported the condition of this fund, and these reports from the year 1888 to 1892 are in evidence.

From the evidence and admissions in the pleadings herein, it appears that, since the year 1880, Humboldt College has had no active existence as a college. The school buildings and ground are owned by that incorporation, and for some years since 1880, a private school has been held in the school building. There has been no election of officers of the college incorporation, nor, indeed, any formal meeting of the board of trustees, since 1880. The president of such board testifies that he has, since 1880, signed some papers officially, as such president. But, apparently, no corporate act has been performed on the part of the institution, in the line of the purposes for which it was incorporated, since 1880, and the college has not been receiving or educating pupils since 1880. The evidence shows that the trustees have regarded and treated the fund as an entirety, and kept its accounts as such. The net income, however, has annually been divided by the trustees into two equal parts,--the one part whereof has annually been paid to the church, while the other half has been retained by the trustees, and each year thereafter the half of the net income for that year has been added thereto. This half, which, had Humboldt College been in active existence, would have been expended in educating persons for the gospel ministry, amounted, upon November 19, 1892, to $2,153.98, according to the report of that date.

Complainants' bill alleges that Humboldt College is no longer in existence that by nonuser it has 'voluntarily surrendered its charter, and its rights and franchises acquired thereunder, and that since 1880 said college has had no existence whatever, and the same is wholly extinct, and that there is no institution in existence, under the aforesaid name, designation, and title, which has for its object and purpose the education of the young in literature and science.' And complainants, who are the sole heirs of said David White, (said David White and his wife being both dead,) claim that said trust, as to said Humboldt College, has failed, and that they are therefore entitled to said fund, i. e. that part which was conveyed in trust for Humboldt College,--an amount equal to one-half of the principal fund, and all the said net income therefrom, which is now in the hands of said trustees, by their report shown,--and they pray decree accordingly. But they present an alternative prayer, to wit, that in case the court shall determine said complainants are not entitled to said fund as prayed, then this court shall 'designate and appoint a beneficiary or beneficiaries, so that the said trust fund shall become active,' etc. The trustees of said church file a cross bill, wherein, among other matters, they allege said Humboldt College has ceased to exist, so far as relates to the purpose to whose attainment said trust was created,--the facts constituting such nonexistence being alleged, substantially, as in complainants' bill; that no other college or institution has succeeded to said trust; that 'it was the intention, purpose, meaning, and design of said White and wife, at the time of executing the said deed of...