Board of Trustees v. Attorney General

• Decision Date: 31 May 1910
• Parties: BOARD OF TRUSTEES OF PARK COLLEGE v. ATTORNEY GENERAL.
• Court: Missouri Supreme Court

129 S.W. 27

228 Mo. 514

BOARD OF TRUSTEES OF PARK COLLEGE v. ATTORNEY GENERAL.

Supreme Court of Missouri, Division No. 1.

May 31, 1910.

1. COLLEGES AND UNIVERSITIES (§ 6)—PROPERTY AND FUNDS—RIGHTS OF TRUSTEE.

The charter of an educational institution provided that the board of trustees are hereby forbidden to contract any debts against the corporation, or to mortgage the property of the college proper, or to do any act to erect a lien upon or incumber any property given, or purchased, or vested in it, in trust or otherwise, but shall hold inviolate all furniture, stock, assets, lands, buildings, moneys, or endowment funds, professorships, scholarships, or other funds, preserving them in perpetuity, using only furniture, stock, lands, and buildings, and the interest of the funds, handing them down to their successors forever, and all claims against the above-named property or corporation shall be void. Held, that the trustees were not thereby forbidden from using for necessary current expenses money given by donors without direction as to the purposes to which it was to be used.

2. WORDS AND PHRASES—"BUT."

The meaning of the word "but" varies according to the context. It is used to mean "except," and also to mean "on the contrary," or "on the other hand."

3. COLLEGES AND UNIVERSITIES (§ 6)—PROPERTY IN FUNDS—CONSTRUCTION OF CHARTER— "OR."

Provisions in the charter of a college that the trustees should hold inviolate all furniture, stock, assets, lands, buildings, moneys, or endowment funds, professorships, scholarships, or other funds, did not forbid the trustees from using for current expenses money donated without any direction as to the purpose for which it was to be used; the word "or" not being used as equivalent to "either," and as presenting the choice of either. The word "or" has two significations. It may be used to convey the idea of an alternative, or may be used to join different terms expressing the same thing or idea, and in this sense it was here used.

Appeal from Circuit Court, Platte County; Alonzo D. Burnes, Judge.

Suit in equity by the Board of Trustees of Park College against the Attorney General. From the judgment, said Board appeals. Reversed, and judgment directed.

John F. McRuer, Geo. W. Day, and Scarritt, Scarritt & Jones, for appellant. E. W. Major, Atty. Gen., Wilson & Wilson, and Warner, Dean, McLeod & Timmonds, for respondent.

VALLIANT, J.

This is a suit in equity, the purpose of which is to obtain a judicial interpretation of certain clauses of the plaintiff's charter. The plaintiff corporation is an educational institution chartered under the general laws of this state, first in 1879, and again by amended charter in 1894. The college had existed as an unincorporated educational institution some years before 1879, under the care, and to a great extent, at the expense, of its founder, George S. Park. From a small beginning it has grown to be an institution of large means, affording at present educational facilities to several hundred students, and giving advantages to ambitious boys and girls, who have not otherwise means, to obtain education of a high degree by aid of their own industry and cooperation in the college work. It is an institution that reflects great credit on its founder, and on that body of faithful men who have devoted their lives to the work. The charter gives to the board of trustees the power to fill vacancies, thus making the board self-perpetuating. It also gives them power to create vacancies by removal from office; but, although now a difference has arisen between them touching the meaning of a certain clause in the charter, yet neither in the past nor in the present has there been or is there any reproach or charge of misconduct cast by one on another. We approach the consideration, therefore, of the point of difference between these parties with the highest respect for the opinion of each and with perfect confidence that on both sides the desire is to arrive at the true meaning of the charter.

In the first article of the charter it is declared that "the principles of the college shall be nonsectarian, but evangelical, imbued with the spirit of Christian liberty and charity." And it is further declared that "the object of this corporation shall ever be to diffuse moral and religious principles, in the most practical and effectual manner, to afford the advantages of training and education to the youth of both sexes of the country, especially the West and Southwest, to give especially facilities to youth found worthy and not having sufficient means, who may be inured to hardship, acquainted and in sympathy with the people among whom they are to live and labor, to obtain an education by labor or otherwise, thus offering a safe and unlimited opportunity to the patriotic and benevolent to assist in this great work, by their donations and endowment." In article 2 of the charter it is provided that there shall be daily Bible readings, lectures, model Sabbath school, etc., besides a full course of instruction in science, literature, and art. "In the male department shall be taught agriculture, business management, skilled labor, and practical wisdom"; in the female department, household and domestic duties. By such means it was declared that the students would contribute largely to their own support while gaining knowledge. "It is designed to educate by practice, training and doing, as well as by teaching, and these departments of skilled labor, and science, literature, and art, shall be under the supervision and direction of the most competent instructors that the funds of the college will permit the trustees to employ." Section 2 of article 3 of the charter is the section about which there is a difference in opinions, which difference has led to this suit. That section is as follows: "The board of trustees are hereby forbidden to contract any debts against the corporation, or to mortgage the property of the college proper, or to do any act to erect a lien upon or incumber any property given, or purchased, or vested in it, in trust or otherwise, but shall hold inviolate all furniture, stock, assets, lands, buildings, moneys or endowment funds, professorships, scholarships, or other funds, preserving them in perpetuity, using only furniture, stock, lands and buildings, and the interest of the funds, handing them down to their successors forever, and all claims against the above-named property or corporation shall be void in law; and any trustee voting or acting against this provision of the charter, or any other officer or agent, shall not in any way legally bind the board of trustees of the institution. They have superseded their authority and can only assume individual and personal responsibility, and the record of this charter in Platte county, Missouri, shall be legal notice thereof to all."

From the beginning of the college it has subsisted on donations from various sources, helped out by the labor of the students in its various industrial departments. Many of the donations have come with specific directions from the respective donors as to the particular purpose to which they are to be devoted, and about them there is no difference of opinion as to how they are to be used or applied. But there are also many donations which have come without any designation by the donors of the purpose for which they are to be used, and it is in reference to these that the difference in opinions has arisen. On the part of the minority of the board of trustees it is contended that the charter means that donations of the last-named class must be invested in the endowment fund, and only the interest arising therefrom can be used in defraying the expenses of the institution, while the majority are of the opinion that the principal of such donations may be used when necessary to defray general expenses of the college. The trial court adopted the view of the minority and held as follows: "And the court further finds from the pleadings and the evidence that the Board of Trustees of Park College now holds funds aggregating about $250,000, which have been donated to it without any restrictions or directions by the respective donors as to the use to be made thereof, and that other funds may be similarly donated without restrictions or directions as to the use to be made thereof. It is the decree of the court that it was and is the true intent and meaning of said charter that all such funds, so donated, shall become part of the permanent funds of the college; that no part of the principal thereof shall be used or expended, but the same shall be loaned or invested so as to produce interest or income, which interest or income only shall be used or expended by said board of trustees as they may deem for the best interest of the college." From that decree this appeal has been taken.

In interpreting a clause in any written instrument, it is well to read the whole instrument and derive light from its general controlling purpose if we can. Section 3 of this article declares that "the board of trustees shall have oversight, approval and direction of all endowment funds, of all real estate and personal property, and of all loans made of them." Then it proceeds to mention the character of the securities in which the funds may be invested. Quotations are made in one of the briefs from section 4 as throwing light on the subject. That section is as follows: "It is the earnest desire of the friends of this institution that it be established and built up by wisdom, and stand forever, and go on improving like the older institutions of Europe and America. To accomplish this purpose it is suggested that the board of trustees look most critically into the way things are going and make wise provisions for future contingencies. If any trustee neglects such care and caution, request him to resign and appoint another. It is a positive wrong to be indulgent to incapacity or inefficiency, to...