Colin McK. Grant Home v. Medlock
| Decision Date | 19 May 1986 |
| Docket Number | No. 0804,0804 |
| Citation | 349 S.E.2d 655,292 S.C. 466 |
| Court | South Carolina Court of Appeals |
| Parties | COLIN McK. GRANT HOME, an Eleemosynary Corporation and W.A. Wier, Jr., as President and representing all of the Members of the Board of Trustees of the Colin McK. Grant Home, Petitioners-Respondents, v. T. Travis MEDLOCK, as Attorney General of the State of South Carolina, Mrs. Ruby Donald, a resident of the Grant Home and representing the other residents, Chet Lane Rose, Allene R. Goodman, Claudia Ramos, Robert Goodman, Gail Henderson, Colin G. Edwards, Lucy Edwards Hochstein, Walter H. Edwards, Walter H. Edwards, Jr., Joan E. Dietschweiler, and Carol E. Thomas, individually and representing the class of any unborn descendents of the family of Mrs. Elizabeth G. Rose unto the fourth generation, Respondents, of whom T. Travis Medlock, as Attorney General of the State of South Carolina, Mrs. Ruby Donald, a resident of the Grant Home and representing the other residents, Allene R. Goodman, Claudia Ramos, Robert Goodman, Gail Henderson, are also Respondents, Appeal of Chet Lane ROSE, Lucy Edwards Hochstein, Walter H. Edwards, Colin W. Edwards, Walter H. Edwards, Jr., Joan Edwards Dietschweiler, and Carol E. Thomas, individually and representing the class of any unborn descendents of the family of Mrs. Elizabeth G. Rose unto the fourth generation. . Heard |
Richard S. Rosen and Susan C. Rosen of Rosen, Oberman and Rosen, Charleston, for appellants.
T. Travis Medlock, Atty. Gen., and Charles H. Richardson, Asst. Atty. Gen., Columbia, Norman W. Stevenson and N.L. Barnwell of Barnwell and Stevenson, Charleston, and Theodore B. Guerard and William Cleveland of McKay and Guerard, Charleston, for respondents.
Colin McK. Grant Home, an eleemosynary corporation, and W.A. Wier, Jr., as President and representative of the Board of Trustees of the Colin McK. Grant Home, commenced this action petitioning for approval to sell the Home's real property and use the proceeds to establish a housing subsidy fund for the trust beneficiaries. The Home operates under a trust established by Colin McK. Grant. It provides housing for qualified residents at the Home. The appellants, heirs of Colin McK. Grant, allege the trust has failed and should be dissolved, with the proceeds distributed to Grant's heirs at law. The Attorney General of South Carolina was made a party to this action in accordance with Section 1-7-130, Code of Laws of South Carolina, 1976. The master and the circuit court found the principle of equitable deviation allowed the property to be sold and a housing fund established from the proceeds. The heirs appeal. We affirm.
The facts of the case are largely undisputed. Grant and his wife, Jane Wilson Grant, chartered an eleemosynary corporation on April 29, 1920. The purpose of the corporation, as stated in its charter, was "[t]o provide a home for Elderly white Presbyterians of Charleston, South Carolina." Grant died on September 21, 1921. In his will he left the residue of his estate to the Colin McK. Grant Home, to be built on the southwest corner of Huger and Meeting Streets. Mr. Grant directed the Home to be:
for white persons in reduced circumstances, both men and women, who by faith and profession are Presbyterians and who may be admitted to said Home under such rules as may be established by the Trustees of said Home. Provided that ... such persons shall be over forty years of age and shall have been residents of the City of Charleston for at least five years.
A codicil to Mr. Grant's will directed that all residents be Presbyterian and that no trustee, officer, or employee of the Home be a Roman Catholic.
Mrs. Grant died September 5, 1923. She bequeathed all of her residual estate to the Home established in memory of her husband, in accordance with the rules and regulations for its management in force at the time of her death. The Home was under construction at the time of Mrs. Grant's death. It consists of six brick, two-story houses, with the capacity to house 24 residents. The Home commenced operation in 1924. For years it was filled to capacity and had a waiting list.
At the time this suit was commenced, the deterioration of the surrounding neighborhood had caused severe problems. The area had a high crime rate, and there were no nearby shopping facilities. Occupancy was down to six persons. At the time of the hearing, the number of residents had declined to three.
The trustees desire to sell the present Home and use the proceeds to establish a fund to provide housing to persons meeting the trust's criteria. They entered a contract to sell the property for $132,500, pending the court's approval.
Mr. Grant provided in the codicil to his will that each descendant of his sister Mrs. Elizabeth G. Rose, to the fourth generation, was entitled to occupy half of one of the foundation's houses. Eleven of Mr. Grant's seventeen heirs refused to renounce their rights under his will. They maintained in their answer and counterclaim that because of changed circumstances, the operation of the Home as contemplated by the Grants cannot be accomplished and the trust should be dissolved with proceeds distributed to the heirs. They later amended their answer to seek dissolution of the trust on the ground that the Home practiced racial discrimination in violation of the public policy and laws of this State and of the United States.
The trustees of the Home passed a resolution by which they amended their petition and asked the court to delete the racial restrictions from the trust's requirements.
The master in equity recommended that the court decree: (a) the proposed sale of the property did not violate the trust provisions and should be confirmed; (b) the proposed plan to use the funds to subsidize housing for Presbyterians of all races who are over forty and in reduced circumstances and have resided in Charleston for at least five years will carry out the essential purpose of the trust; and (c) the heirs at law of Mrs. Elizabeth Grant Rose to the fourth generation who have not renounced their rights under the terms of Mr. Grant's will may also be beneficiaries of the fund created, if they are in reduced circumstances and residents of the City of Charleston. The circuit court confirmed the master's report.
The heirs appeal the trial court's order and argue the trust should be dissolved. They contend the trial judge erred in (1) failing to find the testators intended to establish a home at a specific location as a perpetual monument to Mr. Grant and exclusively for the benefit of white persons; and (2) improperly applying the doctrine of equitable deviation to uphold the trust when it is no longer possible to carry out the trust's purpose.
Charitable trusts are entitled to peculiar favor; the courts will construe them to give them effect, if possible, and to carry out the general intention of the donor. Porcher v. Cappelmann, 187 S.C. 491, 198 S.E. 8 (1938). Cf. G. Bogert, The Law of Trusts and Trustees § 361, at 2 (rev. 2d ed. 1977). Because of this special deference, courts have employed two doctrines to permit the survival of a charitable trust when it is impossible to comply with the literal terms of the trust. The doctrine of cy pres, which permits a court to apply the funds of a charitable trust to a general charitable purpose, has been consistently rejected by the courts of this State. South Carolina National Bank v. Bonds, 260 S.C. 327, 195 S.E.2d 835 (1973); Furman University v. McLeod, 238 S.C. 475, 120 S.E.2d 865 (1961); Mars v. Gibert, 93 S.C. 454, 77 S.E. 131 (1912); Pringle v. Dorsey, 3 S.C. 502 (1872). This State has, however, long recognized the doctrine of equitable deviation, which permits the strict terms of a trust to be altered when changed circumstances so require to effectuate the trust's purpose. South Carolina National Bank v. Bonds, supra. See also Furman University v. McLeod, supra; Mars v. Gibert, supra.
Although a court has considerable discretion to adapt a trust to changed circumstances, this flexibility is not unlimited. The distribution of trust property must always be in accord with the settlor's intent. South Carolina National Bank v. Bonds, supra. The trial judge, concurring with the master, found Mr. and Mrs. Grant intended "to provide housing needs to elderly Presbyterians in Charleston." The heirs challenge this finding and contend the testators' intent was, more specifically, to establish a home at the corner of Huger and Meeting Streets in Charleston to serve as a monument to Mr. Grant and to benefit only members of the caucasian race.
When the circuit court concurs in the master's findings of fact, this Court will not disturb those findings unless they are without any evidentiary support or against the preponderance of the evidence. Ex parte Guaranty Bank and Trust Co., 255 S.C. 106, 177 S.E.2d 358 (1970). The record in this case amply supports the findings of the master and the circuit court judge.
The heirs stress the portion of both Mr. and Mrs. Grant's wills that provided the Home be located on Huger and Meeting Streets for the housing of white Presbyterians. They also emphasize that at the time of Mrs. Grant's death, the Home's by-laws provided as...
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