Estate of Breeden

• Citation: 208 Cal.App.3d 981,256 Cal.Rptr. 813
• Decision Date: 16 March 1989
• Docket Number: No. D006663,D006663
• Court: California Court of Appeals
• Parties: In re ESTATE OF Wilmer BREEDEN, Deceased. Peter NEU et al., Petitioners and Appellants, v. Milton LESSNER, Objector and Respondent.

Page 813

256 Cal.Rptr. 813

208 Cal.App.3d 981

In re ESTATE OF Wilmer BREEDEN, Deceased.

Peter NEU et al., Petitioners and Appellants, v. Milton LESSNER, Objector and Respondent.

No. D006663.

Court of Appeal, Fourth District, Division 1, California.

March 16, 1989.

Law Offices of Richard T. Hilmen, Jr. and David H. Getz, San Diego, for petitioners and appellants.

Gilson & Heaton, Virginia R. Gilson and Irwin Gostin, San Diego, for objector and respondent.

WORK, Associate Justice.

When Wilmer Breeden died, his will designated the bulk of his estate to be placed in trust and used to promote the principles of socialism and related causes. Claiming Breeden's bequest was not intended to be a charitable trust and was not otherwise valid because it failed to designate definite beneficiaries and violated the rule against perpetuities, Breeden's nephew (Peter Neu) and niece (Nancy Deets) unsuccessfully petitioned to have the trust provision declared invalid and the estate residue given to them as intestate heirs. On their appeal from an order denying the petition, we distinguish between the definition of charitable intent which characterizes the motivating purpose of a trustor so as to identify a trust as charitable and the specific use of trust funds in a manner which may not qualify the trust for tax-exempt status. Because we hold the evidence establishes Breeden's testamentary intent was charitable, his will created a valid charitable trust. Accordingly, we affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

Breeden, an active socialist, willed the residue of his estate to the Breeden-Schmidt Foundation or, if it had not been created before his death, to Milton Lessner and Willard Sinclair, as co-trustees, for distribution "to persons, entities and causes advancing the principles of socialism and those causes related to socialism. This shall include, but not be limited to, subsidizing publications, establishing and conducting reading rooms, supporting radio, television and the newspaper media and candidates for public office." ¹ After the will was admitted to probate, Lessner as surviving trustee established the Breeden-Schmidt Foundation to receive the trust funds. Two attorneys, Louis Katz and Irwin Gostin, were selected to serve as co-trustees. The declared purpose of the foundation paralleled that of the testamentary trust, employing the same language which appeared in Breeden's will. As trustor, Lessner specifically declared:

"[T]his is not intended to be a charitable trust, although the TRUSTEES may in the future, if they unanimously determine, apply for such designation and tax status. Unless that is done, however, the TRUSTEES are free to use the trust assets for non-charitable purposes as long as they determine that said purposes are consistent with the purpose of establishment of this trust." ²

Appellants contend Breeden must not have intended the trust to be charitable in character because the funds can be used for any noncharitable purpose; as a noncharitable trust, it fails for lack of a designated definite beneficiary. However, even if the trust was valid, it was nevertheless unenforceable as against public policy. Lessner argues the will establishes a valid charitable trust and, in any event, if the trust were invalid, the residue would pass to a related charity under the cy pres doctrine, and not to the nephew and niece.

I

Petitioners contend the overwhelming and uncontroverted evidence establishes Breeden did not intend the testamentary trust to be charitable in character. They cite his testamentary language that the "trust fund be made available to profit making ventures, or any other beneficiary, for whatever purpose he chose to use the funds, so long as he met the threshold qualification of being an advocate of, or related in some way to the cause of socialism." Moreover, they contend the will's express terms preclude a finding of charitable trust because they permit disbursement to noncharitable beneficiaries for noncharitable purposes. Thus, they assert that according to the will persons, entities and causes advancing the principles of socialism could qualify as beneficiaries simply by meeting the predicate of "advancing socialism" and then expend the funds for any noncharitable purpose desired. Lessner counters the heirs' challenge too narrowly defines "charitable" by equating "charitable" only with "tax-exempt." He contends the term "charitable" within the context of the trust should be broadly construed to satisfy the underlying altruistic intent of the testator.

To establish a valid charitable trust, the bequest must limit the use of the fund to charitable purposes. (Estate of Thomason (1966) 245 Cal.App.2d 793, 798, 54 Cal.Rptr. 229; Estate of Rollins (1958) 163 Cal.App.2d 225, 227, 328 P.2d 1005.) However, a bequest will not be deemed a charitable trust if the testamentary language permits noncharitable, as well as charitable, uses. (Estate of Rollins, supra, 163 Cal.App.2d at p. 227, 328 P.2d 1005; Estate of Moore (1961) 190 Cal.App.2d 833, 839, 12 Cal.Rptr. 436.) On the other hand, because charitable bequests are favored, they will be upheld if one can possibly be construed as valid by applying liberal rules of construction designed to accomplish the intent of the trustor or testator. (Estate of Moore, supra, 190 Cal.App.2d at p. 839, 12 Cal.Rptr. 436; Estate of Rollins, supra, 163 Cal.App.2d at p. 227, 328 P.2d 1005; 12 Cal.Jur.3d, Charities, § 25, p. 122; 7 Witkin, Summary of Cal.Law (8th ed. 1974) Trusts, § 37, p. 5398.)

A bequest is charitable where it is made for a charitable purpose, the aims and accomplishments of which are religious, educational, political or in mankind's general social interests, and the ultimate recipient is either the whole or an unascertainable part of the community. (Lynch v. Spilman (1967) 67 Cal.2d 251, 261, 62 Cal.Rptr. 12, 431 P.2d 636; Estate of Robbins (1962) 57 Cal.2d 718, 722, 21 Cal.Rptr. 797, 371 P.2d 573; Estate of Henderson (1941) 17 Cal.2d 853, 857, 112 P.2d 605; Estate of Thomason, supra, 245 Cal.App.2d at p. 798, 54 Cal.Rptr. 229.) More precisely, "[c]haritable purposes include (a) the relief of poverty; (b) the advancement of education; (c) the advancement of religion; (d) the promotion of health; (e) governmental or municipal purposes; (f) other purposes the accomplishment of which is beneficial to the community." (Rest.2d Trusts, § 368, p. 246; Lynch v. Spilman, supra, 67 Cal.2d at p. 261, 62 Cal.Rptr. 12, 431 P.2d 636.) ³ "The dissemination of a rational though perhaps unpopular, belief or doctrine constitutes an educational purpose." (Estate of Connolly (1975) 48 Cal.App.3d 129, 132-133, 121 Cal.Rptr. 325, fn. omitted.) In this context, a trust designed to peacefully promote political purposes and change has been characterized as charitable. (Estate of Murphey (1936) 7 Cal.2d 712, 715, 62 P.2d 374; Collier v. Lindley, supra, 203 Cal. at pp. 650-652, 266 P. 526; see Annot. (1950) 12 A.L.R.2d 849, 876-881.) Moreover, regardless whether considered educational or political in nature, a charitable trust designed to disseminate propaganda with the object of creating a more enlightened public opinion is valid. (Estate of Peck (1959) 168 Cal.App.2d 25, 28, 335 P.2d 185.) A charitable trust established for "the purpose of teaching and practicing the doctrines of socialism" has been upheld. (Lowell v. Lowell (1925) 29 Ariz. 138, 240 P. 280, 286, quoting City of Philadelphia v. Girard's Heirs (1863) 45 Pa. 9, 84 Am.Dec. 470; 5 R.C.L. 299, § 11; but see contra, In re Loney (1953) 4 D.L.R. 539, 540-541 [holding "the purpose of promoting and propagating the doctrines and teachings of Socialism" is not charitable]; see also Peth v. Spear (1911) 63 Wash. 291, 115 P. 164, 165 [upholding a charitable trust established by a conveyance of land to trustees for the benefit of an unincorporated association, the purpose of which was to acquire land and establish a community demonstrating the feasibility of socialism (Annot. (1950) 12 A.L.R.2d 849, 878) ]; George v. Braddock (1889) 45 N.J.Eq. 757, 18 A. 881 [upholding a trust to distribute the works of Henry George advocating the single tax principle].) ⁴

Although a trust to promote the success of a specific political party is not charitable (see IVA Scott, Law of Trusts (4th ed. 1989) § 374.6, p. 221; 41 A.L.R.3d 833, 836-837), the promotion of a particular cause or doctrine remains charitable regardless whether it is embraced as well by a political party (Rest.2d, Trusts, § 374, com. k, pp. 260-261). In fact, in Buell v. Gardner (1914) 83 Misc. 513, 144 N.Y.S. 945, the court upheld as charitable a gift in trust establishing a temperance fund to be used to defray the expenses of the Prohibition Party because the purpose of the devise was charitable--to advance the cause of temperance and not the fortunes of any political party. (See Garrison v. Little (1898) 75 Ill.App. 402 [upholding a trust to promote the cause of woman's suffrage]; Taylor v. Hoag (1922) 273 Pa. 194, 116 Atl. 826 [upholding a trust to promote change in government such as the initiative and referendum, mandating the trustees to use all lawful methods to accomplish such results]; Harrington v. Pier (1900) 105 Wis. 485, 82 N.W. 345 [upholding a trust to promote temperance legislation]; see generally, 22 A.L.R.3d 886.) We are satisfied the promotion of socialistic principles through education and support of those whose activities serve to advance those principles does not offend public policy and purpose which may qualify a trust as charitable.

II

It is a cardinal rule that in construing a will the testator's intent when clearly expressed within the document must be given effect. (Estate of Russell (1968) 69 Cal.2d 200, 205, 70 Cal.Rptr. 561, 444 P.2d 353; Estate of Lindstrom (1987) 191 Cal.App.3d 375, 382, 236 Cal.Rptr. 376.) Thus, courts look with favor upon attempted charitable bequests, endeavoring to effectuate them...