Estate of Crawshaw, Matter of

• Decision Date: 01 March 1991
• Docket Number: No. 65136,65136
• Citation: 806 P.2d 1014,15 Kan.App.2d 273
• Parties: In the Matter of the ESTATE OF Chester D. CRAWSHAW, Deceased.
• Court: Kansas Court of Appeals

Page 1014

806 P.2d 1014

15 Kan.App.2d 273

In the Matter of the ESTATE OF Chester D. CRAWSHAW, Deceased.

No. 65136.

Court of Appeals of Kansas.

March 1, 1991.

Review Granted April 23, 1991.

Syllabus by the Court

1. Charitable trusts are favorites of the law. When a devise or grant is determined to constitute a charitable trust, courts look with liberality upon the instrument creating the trust for the purpose of carrying out the intention of the donor.

2. Technical rules of construction that prevent conveyances or bequests creating a charitable trust from taking effect are to be disregarded. Moreover, when it is ascertained that the donor intended to create a public charity, the conveyance or bequest will not be allowed to fail because the trustee is incapable of taking.

3. It is appropriate to consider the surrounding circumstances in the creation of a charitable testamentary trust when faced with a question of whether the testator possessed a general or specific charitable intent.

4. It is elementary that the intent of the testator must be ascertained not from a single or isolated provision, but from all provisions contained within the four corners of the instrument and from circumstances surrounding its execution if they are needed to clarify the testator's true purpose and intent.

5. Under the cy pres doctrine, equity will, when a charity is originally or later becomes impossible, inexpedient, or impracticable of fulfillment, substitute another charitable object which is believed to approach the original purposes as closely as possible. Where the court finds the testator had a general charitable intent, the doctrine applies the theory that equity has the power to revise a charitable trust, in order to meet unexpected emergencies or changes in conditions which threaten the existence of the trust.

6. Under K.S.A.1990 Supp. 59-22a01 and Kansas case law, the doctrine of cy pres permits a court to implement a testator's intent and save a testamentary charitable gift by substituting beneficiaries when the following conditions are met: (1) The gift must be to a charitable organization for a charitable purpose; (2) it must be impossible, impracticable, or illegal to carry out the testator's stated charitable purpose; and (3) it must appear that the testator had a general charitable intent.

Richard D. Ewy and Timothy B. Mustaine of Foulston & Siefkin, Wichita, for appellant Salvation Army, Wichita, Kan.

Paul S. Gregory of Gregory & Gregory, Osborne, for appellee Paul S. Gregory, Administrator CTA.

Daniel K. Diederich and Thomas J. Kennedy of Kennedy, Berkley, Yarnevich & Williamson, Chartered, Salina, for appellees Marymount College of Kansas and Marymount Memorial Educational Trust Fund.

Before DAVIS, P.J., LEWIS, J., and FLOYD H. COFFMAN, District Judge Retired, assigned.

DAVIS, Presiding Judge.

Chester D. Crawshaw left the bulk of his estate in trust to Marymount College in Salina, Kansas, for school loans to nursing students under conditions set forth in his testamentary trust. Soon after his death, Marymount College terminated its existence. The trial court, applying the cy pres doctrine under K.S.A.1989 Supp. 59-22a01 named a successor trustee to administer the funds for the same educational purposes. The remaining residuary legatee, the Salvation Army, appeals, contending that the trial court erred by applying cy pres because the language in the decedent's testamentary trust evidenced a specific charitable intent to benefit students at Marymount College, not a general charitable intent. We affirm.

The case was submitted to the trial court on the following stipulated facts:

Stipulated Facts

"1. Chester D. Crawshaw, a resident of Osborne, Kansas, died testate on May 4, 1989. On May 12, 1989 his Last Will and Testament (attached as Exhibit 'A') was admitted to probate in Osborne County District Court, Probate Division. (Petition to Probate Will). Paul S. Gregory was appointed as administrator with Will annexed. (Letters Testamentary).

"2. The Last Will and Testament of Chester D. Crawshaw provides for the distribution of the personal effects of the deceased, and further provides for certain legacies to four individuals, said legacies totaling $350.00. (Last Will and Testament). The residuary estate is valued in excess of $140,000.00. (Inventory and Appraisement).

"3. Upon distribution of these bequests and legacies, the Will directs that the personal property and real property remainder of the estate be sold and converted to cash and that the proceeds be distributed as follows:

"A. I direct that said Executor first pay all of my just debts, including my funeral expenses and expenses of my last sickness, and the costs of administering my estate, and all legacies provided for by this, my Last Will and Testament.

"B. I give, devise and bequeath fifteen percent (15%) of the rest, residue and remainder of the funds, proceeds and property of my estate to the Salvation Army, with Kansas office at Wichita, Kansas, to be used by it as it shall deem fit, without any restrictions whatever.

"C. I give, devise and bequeath the remaining eighty-five percent (85%) of the rest, residue and remainder of the funds, proceeds and property of my estate to Marymount College, located at Salina, Kansas, in trust, or in the event that said college does not have the legal capacity to accept and administer the herein created trust, then in trust, to the official Board or Association of said college having the legal capacity to accept and administer the herein created trust, in any event hereinafter referred to as Trustee, and that said trust is created for the purposes, and subject to the conditions, hereinafter stated:

"1. That such trust fund, with its accretions, shall perpetually be called and known as the 'Mary Anna and Chester D. Crawshaw Trust Fund'.

"2. That said trust fund shall be paid to said legatee and devisee by my Executor at the time of the final settlement of my estate.

"3. The funds herein provided for may be loaned to students in the nursing department of said college. If there are no eligible candidates in said nursing department for this fund in any academic year, then the administrators may grant a loan to any other student or students attending said college.

"4. The administration of the fund shall be left entirely to the Trustee.

"5. Any and all loans made from said fund shall be evidenced by a note for the amount, and stating the terms of such loan, and signed by the person receiving such loan. Any such note shall not bear interest during the time such loan recipient is in regular attendance at said college, and is satisfactorily carrying a normal school load. The note of any loan recipient shall draw interest as shall be fixed by the Trustee, and shall bear interest from date of graduation of such loan recipient, or from the time any loan recipient shall fail to attend, or shall withdraw from, said college, or from the time any loan recipient shall fail to make grades acceptable, or required, for graduation. The principal of each note, with interest, shall be due and payable in four equal annual installments, following the graduation of said loan recipient from college, or from the date of his or her withdrawal from college, or from the end of the semester in which he or she fails to make satisfactory passing grades. For good cause shown, the Trustee may extend the time of payment of any note. When interest is received on any note, it shall be added to, and become a part of, the principal of said trust fund, and shall be used in the same manner as the original amount. Additions to the trust fund may be made from time to time by any person, persons, firms or corporations desiring to do so.

(Last Will and Testament of Chester D. Crawshaw)

"4. Chester D. Crawshaw was not Catholic but his deceased wife was Catholic and they were married in the Catholic Church. Chester D. Crawshaw received a Methodist burial service. Chester D. Crawshaw was not a Marymount College alumni, director, employee, former employee, teacher, or former teacher, nor is it known that he had any other type of special personal relationship with Marymount College.

"5. Effective June 30, 1989 Marymount College of Kansas terminated its nursing department and all other departments, programs and curricula offered at its campus in Salina, Kansas. (Petition of Marymount College, Par. 5).

"6. Marymount College of Kansas is now and at all times pertinent herein and has been a not-for-profit Kansas corporation. Although its Articles of Incorporation were forfeited on March 15, 1989 for failure to timely file its annual report, its Articles of Incorporation were renewed and revived in accordance with K.S.A. 17-7002 and K.S.A. 17-6003 with the same force and effect as if said Articles of Incorporation had not been forfeited. Attached hereto as Exhibit 'B' is a Certificate of Good Standing issued by the Secretary of State of Kansas.

"7. The termination of the nursing department and other departments and academic programs at Marymount College of Kansas make the Decedent's bequest to Marymount College impossible and impracticable of fulfillment, and the Decedent makes no provision for any alternative plan of disposition in the event Marymount College of Kansas should cease operations as an institution of higher learning. (Petition of Marymount College, Par. 5).

"8. The Marymount Memorial Educational Trust Fund (hereinafter referred to as 'MMETF') was established on September 13, 1989 by and between Marymount College of Kansas and George K. Fitzsimons, Bishop of the Roman Catholic Diocese of Salina in Kansas. (Petition of Marymount College, Par. 7; and MMETF Trust Agreement (Exhibit 'C')).

"9. On September 19, 1989 Marymount College petitioned the Saline County District Court and obtained an Order that the MMETF Trust Agreement was a proper and suitable trust arrangement to carry out the general charitable intention of...