Love v. Sullivan

• Decision Date: 22 November 1966
• Docket Number: No. 3,No. 299,299,3
• Citation: 146 N.W.2d 117,5 Mich.App. 201
• Parties: June Schoder LOVE, Plaintiff and Appellant, v. James M. SULLIVAN, Administrator WWA, DBN of the Estate of Raymond W. Schoder, Deceased, Defendant and Appellee. Cal
• Court: Court of Appeal of Michigan — District of US

Page 117

146 N.W.2d 117

5 Mich.App. 201

June Schoder LOVE, Plaintiff and Appellant, v. James M. SULLIVAN, Administrator WWA, DBN of the Estate of

Raymond W. Schoder, Deceased, Defendant and Appellee.

Cal. No. 299.

Court of Appeals of Michigan, Division No. 3.

Nov. 22, 1966.

Rehearing Denied Jan. 12, 1967.

Leave to Appeal Denied March 29, 1967.

Roger H. Nielsen, Battle Creek, for appellant.

James M. Sullivan, Sullivan & Hamilton, Battle Creek, for appellee.

Before HOLBROOK, P.J., and BURNS and HOFFIUS, ^* JJ.

HOLBROOK, Presiding Judge.

Plaintiff's complaint was filed in the circuit court for the county of Calhoun, February 18, 1960, seeking interpretation of paragraph 17 of the will of Raymond W. Scholder. Mr. Scholder was born with the affliction called 'harelip and cleft palate.' Although he had some remedial work done, this affliction influenced his entire life. By his will, after leaving various bequests to many distant relatives, he gave the plaintiff, his closeat relative and niece, $5,000 in cash, all his household goods, furniture, heirlooms, and so forth, and a life estate in his 3 properties in the city of Battle Creek and then bequeathed the remainder in said real estate to plaintiff's children. Mr. Schoder then made provision for the disposition of the residue of his estate in the following manner:

'17. All the rest, residue and remainder of my property and estate, both real and personal, and whatsoever kind and wheresoever situated, of which I shall die seized or possessed or of which I shall be entitled to dispose at the time of my death, I give, devise and bequeath to Ronald M. Ryan, attorney at law, of Battle Creek, Michigan, in trust nevertheless, to hold, manage, invest and reinvest the same, to collect the income and to use said income as well as any part or all of the principal when and as such trustee shall deem best, under the direction and guidance of my cousin Rev. Raymond V. Schoder, now residing at West Baden, Indiana, for assisting and helping those having harelip or cleft palate. It is my intention that said trustee shall have unfettered discretion in using the income and principal of said trust estate to help those who wish to correct this particular speech defect, and to this extent the proceeds from said trust estate may be given to any school, college or university as a gift or grant, if such gift or grant will either directly or indirectly carry out the purpose of this trust, but in any event, the judgment of said trustee shall be final and conclusive.'

The will was duly admitted to probate and plaintiff, in her complaint, claimed that the language employed by the testator in said paragraph 17 was insufficient to create a charitable trust and therefore was invalid under the statutes and laws of the State of Michigan. She further alleged that the testator died intestate as to the rest, residue and remainder of his estate, and that she as sole heir of the deceased was entitled to be decreed the sole owner of the residue of said estate.

The case was tried without a jury before the circuit judge. The testimony produced at the trial showed that the affliction of harelip and cleft palate is one of infrequent incidence in this country, occurring approximately once out of every 800 births; that it is one of the more serious problems in the field of birth defects. The proofs also showed that proper care and treatment and the use of prosthetic devices can greatly assist the afflicted to overcome the defect and to lead more or less normal lives. However, the treatment starts within weeks after birth, continues for 15 to 17 years and requires the services of a team consisting of 12 to 15 professional members, each operating within his own specialty and the cost to treat an ordinary case is from $5,000 to $15,000. Many of the afflicted sufferers have not the means to pay for the necessary care and treatment. There is a shortage of professional specialists who treat patients suffering from the afflictions. Teams of professional specialists donate their time and advice to help harelip and cleft palate victims in our State, at treatment centers located in Detroit, Ann Arbor, Grand Rapids, and Saginaw. Even with these specialists donating their time and professional skills the cost of treatment for surgery, dental work, special therapy, and often times psychiatric help is great and beyond the means of most of those in need. The proofs also showed that the care and treatment for harelip and cleft palate victims is one of the important types of cases helped by the Michigan Crippled Childrens Association, which is in need of funds to extend their services to many needy children not able to be served at the present time.

The Honorable Alfonso A. Magnotta, presiding circuit judge in a very thorough opinion filed January 17, 1963, determined that paragraph 17 of the will created a trust for charitable purposes and that under the provisions of the applicable statute constituted a valid charitable trust and ordered the plaintiff's complaint dismissed. Judgment of dismissal was filed February 1, 1963. February 18, 1963, plaintiff filed a motion for a new trial. Because the original defendant had been appointed to fill the vacancy created by Judge Magnotta's untimely death, both judges of the circuit disqualified themselves and the Honorable Robert W. McIntyre was assigned to hear the motion. This hearing was held April 10, 1964. By an order dated and filed August 15, 1963, counsel for both parties stipulated to the court that a gift for the benefit of sufferers from harelip and cleft palate would be a charitable use, unmodified by any other condition.

Judge McIntyre in his ruling denying the motion for new trial stated in part as follows:

'Plaintiff also relies heavily on the case of Attorney General v. Soule, 28 Mich. 153. In that case, the testator provided for the establishment of a school for the education of children to be expended according to the direction of the executors. In defeating this trust, Justice Graves said:

"And I see nothing in the words of the testator to preclude a school which, according to the authorities, could not be recognized as a charity at all.'

'The court in Attorney General v. Soule pointed out that the testator did not describe with any accuracy whatsoever the nature of the school which was intended, whether it was to be public or private, the number of pupils, the purposes of the education, and in effect disclosed no intention on the part of the testator to create a charitable use. Moreover, this case was decided long before the passage of P.A.1915, No. 280, specifically requiring our present liberal construction.

'This court finds that the words of the testator in the current case do Not express an intent to any degree that his property be devoted to private use.

'The well-springs of this trust are to be found in the pleadings themselves; in the complaint filed, the plaintiff alleges in par. 9 that the deceased lived a miserly existence; that he had a harelip and cleft palate which caused him to exist and live in relative isolation; that he had a sense of inferiority and affliction; and that he was possessed of many idiosyncrasies, and lived an abnormal life. It is therefore most logical to find that the testator suffering so bitterly from a cruel affliction would seek to spare this pain and humiliation in his fellow man. The late Judge Magnotta who heard all of the testimony in this cause found that the intent of the testator was clearly expressed. That his intention was contained in the following words: 'Assisting and helping those having harelips and cleft palates.' And 'to help those who wish to correct this particular speech defect, and to this extent the proceeds from said trust estate may be given to any school, college or university as a gift or grant, if such gift or grant will either directly or indirectly carry out the purpose of this trust.' It is true the testator gave his trustee, 'unfettered discretion,' and that he said, 'the judgment of said trustee shall be final and conclusive.', however it is clear to this court that considering paragraph 17, of the will in question, it was the intention of the testator that these words be modified by, and confined to, 'using the income and principal of said trust estate to help those who wish to correct this particular speech defect.' This court cannot find that the words, 'the proceeds from said trust estate may be given to any school, college or university as a gift or grant.' denotes an intention on the part of the testator that the gift be made to a profit-making institution, but rather is merely a suggestion how the broad purposes of the trust might be carried out.

'The great overriding and dominant character of paragraph 17 is to help those having harelip or cleft palate, and certainly not the establishment of schools, colleges, or universities. Paraphrasing the words of Judge Simons in Chicago Bank of Commerce v. McPherson (C.C.A.6), 62 F.2d 393, 'assisting and helping those having harelips or cleft palates' are dominant words, coloring and conditioning those which follow, and that an overriding charitable intent is disclosed.

'This court has no qualms as to possible misapplication of the funds of this trust. The traditional powers of the court of equity to supervise such matters have been so clearly established as to require no authority, particularly as respects its power to control the subsequent actions of the trustee, to ensure the funds are canalized so as to flow into charitable uses.'

Plaintiff has appealed from the judgment entered February 1, 1963, and from the order denying a new trial entered July 6, 1964, and presents the following question for review by this Court. Do the provisions of paragraph 17 of the will create a valid charitable trust? Plaintiff asserts that the answer to this question must be 'no' for several reasons: (1) by the terms of the trust a nonfiduciary...