Lovelace v. Marion Institute

• Court: Alabama Supreme Court
• Writing for the Court: SAYRE, J.
• Citation: Lovelace v. Marion Institute, 215 Ala. 271, 110 So. 381 (Ala. 1926)
• Decision Date: 18 November 1926
• Docket Number: 2 Div. 903
• Parties: LOVELACE v. MARION INSTITUTE et al.

110 So. 381

215 Ala. 271

LOVELACE v. MARION INSTITUTE et al.

2 Div. 903

Supreme Court of Alabama

November 18, 1926

Appeal from Circuit Court, Perry County; H.F. Reese, Judge.

Bill in equity by W.H. Lovelace against the Marion Institute and others to enjoin the execution and delivery of a mortgage and cross-bill by the respondents. From a decree for respondents, complainant appeals. Reversed and remanded.

Clifton C. Johnston, of Marion, for appellant.

Rushton Crenshaw & Rushton, of Montgomery, for appellees.

SAYRE J.

By their deed of February 3, 1888, Messrs. Wilkerson and Lovelace, the last named being an ancestor of the complainant in this cause, dedicated the property formerly known as Howard College, and now as Marion Institute, to use as an educational institution--a charitable trust. The deed provided for a board of trustees to manage the property and affairs of the institute and their perpetual succession. They have since been incorporated as the deed provided they might. It was provided that-- "The said board of trustees shall not sell or encumber the said property, nor shall the same be sold or in any way incumbered, but shall forever remain dedicated to and for educational purposes and used as aforesaid."

It is shown in the original bill that the buildings on the property, consisting of a chapel and two dormitories, brick structures, and the dining hall, a frame building, were constructed prior to the war between the states, are out of repair, and, unless repaired, will soon become worthless for any purpose, and besides are so constructed that they are not at all suited for the conduct of an educational institution according to modern standards; that the trustees are maintaining a school of high grade for the education of boys and have adopted--complainant dissenting--a resolution authorizing and directing their executive officers to borrow the sum of $50,000 to be secured by a mortgage on the property and to be used in the repair and rehabilitation of the buildings thereon without which, the bill avers, the school cannot be successfully conducted. The trustees (other than complainant) and the executive officers of the board are made parties defendant. They demurred and filed their cross-bill in which they set up the necessity for the contemplated loan and ask that they be permitted under decree of the court to borrow money for the purposes indicated and to execute a mortgage on the property for the purpose of securing the loan when made. There being no dispute concerning the facts, the court overruled the demurrer and passed a decree authorizing the loan and mortgage contemplated by the parties.

The court of equity has jurisdiction over charitable trusts, to uphold, protect, and enforce them and prevent their abuse; but where a discretion has been committed to the trustees and is being fairly and honestly exercised by them, the court will not interfere. 11 C.J. 356 et seq.; Williams v. Pearson, 38 Ala. 299: Carter v. Balfour, 19 Ala. 814; Code, § 6479. That the deed of February 3, 1888, created a trust of that character is neither denied nor doubted.

The parties would uphold the decree authorizing the mortgage desired on the theory that such a mortgage is necessary to preserve the trust. The brief concedes, very correctly, that "ordinarily the instrument creating the trust is the law of the trust and neither the trustees nor the Legislature nor the chancery court have any power to divert the property from the uses for which the donor intended it, nor has either of them the power to change the donor's scheme of the trust, since the donor owned the property and had a right to give it under such circumstances and conditions as he saw fit"; but, the argument is, "when conditions have changed to such an extent as to make it impracticable to carry out all of the provisions of the trust instrument," the court may "authorize a departure therefrom in order to carry out the general intent of the donor." That contention would call for an application in some sort of the doctrine of cy pres, and perhaps section 6479 of the Code 1923, is cited as lending approval to the proposed application; but, since that provision of the statute law was enacted in this state, this court has on a number of occasions repudiated the cy pres doctrine, which, as the court said in Carter v. Balfour, supra, "in substance is, if you cannot find the society specified in the will, or apply the fund to the charity intended by the testator"--the court was speaking in terms of the devise creating the trust in that case--"the court will then apply it to some other charity as nearly analogous to it as possible." Carter v. Balfour, supra, and in Williams v. Pearson, the court, after citing and discussing to some extent the case of Carter v. Balfour, said:

"But, the cy pres doctrine and the prerogative power to carry out indefinite charities being excepted, the law of charities, as administered in the English court of chancery, is substantially our law."

The above-stated conclusions have been consistently followed in this state. Johnson v. Holifield, 79 Ala. 423, 58 Am.Rep. 596; Huntsville v. Smith, 137 Ala. 382, 35 So. 120; Woodroof v. Hundley, 147 Ala. 287, 39 So. 907; State Universalist Convention v. May, 147 Ala. 455, 41 So. 515; Crim v. Williamson, 180 Ala. 179, 60 So. 293; Johns v. Birmingham Trust Co., 205 Ala. 535, 88 So. 835.

The appeal in this case is not to any cy pres power of the court, but to the equitable doctrine of approximation in virtue of which the court of chancery exercises jurisdiction merely to vary the details of administration in order to preserve the trust and carry out the general purpose of the donor. In 11 C.J. 358, § 74, it is said that--

"Under the general jurisdiction of a court of chancery to administer the estate of a charity, it has power to vary the precise terms of a charitable trust when necessary. It is a natural and necessary branch of the jurisdiction over charitable trusts that the means or details prescribed for their administration should be subject to be molded so as to meet any exigency which may be disclosed by a change of circumstances, and to relieve the trust from a condition which imperils or endangers the charity itself or the funds provided for its endowment and maintenance."

We have examined the cases cited in support of the text.

The equitable doctrine of approximation is said to be in reality a principle of judicial construction resulting, not from an arbitrary power exercised in disregard of the donor's wishes, but based on a judicial finding of his intention as applied to new conditions. 11 C.J. § 76, p. 360. "The ground upon which courts of equity interfere in cases of this sort is that of effectuating the specific intent of the donor." Schmidt v. Hess, 60 Mo. 591, 594. The Supreme Court of Missouri in a carefully considered case notes a difference between lands actually used for the charity itself, e.g. (in the present case) the land described in the deed of February 3, 1888; lands set apart in order to provide a fund for the endowment of the charity by means of their use or income; and lands purchased or...