Madison Acad. v. Bd. of Ed. of Richmond

• Decision Date: 26 April 1940
• Citation: 282 Ky. 671
• Parties: Board of Trustees of Madison Academy v. Board of Education of City of Richmond.
• Court: United States State Supreme Court — District of Kentucky

282 Ky. 671

Board of Trustees of Madison Academy v. Board of Education of City of Richmond.

Court of Appeals of Kentucky.

April 26, 1940.

1. Charities. — A deed, conveying lot to academy trustees for sole purpose of erecting buildings thereon for academys use, created "charitable trust" within statute authorizing circuit court of

county wherein realty so held is situated to adjudge sale thereof for reinvestment in similar property therein for same uses, trust, and purposes on petition in equity by proper parties (Ky. Stats., sec. 324).

2. Charities. — Property composing part or all of charitable trust may be sold for reinvestment under certain proved facts and conditions, if purpose of trust is not thereby abandoned, but continues to be provided for in such manner as to carry out donor's general intention and purpose.

3. Charities. — An agreement by trustees of academy without funds to join with city board of education, to which trustees had leased lot conveyed to them in trust to erect buildings thereon for academy's use, in deed conveying lot to county for erection of armory thereon by Military Department of Commonwealth, held not to violate provisions of trust deed.

4. Action. — The heirs of deceased grantor of lot, conveyed to academy trustees for erection of buildings thereon for academy's use, should be made parties to proceeding by academy for declaratory judgment, determining whether trustees' agreement to join city board of education, to which they had leased lot, in deed conveying it to county for erection of armory thereon by Military Department of Commonwealth, violates terms of trust deed, before entering final judgment therein (Civil Code of Practice, secs. 28, 639a-9).

Appeal from Madison Circuit Court.

George C. Robbins, for appellant.

John Noland for appellee.

Before W.J. Baxter, Judge.

OPINION OF THE COURT BY JUDGE THOMAS.

Reversing.

This is a declaratory judgment proceeding brought by appellee, as plaintiff below, against the appellant, as defendant below, under the provisions of Sections 639a — 1 to and including 639a — 12 of our Civil Code of Practice. Its purpose was and is to construe a deed executed by one Robert Caldwell on June 15, 1816, by which he conveyed a vacant lot containing 1 1/2 acres to the appellant, which was created by a special act of the General Assembly of Kentucky, approved on February 1, 1814, with provided trustees for carrying out the project contemplated by the act creating the academy, by which term we will hereafter refer in designating the appellant. The deed contains a stipulation in these words: "It is expressly understood by and between the parties hereto, that the said Caldwell does vest the title of the land aforesaid in the said Trustees for the sole purpose of erecting buildings thereon for the use of the Madison Academy, and for no other purpose whatever."

It was also provided therein that "if the said trustees or their successors in office shall fail to improve said lot by erecting thereon, a building for the purpose of teaching students for the term of three years from the date first above written (the date of the deed), then and in that case the land hereby sold and conveyed * * * shall revert and be again vested in the said Robert Caldwell, his heirs and assigns, as fully as he the said Robert Caldwell held the same before the execution of this Indenture." That condition was complied with and the reverter therein provided for became obliterated. Another provision in the deed said: "And it is also understood by the parties aforesaid and expressly reserved by the said Caldwell that when the Citizens of Richmond and its vicinity shall choose to erect a meeting house or church for the purpose of religious worship they shall have a right at any time and forever to erect and keep in repair the same on the land hereby sold and conveyed, on some suitable part thereof." The deed further prescribed that: "And it is also understood by the parties aforesaid and expressly reserved by the said Caldwell, that if the members of the Masonic body Richmond Lodge number twenty five, shall at any time choose to erect a building on said lot or parcel of ground for the accommodation of said Lodge, they shall have the privilege of doing so on some suitable part of said ground, and enjoy all the privileges necessarily incident to the establishing of said Lodge on said ground."

There were, therefore, three sets of beneficiaries provided for in the deed. They were, studnts desiring to be educated in or at the contemplated Academy; the citizens of Richmond, and its vicinity, if they saw proper to erect a church building on a portion of the lot, and Masonic Lodge No. 25 of Richmond, if it saw proper to erect a building on a portion of the lot for its use. Neither of the last two beneficiaries ever sought to appropriate the benefits conferred by them under the deed. They, therefore, may be considered to have abandoned the benefits of the trust conferred upon them.

Within the three years stipulated in the deed the trustees of the Academy erected an appropriate building and conducted a school therein for the education of students desiring to attend, and which was operated until about 1894 when, because of a total lack of funds arising from student tuition or other sources, plus the extremely dilapidated condition of the property, the school could no longer be conducted without the expenditure of a considerable amount of money, which was utterly unavailable to the trustees. Consequently they, in the year mentioned, entered into a contract with the then Board of Education of the City of Richmond (which has continued as an educational institution since then) by which it leased the lot conveyed by the Caldwell deed to the board (by which word the appellee will hereafter be referred to) for a period of ninety-nine years from that date — with the agreement that the board would erect on the lot a school building for the education of students of the community and that it and its successors would operate it as such throughout the period of the lease. A building was erected on the lot following that lease and a school conducted therein in accordance with the terms of the lease until the year 1919, when the building was burned, thus producing the necessity of erecting a new one. However, before the burned building was erected by the board on the lot conveyed by Caldwell, a suit was instituted for the purpose of determining whether or not the board of trustees of the Academy had the right to make the lease on the terms indicated, and it was adjudged by the trial court that they possessed that right, and that in doing so they in no wise violated the terms of the trust. That judgment was affirmed by this court in the case of Trustees of Madison Academy v. Board of Education of Richmond, 26 S.W. 187, 16 Ky. Law Rep. 51.

The time elapsing from the construction of the school building by the board in 1894 until it burned in 1919 (25 years) brought about many changes in conditions in the city of Richmond, prominent among which were that the 1 1/2 acres became too small an area for the operation of the requisite high school which conditions then demanded in the city of Richmond. Another one was that the population had shifted so as to make the Caldwell conveyed lot more or less isolated, and when a new school building was erected by the board after the 1919 fire it was on a lot containing more than seven acres which the board had acquired for that purpose, although its lease on the Caldwell lot was then only about one fourth expired, but which at this time has 54 years to run. In the circumstances the trustees of the Academy entered into an agreement with the Military Department of the Commonwealth of Kentucky, and...