Old Colony Trust Co. v. O.M. Fisher Home, Inc.

• Decision Date: 01 July 1938
• Parties: OLD COLONY TRUST CO. v. O. M. FISHER HOME, Inc., et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

301 Mass. 1

16 N.E.2d 10

OLD COLONY TRUST CO.

v.O. M. FISHER HOME, Inc., et al.

Supreme Judicial Court of Massachusetts, Suffolk.

July 1, 1938.

Proceeding by the Old Colony Trust Company, executor of the will of Clara Emerette Gary, against O. M. Fisher Home, Incorporated, and others, for instructions as to the disposition of testatrix' estate. From an adverse decree, respondent the University of Vermont, appeals.

Affirmed.Appeal from Probate Court, Suffolk County; Dolan, Judge.

V. V. R. Booth, of Boston, stated the case.

E. C. Mower, of Boston, for appellant.

A. M. Lyon, of Boston, and G. L. Hunt, of Montpelier, Vt., for appellee O. M. Fisher Home Incorporated.

LUMMUS, Justice.

On January 10, 1919, a charitable corporation was formed in Vermont under the laws of that State, called O. M. Fisher Home, Incorporated, ‘for the purpose of perpetuating the name and memory of Oscar Merrill Fisher, late of Montpelier in the County of Washington and State of Vermont, and to maintain a home for the aged and to provide rooms, board, care, medical attendance and necessaries for the comfort and relief of such persons as may be admitted to said O. M. Fisher Home, Incorporated, and with preference given to women whenever in the judgment of the trustees of said O. M. Fisher Home, Incorporatedthe facilities and accommodations may not be sufficient for both sexes.’ By its articles of association it ‘may take by gifts, grant or devise and hold or dispose of by deed or otherwise real estate and personal property and have generally all the powers incident to corporations.’ On the same day Sophia C. Fisher, widow of Oscar Merrill Fisher, of said Montpelier, executed a will containing this provision: ‘For the purpose of perpetuating the name and memory of Oscar Merrill Fisher, my late husband, I give, devise and bequath all the remainder of my estate, both real and personal and of whatever kind and name and wherever situate, to the O. M. Fisher Home, Incorporated, a corporation organized under and by virtue of the laws of the state of Vermont and having its principal office at Montpelier aforesaid and to its successors forever. This devise and bequest is for the purpose of carrying our the objects specified in the Articles of Association of the said O. M. Fisher Home, Incorporated.’ The will of Sophia C. Fisher, was proved in 1923, in Vermont. The residuary estate amounted to about $18,500.

O. M. Fisher Home, Incorporated, operates a home for aged persons in Montpelier, Vermont. The real estate occupied by it is owned by another charitable corporation called Montpelier Home for the Aged, Incorporated, which had no funds for equipment or maintenance, and therefore leased the real estate without rental to O. M. Fisher Home, Incorporated, which had such funds. There are now six or seven inmates of the institution, and all of them have contributed to the funds of the latter corporation, in the aggregate to the amount of $14,000. Earlier inmates contributed about $50,000, which is in the treasury of that corporation. That fact does not deprive the corporation of its charitable character. Brattleboro Retreat v. Brattleboro, 106 Vt. 228, 237, 173 A. 209. The annual income of that corporation is about $3,000, in addition to gifts from Montpelier Home for the Aged, Incorporated, which amount to about $800 a year. With more money, more inmates could be cared for.

The present petition is brought by the executor of the will of Clara Emerette Gary, late of Boston in this Commonwealth, for instructions. By her will, executed in 1933, she gave the residue of her estate to O. M. Fisher Home, Incorporated, upon conditions stated in articles eight, nine, ten and eleven of the will, for the erection of a memorial building to be known as Gary Home for the Aged, and to be so marked over the front door. She provided that the following inscription be placed in the building: ‘Clara Emerette Gary, M. D., Sc. D. requested the erection of this building in loving memory of her parents * * * [naming them] and her sister and brothers * * * [naming them].’ She provided that if O. M. Fisher Home, Incorporated, should not within three months after her death accept, or vote to accept, the gift, the gift should pass to the University of Vermont. If that institution should not accept the gift, then she wished it to pass to the American Baptist Home Mission Society. The exact language of these articles is shown in a footnote. ¹ Confronted with the necessity of accepting the gift within three months from the death of Clara Emerette Gary on February 15, 1936, O. M. Fisher Home, Incorporated, found itself in doubt as to whether there were any members of the corporation, for all the original incorporators had died, and the articles of association and by-laws provided no means of election others. But as the original incorporators who by the articles of association constituted the ‘first board of trustees,’ had severally died, other persons had been elected as trustees in their stead. On March 27, 1936, there were six trustees, two of whom because of illness or absence were unable to take action. The other four on that day petitioned a superior judge in Vermont to appoint the six trustees as members of the corporation. This the judge did on March 27, 1936, and all six accepted the appointment on March 30, 1936. This was in accord with Vermont Pub.Laws (1933) Title 26, c. 239, s. 5884. All six members agreed in writing to hold a meeting of the corporation at a certain hour and place on April 20, 1936, for the adoption of by-laws and other specified purposes. Notice to all six members, sent by one of them on April 7, 1936, declared that the following additional business would be presented to the meeting of April 20, 1936: ‘(1) To see if the Corporation will accept the gift made to it by the last will and testament of Clara E. Gary, late of Boston, Massachusetts, upon the terms and conditions stated in said will. (2) To take such further action with respect to said gift and the subject-matter thereof as may be advisable.’ At the meeting on April 20, 1936, four our of the six members were present, and they adopted a resolution which, after reciting the nature of the gift under the Gary will, declared as follows: ‘Therefore, be it resolved by said Corporation, that the gift so made to it, as in the premises stated, be, and the same hereby is accepted, upon the terms and conditions in said will stated. Be it further resolved, that notice of this acceptance of said gift be given forthwith by delivering to the Old Colony Trust Company, Boston, Massachusetts, by said will appointed the executor thereof, an attested copy of this resolution, and by filing in the Probate Court, for the County of Suffolk, in the Commonwealth of Massachusetts, a like attested copy of this resolution.’ Notice was given accordingly, and was received by the Probate Court, filed, and docketed on April 22, 1936.

The University of Vermont contends that it is entitled to the residuary estate, amounting to about $150,000, because (1) the acceptance should have been by the trustees of O. M. Fisher Home, Incorporated, and not by the members; (2) the members, even if empowered to act, did not act at a lawfully called meeting; (3) the provisions attached to the gift were such as the O. M. Fisher Home, Incorporated, could not carry out without violation of its own articles of association; and (4) the O. M. Fisher Home, Incorporated, is not in a position to carry out the purposes of the gift, and no acceptance by it should be given effect.

Contentions (1) and (2) may be treated together. The University of Vermont argues that by the law of Vermont the board of trustees of O. M. Fisher Home, Incorporated, had the exclusive power to manage its affairs (Vermont Pub. Laws [1933] Title 26, c. 239, s. 5807), and that this power was confirmed by the by-laws adopted at the meeting of April 20, 1936, prior to the vote purporting to accept the gift. Substantially the only powers of the members, it is contended, are to amend the articles of association and by-laws, to elect trustees, and to fix their compensation. See Burrill v. Nahant Bank, 2 Metc. 163,35 Am.Dec. 395;Enos v. Church of St. John the Baptist, 187 Mass. 40, 44, 72 N.E. 253;Charlestown Boot & Shoe Co. v. Dunsmore, 60 N.H. 85; McCullough v. Moss, 5 Denio, N.Y., 567, 575; Manson v. Curtis, 223 N.Y. 313, 323,119 N.E. 559, Ann.Cas.1918E, 247;Whitfield v. Kern, 120 N.J.Eq. 115, 133, 134,184 N.E. 333. There was no formal action by the board of trustees.

The University of Vermont contends, further, the even if the members had any power, the agreement under which the meeting was held did not include the acceptance of the gift as one of the purposes of the meeting; the additional call by one member that did include it was unauthorized, there being no by-law on the subject at the time; and the two members who were absent from the meeting did not, so far as appears, consent in advance or contemporaneously to such action at the meeting. Under these circumstances, it contends, the action of a majority at the meeting was invalid. Wiggin v. Freewill Baptist Church, 8 Metc. 301; Sabourin v. Lippe, 195 Mass. 470, 478, 479, 81 N.E. 282;Syrian Antiochean St. George Orthodox Church v. Ghize, 258 Mass. 74, 79, 80, 154 N.E. 839;People's Bank v. St. Anthony's Roman Catholic Church, 109 N.Y. 512, 522,17 N.E. 408;Peirce v. Morse-Oliver Building Co., 94 Me. 406, 47 A. 914;Ames v. Goldfield Merger Mines Co., D.C., 227 F. 292, 301, 302;Holcombe v. Trenton White City Co., 80 N.J.Eq. 122, 134, 82 A. 618, affirmed, 82 N.J.Eq. 364, 91 A. 1069. See, also, Carbone, Inc. v. Kelly, 289 Mass. 602, 605, 194 N.E. 701. Although in Vermont the informal action of a majority of a corporate board, without notice, meeting or vote, appears to be valid (Buckley v. Jennings, 95 Vt. 205, 209, 114 A. 40), it is pointed out that in the present case the majority, though a majority of both the...