Scudder v. Sec. Trust Co., 169.

• Decision Date: 01 April 1927
• Docket Number: No. 169.,169.
• Citation: 213 N.W. 131,238 Mich. 318
• Parties: SCUDDER v. SECURITY TRUST CO.
• Court: Michigan Supreme Court

238 Mich. 318

213 N.W. 131

SCUDDER

v.SECURITY TRUST CO.

No. 169.

Supreme Court of Michigan.

April 1, 1927.

Appeal from Circuit Court, Wayne County, in Chancery; Alfred J. Murphy, Judge.

Suit by Charles J. Scudder against the Security Trust Company, as trustee. Decree of dismissal, and plaintiff appeals. Affirmed.

Argued before the Entire Bench, except CLARK, J.Douglas, Barbour, Brown & Rogers, of Detroit, for appellant.

H. E. Spalding, of Detroit, for appellee.

McDONALD, J.

The purpose of this bill is to test the validity of a charitable trust created in the will of John Scudder, deceased. The plaintiff is an heir at law. The defendant is the trustee named in the will. The hearing was had upon the pleadings. The circuit judge sustained the trust and dismissed missed the bill. From the decree entered the plaintiff has appealed.

The trust was created by section h of paragraph 8 of the will. It reads as follows:

‘Upon the death of my sister, Jennie Baxter, I direct that the entire residue of my trust estate (after providing for the specific trusts hereinabove created) shall be held by my trustee as a trust to be known as the ‘John Scudder Trust for Old People.'

‘My trustee shall use said fund, both principal and income, for the purpose of promoting and providing for the welfare and comfort of elderly men and women who are entirely without means for their maintenance and support. To accomplish this purpose, I direct that said funds shall be used by my trustee under the direction of a committee of three (3) persons. Such committee shall be selected by my trustee. One member thereof shall be the president or one of the vice presidents of the Security Trust Company, said trustee, and the other two (2) members shall be persons identified with charitable work and who, in the judgment of my trustee, are qualified to perform the duties hereby imposed upon them. My trustee shall have sole discretion in the naming of the members of said committee and it may remove such members and select others whenever in its judgment such action is advisable.

‘It is my wish and I direct that said trust funds shall be distributed among not less than three (3) organized institutions in the city of Detroit which undertake the charge and care of elderly persons or a part thereof may be used to found a new institution having a like purpose. The distribution of said funds shall rest in the sole discretion of the committee and in allotting and assigning said funds the committee shall not take into consideration race, color, sect, religious faith or any other like conditions. Either principal or income of said trust property may be paid to such institutions in the discretion of the committee and the same may be used for new buildings and equipment, as a part of an endowment fund, or for special purposes as particular needs may require, as it is my wish that said funds shall be used to aid in the broadest manner the care of elderly people without means of support.

‘The distribution and use of said funds by the committee shall be final and no institution or organization shall have any right of appeal from its decision. Such distribution shall not of necessity be in equal portions to any designated institution, nor shall such payments necessarily be made in the same manner nor at the same time. I have confidence that my trustee in co-operation with such committee will use the trust funds hereby provided in a manner which will best promote the welfare of elderly persons without means of support and which will serve the best interests of the community.'

The plaintiff contends that this trust provision is invalid, because the trust is not fully expressed and clearly defined in the will.

Prior to the enactment of Act 122, Public Acts of 1907, a charitable trust in this state, like all other beneficial trusts was invalid if it created a perpetuity, or if there was indefiniteness and uncertainty in regard to the beneficiary or object of the trust. The statute which was then effective as to all trusts provided:

‘Express trusts may be created for * * * the beneficial interest of any person or persons, when such trust is fully expressed and clearly defined upon the face of the instrument creating it, subject to the limitations as to time prescribed in this title.’ Section 11575, C. L. 1915.

By the enactment of Act 122, the Legislature of 1907 distinguished charitable trusts from trusts for private benefit by providing that they should not be invalid for indefiniteness or uncertainty as to the beneficiaries or for violating the rule against perpetuities.

Act 122 and the amendment of 1911 were repealed by Act 280, Public Acts 1915 (§ 11099, C. L. 1915). The act of 1915 was much more comprehensive than the acts which it repealed, but it re-enacted the main provisions of the former acts.

It is first argued by counsel for the plaintiff that the validity of the trust provision in question is to be tested by construing it in connection with both sections of the statute; viz., section 11575 and section 11099; and so construing it they reached the conclusion stated in their brief, as follows:

‘The rule governing charitable trusts as gathered from the two sections would when be that any gift, grant, bequest, or devise, whether in trust or otherwise, to charitable or benevolent uses is valid without regard to the rule against perpetuities, if it be fully expressed and clearly defined upon the face of the instrument creating it, and misnomer or uncertainty or indefiniteness in naming the beneficiaries thereunder will not invalidate the trust if beneficiaries are named who can be ascertained by extrinsic parol evidence. In this connection, ‘To name’ is given its ordinary and usual meaning; that is, to ascribe an appellation to. In the present case, this was not done and the trust must fail.'

We are unable to agree with counsel in this contention. Section 11575 has no application whatever to charitable trusts. It applies to all other trusts. The subsequent act (section 11099) puts charitable trusts in a class by themselves and provides different rules for testing their validity. So that the validity of the trust provision under consideration must be tested solely by reference to the provisions of Act 280, Public Acts of 1915 (sections 11099-11100, C. L. 1915). And it would seem that the language of this act furnishes a sufficient answer to the objections urged by the plaintiff against the trust provision of this will. It reads as follows:

(11099) Section 1. ‘No gift, grant, bequest or devise, whether in trust or otherwise to religious, educational, charitable or benevolent uses, or for the purpose of providing for the care or maintenance of any part of any cemetery, public or private, or anything therein contained which shall in other respects be valid under the laws of this state, shall be invalid by reason of the indefiniteness or uncertainty of the object of such trust or of the persons designated as the beneficiaries thereunder in the instrument creating the same, nor by reason of the same contravening any statute or rule against perpetuities. If in the instrument creating such a gift, grant, bequest or devise, there is a trustee named to execute the same, the...