Shattuck v. Wood Memorial Home

• Decision Date: 01 May 1946
• Citation: 66 N.E.2d 568,319 Mass. 444
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: MAYO A. SHATTUCK & another, trustees, v. WOOD MEMORIAL HOME, INC., & others.

319 Mass. 444

66 N.E.2d 568

MAYO A. SHATTUCK & another, trustees, v. WOOD MEMORIAL HOME, INC., & others.

Supreme Judicial Court of Massachusetts, Suffolk.

May 1, 1946

March 5, 1945.

Present: FIELD, C.

J., LUMMUS, RONAN WILKINS, & SPALDING, JJ.

Trust, Charitable trust, Constructive trust. Equity Jurisdiction, To enforce trust. Equity Pleading and Practice, Parties, Answer, Decree.

An unauthorized transfer by a trustee to a charitable corporation of property held by him on a charitable trust must be set aside even after the lapse of twenty-eight years and without regard to the efficiency of the corporation's management of the property.

A succeeding trustee of a charitable trust was a proper party to maintain a suit in equity to set aside an unauthorized transfer of the trust property by the original trustee.

Testamentary trustees, to whom the will gave land and money in trust to establish on the land, if they thought it practicable "institutions [having specified names] providing a home for destitute convalescents and a home for needy incurables . . under such rules and regulations as they deem wise and expedient," did not comply with their duty under the will and acted without authority in transferring all the trust property to a charitable corporation which they incorporated without mention in the incorporation papers of the will or its provision, whose name was different from those specified in the will, whose purposes were to establish and conduct "a home for incurables" and "a home for convalescents" and whose organization was such that the trustees, even though holding offices therein, were in a minority in its control and management and in effect surrendered their powers and discretion respecting the accomplishment of the testator's wishes to a majority not selected by him.

No error appeared in a suit in equity in a failure of the trial court to uphold a defence not set up in the answer.

A charitable corporation, which without consideration had taken a conveyance of property from a testamentary trustee with knowledge of the terms of the will, wherein no authority to make such conveyance was conferred on the trustee, was properly ordered in equity to restore to a succeeding trustee such of the property as was then held by it and to account to him for its expenditures.

In a suit in equity in which the plaintiff sought relief against two defendants in the alternative, a decree properly giving relief against only one of the defendants should not merely have been silent as to the other defendant but should have contained an express dismissal of the bill as to him.

PETITION IN EQUITY, filed in the Probate Court for the county of Suffolk on June 23, 1943.

The case was heard by Dillon, J.

R. C. Evarts, (J.

D. Hanify with him,) for the respondent Wood Memorial Home, Inc.

H. D. McLellan, for the respondents executors of the will of Robert F. Herrick.

M. A. Shattuck, (W.

Powers & J. B. Dolan with him,) for the petitioners.

WILKINS, J. This is a petition in the Probate Court by succeeding trustees under the will of Frank Wood, late of Boston, deceased, against the respondent Wood Memorial Home, Inc., a Massachusetts charitable corporation, for the restoration of assets and for an accounting; or, in the alternative, against the respondents executors of the will of Robert F. Herrick deceased, and against "the estate of Lillian Neale (Wood) Bradway, late of Pasadena, California," Robert F. Herrick and Lillian Neale (Wood) Bradway having been the original trustees under the will of Frank Wood, for the payment of an amount equal to the value of the property held by the corporation and the total of all sums expended by it. The Attorney General was also a party respondent. No service could be made upon representatives of the Bradway estate. The judge entered a decree, which ordered the corporation. "to restore all assets now held by it," and to account for its expenditures, to the petitioners. The decree made no reference to the executors of the Herrick will or to the Bradway estate. The corporation and the executors of the Herrick will appealed. The judge made a report of the material facts found by him, and the evidence is reported. G. L. (Ter. Ed.) c. 215, Sections 11, 18. We are not limited to the facts found by the judge, but from the evidence may find other facts, and may draw our own inferences, whatever may have been those drawn by the judge. Lowell Bar Association v. Loeb, 315 Mass. 176 , 178. Malone v. Walsh, 315 Mass. 484 , 490. Counelis v. Counelis, 315 Mass. 694 , 696. Cooperstein v. Bogas, 317 Mass. 341, 345. Jurewicz v. Jurewicz, 317 Mass. 512 , 513. Ziegler v. McKinlay, 318 Mass. 765 , 767. There is no question of credibility of witnesses, as the facts are undisputed. MacLennan v. MacLennan, 316 Mass. 593 , 595. Kerwin v. Donaghy, 317 Mass. 559 , 565. See Webber v. Rosenberg, 318 Mass. 768 .

The testator died March 27, 1914. His will, which was executed January 15, 1914, and was allowed April 16, 1914, provided: "Nineteenth: I give, devise and bequeath to Lillian Neale Wood and Emma J. Fitz the sum of Twenty-five Thousand (25,000) dollars, but in trust nevertheless for the following purposes, namely: To safely invest and reinvest the same and to pay over the net income therefrom for the benefit of the Children's Home located on North Street, Walpole, Massachusetts, but should the said Home at any time cease to exist, I direct that said principal sum shall be paid over to the trustees named in the Twentieth clause of this my will, to be held by the said trustees in the same manner and for the same uses and purposes set forth in said Twentieth clause. Twentieth: Believing that great good can be accomplished by the establishment of a home for needy and indigent convalescents and a home for incurables, it is my desire to found such institutions in my life time, but should I for any reason fail in the accomplishment of this purpose, I hereby give, devise and bequeath to said Lillian Neale Wood and Robert F. Herrick of Milton, Massachusetts, all my land on Morton Street in Dorchester aforesaid, containing forty acres more or less, and the sum of Fifty Thousand (50,000) dollars in money, but in trust nevertheless for the following purposes, namely: To carefully and thoroughly consider the practicability of such organizations, and if, after full and careful consideration, they deem it practicable and desirable, they are to use said money in founding and establishing institutions providing a home for destitute convalescents and a home for needy incurables, or either of them, upon the land above devised on Morton Street, under such rules and regulations as they deem wise and expedient, to be known as the Convalescents Home and the Home for Incurables. . . . Should said trustees deem it inexpedient and impracticable to establish such Home or Homes as above provided, after taking time for full consideration of the matter but not to exceed three years, I hereby direct them to divide the land and money given them for said purpose among such beneficiaries of this will in such amounts as they may in their judgment deem advisable and expedient. Twenty-first: All the rest and residue of my property and estate, real, personal or mixed, of which I shall die seized and possessed or to which I may be entitled at the time of my decease, I give, devise and bequeath to the Convalescents Home and the Home for Incurables, if either or both of them are established as above provided, but should my trustees deem it inadvisable to found one or both of said Homes, then to the trustees hereinbefore named, to be divided among such beneficiaries herein named in such amounts as they in the exercise of their discretion may deem advisable."

On April 16, 1914, Robert F. Herrick and Lillian Neale Wood, the testator's widow, were appointed and qualified as executors. On February 14, 1916, they qualified as trustees under the twentieth and twenty-first clauses. On February 29, 1916, the widow, who had married Charles A. Bradway, and was then known as Lillian N. Bradway, qualified as sole trustee under the nineteenth clause, Emma J. Fitz having declined to serve.

The testator in his lifetime did not found either of the "institutions" referred to in the twentieth clause. Before March 26, 1915, Mr. Herrick and Mrs. Wood carefully and thoroughly considered "the practicability of such organizations," and "after full and careful consideration" deemed it "practicable and desirable" to form a corporation to provide the homes. On that date Wood Memorial Home, Inc., was incorporated. The incorporators were Mrs. Wood, Mr. Herrick, Stewart C. Woodworth and two other law associates of Mr. Herrick, as well as Alice T. Herrick (the wife of Mr. Herrick), and Emma J. Fitz. The charter recites that the corporation was "for the purpose of establishing, maintaining and operating a home for incurables, and for the further purpose of establishing, maintaining and operating a home for convalescents. For the purpose of doing all or any other acts necessary or proper in connection with the foregoing purposes, provided that none of the funds or property of the corporation shall be paid to any one as dividends or profits; and for the purpose, upon the dissolution of the corporation, of transferring or conveying any or all of the property of the corporation which may be legally so transferred or conveyed to such other charitable corporation or corporations organized under the laws of Massachusetts, only as may be designated by vote of the members."

The original board of trustees consisted of Mrs. Wood, Mr. Herrick, Mrs Herrick, Mr. Woodworth, and Emma J. Fitz. Mrs. Wood (later Mrs. Bradway) was president from the beginning until her death in 1938. Mr....