Smith v. Moore

• Decision Date: 22 March 1965
• Docket Number: No. 9620.,9620.
• Citation: 343 F.2d 594
• Parties: Virginia Marrow SMITH, Eugene B. Chase, Jr., and Ferris Byard Derickson, Appellants, v. Roderick D. MOORE, sole surviving administrator, D.B.N., C.T.A., and trustee of the wills of George B. West, deceased, and Missouri P. Smith, deceased, Virginia Tabb Moore, University of Richmond, a Virginia Corporation, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

343 F.2d 594 (1965)

Virginia Marrow SMITH, Eugene B. Chase, Jr., and Ferris Byard Derickson, Appellants, v. Roderick D. MOORE, sole surviving administrator, D.B.N., C.T.A., and trustee of the wills of George B. West, deceased, and Missouri P. Smith, deceased, Virginia Tabb Moore, University of Richmond, a Virginia Corporation, Appellees.

No. 9620.

United States Court of Appeals Fourth Circuit.

Argued November 6, 1964.

Decided March 22, 1965.

F. Lee Ford, Newport News, Va., and Neill H. Alford, Jr., Charlottesville, Va. (William H. Townsend, Columbia, S. C., Lipshutz, Macey, Zusmann & Sikes, Atlanta, Ga., Townsend & Townsend, Columbia, S. C., and Ford & Avis, Newport News, Va., on brief), for appellants.

Richmond Moore, Jr., Richmond, Va. (S. W. Colonna, Colonna, Lieberman & Cutler, Newport News, Va., and Tucker, Mays, Moore & Reed, Richmond, Va., on brief), for appellees.

Before HAYNSWORTH and BOREMAN, Circuit Judges, and WINTER, District Judge.

WINTER, District Judge.

In this case, we must decide whether a trust created by the last will and testament of George B. West, as augmented by a trust created by the last will and testament of his sister, Missouri P. Smith, has failed and, if so, what is the proper disposition of the corpus thereof. The appeal is before us at the instance of the testator's surviving heirs at law, two great grandnephews and a grandniece, from a determination that no rights to possession of the corpus of the trusts had arisen in favor of them, 225 F.Supp. 434 (1963).

George B. West executed a holographic last will and testament on May 28, 1910 and a codicil dated January 27, 1912. He remained a bachelor throughout his life and died March 3, 1917. By his last will he directed the payment of his debts, made a bequest of his household goods and effects to his niece, Emily M. Barrett, the daughter of Missouri P. Smith, established annuities for another niece and nephew, and created a life estate in the residue in favor of Emily M. Barrett. The codicil cancelled certain debts owing to him by his nephew and the nephew's wife, and made three bequests to religious organizations affiliated with the Baptist Church.

The will provided that upon the death of the life tenant, Emily M. Barrett, the executors should

"`* * * pay over all of my personal estate and convey all real estate belonging to my estate to the Board of Directors of a Hospital hereinafter named and described and directed to be organized and incorporated, or to such persons as they may direct, to be held for the use and benefit of said Hospital as hereinafter provided.\'"

After granting authority to sell real estate without requiring the purchasers to see to the application of the purchase money, the testator wrote the sixth and seventh clauses of his will, giving detailed instructions for the establishment of the aforesaid hospital in the following manner:

"`Sixth. — My executors hereinafter named or the acting or surviving one of them, or my personal representative shall after the death of my niece Emily M. Barrett select and associate with them or him as many other men as will make nine men including such executors, executor or personal representative or representatives, who to-gether (sic) shall incorporate organize and establish a free Hospital in the City of Newport News, Va., or within five miles of its then corporate limits to be after the pattern of the Sheltering Arms Hospital of Richmond, Va., and of which the said nine men shall be the officers and directors for the first year with power in them and their successors to fill vacancies as they may occur. The Hospital shall be named "The Parker and Mary West Hospital," after my parents. It shall be non-sectarian and entirely free from charges and pay by or from its patients and said hospital to minister to all worthy white persons from the City of Newport News, Va. and Eastern Virginia, who are not able to pay physicians and hospital charges, and are not incurable and have no contagious diseases. Preference being given to patients of Newport News, Va.

"`Seventh. — My said executors, executor or personal representative or representatives shall at the death of my said niece Emily M. Barrett or as soon thereafter as they may deem practicable, turn over, transfer and assign to such officers of said hospital, all of my personal and real estate then in their hands or under their control (except that part of my estate specifically bequeathed) to be used for the establishment and maintenance of said free hospital. I desire and direct that not more than one-fifth (1/5) of my estate shall be used in the purchase of a site for said hospital and in erecting buildings and furnishings and equiping (sic) the same. I desire and direct that the income derived from the balance of my estate shall be used and applied to the maintenance of said hospital. The principal thereof to be left intact as an Endowment Fund of said Hospital. The receipts and income therefrom to be used for maintenance and current expenses of said hospital. The Board of Directors and Board of Managers shall serve without pay.\'"

The will made no gift over for the disposition of the trust in the event its specific purpose failed.

Emily M. Barrett survived her uncle, as did her mother, Missouri P. Smith. The latter, by will executed in 1920 bequeathed her household goods and effects to Emily M. Barrett for life, with the "remainder at her death to the Hospital hereinafter named and provided for." After housekeeping directions for the payment of taxes and expenses of administration and making monthly bequests to two nieces during the period that they should be in college, Missouri P. Smith created a life estate in the rest and residue of her estate for her daughter, with the precatory provision "* * * I would suggest and request that, as to any unexpended income from my estate she will give same at her death to the Hospital sought to be established by my brother and myself as a family memorial."¹ The will of Missouri P. Smith then continued:

"At the death of my said daughter said executors and trustees shall turn over the entire remainder of my estate, of every sort and description to the `Parker & Mary West Hospital,\' to be incorporated as provided in clause six (6) of the will of my brother, Geo. B. West, which is on record in the Clerk\'s Office at Newport News."

Emily M. Barrett died in 1953 and her will and codicil were admitted to probate on September 4, 1953.

The district court found that the two great grandnephews and a grandniece were heirs at law of the testator and testatrix and would be entitled to share in the distribution of the balance remaining in their estates and trusts if there has been a failure of purpose. Because the district court found no failure of purpose which the application of legislative cy pres could not correct, it did not adjudicate the respective shares to which the great grandnephews and grandniece, and other persons having possible claims, would be entitled.

The district court also found that the combined estates have a value approximating $700,000.00, and that one-fifth of even the combined estates would be grossly insufficient for site acquisition, constructing a hospital and equipping the same under prices prevailing at any time since the death of Emily M. Barrett. Specifically, the lower court found that the minimum basic cost of constructing a forty-bed hospital would be approximately $560,000.00, without equipment or site acquisition costs, and a more realistic cost of a forty-bed hospital, patterned after Sheltering Arms Hospital, would be in excess of $900,000.00, exclusive of land acquisition costs. These findings are fully supported by the record and adopted by us.

We accept, also, the findings of the district court with reference to the history of Sheltering Arms Hospital, still in operation in Richmond, Virginia significant in that the history of the hospital must have been known to George B. West at the time he executed his will and republished it in connection with the execution of the codicil. The court found:

"This institution demonstrates a pattern of sacrifice and hard work, modesty and faith, all with little or nothing at the beginning, but eventually giving rise to a growth of considerable importance to the City of Richmond and its needy sick. It was established in 1889. With six patients and one nurse, it was initially housed in part of a hotel in downtown Richmond. With the assistance of gifts and solicited funds, the hospital progressed. In 1892 a residence was purchased and remodeled, opening in 1894 with 17 beds. In 1901 a group of leading citizens established an endowment fund through contributions sufficient to provide $16,000.00 annual income. An annex was constructed in 1909-1910, thus increasing to 41 the bed capacity. This was the situation existing when George B. West prepared and executed his will. Services of physicians were entirely voluntary at Sheltering Arms. There was a nursing school on the premises and, in 1909-1910, there were two graduates. The physical plant of the hospital was extremely modest. Surgical, medical, obstetrical, orthopedic and pediatric services were available but it had no X-ray facilities. The staff made its own supplies, bandages, etc., but numerically the staff was always small and, as late as 1922, there were only 10 nurses in training, 2 graduate nurses, an interne, and approximately 12 additional persons supplying general services such as cooking, janitorial, orderly, etc."

Before the lower court, appellee, the successor administrator d. b. n. and c. t. a. and trustee of the estates of George B. West and Missouri P. Smith, advanced two solutions to the problem of application of the combined corpus of the two estates. One proposal, that the north wing of the existing Riverside Hospital in Newport News be purchased for $150,000.00, including the equipment, and used for hospital purposes, need not be...