State ex rel. Nixon v. Hutcherson

• Decision Date: 11 February 2003
• Docket Number: No. SC 84679.,SC 84679.
• Citation: 96 S.W.3d 81
• Parties: STATE ex rel. Jeremiah W. (Jay) NIXON, Attorney General, and Carroll County Trust Company, Relators, v. The Honorable John R. HUTCHERSON, Retired, Circuit Judge, 8th Judicial Circuit, Ray County, Respondent.
• Court: Missouri Supreme Court

96 S.W.3d 81

STATE ex rel. Jeremiah W. (Jay) NIXON, Attorney General, and Carroll County Trust Company, Relators, v. The Honorable John R. HUTCHERSON, Retired, Circuit Judge, 8th Judicial Circuit, Ray County, Respondent.

No. SC 84679.

Supreme Court of Missouri, En Banc.

February 11, 2003.

Jeremiah W. (Jay) Nixon, Atty. General, Tracy E. McGinnis, Sarah E. Ledgerwood, Assistant Attys. General, Jefferson City, James A. Foland, David W. White, Jacqueline M. Sexton, John A. Watt, Kansas City, for Relators.

Roger M. Driskill, Liberty, John P. Killian, Independence, for Respondent.

I.

WILLIAM RAY PRICE, JR., Judge.

Because only the attorney general of the state of Missouri or individuals with a "special interest" have standing to bring suit to enforce charitable trusts, the trial court exceeded its jurisdiction when it refused to dismiss a class action lawsuit in Ray County seeking to enforce certain provisions of a trust and the last will of Mary Katherine Axtell. The preliminary writ is made absolute.

II.

Prior to her death in 1960, Mary Katherine Axtell created a will and testamentary trust. The will contained a number of provisions that are at issue here. First, the will dealt with a farm in Ray County stating,

It is my will that the farm in the Section twenty-four (24) and twenty-five (25), Township Fifty-three (53) and Range twenty-nine (29) all in Ray County, Missouri, or any additional part thereof, is to be used for the purpose for which it was purchased: to begin as a stock ranch with future development, as funds become available, into a boarding ranch for children ranging in age from five (5) years through twelve (12) years, inclusive, for the express purpose of their entertainment and farm life education.

The will also dealt with items of personal property, ultimately stating,

Any accumulated funds above cost of maintenance and reasonable compensation for said trustee to be used for the higher education of capable children of Ray and Carroll Counties, Missouri, especially those whose parents are unable, financially, to provide such education.

The will also provided for another farm in "Moss Creek, Trotter and Egypt Townships". The "income" of this farm "or accumulated cash therefrom" was ultimately to be distributed in equal shares among seven individuals until the death of the last survivor. Then,

[M]y said trustee shall thereafter pay the net income from said trust property to an endowment fund to be used for the higher education of capable children of Ray and Carroll Counties, Missouri.

Finally, the will provided that the trust created therein should extend for twenty years beyond the death of the last survivor of the above group of seven individuals and that,

I do direct that upon the expiration of the said twenty (20) years following the death of the survivor, my said trustee shall pay out of the residue of said trust estate for the same purpose as hereinbefore stated to such capable children as are selected by my said trustee in such amounts as my trustee deems advisable.

Lucille Palmer is the sole living beneficiary of the above group of seven individuals. She is a plaintiff in the lawsuit below making individual claims on her own behalf and is not involved in the writ proceeding now before this Court. The plaintiffs in the lawsuit¹ sought and obtained class certification pursuant to Rule 52.08 to proceed in this matter as representatives of the class of "all persons including students past and present, parents of such students and adults responsible for such students who were and are `capable children desiring higher education of Ray and Carroll Counties, Missouri, especially those whose parents are unable, financially, to provide such education and children between the ages of five and twelve desiring to receive a farm life education.'" It was represented to the court below that this class contains "at least six thousand persons". The putative class representatives, and certain other individual plaintiffs, seek relief against the trustee, the Carroll County Trust Company, alleging that it never operated the Ray County real estate as a boarding ranch for children; that it never operated the Ray County real estate as a stock ranch; and that it never provided financial assistance for the academic interests of the children from Ray and Carroll Counties.

The Carroll County Trust Company and the attorney general sought dismissal below of, these claims arguing, inter alia, that the class plaintiffs, and the other individual plaintiffs, have no standing to bring this action. They maintain that only the attorney general has standing to bring a lawsuit to enforce a charitable trust. This Court issued its preliminary writ on August 27, 2002.

III.

The nature of a charitable trust, in contrast to a private trust, determines who has standing to bring suit thereunder. This is most clearly explained in Austin Wakeman Scott & William Franklin Fratcher, The Law of Trusts vol. IVA, 364, p. 108 (4th ed. 1989):

The most important distinction between a private trust and a charitable trust is with reference to the beneficiaries.... [A] private trust is not valid unless there is a beneficiary who is definitely ascertainable within the period of the rule against perpetuities. In the case of a private trust no one except a beneficiary or one suing on his behalf can maintain suit to enforce the trust. In the case of a charitable trust the beneficial interest is not given to individual beneficiaries, but the property is devoted to the accomplishment of purposes that are beneficial or are supposed to be beneficial to the community, and the persons who are to receive benefits from the trust need not be designated. A charitable trust is enforceable at the suit of the Attorney General and ordinarily is not enforceable at the suit of any beneficiary, although in some charitable trusts there may be beneficiaries having such special interest in the performance of the trust as to entitle them to maintain a suit to enforce it.

The law of Missouri is in accord. "A public charity is one in which there is a benefit to be conferred on the public at large, or some portion thereof, or upon an indefinite class of persons." Voelker v. Saint Louis Mercantile Library Ass'n, 359 S.W.2d 689, 696 (Mo.1962) (quoting 10 Am. Jur. Charities, § 5). "The essential elements of a public charity are that it is not confined to privileged individuals, but is open to the indefinite public." Id. at 694.

An individual member of the public has no vested interest in the property or funds of the [charitable] trust.... Any action on this account must be taken by the Attorney General as the representative of the public. However, those with a special interest may enforce the trust, or a localized or grouped charity may be enforced by a class suit.

Dickey v. Volker, 321 Mo. 235, 11 S.W.2d 278, 281 (1928).

The Attorney General does, of course, represent the public and the public interest in respect to matters involving enforcement of public charitable trusts....

German Evangelical St. Marcus Cong. v. Archambault, 404 S.W.2d 705 (Mo.1966)....