Trustees of New Castle Common v. Gordy

• Citation: 33 Del.Ch. 334,40 A.L.R.2d 544,93 A.2d 509
• Parties: , 40 A.L.R.2d 544 TRUSTEES OF NEW CASTLE COMMON v. GORDY et al.
• Decision Date: 13 December 1952
• Court: United States State Supreme Court of Delaware

Page 509

93 A.2d 509

33 Del.Ch. 334, 40 A.L.R.2d 544

TRUSTEES OF NEW CASTLE COMMON v. GORDY et al.

Supreme Court of Delaware.

Dec. 13, 1952.

Edward W. Cooch, Jr., of Wilmington, for plaintiff.

Albert W. James (of Hering, Morris, James & Hitchens), of Wilmington, for defendants Elva S. Gordy and Ralph E. Gordy.

H. Albert Young, Atty. Gen., pro se.

SOUTHERLAND, Chief Justice, TUNNELL, Justice, and HERRMANN, Judge, sitting.

SOUTHERLAND, Chief Justice.

Trustees of the New Castle Common, a corporation (herein 'plaintiff'), brought suit in the Court of Chancery against Elva S. Gordy and Ralph E. Gordy (herein 'defendants') for the specific performance of a contract by which plaintiff has agreed to sell and defendants have agreed to buy certain land owned by plaintiff. Defendants have refused to perform the contract, asserting that plaintiff is without power to convey good title to the land, which is part of the corpus of a charitable trust administered by plaintiff. Plaintiff avers that it is empowered to convey by the Act of the General Assembly of April 15, 1885, ch. 575, Vol. 17, Del.Laws; and defendants reply that the act is unconstitutional.

This issue of law having been framed, the Chancellor has certified to us under Rule 20 the following question:

'Is Section 1 of the Act of the General Assembly of the State of Delaware, being Chapter 575, Volume 17, Laws of Delaware, passed at Dover April 15, 1885, which authorized and empowered the Trustees of New Castle Common to sell and convey in fee simple, in whole or in part, the real estate held by them in trust, and to make good and sufficient deeds under the corporate seal of said Trustees, in such manner that the Purchaser or Purchasers shall take and hold the said property freely and discharged from the said Trust, and without liability as to the application of the purchase money, valid and constitutional?'

The essential question concerns the nature and extent of the power of the General Assembly of this state over the administration of a charitable trust.

After argument in the cause, this Court of its own motion stayed proceedings here until the Attorney General should be made a party to the cause, and leave was granted to the parties to take appropriate proceedings in the court below for that purpose. See Del.Sup., 91 A.2d 135. Such proceedings were had and have been certified to this Court. The Attorney General filed in the court below a motion for summary judgment for the defendants, but has now advised us that the motion will not be pressed. He has also advised us that he has concluded that the issues have been adequately briefed and that the public interest will be protected by this Court's decision. He accordingly submits himself to any judgment which may be given in the cause. We therefore take up the merits.

The facts are these:

By virtue of a warrant from William Penn, Proprietary and Governor of Pennsylvania and the 'Counties annexed' (now the State of Delaware), there was surveyed in 1704 a tract of 1068 acres of land adjoining to or near the Town of New Castle, New Castle County, 'to the only use and behoof of the * * * Inhabitants' of the town, 'to lie in common.' No formal deed or grant was then made, however, and no authority for the regulation of the use of the common was established.

By the year 1760 the encroachments of trespassers upon the common lands appear to have rendered necessary the creation of a body empowered to administer and protect the rights of the inhabitants of New Castle in the common lands. Accordingly, upon petition to the colonial assembly of the three counties, and upon application to Thomas Penn and Richard Penn as 'Proprietaries and governors in chief of the Counties of New Castle, Kent and Sussex, on Delaware', the Proprietaries, by an instrument dated October 31, 1764, constituted certain of the inhabitants of New Castle 'Trustees of New Castle Common', to be 'one body corporate and politic * * * by the name of the Trustees of New Castle Common', with perpetual succession; and by the same instrument granted to the Trustees the tract of 1068 acres theretofore surveyed. After conferring certain administrative powers upon the Trustees, the instrument--a combined charter and deed--provided that the Trustees 'shall not have, nor be deemed or construed to have, any right, power or authority to grant, bargain, sell, alien, convey, release or confirm the hereby granted premises, or any part thereof, to any person or persons whatsoever;' and declared that the land 'shall be and remain * * * for the use of a Common for the inhabitants of the Town of New Castle, and to no other use, intent or purpose whatsoever.' A condition subsequent was added, providing that if any part of the land should be sold or conveyed away, or if the corporation should be dissolved or its charter forfeited, then and in any such case the grant should 'cease, determine and become absolutely void', and the granted premises should revert to the grantors, their heirs and assigns.

These restrictive provisions of the grant--the condition subsequent and the limitation of the use of the land to a common--had the effect of preventing the inhabitants of New Castle, the beneficiaries of the trust, from reaping any substantial benefit from the trust property. In 1789 representations to this effect were made to the Penn heirs, and in 1790 the trustees presented to the Penns a formal petition seeking the relinquishment by them of the burdensome limitations of the former grant. By deed dated July 7, 1791 (herein 'the deed of 1791'), the Penns, as 'late proprietaries' conveyed the land to Isaac Grantham and others in fee simple, in trust, however, for the use and benefit of the inhabitants of the Town of New Castle, and to be conveyed by the grantees, 'by such assurance or assurances' as counsel might advise, in trust 'unto the present or future trustees' of the land 'or unto such future trustees and their successors as may be chosen or appointed, in and by virtue of an act of incorporation, when the same may be passed by an act of the General Assembly of the Delaware State, * * * to be appropriated in such manner as a majority of trustees in their wisdom may direct'. Then follows this proviso:

'Provided, that nothing herein contained, or in the assurance of assurances so to be made as aforesaid, shall vest the trustees of the said Common with any power or authority to sell the same, or any part thereof'.

By the Act of the General Assembly of January 25, 1792, entitled 'An Act to enlarge the Corporate Power of the Trustees of the New Castle Common' (herein 'the Act of 1792'), the trustees of the Common were re-created a 'body politic and corporate * * *' by the name of the Trustees of the New Castle Common, and empowered to take title to the land, 'and the same, or any part thereof, to grant, demise and dispose of for the use and behoof of the Inhabitants of the said Town of New Castle, to be appropriated in such manner as a majority of the said trustees in their wisdom may direct.' There follows this proviso:

'Provided always, that they reserve to themselves, and their successors, for the benefit and use of the inhabitants of the said town, an annual or other rent, as a reasonable equivalent for the leasing or disposing of the before described tract of land, or any part or parts thereof, and that neither the said trustees, nor their successors, shall have power to sell the said tract of land, nor any part or parts thereof, absolutely, nor lease, nor otherwise dispose thereof for a longer term than thirty years from the commencement of the lease or other contract.'

On July 30, 1792 (herein 'the deed of 1792'), Isaac Grantham and others conveyed the land to the surviving trustees of the New Castle Common in fee simple, subject to the following trusts and conditions:

'In trust, nevertheless, to and for the special uses, benefits, ends, intents and purposes, and under and subject to the several provisos contained, mentioned and declared, as well in the beforementioned indenture of conveyance from the said John Penn, of Stoke Pogis, and John Penn, of Dover Street [the deed of 1791], as also in an Act of General Assembly of the Delaware State, passed at Dover, the day in the year of our Lord one thousand seven hundred and ninety-two, entitled 'An Act to enlarge the Corporate Powers of the Trustees of the New Castle Common."

The gift by William Penn and his heirs, embodied in the instruments just reviewed, created a charitable trust. Trustees of New Castle Common v. Megginson, 1 Boyce 361, 77 A. 565.

On April 15, 1885, was passed the Act of Assembly, Vol. 17, Laws of Del., Ch. 575, empowering the Trustees of the New Castle Common to sell and convey in fee simple all or any part of the lands held by them. It reads as follows:

'Whereas by warrant from William Penn and by subsequent charter and deeds from his heirs, certain real estate adjacent to the City of New Castle (then town) was vested in trustees for the benefit of the citizens of said city (then town); and whereas it has been represented to this General Assembly that it would be greatly for the benefit of the said city and its inhabitants if the said real estate should be sold; therefore

'Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met (two-thirds of each branch concurring therein):

'Section 1. That the Trustees of New Castle Commons be and they are hereby authorized and empowered to sell and convey in fee simple, in whole or in part, the said real estate now held by them in trust, making therefor good and sufficient deeds under the corporate seal of the said trustees, in such manner that the purchaser or purchasers shall take and hold the said property free and discharged from the said trust, and without liability as to the application of the purchase money.

'Section 2. Upon sale of the said premises, in part or in whole, as...