St. James v. . Bagley , 138 N.C. 384 ( 1905 )

CLARK, C. J., dissenting. This is a controversy without action under section 567 of The Code. The plaintiff is a corporation — Wardens and Vestry of St. James Parish — organized and existing under the laws of North Carolina, with full power to take, hold, and dispose of real and personal property.

On 29 March, 1867, Dr. A. J. DeRosset and wife executed and delivered to the plaintiff a deed in words and figures as follows: "This indenture made this 29 March, 1867, between Armand J. DeRosset and Eliza J., his wife, of the city of Wilmington, State of North Carolina, of the first part, and the Vestry and Wardens of St. James Church, in the town of Wilmington, of the second part: witnesseth, that the said parties of the first part, for the purpose of aiding in the establishment of a Home for Indigent Widows or Orphans or in the promotion of any other charitable or religious objects to which the property hereinafter conveyed may be appropriated by the said parties of the second part, and in further consideration of $1 to them in hand paid by the parties of the second part, the receipt whereof is hereby acknowledged have granted, bargained, and sold, and do by these presents (386) grant, bargain, and sell to the said parties of the second part, their successors and assigns, all those lots or parcels of land situate in the city of Wilmington aforesaid, between Orange and Ann streets and Eighth and Ninth streets, being the whole of block 133, according to the plan of the town of Wilmington, surveyed and prepared by L. C. Turner in 1856, together with all and singular the improvements, privileges, and appurtenances to the same belonging or in any way appertaining. To have and to hold the said described lots or parcels of land to the said parties of the second part and their successors and assigns forever. In witness whereof the said parties of the first part have hereunto set their hands and seals the day and year above written."

Said deed was duly proved and recorded on 10 May, 1867, in the office of the Register of Deeds of New Hanover County. It being suggested that the probate was informal, it was again submitted to probate on 10 March, 1905, and again recorded in said county. Upon the execution of said deed plaintiff corporation took possession of the said property and used it for a considerable time for charitable purposes, having thereon a building which was used as a home for elderly women and a school was conducted in connection therewith until 5 April, 1896, when the buildings were destroyed by fire, and the plaintiff was unable to replace them; for the last several years it has been inconvenient and impracticable for the plaintiff to use it for any purpose. The land is now vacant, unused, and of little value to plaintiff. Since the execution of said deed the plaintiff has had continuous, open, actual, and adverse possession of the said land, claiming it as its own against all parties.

Some years ago and subsequent to the burning of the buildings situated on said land some question was made as to whether the plaintiff (387) had a title in fee absolute with the power to dispose of the property or any portion thereof. The matter being brought to the attention of Dr. DeRosset, the grantor of said deed, he wrote to the Rev. Dr. Strange, the rector of the parish, a letter, a portion of which is as follows: "Wilmington, N.C. 22 March, 1895. . . . As the donor of the property `St. James Home,' I have nothing to say except that it is absolutely the property of the vestry, and may be disposed of as they think proper, without regard to any trust, real or implied, which any one may think is binding upon the vestry in considering the propriety or advisability of alienating the whole or any part of it."

At a meeting of the Wardens and Vestry of St. James Parish, held on 14 March, 1905, the following resolution was passed: "Resolved, that the sale of the property lying between Orange and Ann streets and Eighth and Ninth streets, it being known as Block 133, according to the plan of the city of Wilmington, to Thomas P. Bagley for the sum of $12,000 be confirmed and it is ordered that the deed for said property be made; that the corporate seal be attached thereto by Thomas D. Meares, senior warden, J. Victor Grainger, junior warden, and William L. DeRosset, member of the corporation."

The Wardens and Vestry of St. James Parish, the plaintiff, have constituted and established a trust fund, of which the proceeds of the sale of the aforesaid property is to constitute a large portion, for charitable and religious objects in connection with St. James Parish, and at a meeting held on 9 March passed the following resolution: "Moved by Mr. Calder, that the net proceeds, together with the amount now standing to the credit of `St. James Home Fund,' be placed to a fund to be designated as the `Armand J. DeRosset Memorial Fund,' which, with the income derived from the same, is to be used for the (388) promotion of charitable and religious objects. Carried."

It is further agreed between the parties hereto, that if the plaintiff has and can convey to the defendant a good and indefeasible title, free from all trusts and equities, judgment is to be entered compelling a specific performance of the contract by the defendant and requiring him to pay the purchase price, upon the execution by the plaintiff of a proper deed to him, and for costs of the action; but if the plaintiff holds the property in trust and cannot convey a good title, then judgment is to be entered against the plaintiff for costs of the action.

Attached to the facts agreed is the affidavit in accordance with the provisions of The Code.

The controversy having been submitted to Judge Allen, the following judgment was rendered: "It is adjudged that the deed from Dr. A. J. DeRosset and wife, dated 29 March, 1867, conveyed to the plaintiff a good and indefeasible title in fee, free from all trusts and equities, and the plaintiff now has and is able to convey an absolute and indefeasible title to the defendant for the following described property. And it is further adjudged that the contract of purchase of said property by the defendant from the plaintiff be specifically performed, and that the plaintiff tender to the defendant a good and sufficient conveyance in fee of said property. And it is further adjudged that the defendant pay to the plaintiff or its attorneys the sum of $12,000, with interest thereon from 18 March, 1905, the purchase-money named in the contract herein set forth, and the costs of action." From this judgment the defendant appealed. After stating the facts: There can be no doubt that the (389) grantee is a corporate body with capacity to take and hold the legal title, for purposes consistent with its creation and existence, of the land conveyed by Dr. DeRosset. Code, sec. 3665; Lord v. Hardie,82 N.C. 241. It is equally clear that the legal title to the land passed to and vested in the plaintiff corporation by virtue of the deed of 29 March, 1867. Whether the deed operates as a bargain and sale sustained by a valuable consideration, or as a feoffment by virtue of our registration laws, Code, sec. 1245, it is effectual to pass the legal title to the plaintiff. Hogan v. Strayhorn, 65 N.C. 279; Ivey v. Granberry, 66 N.C. 223;Morris v. Pearson, 79 N.C. 253. Certainly, there is nothing in the deed to indicate a purpose on the part of the grantor to retain any right, title, or interest in or control over the land or the uses to which it should be put. It is suggested that the language expressing the purpose which moved the grantor to convey the property should be interpreted as the declaration of a trust for the objects referred to as appealing to his generosity. It is further suggested that these purposes are so indefinite that they are incapable of enforcement and that a resulting trust is raised whereby the plaintiff holds the legal title in trust for the grantor or his heirs. The successful maintenance of this conclusion, so contrary to the benevolent purpose of the grantor, is dependent upon the truth of the proposition that a trust is declared and impressed upon the legal title. It must be conceded that it is not necessary for the valid declaration of a trust that any peculiar language be used. Bispham Eq., 71. When it is doubtful whether language in the grant operates as the declaration of trust, the court will examine the entire deed, the relation of the parties, etc., to enable it to gather the intention of the grantor. "The effect of a deed must depend upon the effect of the language used. A grantor can impose conditions and can make the title conveyed dependent upon their performance. But (390) if he does not make any condition, but simply expresses the motive which induces him to execute the deed, the legal effect of the granting words cannot be controlled by the language indicating the grantor's motive." 2 Devlin on Deeds, Sec. 838; Mauzy v. Mauzy, 79 Va. 537. Formerly, the rule in England was that whenever property was given, coupled with expressions of request, hope, desire, or recommendation that the person to whom it is given will use or dispose of the same for the benefit of another, the donee will be considered a trustee for the purpose indicated by the donor. Such expressions were regarded as prima facie imperative. "But within the last few years the doctrine has changed and the English rule is, now, that precatory words are not to be regarded as imperative, unless it is plain from the context that the testator so intended them. Prima facie, a mere request, or an expression of hope or confidence, or expectation does not import a command." Bispham Eq. (6 Ed.), 117. Mr. Pomeroy says: "Judges have for some time shown a disposition against the doctrine of precatory trusts and a strong tendency to restrict its operation within reasonable and somewhat narrow bounds; many of the earlier decisions would not be followed at the present day. The courts of this country have generally adopted the doctrine substantially as settled in England, although with some caution and reserve, and they all exhibit the modern tendency to limit rather than enlarge its scope. . . . Whether or not a trust has been created in any particular case is entirely a question of interpretation and construction. The intention must be sought for not only in the precatory words themselves, but also in the terms and qualifications of the gift, the powers of disposition and enjoyment conferred upon the first taker, the nature of the property, the description of the supposed beneficiaries, and all the other context." 2 Pomeroy Eq., 1015-1016. In Lamb v. Eames, 6 Ch. App. Cases, 596, James, L. J., speaking of an attempt to impress a trust upon the title to property given by a man to his wife, said: "I am satisfied that no such trust was intended, and that it would be a violation of the (391) clearest and plainest wishes of the testator if we decided otherwise." In In re Adams and the Kensington Vestry, L. R. (1884), Ch. Div., 394, Cotton, L. J., said: "I have no hesitation in saying myself that some of the older authorities went a great deal too far in holding that some particular words appearing in a will were sufficient to create a trust. . . . Having regard to the later decisions, we must not extend the old cases in any way, or rely upon the mere use of the particular words, but, considering all the words which are used, we have to see what is their true effect and what was the intention of the testator as expressed in his will." Lindley, L. J., in the same case, said: "I am very glad to see that the current is changed, and that beneficiaries are not to be made trustees unless intended to be so by the testator." The same learned judge in In re Hamilton v. Hamilton, 2 L. R., Ch. Div. (1895), after reviewing the cases, expressly approved what is said in In re Adams, supra, and says: "I say in this case we are bound to see that the beneficiaries are not made trustees, unless intended to be made so by the testator. . . . You must take the will which you have to construe and see what it means, and if you come to the conclusion that no trust was intended, you say so, although previous judges have said the contrary on some wills more or less similar to the one which you have to construe." In Hill v. Hill, 1 L. R. (1897), Q. B. Div., 483, the authorities are again reviewed and those cited approved, whenChitty, L. J., said: "In the case before us the word `trust' does not occur. A trust may undoubtedly be created by any apt words; but the circumstance that the well understood and obvious term `trust' is not used seems to me to be worthy of some consideration when the question is whether a trust is or is not intended to be created. Now, it is incumbent on those who claim that there is a trust, whether created by precatory words or otherwise, to point out with reasonable (392) certainty who are the objects of the trust. These objects must be ascertained from the words used, construed reasonably." We have cited at some length the opinions of the learned English judges to show the uniform current of thought upon the subject. The English and American cases are reviewed by Mr. Justice Matthews in Colton v. Colton,127 U.S 300, in which he adopts the rule as generally followed in the several States, stated by Gray, C. J., in Hess v. Single,114 Mass. 56: "It is a settled doctrine of courts of chancery that a devise or bequest to one person, accompanied by words expressing a wish, entreaty, or recommendation that he will apply it to the benefit of others, may be held to create a trust if the subject and object are sufficiently certain. Some of the earlier English cases had a tendency to give to this doctrine the weight of an arbitrary rule of construction. But by the later cases, in this and in all other cases of the interpretation of wills, the intention of the testator as gathered from the whole will controls the court. In order to create a trust, it must appear that the words were intended by the testator to be imperative; and when the property is given absolutely and without restriction, a trust is not to be lightly imposed upon mere words of recommendation and confidence." Bigelow, C. J., in Warner v.Bates, 98 Mass. 274, says: "That to create a trust it must clearly appear that the testator intended to govern or control the conduct of the party to whom the language of the will is addressed, and did not design it as an expression or indication of that which the testator thought would be a reasonable exercise of a discretion which he intended to repose in the legatee or devisee." "The question in all cases is whether a trust was or was not intended to be created, or, in other words, whether the testator designed to leave the application or nonapplication of the subject-matter of the bequest to the designated object entirely to the discretion (393) of the donee, or whether his meaning was that his language should be deemed imperative and that such discretion should be excluded. This is usually considered by the best authorities to depend upon three things: First, upon the general terms of the will; second, upon the certainty of the object, and, third, upon the certainty of the subject. . . . The determination of the question whether or not discretion has been excluded often depends upon the degree of certainty with which the objects of the supposed bounty are pointed out. If, for example, a gift is bestowed coupled with a suggestion or recommendation that it be applied by the donee to objects which are vaguely and imperfectly described, this vagueness will be regarded by the court as tending to show that the application or nonapplication of the gift was to be left to the option of the donee. . . . There is, however, this difference between trusts created by technical words and those raised by expressions of recommendation and request: In the former, if the trust fails for want of certainty in the objects, the trustee will not hold beneficially, but there will be a resulting trust in favor of the donor or his estate; in the latter this uncertainty will, in many instances, take away entirely from the gift its fiduciary character and cause it to vest beneficially in the donee. In the one case a trust is created, but fails for want of certainty in its object; in the other the want of certainty is evidence to show that the donor never intended to create a trust." Bispham, 74, 75. In Morice v. Bishop of Durham, 10 Ves., 536, the Lord Chancellor said: "If neither the object nor the subject are certain, then the recommendation or request does not create a trust; for of necessity the alleged trustee is to execute the deed; and the property being so uncertain and indefinite, it may be conceived the testator meant to leave it entirely to the will and pleasure of the legatee whether he would take upon himself that which is technically called a trust."

"It seems clear that, when the expression or desire in the will is ever so strong, it will not be construed to create a trust for others, when the will contains an expression that the devisee is nevertheless (394) to be free to act in his own discretion." Redf. on Wills, 418;Giles v. Anslow, 128 Ill. 187. Professor Pomeroy states the rule: "In order that a trust may arise from the use of precatory words, the court must be satisfied from the words themselves, taken in connection with all the other terms in the disposition, that the testator's intention to create an express trust was as full, complete, settled, and sure as though he had given the property to hold upon a trust declared in express terms in the ordinary manner." Pom. Eq., 1016. Stead v. Mellor, L. R., 5 Chan. Div., 225; Bryan v. Milby, 6 Del., ch. 208; Harrison v. Harrison, Ex. 2 Grat., 1, 44 Am. Dec., 365; Post v. Moore (N. Y.,) 73 N.E. 482. We have given the question a thorough examination because we find no case in our Reports in which it has been discussed, and it is of much importance to the parties in this action that our opinion be sustained by the best considered modern authorities. The amount to be paid for the property is considerable, and it is stated in the case that its value consists in the fact that it may be divided into town lots. It would be unfortunate if any cloud shall hang over the title when it becomes the home of persons who may purchase and improve it. With the aid of the general principles which we find uniformly adopted for ascertaining the intention of the donor, we entertain no doubt that it was the intention of Dr. DeRosset to convey the property to the Vestry and Wardens of St. James Parish and their successors, with full confidence that they would use it, or dispose of it and use the proceeds for the benevolent and pious purposes which moved him to make the donation. We may take notice of the fact that Dr. DeRosset was a gentleman of more than ordinary intelligence, and we may see from the language used that he was deeply interested in the welfare of the parish and the purpose for which it existed. He evidently knew how to use language declaring a trust. The order in which the language expressing his motive or purpose in making the deed is found, in the recital, rather (395) than following the habendum, where declarations of trust are almost uniformly found, indicates that it was his purpose to avoid expressing a trust, preferring rather to leave the manner of disposing and using the property to the discretion of those in whom he reposed confidence. We also note that Mr. Wright, an eminent and learned member of the bar, is a witness to the deed. We may reasonably infer that he either wrote or was consulted in regard to the deed. The fact that no trust is declared is convincing proof, in the light of the other circumstances stated, that none was intended. He doubtless knew that the property was of value in "aid" of the objects in which he felt an interest, and that the extent of its value in those respects depended largely upon giving to the vestry and wardens an unlimited discretion. The letter to Dr. Strange shows his deep interest in the welfare of the parish. It would be doing violence to all rules of interpretation to find in the language used an intention to create an express trust, which by reason of its uncertainty would be void, thereby defeating the will and intention of the donor. The very uncertainty of the terms used, which it is said furnish evidence of a purpose not to create a trust, would thus be relied upon to destroy the purpose and place the donor in the singular position of declaring a purpose and, in attempting to effectuate it, destroying the power of the donee to do so by creating a resulting trust for himself. By all of the canons of construction and the rules laid down by the courts for ascertaining the intention of the donor, we are brought to the conclusion that no trust is created by the language in this deed. In saying that no trust is created, we, of course, mean no other trust than is imposed upon all property held by the trustee or official body representing a religious society pursuant to the provisions of section 3665 of The Code. The plaintiff held the property for the use of the congregation, consisting of the members of the church organized (396) as St. James Parish, with the right and power to appropriate it to such uses and purposes as the said congregation, acting through its organized agencies, may direct. There is no suggestion that the disposition of the property, or the use to which the proceeds are to be put, is in any manner inconsistent with the provisions of the statute or the wishes of the congregation; on the contrary, it appears that the plaintiff is acting in strict accordance with the wishes of the donor in the establishment of a trust for charitable and religious objects in connection with St. James Parish. While the letter of Dr. DeRosset to the rector of the parish is set out in the case agreed and fully sustains the construction which we have given the deed, we have not called it in aid of our conclusion. The cases which we have found in our investigation generally arose upon the construction of wills. We see no reason why, in the interpretation of language in a deed, the same rules of construction should not apply. We, of course, recognize the fact that more latitude is taken by courts in construing wills than deeds, but in both the purpose is the same — to ascertain and effectuate the intention of the testator. While the language used by the donor is not, strictly speaking, precatory, but rather expressive of motive, the same interpretation should be given it. The real test is whether the language is imperative or leaves the use and disposition of the property to the discretion of the donee. We note, also, that the heirs, or, if he left a will, the devisees of Dr. DeRosset are not parties to this controversy. We have no doubt that the plaintiff and defendant may without joining any other parties submit the controversy, by complying as they have done, with the provisions of The Code, and that they will be bound by the judgment. It is advisable, however, that in cases involving the title to real property all persons having, or who may have, an interest in the subject-matter be brought in, so that the title may be quieted. We may not refuse to decide a controversy when properly presented because of the failure to make such parties. We conclude that the (397) judgment of his Honor was correct.

We have refrained from discussing the effect of the language used in the deed which it is supposed creates an express trust, or expressing any opinion as to its validity if construed into a declaration of trust, for the manifest reasons set forth in the opinion. To prevent any possible misconception, we desire to say that we do not concur in the suggestion that the language if so construed would not be valid as the declaration of an enforcible trust. One of the elements of a religious or charitable trust is its uncertainty. The courts have endeavored to sustain and give effect to the intention of the donors in such cases and prevent a failure of their benevolent purposes. The case of Tilden v. Green, 130 N.Y. 29, was decided by a divided court, three of the seven judges joining in a very strong dissenting opinion. The opinion of the majority has been criticised, and the Legislature of New York has since passed a statute to prevent a failure of a trust so declared. We simply decide that there is no declaration of trust in the deed made by Dr. DeRosset to the plaintiff, that the language sought to be construed into a trust is expressive only of his motive and purpose in conveying the property to the plaintiff, and, in our opinion, expressly excludes the idea of attaching a trust thereto.

No error.

WALKER, J., did not sit.