Loomis Institute v. Healy , 98 Conn. 102 ( 1922 )

John Mason Loomis, pursuant to a family compact, gave by will to the Loomis Institute property valued at nearly a million and a half of dollars, about two thirds of the entire sum of the bequests which have been made to this Institute. The family procured, in 1874, from the General Assembly an Act of incorporation for this Institute, which provided that it should furnish free and gratuitous instruction to all its students. This Act and the will of John Mason Loomis disclose the common purpose of these donors to found an institution which should be enduring, and forever carry on the great cause it should serve, and at the same time to honor and perpetuate the Loomis family, "descended or to be descended from Joseph Loomis." To this end the testator provided, in the part of the third clause which is in question, that the property of the Institute should never be mortgaged or pledged, that the Institute should not run in debt, and that not more than one third of the funds of the Institute should be devoted to the grounds, buildings and outfit, while the other two thirds should be invested and the income only used for the support of the Institute. My brethren hold that the words of this clause are mere words of advice and comment, and in consequence the invested funds of this institution, about a million and a half, — thus far set apart by the trustees in their belief that the language of this clause was imperative and must be carried out by them, — may be expended by the trustees at their discretion and without regard to these perpetuity requirements.

I differ with that construction. I think these provisions are imperative, and that the clear intention of the testator should be carried out. Further, I am of the opinion that this noble charity, so splendidly conceived by this family, will, in the long run, be injured by giving to these trustees and their successors the power to convert at their discretion this endowment into buildings and equipment. It is also my belief that the diversion of these charitable funds from the purposes designed by the testator will injure not alone this institution but all institutions of learning which live in greater part upon the bounty of the dead. I state in part the grounds of my dissent. The provisions of this will which are before us for construction appear in the statement of facts beginning: "My Will is that no buildings," etc. In their primary sense these words are precatory words, and are properly held to be words of advice unless the testator intended them to be used in another sense. We determine this by reading them in connection with the other parts of the will and in the light of the circumstances surrounding the testator at its making. Whether the language of this clause creates a trust as the defendant claims, or is merely an expression of the testator's advice, depends upon the intention of the testator in its use. All the law involved in this question is summed up, and in conformity with modern authority, in Hughes v. Fitzgerald, 78 Conn. 4, 7, 60 A. 694, where the court, speaking by Mr. JUSTICE HALL, says: "Whether a trust has been created becomes, therefore, often a question of intention `to be gathered . . . from the general purpose and scope of the instrument.'Colton v. Colton, 127 U.S. 300, 310, 311,8 Sup. Ct. 1164. In determining from particular words and terms of a will whether a certain gift was intended to be made in trust, there are, however, some well-established rules which should be considered, and among those applicable to the present case is the settled law in this State, that a trust will not be raised by expressions in a will importing recommendation, confidence, or desire, unless it clearly appears that they were intended to be used in an imperative sense . . . ; although words which are precatory in form may sometimes be regarded as mandatory in effect, where it appears that they were intended to be used in that sense." We thus adopted the rule as stated in Pomeroy's Equity Juris. (3d Ed. Vol. 3) § 1016: The testator's intent must be 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." "The question in every case is whether they [the words] express merely the testator's wish, or whether they express his will." Gardner on Wills (2d Ed.) p. 479. Whether a trust was created by the language of this clause depends upon whether the testator meant by it to govern the conduct of the trustees, or to merely suggest by way of advice to the trustees the course of conduct they should take. That is, is the language imperative and mandatory, or is it merely precatory and advisory? There are no rules of construction which will solve this problem.

Before ascertaining the intention of the testator, let us consider the rules of construction which my brethren rely on in support of their position. The fact that this testator gave to the trustees of the Loomis Institute his residuary estate absolutely, and thereafter inserted this precatory clause, does not solve the problem. The rule is not automatic; at most this fact is a circumstance to be considered, but not a controlling one in arriving at the testator's intention. A prior absolute devise does not create a presumption that no trust was intended. The true rule is that stated inHughes v. Fitzgerald, 78 Conn. 4, 60 A. 694, that the trust will not be raised unless it clearly appears that the words were used in an imperative sense. My brethren also invoke the rule — "nor will a trust be implied if there is uncertainty as to . . . the manner in which the property is to be applied." Perry on Trusts Trustees (6th Ed. Vol. 1) § 116. Uncertainty, it is said, will arise in the administration and application of this fund if a trust be held to be created; that is, as to whether the value of the buildings and equipment would be cost, replacement value, or value arising after deduction for depreciation, or a sum less the value of buildings, etc., no longer fit for use, and as to whether the value of the securities would be their cost, market value, or their book value in case a rule of amortization had been carried out. The difficulties under this head will vanish if approached having in mind what we said concerning a related trust. "The trust undertaken to be created is a charitable one, since its object is the education of youth. . . . Having a charitable purpose, the language used by the testator in his attempt to establish the trust and define its terms and conditions, should have such liberal and favorable construction as may be necessary to establish its validity and ascertain its meaning." Hoyt v. Bliss, 93 Conn. 344, 350, 105 A. 699. To hold that a charitable trust of this character failed for uncertainty in the administration and application, would be a sad reflection upon a court of equity charged with the duty of carrying out the testator's intention. There is no real difficulty in determining these questions of administration and application. They are the everyday problems of business. Two difficulties are suggested if this provision is construed to be an imperative trust. The Institute, it is said, would be forbidden to accept a gift or devise of real property unless it had on hand enough surplus investments to cover twice the value of the gift. Applied to the William H. Loomis bequest the trustees must, if an imperative trust has been created by this clause, raise twice the amount of the bequest or decline the gift. This reduces the argument to an insensible point. There is nothing in the charter or in this will to prevent the acceptance of a specific devise or bequest of building or equipment. The trustees would be thus much relieved of the need of accumulating the income for such purposes. The testator referred in the clause in question to funds acquired for the general purposes of the Institute, not those given for a specific object. It hardly seems that argument was needed to refute a contrary conclusion. Then it is said, the testator could not have intended to give authority to begin buildings when the funds had reached $200,000 and then to restrict the expenditure for buildings, etc., to only $67,000 of the $200,000. The language plainly says this very thing. From the beginning the trustees have acted in conformity to this construction. They waited until the funds were $600,000 before, in 1914, they began the buildings. And it must be remembered that all of this family were, from 1874 to their death, trustees of the Institute, and that John Mason Loomis, the last of this family group, so continued until his death on August 2d 1900. As he executed his will in 1892, it is a reasonable presumption that his fellow-trustees knew his purposes and in their course of conduct acted in the light of this knowledge. The rule invoked, that no precatory words will create a trust if such "words apply not only to the property given by the testator but to all of the property of the legatee," has no application to the situation before us. The testator had the right to so condition his gift, and if his intention so to do be found in the manner in which a trust created by precatory words can be found under our rule, his intention must be made effective. The statement at the conclusion of the majority opinion, that no trust can be created by precatory words if it affects other property than the testator's, is in direct conflict, as it seems to me, with our law as stated in Hughes v. Fitzgerald, 78 Conn. 4,60 A. 694. The intention of the testator is the determining factor. No rule of construction can automatically determine that, as we have already said; at most, rules are only helps to aid in ascertaining this intention. The language of the will indicates that the testator used the expression "My Will is," in the clause in question, in an imperative sense. "My Will is," introducing this clause, may, so far as the word "will" goes, have been used in a precatory or a mandatory sense. But its use in other parts of the will and codicil, and always in an imperative sense, strongly signifies that the testator used the word in the clause we are construing in a like sense. Thus immediately following this clause we find the clause: "My wish is. . . . that in the admission of youths to its benefits, preference shall be given to those belonging to the Loomis family by name or consanguinity, next to those belonging to the town of Windsor, Connecticut, next to those belonging to the State of Connecticut, and next to those deemed by the Trustees most worthy, without regard to State or nation." Carrying out a primary purpose of the will, as this clause does, it is not and cannot be claimed that its provisions were not intended by the testator to be imperative, and that it is just a bit of advice to the trustees which they may disregard or follow at their discretion. Again, in the seventh clause, we find: "But it is my Will that if the income of my Estate shall in any year fall below the sum of Fifteen Thousand Dollars, neither my Executors or my Trustees shall be entitled to any compensation for their services as such, rendered during that year, or during any subsequent year in which said income shall be less than the amount above stated, and in such event my wife shall have full liberty to use and consume any part or all of the principal of my estate for her maintenance and support without accountability to any person whoever." These manifestly are mandatory provisions, and the words "But it is my will" were used by the testator in an imperative sense. Similarly we find the expression "But it is my will" in the Third clause, 3(b), introducing a mandatory provision as to his wife's income. In the codicil we find this clause: "Third: It is my Will, that if at any time after my death there shall be any danger whatever of any portion of my devise and bequest to the Loomis Institute lapsing or failing because of any real or supposed incapacity on the part of said Institute to receive and hold any real estate at that time belonging to my Trust estate, then it shall be the duty of my Trustees to convert said real estate into personal property as soon as it conveniently may be; and I desire it distinctly understood, that as to any real estate at any time after my death belonging to my estate, which the Loomis Institute may by any possibility be unable under the law, to take, it is my Will that said Loomis Institute shall not in any event have any claim whatever upon such real estate, but shall, at the most, be entitled to receive only the proceeds thereof in personal property." Twice, in a clause whose provisions are undeniably mandatory, we find the testator uses the expression "It is my Will." The will appears to have been the composition of the testator, while the codicil is that of the skilled draughtsman, but each makes use of the term "will" to express the testator's intention. The other members to the family compact predeceased this testator and he undoubtedly was familiar with their wills. It is significant that the will of James C. Loomis makes use of the expressions "And my will further is," also, "And my desire is." The testator was an executor of the will of James C. Loomis, who was an eminent lawyer of this State, and it is not unreasonable to assume that he made use of this will when he drafted his own will. In the wills to two other members of this family compact, he found similar expressions. In Allen's Appeal, 69 Conn. 702,707, 38 A. 701, we said: "The rule of construction that words occurring more than once in a will shall be presumed to be used always in the same sense, unless a contrary intention appears by the context or they be applied to a different subject, applies with double force where the word in question is found in two sentences in immediate succession." While in Greene v. Huntington,73 Conn. 106, 113, 46 A. 883, we said that the term "legal representatives" prima facie should receive the same interpretation when repeated in the codicil. This is Jarman's 18th Rule. See also Ryder v. Lyon,85 Conn. 245, 251, 82 A. 573; Pease v. Cornell,84 Conn. 391, 400, 80 A. 86, and cases cited; 2 Jarman on Wills, pp. 840-843 (5th Amer. Ed., Vol. 3, pp. 702, 709). Moreover the entire language of this will is that of command. The testator was not advising his trustees, he was directing their conduct. In ascertaining the testator's intention we should keep before us his own and the family purpose, and construe his words so as to effectuate his intention. That purpose was to found a school where instruction should be free, where first those of the Loomis name or consanguinity, next those from Windsor, next those from Connecticut, and next those found by the trustees most worthy without regard to State or Nation, should be admitted to its benefits. The entire will, and the charter as well, indicates that the peculiar solicitude of this testator and of the other founders was to establish a school which should endure for all time. The charter, by express provision, contemplates the building up of an endowment fund, and that only a part of the funds of the Institute should be put into buildings, etc., and that the balance should be invested in perpetuity and the income only used for current maintenance. Both will and charter provide that buildings shall not be commenced until funds to the amount of $200,000 are in hand, and that none of the property of the Institute shall be mortgaged. The will provides further in this clause that (1) no debt whatever shall be created by the Institute; (2) that none of its property shall be pledged; (3) that not more than one third of the funds of the Institute shall be at any time invested in the grounds, buildings and outfit of the Institute, the other two thirds, shall be kept invested to produce the income necessary for the support of the Institute; and when the income shall be insufficient to pay the expenses of the Institute, such expenses shall be reduced until the income is equal to their payment. Could any provisions go further to preserve this institution in perpetuity? Their wisdom as applied to an educational institution is beyond question. Its property is to remain intact, free from mortgage or pledge. It is to be run on a pay-as-you-go basis. An endowment fund is provided, so that its maintenance can never be crippled. The charter requirement that instruction shall be free and gratuitous necessarily requires a larger endowment than if the instruction was paid for. The history of educational institutions in this country demonstrates the value and necessity of such endowment funds. The creation or increase of such funds has been the purpose and strenuous endeavor of practically all of our large semi-public preparatory schools of the east in recent years. To place this school beyond the need of such effort, and to place the fund above the discretionary use of any board of trustees, was the fixed aim of this testator. The testator helped frame the charter in accordance with the family compact, and he knew that the giving of free and gratuitous instruction would require most generous support from endowment funds. He knew when he made his will what the other members of the family compact had left to the institution, and he knew that he was providing over two thirds of all the funds received from the members of this compact. If our construction preserves the endowment fund it carries out this testator's intention. He incorporated in his will the charter. In a codicil he excluded it. My brethren say that since this clause in question restates provisions of the charter excepting only the division of the funds of the Institute for buildings, etc., and for endowments, it is a fair deduction that the entire clause was in the nature of comment and advice. This is a non sequitur, and, further, it is based on a mistaken understanding. The provision as to debts and as to pledging is not in the charter. The testator has left no room for a speculation as to the reason for excising the charter from his will, for he gives his reason for including it originally and then gives his reason for excluding it: "I have written into my Will," he says in the codicil, "the substance of those provisions of said Act which I consider essential." The argument that the excision of the charter resulted from the testator's desire not to fetter the institution, seems to conflict with the argument that the inclusion of these provisions in the will is mere comment and advice. The argument seems to be: the provisions of the charter incorporated in the will, so far as this bequest goes, will be valid and prevent the change of the charter as to them, and the same provisions placed in the will apart from the charter become comment and advice. When the testator says, I have written into my will the provisions of the charter which I consider essential, could language be clearer or indicate definite intention better? As to these matters, can it be reasonably said that they are mere advice and comment without ignoring the testator's own expressed statement concerning them? Will it do to hold that the remaining provisions of this clause, that the provisions as to debts, pledging and dividing the funds, are comment and advice, while the matters copied from the charter are not? My brethren put them all on the same basis and logical reasoning requires that they stand or fall together. The fact that the testator restates in his will some of the provisions of the charter marks his especial interest in them and his imperative intention to create a trust as to them so that his intention can be carried out. Does it not indicate the testator's intention to make this provision indestructible so far as his disposition went? The same argument applies to the following clause as to admissions to the Institute. This, too, is practically copied from the charter. The suggestion that because the testator did not provide that his property should go to his legal representatives in case the Loomis Institute could not legally accept his gift, or did not deem it wise to do so because of the division of the funds, shows that he did not intend to create a trust under this clause in question, is without force. The testator did not contemplate failure for this Institute, and that the Institute might not be able legally to take his gift was probably about as near his thought as that this young educational institution would refuse a gift of one and a half million dollars through fear that the provision that two thirds of the funds should form an endowment fund would some time hamper the future of the institution. Already a million dollars has been expended on buildings, land and equipment. An endowment of a million and a half is a necessity for a school of this high character which gives to its student body free instruction. This is only a part of what might be urged. The matter concerns a public charity. The cause of education can show few, if any, nobler gifts for her sake than this great gift of the Loomis family. They were not thinking of bigness for their Institute. And this testator, outliving his relatives in the compact, profiting by the twenty years' experience which he had had in living with this idea, sought to guard this institution against debt and the depletion of its funds to the destruction of its primary purpose to give "free and gratuitous" instruction. I would construe this clause so as to carry out his intention and keep this large endowment fund to give to this Institute support and strength in all the years to come and to continue to make it, for this reason, distinctive among like institutions.