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Kelly v. Guild

JUNE 14, 1963.

ORLEANA B. KELLY, ET AL., PLAINTIFFS-APPELLANTS,

v.

WILLIAM L. GUILD, AS ATTORNEY GENERAL OF THE STATE OF ILLINOIS, ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Kankakee County; the Hon. LEONARD HOFFMAN, Judge, presiding. Affirmed.

CROW, J.

This is an appeal by the plaintiffs, Orleana B. Kelly, et al., from a decree of December 7, 1961 of the Circuit Court of Kankakee County construing the will of Jennie K. Groenewoud, deceased, in which she bequeathed one half of the residue of her estate (personalty) "to the Trustees of Old Peoples Home Trust, of Kankakee, Illinois, to be used in establishing an old peoples home in accordance with the purposes of said trust." The plaintiffs, as heirs of the testator, claimed this part of the residue, joining as defendants the executor of the decedent's estate, the same party individually as an heir, the Attorney General, the State's Attorney, the former trustees of the Old Peoples Home Trust, and the Stewards Foundation, which latter defendant, a general not-for-profit corporation, claimed the bequest either as a successor trustee, or under the doctrine of Cy Pres. The trial court construed the will in such a manner as to award the bequest to the defendant Stewards Foundation, and the plaintiffs appeal. The appeal was originally taken to the Supreme Court and was transferred by that Court to this Court: (1962) 25 Ill.2d 511.

Many years prior to the present litigation one Azariah Buck died leaving the residue of his estate in trust to certain named individuals to build and maintain an old people's home. This trust was administered in the Circuit Court of Kankakee County under the name "Old Peoples Home Trust," in Case No. 16327. On July 22, 1959, upon petition of the trustees in that cause the Circuit Court found that the trust established by the Buck will was a valid charitable trust in perpetuity, evidencing a general charitable intent, the fund was inadequate for the purpose, permitted application of the Cy Pres doctrine, and substituted the Stewards Foundation in lieu of the corporation suggested to be formed in the Buck will and of the individual trustees thereunder.

Jennie K. Groenewoud, the present decedent, died on October 2, 1959, leaving a will executed July 18, 1956, bequeathing one half of the residue of her estate "to the Trustees of Old Peoples Home Trust, of Kankakee, Illinois, to be used in establishing an old peoples home in accordance with the purposes of said trust." It appears from the opening statement of counsel for the plaintiffs-appellants in the trial court that the Trustees of Old Peoples Home Trust and the foregoing Case No. 16327 have been referred to as the Old Peoples Trust as long as counsel could remember, and there was no doubt in counsel's mind that the present decedent, Jennie K. Groenewoud, intended by this language in her will to give the indicated property to that original Azariah Buck Trust.

The trial court found that the Groenewoud will showed a general charitable intent, and that the Stewards Foundation had heretofore been found to be a proper instrument for effecting the intent and purposes of the Buck will. The court decreed that one half of the residue be paid over to the Stewards Foundation to be used by it, with the other property transferred from the Buck individual trustees, to establish and maintain an old peoples home, in accordance with the decree of July 22, 1959, in the Old Peoples Home Trust, Case No. 16327.

The plaintiffs-appellants argue that the Stewards Foundation is a general not-for-profit charitable corporation, it is not authorized to accept trusts under the Trust Companies Act, Ill Rev Stats, 1961, c 32, pars 287 ff., and it was not appointed and could not be legally appointed as a successor trustee herein. They also maintain that the Groenewoud will discloses no such general charitable intent as to permit application of the doctrine of Cy Pres and the carrying out of the bequest by Stewards Foundation thereunder. Therefore, they claim the bequest here concerned failed and should be paid to the plaintiffs as heirs of the decedent.

The defendants-appellees Stewards Foundation and the Attorney General argue, in the alternative, that the bequest here concerned may go to the Foundation as successor trustee of the Old Peoples Home Trust, that it was so appointed successor trustee by the decree of July 22, 1959, and it is not prevented from acting as trustee by the Trust Companies Act, Ill Rev Stats, 1961, c 32, pars 287 ff., or by the General Not-For-Profit Corporation Act, Ill Rev Stats, 1959 (or 1961) c 32, par 163a, ff., or the bequest may go to the Foundation by virtue of the Cy Pres doctrine, the Groenewoud will disclosing a general charitable intent, and the Probate Act, Ill Rev Stats, 1955, c 3, par 194a (Ill Rev Stats, 1961, c 3, par 43a) operating to cause the Groenewoud will to incorporate the Buck will descriptive of its general charitable intent. The other defendants-appellees have filed no brief here.

Stewards Foundation is a general not-for-profit corporation, chartered to erect, rehabilitate, own, operate, and maintain, inter alia, old peoples homes. It does not have among its express purposes the acceptance or execution of trusts. It was not organized under or qualified as a trust company under the Trust Companies Act, Ill Rev Stats, 1961, c 32, par 287 ff. The validity, as such, of the Foundation's corporate charter permitting it to establish and operate old peoples homes is not involved. A construction of that charter and the Trust Companies Act may be involved.

At the date of execution of the Groenewoud will, in 1956, there was under the administration of the Circuit Court of Kankakee County, in Case No. 16327, as we have indicated, a trust commonly known as the Old Peoples Home Trust, of which certain of the defendants herein, Mary M. Gallagher, Fred W. Swannell, Len H. Small, Vernon McBroom and George E. Luehrs, were Trustees by appointment of that Court. This trust was originally created by the will and codicil of Azariah Buck, deceased, to establish in that County an old peoples home, to which, under rules to be adopted by the trustees, were to be admitted worthy poor people, or people of limited means, not able properly to care for themselves, above the age of 60 years, and residents of that County, who were not paupers, or public charges. There appears to be no question in the present case as to the general charitable nature and intent of the provisions of the Buck will and codicil in this respect. The Buck will directed the trustees to accumulate $100,000 from his residuary estate, $25,000 of which was to be spent to build a home for such persons, and the balance of which was to be retained as an endowment for the operation of such home. That will or codicil provided that the Circuit Court of Kankakee County should have visitorial powers over the trust, its administration should be under that Court, that Court might appoint successor trustees, the Court might order the trustees to organize a corporation to carry out the will, and authorized the trustees to receive bequests from other parties to assist in carrying out "this my object to a public charity." As of early 1959 that trust had accumulated property of the value of some $245,000. Early that year the trustees filed a supplemental complaint or petition therein alleging the funds were insufficient to construct such a home and operate it, suggesting the Stewards Foundation could and would carry out in principle the project of the Buck will, and asking to turn over the fund to the Foundation, and resign as trustees. The Stewards Foundation intervened therein. Ultimately a decree of July 22, 1959 was entered therein.

That earlier decree of July 22, 1959 in the Old Peoples Home Trust, Case No. 16327, found jurisdiction, and found: the plaintiffs in that cause, Mary M. Gallagher, Fred W. Swannell, Len H. Small, Vernon McBroom and George E. Luehrs, are trustees duly appointed of Old Peoples Home Trust established by the will and codicil of Azariah Buck, deceased; the trustees having acquired a tract of land and investigated the cost of an Old Peoples Home, it appears such would deplete the trust funds, leaving no income with which to operate, and it is impossible, impracticable, and inexpedient for the trustees to comply, or attempt to comply, with the terms of the Buck will; Stewards Foundation is an Illinois general not-for-profit corporation, one of the purposes of which is to own, operate and lease hospitals . . . old peoples homes etc., having assets of $5,777,060, which has contracted to purchase land, for the construction of a retirement home to cost about $1,000,000, same to be provided from current funds and mortgage funds; it proposes to establish a home for persons of both sexes above sixty-five, providing laundry, food, services, and infirmary care to qualified persons regardless of race, creed, or color, accepting monthly care payments and covering deficits, to provide modern fireproof apartments, administration, and nursing care, and on the same land to erect a modern general hospital; the Foundation proposes to begin construction of the Home in 1960 after being appointed trustee of the subject Trust and to prefer for admission thereto residents of Kankakee County, and proposes to name the home "The Buck Apartments"; the plaintiffs in that cause propose to resign, and propose that the Court appoint the Stewards Foundation or its officers and directors as Trustees of Old Peoples Home Trust; the Azariah Buck will discloses a general intent warranting application of the Cy Pres doctrine to the Old Peoples Home Trust, and the Foundation is qualified to construct and operate such a Home; the establishment of such a home is in the public interest and the intervenor, Stewards Foundation, is a proper organization to administer the trust estate in lieu of the plaintiffs therein and jurisdiction be retained of the subject matter and parties to pass on any questions arising with regard to the mode of effectuating the general charitable intent expressed in the Buck will. That decree orders that the beneficiaries of the trust are the older people of Kankakee County, not paupers; the trust is a valid charitable trust in perpetuity, evidencing a general charitable intent and permitting application of the Cy Pres doctrine; the provisions (in the Buck will and codicil) for individual trustees and a home and an accumulation are merely incidental; the Foundation is substituted in lieu of the corporation suggested in the will and the individual trustees; it is authorized to accept all trust assets; and the decree retains jurisdiction to make further orders requested by the Foundation for advice and aid in fulfilling the general charitable purposes of the testator. The trust assets were turned over to the Foundation in accordance therewith. The former individual trustees have done nothing since.

The decree of December 7, 1961, in the present cause, from which this appeal is taken, found: at the date of the Groenewoud will, in 1956, there was in existence and under the jurisdiction of the Circuit Court of Kankakee County a trust established pursuant to the will of Azariah Buck, deceased, of which certain of the defendants were trustees at the time of execution of the Groenewoud will, and generally known as "The Old Peoples Home Trust"; on a petition filed by those trustees the Circuit Court on July 22, 1959 had entered a decree finding it impossible, impractical, and inexpedient for the petitioners to carry out the expressed intent of the Buck will, the beneficiaries of which were the older people of Kankakee County; the Stewards Foundation conformed as nearly as possible to Buck's wish for the formation of a corporation to carry out his general charitable intent, and that it was ordered by that 1959 decree that the assets of the Buck trust be transferred to that Foundation to be used by it to erect and maintain a retirement home, the individual trustees to thereupon make final report and be discharged; all the affairs of the former individual trustees had, before the death of Mrs. Groenewoud, on October 2, 1959, been completed and substantially all the assets actually assigned to that Foundation, and the former individual trustees discharged, and plans are under way for the construction by the Foundation of such home; the Groenewoud will shows a general charitable intent that one-half of her residuary estate be used to benefit old people in and about Kankakee by establishing a home in that county in accordance with the purposes outlined in the Buck will, "irrespective of the existence or nonexistence of a trustee under said (Buck) will" at the execution thereof or the death of the testatrix or any other time; and the defendant Foundation is a corporation with charter power to own and operate old peoples homes "which has heretofore been found by this Court to be a proper organization to administer a trust estate, such as that established by the Buck will"; the December 7, 1961 decree orders that the Groenewoud will shows a general charitable intent to aid a class needing such assistance in accordance with the purposes of the Buck will, that the Foundation has charter power to operate old peoples homes, and it has been found to be a proper instrument for effecting the intent and purpose of the Buck will; the decree orders one half of the residue paid to Stewards Foundation to be used, with the Buck property, to establish and maintain an old peoples home in accordance with the decree of July 22, 1959 in Case No. 16327.

At the time of the execution of the will of the decedent, Jennie K. Groenewoud, July 18, 1956, the Probate Act provided, Section 43a, Ill Rev Stats, 1955, c 3, par 194a (Ill Rev Stats, 1961, c 3, par 43a) that:

"194a. Sec 43a. TESTAMENTARY ADDITIONS TO TRUSTS.) By a will signed and attested as provided in this Act a testator may devise and bequeath real and personal estate to a trustee of a trust which is evidenced by a written instrument in existence when the will is made and which is identified in the will, even though the trust is subject to amendment, modification, revocation or termination. Unless the will provides otherwise the estate so devised and bequeathed shall be governed by the terms and provisions of the instrument creating the trust including any amendments or modifications in writing made at any time before or after the making of the will and before the death of the testator."

The same statute was in effect at the time of her decease, October 2, 1959, when her will became effective: Ill Rev Stats, 1959, c 3, par 194a. The Old Peoples Home Trust, of Kankakee, Illinois, was evidenced by a written instrument, namely the Azariah Buck will and codicil, in existence when the Jennie K. Groenewoud will was made. That Trust and that written instrument are, under the circumstances, identified in the will of Jennie K. Groenewoud. Hence she, as the testator, might properly, and did, bequeath personal estate to the trustee, or trustees, of that Trust. Her will not providing otherwise, the estate she so bequeathed is to be governed by the terms and provisions of the instrument creating ...


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