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Burr v. Brooks

OPINION FILED JULY 30, 1979.

LUMAN BURR, PLAINTIFF,

v.

JAMES R. BROOKS ET AL., DEFENDANTS. — (JOSEPH F. BOHRER, TRUSTEE, PLAINTIFF-APPELLEE,

v.

WILLIAM J. SCOTT, ATTORNEY GENERAL, DEFENDANT-APPELLEE; THE CITY OF BLOOMINGTON, DEFENDANT-APPELLANT; MORGAN-WASHINGTON HOME, INTERVENING APPELLEE; BLOOMINGTON BOARD OF EDUCATION, SCHOOL DISTRICT NO. 87, MCLEAN COUNTY, INTERVENING APPELLEE AND APPELLANT.)



APPEAL from the Circuit Court of McLean County; the Hon. WENDELL E. OLIVER, Judge, presiding. MR. JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:

This case concerns the construction of a trust created under the will of a noted Illinois jurist, John M. Scott, who died January 21, 1898. He served 10 years as a county judge, 8 years as a circuit judge, and 18 years as a supreme court justice during which period he was chief justice for three terms.

On August 12, 1977, petitioner Joseph F. Bohrer, trustee of that trust, petitioned the circuit court of McLean County for "instructions relative to the further administration" of the trust. The petition alleged that the last of the annuitants made beneficiaries of the trust had died and requested that the court construe the will to determine the disposition of the residue. Numerous parties were made defendant. Of those, William J. Scott, Attorney General, and City of Bloomington (city) are before the court on appeal. Morgan-Washington Home (Morgan-Washington), a not-for-profit corporation, and Bloomington Board of Education, School District No. 87 (School District), were subsequently permitted to intervene. After various proceedings and a hearing on the merits, the trial court entered an order on October 5, 1978, the substance of which was to award 6/7 of the residue to Morgan-Washington for erecting a suitable building and funding an endowment and 1/7 to the School District to support vocational education.

The city appealed the foregoing order and the School District and Morgan-Washington cross-appealed. The thrust of the city's appeal is that it has accepted the trust and can fulfill the primary objective of the trust within the doctrine of equitable deviation. It maintains that when the primary purpose can be thus served, a condition favoring it should prevail over a secondary purpose that would be served by intervenors, the School District and Morgan-Washington. The School District asserts that it should have received the use of a greater portion of the trust fund. Morgan-Washington has filed no brief as cross-appellant.

The School District filed a separate appeal from a subsequent trial court order denying it attorney's fees. The Attorney General has appealed an order allowing fees to the trustee and his attorney.

The complaint contained a copy of the will which had been executed in 1890. After making various bequests and giving a life estate to testator's wife, it made provision for the previously described annuities. It then directed that upon the death of the last annuitant, all assets except two tracts of real estate were to be converted into money or interest bearing securities to be used for what the will described as a "noble charity." After converting the estate, the trustee was directed to pay the same to the city of Bloomington to be held in trust for the uses or purposes named thereafter. With the trust fund, the city was directed to erect and construct on the property on which decedent resided and an adjoining lot, a building suitable for a hospital to be called "Scott City Hospital." It was to be operated under the city's direction and control and the Elders of the Second Presbyterian Church were to be permitted to advise as to its management and the care of the patients. No more of the trust estate was to be used for construction "than the amount of said trust estate will justify in the judgment of reasonable persons" appointed by the city to have charge of this construction. Whatever trust funds or property remained were to be held in trust by the city as an endowment fund for the hospital. The hospital was to be for the use and benefit of all sick "who may not be able to pay for needed care and attention" particularly those injured by accident who have no friends to care for them. Anyone who wished to be admitted to the hospital and was able to pay for his care or treatment was to be charged "only a reasonable sum."

The next paragraph provided that should the city, by resolution, "decline to accept the trust hereby created for the erection and maintenance of said hospital," the trustee under the will was directed to procure an act of incorporation under Illinois law for establishing an "Industrial School for Girls" and for a site for such school. The trustee was then directed to convey the lots and trust funds to the corporation in trust for the erection of suitable buildings and an endowment fund for such an institution. Again the school was to be open to inspection by Elders of the Second Presbyterian Church, and they were requested to advise and oversee. The deceased stated that it was his will that only a reasonable sum be used to erect the buildings so that a greater sum remain for the endowment fund, the income of which was to support the school.

By its answer filed October 5, 1977, the city requested that the assets of the trust be distributed to it as provided in the will. Then on February 17, 1978, it filed a resolution of its city council purporting to accept the trust. The resolution stated that there were sufficient hospitals in the area and the real estate described in the will was not now suitable for such a project. It also stated that permission of other governing authorities to build and operate another hospital could not be obtained. The resolution directed that the court be asked to order the sale of the real estate to augment the trust fund. In order to meet contemporary health care needs of the city, the resolution proposed that the trust be administered (a) using part of the income to provide health care for those unable to pay for such or who would encounter hardship in doing so, but who were not eligible for other public or private assistance, (b) using a portion of the principal to purchase or construct a family care and diagnostic center which would memorialize the name of John M. Scott and would provide free services to persons unable to pay and services at a reasonable sum to others, and (c) as an alternative or supplement to (b), establishing an emergency medical services program including training and equipment of paramedics.

Answers to the trustee's petition filed by intervenors, the School District and Morgan-Washington, on April 19, 1978, and April 24, 1978, respectively, both requested that the court find (1) it is either impossible, impractical or illegal to carry out Justice Scott's specific charitable intent, and (2) a general charitable intent was expressed which should be carried out by an application of the cy pres doctrine. The School District alleged that the will expressed a general charitable intent to improve industrial education and requested that the funds be placed in a trust to endow the advancement of vocational education in its schools. Morgan-Washington alleged the general charitable intent to be improving health care facilities and housing and educational training for girls in the city. To that end, it requested the court to transfer the funds in trust to be used for the housing and educational projects of Morgan-Washington Home or in the alternative to construe the will as desiring to benefit both types of charities and include Morgan-Washington.

Evidence was presented that at the time Justice Scott wrote his will there was only one hospital in Bloomington and at the time of his death another hospital had been established in Normal. There are now three hospitals in Bloomington-Normal with a combined occupancy rate of 73%. Several witnesses testified that there is no need for another hospital and indeed if one were constructed, it would not be possible to obtain a license or permit to operate it. Witnesses also testified that there are still significant numbers of indigent people in Bloomington who require medical and hospital care but are unable to pay for it and do not qualify for existing financial assistance. The city presented in evidence a resolution supplementing the one filed on February 17, 1978, and setting forth in more detail the nature of the health care facility it proposed, indicating that the center would feature a program to screen people for early indication of illness and then refer them to existing medical facilities for treatment.

Morgan-Washington Home was shown to be the successor to the Women's Industrial Home of McLean County which was incorporated on March 12, 1889, and was granted the right to avail itself of the provisions of "An Act to aid industrial schools for girls" (1879 Ill. Laws 309; now Ill. Rev. Stat. 1977, ch. 122, pars. 646 to 660). According to its amended articles of incorporation, its purposes are to maintain and operate a home for children and to provide for their education, care, training and development; to conduct and carry on social work for the guidance and welfare of children and work and activities designed to further their moral, mental, social and physical welfare and betterment. Morgan-Washington is licensed by the Illinois Department of Children and Family Services (DCFS) as a residential facility and was soon to be licensed as a child welfare agency which would permit them to recruit and license foster families. Its residents are girls from 12 to 16 years of age at time of admission who are referred from DCFS or the courts>. In the last year (1977-78), it accepted a total of 58 girls, 21 from McLean County. It can house a maximum of 18 residents at one time. The majority of the residents are classified as minors in need of supervision or delinquents, with a small percentage of dependent or neglected children. The residents receive their formal education either in the local public schools or at Morgan-Washington in cooperation with District 87. At that time, none were enrolled in District 87's Area Vocational Program.

Evidence was presented that District 87 currently maintains a comprehensive and substantial program of vocational and industrial education which has expanded far beyond the typical vocational curriculum of an 1890's girls' school. Many of these courses are also offered at other area high schools.

The principal issues in this case concern application of the doctrines of cy pres and equitable deviation.

Restatement (Second) of Trusts § 399 (1959) defines the doctrine of cy pres in these words:

"If property is given in trust to be applied to a particular charitable purpose, and it is or becomes impossible or impracticable or illegal to carry out the particular purpose, and if the settlor manifested a more general intention to devote the property to charitable purposes, the trust will not fail but the court will direct the application of the property to ...


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