L. 1909, ch. 45

Future Estates, Charitable Uses, etc.

§ 11

48 N. Y. S. 1046. The real property rule that an unqualified gift by will of the rents or income of real estate is in legal effect a devise of the property itself, has been held applicable to personal property. Tabernacle Baptist Church v. Fifth Ave. Baptist Church, (1901) 60 App. Div. 327, 70 N. Y. S. 181, affirmed (1902) 172 N. Y. 598, 64 N. E. 1126. See also Reform Soc. v. Case, (1884) 3 Dem. 15. A future contingent interest in personal property has been held alienable by analogy to the rule with reference to a contingent remainder in real property, and therefore subject to the claims of conditions. National Park Bank v. Billings, (1911) 144 App. Div. 536, 129 N. Y. S. 846, affirmed (1911) 203 N. Y. 556, 96 N. E. 1122; Lauter v. Hirsch, (1910) 67 Misc. 165, 121 N. Y. S. 651.

Specific sections of Real Property Law held applicable. The provision of the present section making the rules prescribed in relation to future estates. in real property applicable to limitations of future or contingent interests in personal property has been applied specifically to a number of sections of the Real Property Law. The following sections of Real Property Law have been held thus applicable:

Section 40, relating to the vesting of future estates. Brooklyn Trust Co. v. Phillips, (1909) 134 App. Div. 697, 119 N. Y. S. 401, affirmed (1911) 201 N. Y. 561, 95 N. E. 1124; Ogden v. Ogden, (1903) 40 Misc. 473, 82 N. Y. S. 710; Crossman v. Crossman, (1887) 6 Dem. 148; Barker v. Southerland, (1886) 6 Dem. 220.

Section 43, relating to the limitation of successive life estates and remainders thereon. In re Conger, (1903) 40 Misc. 157, 81 N. Y. S. 733, affirmed 81 App. Div. 493, 80 N. Y. S. 933; Orphan Asylum v. White, (1888) 6 Dem. 201.

Section 44, which provides: "A remainder shall not be created on an estate for the life of any other person than the grantee or devisee of such estate, unless such remainder be in fee; nor shall a remainder be created on such an estate in a term of years, unless it be for the whole residue of such term." In re Bogardus, (1904) 43 Misc. 473, 89 N. Y. S. 478.

Section 48, which provides that "where a remainder shall be limited to take effect on the death of any person without heirs or heirs of his body, or without issue, the word 'heirs' or 'issue' shall be construed to mean heirs or issue living at the death of the person named as ancestor." Schlereth v. Schlereth, (1903) 173 N. Y. 444, 66 N. E. 130, 93 A. S. R. 616, affirming 73 App. Div. 283, 76 N. Y. S. 676.

Section 57, relating to defeat of expectant estates. Tuthill v. Davis, (1907) 121 App. Div. 290, 105 N. Y. S. 672; Bell v. Train, (1875) 4 Hun 406.

Section 59, making expectant estates descendible, devisable and alienable in the same manner as estates in possession. New York Life Insurance, etc., Co. v. Cary, (1908) 191 N. Y. 33, 83 N. E. 598, reversing judgment 120 App. Div. 264, 105 N. Y. S. 125; Roosa v. Harrington, (1900) 31 Misc. 529, 65 N. Y. S. 601, affirmed 57 App. Div. 631, 68 N. Y. S. 1147, affirmed (1902) 171 N. Y. 341; Palmer v. Dunham, (1889) 52 Hun 468, 6 N. Y. S. 46; Barker v. Southerland, (1886) 6 Dem. 220.

Section 63, relating to undisposed profits, and which provides as follows: "When, in consequence of a valid limitation of an expectant estate, there is a suspension of the power of alienation, or of the ownership, during the continuance of which the rents and profits are undisposed of, and no valid direction for their accumulation is given, such rents and profits shall belong to the persons presumptively entitled to the next eventual estate." Under the present section of the Personal Property Law this rule is equally applicable to. future interests in personal property. Matter of Harteau, (1912) 204 N. Y. 292, 97 N. E. 726, modifying decree 142 App. Div. 904, 126 N. Y. S. 1131; Mills v. Husson, (1893) 140 N. Y. 99, 35 N. E. 422; Cook v. Lowry, (1884) 95 N. Y. 103; Tredwell v. Tredwell, (1914) 86 Misc. 104, 148 N. Y. S. 391; Tobin v. Graf, (1902) 38 Misc. 412, 80 N. Y. S. 5; In re Kohler, (1916) 96

§ 12

Future Estates, Charitable Uses, etc.

L. 1909, ch. 45

Misc. 433, 160 N. Y. S. 669; Garland v. Garland, (1901) 35 Misc. 147, 71 N. Y. S. 465; Olcott v. Ossowski, (1901) 34 Misc. 376, 69 N. Y. S. 917; Gould v. Rutherford, (1894) 79 Hun. 280, 29 N. Y. S. 362; St. John v. Andrews Institute for Girls, (1907) 117 App. Div. 698, 102 N. Y. S. 808, judgment modified (1908) 191 N. Y. 254, 83 N. E. 981, 14 Ann. Cas. 708; Potter v. McAlpine, (1885) 3 Dem. 108.

Section 93, abolishing passive trusts. Reilly v. Reilly, (1903) 82 App. Div. 374, 81 N. Y. S. 861, affirmed (1903) 176 N. Y. 597, 68 N. E. 1116.

Section 96, relating to the purposes for which express trusts may be created. Bray v. O'Rourke, (1903) 89 App. Div. 400, 85 N. Y. S. 907; Robinson v. Adams, (1903) 89 App. Div. 20, 80 N. Y. S. 1098, affirmed (1904) 179 N. Y. 558, 71 N. E. 1139.

Sections 100 and 101, relating to trustees of express trusts. Matter of Van Kleeck, (1916) 95 Misc. 40, 158 N. Y. S. 539.

Section 178, with reference to computation of term of suspension by instrument in execution of a power. Matter of Pilsburg, (1905) 50 Misc. 367, 99 N. Y. S. 62, affirmed 113 App. Div. 893, 99 N. Y. S. 62, (1906) 186 N. Y. 545, 79 N. E. 1114.

§ 12. Gifts and bequests of personal property for charitable purposes. 1. No gift, grant, or bequest to religious, educational, charitable, or benevolent uses, which shall in other respects be valid under the laws of this state, shall be deemed invalid by reason of the indefiniteness or uncertainty of the persons designated as the beneficiaries thereunder in the instrument creating the same. If in the instrument creating such a gift, grant, or bequest there is a trustee named to execute the same, the legal title to the property given, granted, or bequeathed for such purposes shall vest in such trustee. If no person be named as trustee then the title to such property shall vest in the supreme court.

2. The supreme court shall have control over gifts, grants and bequests in all cases provided for by subdivision one of this section, and, whenever it shall appear to the court that circumstances have so changed since the execution of an instrument containing a gift, grant or bequest to religious, educational, charitable or benevolent uses as to render impracticable or impossible a literal compliance with the terms of such instrument, the court may, upon the application of the trustee or of the person or corporation having the custody of the property, and upon such notice as the court shall direct, make an order directing that such gift, grant or bequest shall be administered or expended in such manner as in the judgment of the court will most effectually accomplish the general purpose of the instrument, without regard to and free from any specific restriction, limitation or direction contained therein; provided, however, that no such order shall be made with

L. 1909, ch. 45

Future Estates, Charitable Uses, etc.

§ 12

out the consent of the donor or grantor of the property, if he be living.

3. The attorney-general shall represent the beneficiaries in all such cases, and it shall be his duty to enforce such trusts by proper proceedings in the courts.

4. Whenever heretofore or hereafter any voluntary association or committee shall have received by public subscription from contributors exceeding one thousand in number a fund for a charitable or benevolent purpose, a portion of which shall remain unexpended after the expiration of five years from its receipt, and it shall appear that a literal compliance with the terms of the subscription is impracticable, the supreme court may, on the application of such association, or of the treasurer of the committee having the custody of such unexpended balance, and upon twenty days' personal notice to the attorney-general, and four weeks' notice by publication once a week for four successive weeks in two newspapers of general circulation published in the county in which the treasurer of such association or of such committee shall reside, or, if such treasurer shall reside out of the state in the county in which at least ten per centum of the contributors to such fund shall have resided at the time of its receipt, otherwise in such manner as the court shall prescribe, to the contributors as a class, to ten specified members of such class, and to the trustees of such association, or to the surviving members of such committee, make an order directing that such balance be transferred for administration to such domestic corporation as in the judgment of the court will most effectually accomplish the general purpose for which said fund shall have been collected, without regard to and free from any express or implied limitation, restriction or direction upon which the subscription shall have been made; and on the transfer of said fund to the corporation designated in such order, said voluntary association and its officers and trustees, or said committee and its treasurer and other officers, shall be fully exonerated and discharged from all liability to account therefor.

Subdivision 1 was derived from L. 1893, ch. 701, § 1; subdivisions 2 and 3 were derived from L. 1893, ch. 701, § 2, as amended by L. 1901, ch. 291, § 1. Subdivision 2 was amended by L. 1909, ch. 144, § 1 to read as above. This amendment struck out the words "until the expiration of at least twenty-five years after the execution of the instrument or " which followed the words "order shall be made " near end of section.

§ 12

Future Estates, Charitable Uses, etc.

Subdivision 4 was added by L. 1911, ch. 220.

L. 1909, ch. 45

The report of the Board of Statutory Consolidation (1907), page 3924, has the following note relating to this section: "This is a consolidation of L. 1893, ch. 701, §§ 1, 2, as amended by L. 1901, ch. 291, § 1. No change is made in the language of the statutes, further than to limit their application to personal property. The same laws, in so far as applicable to real property, are transferred to section 113, Real Property Law."

I. Generally, 20

II. Validity of charitable bequests, 21

III. Administration of charitable trusts, 26

I. GENERALLY

Grants and devises of real property for charitable purposes: see REAL PROPERTY LAW, § 113. Military organizations may take property by devise or bequest: see MILITARY LAW, § 244. Trusts for care of cemetery lots: see infra, § 13-a; REAL PROPERTY LAW, § 114-a.

Effect of statute. The effect of the statute embodied in the present section is to restore the law as it was declared in Williams v. Williams, (1853) 8 N. Y. 525, which held that the law of charitable uses as it existed in England at the time of the revolution was in force in this state. See Sailors Snug Harbor v. Carmody, (1914) 211 N. Y. 286, 105 N. E. 543, affirming 158 App. Div. 738, 144 N. Y. S. 24, which reversed judgment 77 Misc. 494, 137 N. Y. S. 968; Matter of Graves, (1902) 171 N. Y. 40, 63 N. E. 787, reversing order 66 App. Div. 267, 72 N. Y. S. 815; Matter of Griffin, (1901) 167 N. Y. 71, 60 N. E. 284, reversing judgment 45 App. Div. 102, 61 N. Y. S. 639; Allen v. Stevens, (1899) 161 N. Y. 122, 55 N. E. 568, reversing judgment 33 App. Div. 485, 54 N. Y. S. 8, which reversed 22 Misc. 158, 49 N. Y. S. 431; Utica Trust, etc., Co. v. Thomson, (1914) 87 Misc. 31, 149 N. Y. S. 392; In re Cunningham, (1912) 76 Misc. 120, 136 N. Y. S. 922, affirmed 151 App. Div. 940, 135 N. Y. S. 1107, affirmed (1912) 206 N. Y. 601, 100 N. E. 437. The intent and purpose of the statute embodied in the present section was to restore to the courts the power formerly exercised through the court of chancery to sustain and enforce trusts for charitable uses; and by virtue of its provisions the courts are now authorized and required to sustain gifts and bequests for charitable purposes, notwithstanding indefiniteness as to the beneficiaries or the suspension of the power of alienation not measured by lives. Morgan v. Durand, (1906) 51 Misc. 523, 101 N. Y. S. 1002.

Section as affecting statute against perpetuities. This section relieves such trusts as are religious, educational, charitable or benevolent, within the meaning of this provision of the law, from the operation of the statute against perpetuities. Matter of MacDowell, (1916) 217 N. Y. 454, 112 N. E. 117, reversing on other grounds 170 App. Div. 245, 156 N. Y. S. 387, which affirmed 89 Misc. 323, 153 N. Y. S. 653. See also supra, § 11, note. Prior to the enactment of the present section, charitable bequests in trust which were not measured by two lives were generally held invalid as obnoxious to the statute against perpetuities. See Fosdick v. Hempstead, (1891) 125 N. Y. 581, 26 N. E. 801, 11 L. R. A. 715, reargument denied (1891) 126 N. Y. 651, 27 N. E. 382, 37 N. Y. S. Rep. 130; Holmes v. Mead, (1873) 52 N. Y. 332; Adams v. Perry, (1871) 43 N. Y. 487; In re William, (1892) 1 Misc. 440, 23 N. Y. S. 150; Iseman v. Myres, (1882) 26 Hun 651; Rose v. Rose, (1863) 4 Abb. App. Dec. 108; McCaughal v. Ryan, (1857) 27 Barb. 376.

Effect of section upon statutory prohibition against accumulations. This section has not removed gifts, grants, bequests or devises to religious, educa

L. 1909, ch. 45

Future Estates, Charitable Uses, etc.

§ 12

tional, charitable or benevolent uses from the statutory prohibition against accumulations. St. John v. Andrews Institute for Girls, (1908) 191 N. Y. 254, 83 N. E. 981, 14 Ann. Cas. 708, modifying judgment 117 App. Div. 698, 102 N. Y. S. 808.

As to validity of directions for accumulation of income, see infra, § 16. Statute as retroactive. The statute embodied in the present section is not retroactive in its operation. Murray v. Miller, (1904) 178 N. Y. 316, 70 N. E. 870, affirming 85 App. Div. 414, 83 N. Y. S. 591; People v. Powers, (1895) 147 N. Y. 104, 41 N. E. 432, 35 L. R. A. 502, reversing judgment 83 Hun 449, 29 N. Y. S. 950, 31 N. Y. S. 1131; Butter v. Protestant Episcopal Church Parochial Fund, (1895) 92 Hun 96, 36 N. Y. S. 562; Matter of Sturges, (1899) 28 Misc. 110, 59 N. Y. S. 783, affirmed 48 App. Div. 624, 62 N. Y. S. 1148, reversed on other grounds (1900) 164 N. Y. 485, 58 N. E. 646. See also Fairchild v. Edson, (1897) 154 N. Y. 199, 48 N. E. 541, 61 A. S. R. 609, affirming 77 Hun 298, 28 N. Y. S. 401. This principle, however, is operative only to protect vested interests. Morgan v. Durand, (1906) 51 Misc. 523, 101 N. Y. S. 1002.

Statute as applicable to ascertainable and defined class of beneficiaries.— The present section does not apply to a fund in the hands of a committee appointed to accept donations for the relief of sufferers in a steamboat disaster, since in such a case the beneficiaries are persons within an ascertainable and defined class. The court will not therefore order the distribution of the fund regardless of the exercise of good faith by the committee to whose discretion the expenditure of the fund has been confided by the donors. If the moneys donated should prove more than sufficient for the purpose, the surplus would belong to the donors, if ascertainable; if not, it would revert to the state. Boenhardt v. Loch, (1907) 56 Misc. 406, 107 N. Y. S. 786, affirmed 129 App. Div. 355, 113 N. Y. S. 747, affirmed (1910) 198 N. Y. 631, 92 N. E. 1078. See also Loch v. Mayer, (1906) 50 Misc. 442, 100 N. Y. S. 837.

Cited. The statute embodied in the present section was cited in Dammert v. Osborn, (1893) 140 N. Y. 30, 35 N. E. 407, reversing 65 Hun 585, 20 N. Y. S. 474, in connection with the construction of the statute embodied in section 11. See supra, § 11, note. It was cited in Matter of Watson, (1902) 171 N. Y. 256, 63 N. E. 1109; Matter of Altman,, (1914) 87 Misc. 255, 149 N. Y. S. 601, and in the case of In re Moses, (1910) 138 App. Div. 525, 123 N. Y. S. 443, in connection with the question of exemption of religious and benevolent corporations from the transfer tax. See TAX LAW, § 221.

This section was cited in Hughes v. Stoutenburgh, (1915) 168 App. Div. 512, 154 N. Y. S. 65; Warburton Ave. Baptist Church v. Clark (1913) 158 App. Div. 230, 142 N. Y. S. 1089, reversing 80 Misc. 306, 141 N. Y. S. 1.

II. VALIDITY OF CHARITABLE BEQUESTS

Bequest in general terms for "religious purposes or for "the good of religion," etc., as good charitable bequest: see Ann. Cas. 1912C 1057, note. Bequest to individual manifest result of which is evasion of statute limiting bequests to charities: see 13 Ann. Cas. 1196, note. Charitable trust where trustee has discretion to defeat it: see 21 Ann. Cas. 156, note.

Validity and effect of condition of inalienability attached to gift for charity: see 12 Ann. Cas. 816, note. Validity, within rule against perpetuities, of gift to charity not in existence and beginning of whose existence is uncertain or contingent: see Ann. Cas. 1913A 139 note.

Validity of bequest for purchase of care of tomb, monument, burial lot, of cemetery: see 15 Ann. Cas. 606, note. Charitable nature of gift as affected by fact that it is intended as private memorial: see 21 Ann. Cas. 1159, note. Gift for establishment of hospital as charitable gift: see Ann. Cas. 1912D 58,