Girard v. Philadelphia - 74 U.S. 1 (1868)
U.S. Supreme Court
Girard v. Philadelphia, 74 U.S. 7 Wall. 1 1 (1868)
Girard v. Philadelphia
74 U.S. (7 Wall.) 1
APPEAL FROM THE CIRCUIT COURT FOR
THE EASTERN DISTRICT OF PENNSYLVANIA
1. Where a testator devises the income of property in trust primarily for one object, and if the income is greater than that object needs, the surplus to others (secondary ones), a bill in the nature of a bill quia timet, and in anticipation of an incapacity in the trusts to be executed hereafter, and when a surplus arises (there being no surplus now, nor the prospect of any) will not lie by heirs at law (supposing them otherwise entitled, which here they were decided not to be) to have this surplus appropriated to them on the ground of the secondary trusts' having, subsequently to the testator's death, become incapable of execution.
2. Neither the identity of a municipal corporation nor its right to hold property devised to it is destroyed by a change of its name, an enlargement of its area, or an increase in the number of its corporators. And these are changes which the legislature has power to make.
3. Under the will of Stephen Girard (for the terms of which see the case infra), the whole final residuary of his estate was left to the old City of Philadelphia in trust, to apply the income;
i. For the maintenance and improvement of his college as a primary object, and after that
ii. To improve its police;
iii. To improve the city property and the general appearance of the city, and to diminish the burden of taxation.
The court having declared that so long as any portion of the income should be found necessary for improvement and maintenance of the college, the second and third objects could claim nothing, and the whole income being, in fact, necessary for the college,
i. That no question arose at this time as to whether the new
city should apply the surplus under the trusts for the secondary objects to the benefit of the new city or to that portion of it alone embraced in the limits of the old one.
ii. That whether or not, the trusts being, as was decided in Vidal v. Girard, 2 How. 127, in themselves valid, Girard's heirs could not inquire or contest the right of the city corporation to take the property or to execute the trust, this right belonging to the state alone as parens patriae.
The City of Philadelphia, as originally laid out in 1683 and as incorporated in 1701, was situated upon a rectangular plot of ground bounded in one direction by two streets called Vine and South, a mile apart, and in the other by two rivers (the Delaware and Schuylkill), two miles apart -- the corporate title of the city being "the Mayor, Aldermen, and Citizens of Philadelphia." Upon the neck of land above described the corporate city continued to be contained until 1854, the inhabitants outside or adjoining it being incorporated at different times, and as their numbers extended, into bodies politic, under different names, by the state legislature, and with the city, forming the County of Philadelphia. In 1798, the Revolution having dissolved the old corporation, the legislature incorporated the city with larger powers, and prior to 1854 nearly twenty acts had been passed altering that law and forming, the whole of them, what was popularly called the charter of the city; but as already said, from 1683 to 1854, the city limits were the same.
In this state of things, Stephen Girard, in 1831, after sundry bequests to his relatives and friends and to certain specified charities and after announcing that his great and favorite object was the establishment of a college for the education of poor orphans, and that, together with the object adverted to, he had sincerely at heart the welfare of the City of Philadelphia, and as a part of it was desirous to improve the neighborhood of the River Delaware so that the eastern part
of the city might be made better to correspond with the interior -- left by will the real and personal residue of an estate of some millions of dollars to "the Mayor, Aldermen and Citizens of Philadelphia" -- that is to say to the city corporation above described, in trust, so far as regarded his real estate in Pennsylvania (this being the important part of his realty), that no part of it should ever be alienated, but should be let on lease, and that after repairing and improving it, the net residue should be applied to the same purposes as the residue of his personal estate, and that as regarded that it should be held in trust as to $2,000,000, to expend it, or as much as might be necessary, in constructing and furnishing a college and out-buildings for the education and maintenance of not less than three hundred orphans. A lot near Philadelphia of forty-five acres was devoted for these structures, and the orphans might come from any part of Pennsylvania (orphans from the City of Philadelphia having a preference over others outside) or from the Cities of New York or New Orleans.
After many and very special directions as to the college, followed by a bequest of $500,000 for a city purpose, the will proceeded:
"If the income arising from that part of the said sum of $2,000,000 remaining after the construction and furnishing of the college and out-buildings shall, owing to the increase of the number of orphans applying for admission, or other cause, be inadequate to the construction of new buildings or the maintenance and education of as many orphans as may apply for admission, then such further sum as may be necessary for the construction of new buildings and the maintenance and education of such further number of orphans as can be maintained and instructed within such buildings as the said square of ground shall be adequate to shall be taken from the final residuary fund hereinafter expressly referred to for the purpose, comprehending the income of my real estate in the City and County of Philadelphia, and the dividends of my stock in the Schuylkill Navigation Company, my design and desire being that the benefits of said institution shall be extended to as great a number of orphans
as the limits of the said square and buildings therein can accommodate."
This final residuary fund was directed to be invested, and the income applied:
"1st. To the further improvement and maintenance of the aforesaid college [as directed in the last quoted paragraph]."
"2d. To enable the city to improve its police."
"3d. To enable it to improve the city property, and the general appearance of the city itself, and in effect to diminish the burden of taxation, now most oppressive."
"To all which objects," the will proceeded,
"the prosperity of the city, and the health and comfort of its inhabitants I devote the said fund as aforesaid, and direct the income thereof to be applied yearly and every year forever, after providing for the college as hereinbefore directed as my primary object."
In conclusion, he directed that if the city should willfully violate any of the conditions of his will, the remainder of his estate should go to the Commonwealth of Pennsylvania for certain purposes, excepting, however, the income from his real estate in the City and County of Philadelphia, which it was to hold for the college; and if the commonwealth failed so to apply it, the remainder should go in the same way to the United States.
The above described city corporation, "the Mayor, Aldermen, and Citizens of Philadelphia," having accepted the trust, and built and furnished the college and out-buildings, administered the charity through its organs until 1854. By that time twenty-eight municipal corporations making the residue of the county had grown up around the old "city," some near, some far off, some populous, some occupied yet by farms. They comprised "districts," boroughs, townships, were of various territorial extent, and differed in the details of their respective organizations. In the year named, the Legislature of Pennsylvania passed what is known in Philadelphia as the Consolidation Act.
By this act, the administration of all concerns of the twenty-nine corporations, including their debts, taxes, property, police, and whatever else pertained to municipal office, and also the government of the county itself, were consolidated into one. All the powers, rights, privileges, and immunities incident to a municipal corporation and necessary for the proper government of the same, and those of "the Mayor, Aldermen, and Citizens of Philadelphia," and
"all the powers, rights, privileges, and immunities, possessed and enjoyed by the other twenty-eight corporate bodies, which, with the old city, made up the County of Philadelphia,"
"the board of police of the police district, the commissioners of the County of Philadelphia, the treasurer and auditor thereof, the county board, the commissioners of the sinking fund, and the supervisors of the township"
were, by virtue of the process of consolidation, vested in "the City of Philadelphia, as established by this act." A police board was to fix the whole number of policemen "for the service of the whole city." The "right, title, and interest," of the
"several municipal corporations mentioned in this act of, in, and to all the lands, tenements, and hereditaments, goods, chattels, moneys, effects, and of, in, and to all other property and estate whatsoever and wheresoever, belonging to any or either of them,"
were "vested in the City of Philadelphia," and all "estates and incomes held in trust by the county, present city, and each of the townships, districts, and other municipal corporations united by this act" were
"vested in the City of Philadelphia upon and for the same uses, trusts, limitations, charities, and conditions as the same are now held by the said corporations respectively."
The act also declared that the new city corporation should be "vested with all the powers, rights, privileges, and immunities" of the old one. The "net debt of the County of Philadelphia, and the several net debts of the guardians for the relief and employment of the poor of the City of Philadelphia," and of the board of health, "and of the controllers of the public schools," and of such of the said twenty-nine municipalities, eighteen being enumerated, as
had contracted debts, were consolidated and formed into one debt, to be called the debt of the City of Philadelphia, in lieu of the present separate debts so consolidated. The consolidation was carried into full effect. The act provided that the corporators of the new city having elected a mayor and councils, the councils should direct the mayor to appoint a day when "all the powers, rights, privileges, and immunities possessed and enjoyed" by the various corporations, and those also of the old city, should "cease and terminate," and the councils did accordingly, by resolution, direct the mayor to "issue his proclamation forthwith dissolving the different corporations superseded by the act, to take effect on the 30th instant," and in obedience thereto, the mayor, by public proclamation dated the 24th June, 1854, proclaimed that "all the powers, rights, privileges, and immunities possessed and enjoyed" by the now late twenty-eight municipalities, and "by the present mayor and councilmen" of the City of Philadelphia, from the said 30th day of June, 1854, should "cease and terminate."
The old city covered about two square miles; the new one, which covered the whole old County of Philadelphia, about a hundred and twenty-nine. In point of population, however, the old city embraced a fourth or fifth part of all the inhabitants of the new one. In the popular branch of the new city legislature, composed of eighty-five members, the old city enjoyed twenty. In the higher branch it had six members, the residue having eighteen. The debt of the old city had been small and its credit high. By the consolidation, the debt became large.
By the Consolidation Act, it may be well to add, the councils of the city, in laying taxes, were required so to lay them as to show how much was laid for each object supported respectively, and this exhibition was required by the act to be printed on the tax bills furnished to the taxpayers, as thus:
"For the relief of the poor, 15 cents in the $100 of the assessed value of said property. "
"For public schools, 28 cents in the $100 of the assessed value of said property."
"For lighting the city, 9 cents in the $100 of the assessed value of said property."
"For loan tax, 75 cents in the $100 of the assessed value of said property."
"For expenses of police, 22 cents in the $100 of the assessed value of said property &c."
In the erection and furnishing of the college and outbuildings, the whole fund of $2,000,000 was exhausted, and the whole income of the final residuary fund was now habitually drawn upon for the maintenance and education of the orphans, numbering, at the time when the bill was filed, about three hundred and thirty and limited to this number because the income from even the residuary fund was inadequate to the maintenance and education of a greater number. However, a part of Girard's estate consisted of coal lands in Pennsylvania, not yet ripe for being worked, whose value was largely increasing, and from which, when it should be found expedient to work them, the revenue would perhaps be very great.
In this state of things, certain heirs of Girard filed their bill in the court below praying an account and that a master might be appointed to inquire into the gross value, and then present capacity for annual yield of the coal lands, and if such an inquiry showed a capacity for affording income "immensely" beyond all the wants of the college, and all proper charges on the estate, that then, if the court should be of opinion that the whole residuary estate was applicable to the college (a matter denied by the bill), that it would decree "such surplus, found to exist beyond and beside all possible and lawful wants of the college," &c., to the complainants.
The court below dismissed the bill, which action of it was the ground of the appeal.
MR. JUSTICE GRIER delivered the opinion of the Court, and after observing that the attempt to restrain the alienation of the realty, being inoperative, could not affect the validity of the devise, and that the income of the whole residuary was devoted to the three objects stated by the testator, the college being the "primary object," and that so long as any portion of this residuary fund should be found necessary for "its improvement and maintenance," on the plan and to the extent declared in the will, the second and third objects could claim nothing, proceeded as follows:
The bill admits this to be a valid charity, and claims only the residue after that is satisfied. Now it is admitted (for it has been so decided), [Footnote 1] that till February, 1854, the corporation was vested with a complete title to the whole residue of the estate of Stephen Girard, subject to these charitable trusts, and consequently, at that date, his heirs at law had no right, title, or interest whatsoever in the same. But the bill alleges that the act of the legislature of that date (commonly called the "Consolidation Act"), which purports to be a supplement to the original act incorporating the city, has either dissolved or destroyed the identity of the original corporation, and it is consequently unable any longer to administer the trust. Now if this were true, the only
consequence would be not that the charities or trust should fail, but that the chancellor should substitute another trustee.
It is not insisted that the mere change or abbreviation of the name has destroyed the identity of the corporation. The bill even admits that a small addition to its territory and jurisdiction might not have that effect, but that the annexation of twenty-nine boroughs and townships has smothered it to death, or rendered it utterly incapable of administering trusts or charities committed to it when its boundaries were Vine and South Streets and the two rivers. There is nothing to be found in the letter or spirit of this act which shows any intention in the legislature to destroy the original corporation either by changing its name, enlarging its territory, or increasing the number of its corporators. On the contrary, "all its powers, rights, privileges and immunities &c., are continued in full vigor and effect." It provides also that "all the estates &c.," held by any of the corporations united by the act shall be held "upon and for the same uses, trusts, limitations, charities, and conditions, as the same were then held."
By the act of 4th of April, 1852, the corporation was
"authorized to exercise all such jurisdiction, to enact all such ordinances, and to do and execute all such acts and things whatsoever as may be necessary for the full and entire acceptance, execution, and prosecution of any and all the devises, bequests, trusts, and provisions contained in said will."
It may also
"provide by ordinance or otherwise for the election and appointment of such officers and agents as they may deem essential to the due execution of the duties and trusts enjoined and created by the will of the late Stephen Girard."
Now it cannot be pretended that the legislature had not the power to appoint another trustee if the act had dissolved the corporation, or to continue the rights, duties, trusts &c., in the enlarged corporation. It has done so, and has given the widest powers to the trustee to administer the trusts and charities, according to the intent of the testator, as declared in his will.
The legislature may alter, modify, or even annul the franchises of a public municipal corporation, although it may not impose burdens on it without its consent. In this case, the corporation has assented to accept the changes, assume the burdens, and perform the duties imposed upon it, and it is difficult to conceive how they can have forfeited their right to the charities which the law makes it their duty to administer. The objects of the testator's charity remain the same, while the city, large or small, exists; the trust is an existing and valid one, the trustee is vested by law with the estate, and the fullest power and authority to execute the trust.
Whatever the fears or fancy of the complainants may be as to the moral ability of this overgrown corporation, there is no necessary or natural inability which prohibits it from administering this charity as faithfully as it could before its increase. In fact, it is a matter in which the complainants have no concern whatever, or any right to intervene. If the trust be not rightly administered, the cestui que trust or the sovereign may require the courts to compel a proper execution.
In the Case of Vidal, [Footnote 2] the Supreme Court said that
"if the trusts were in themselves valid in point of law, it is plain that neither the heirs of the testator or any other private person would have any right to inquire into or contest the right of the corporation to take the property or execute the trust; this would exclusively belong to the state in its sovereign capacity and as parens patriae, and its sole discretion."
This is not an assertion that the legislature, as parens patriae, may interfere, by retrospective acts, to exercise the cy pres power, which has become so odious from its application in England to what were called superstitious uses. Baxter's Case and other similar ones cannot be precedents where there is no established church which treats all dissent as superstition. But it cannot admit of a doubt that where there is a valid devise to a corporation, in trust for charitable
purposes, unaffected by any question as to its validity because of superstition, the sovereign may interfere to enforce the execution of the trusts, either by changing the administrator, if the corporation be dissolved, or if not by modifying or enlarging its franchises, provided the trust be not perverted and no wrong done to the beneficiaries. Where the trustee is a corporation, no modification of its franchises or change in its name, while its identity remains, can affect its rights to hold property devised to it for any purpose. Nor can a valid vested estate, in trust, lapse or become forfeited by any misconduct in the trustee or inability in the corporation to execute it, if such existed. Charity never fails, and it is the right as well as the duty of the sovereign, by its courts and public officers, as also by legislation (if needed), to have the charities properly administered.
Now there is no complaint here that the charity, so far as regards the primary and great object of the testator, is not properly administered, and it does not appear that there now is or ever will be any residue to apply to the secondary objects. If that time should ever arrive, the question whether the charity shall be so applied as to have the "effect to diminish the burden of taxation" on all the corporation, or only those within the former boundaries of the city, will have to be decided. The case of Soohan v. City does not decide it, nor is this Court bound to decide it. The answer shows how it may be done, and the corporation has ample power conferred on it to execute the trust according to either hypothesis; and, if further powers were necessary, the legislature, executing the sovereign power, can certainly grant them. In the meantime, the heirs at law of the testator have no concern in the matter or any right to interfere by a bill quia timet. Their anticipations of the future perversion of the charity by the corruption or folly of the enlarged corporation, and the moral impossibility of its just administration, are not sufficient reasons for the interference of this Court to seize upon the fund, or any part of it, and to deliver it up to the complainants, who never had, and by
the will of Stephen Girard, were not intended to have any right, title, or claim whatsoever to the property.
In fine, the bill was rightly dismissed because:
1st. The residue of the estate of Stephen Girard, at the time of his death, was, by his will, vested in the corporation on valid legal trusts, which it was fully competent to execute.
2d. By the supplement to the act incorporating the city (commonly called the "Consolidation Act"), the identity of the corporation is not destroyed, nor can the change in its name, the enlargement of its area, or increase in the number of its corporators affect its title to properly held at the time of such change.
3d. The corporation, under its amended charter, has every capacity to hold, and every power and authority necessary to execute the trusts of the will.
4th. That the difficulties anticipated by the bill, as to the execution of the secondary trusts, are imaginary. They have not arisen, and most probably never will.
5th. And if they should, it is a matter, whether probable or improbable, with which the complainants have no concern and cannot have on any possible contingency.
Decree affirmed with costs.
Vidal v. Girard, 2 How. 127.
43 U. S. 2 How. 191.