
    Matter of the Judicial Settlement of the Accounts of William J. Roche, as Executor of the Last Will and Testament of Henry T. Nason, Deceased.
    
      (Surrogate’s Court, Rensselaer County,
    
    
      February, 1907.)
    Trust : Nature and elements in general—Gift to corporation for corporate purposes does not constitute a trust; the trustee, appointment, etc.—Beneficiary as trustee.
    Corporations—Incorporation and organization—Contents of articles.
    Where a testator gives to an incorporated hospital a sum of money, to be used, while said corporation maintains a hospital in Troy, for maintaining a room for the use of persons to be admitted in a certain manner, two churches of said city having respectively the first and second right to select those who shall occupy it, and with the provision that the corporation shall before receiving the fund execute an agreement to administer the fund as required by the will of the testator; and where the intention and purposes of" the testator are all within the corporate powers of the corporation, whose board of directors is competent to make rules and regulations-to carry out the details of the testator’s expressed wishes, held that it was the intention of the testator to make an absolute gift to the corporation for the purpose of its incorporation, not limited, to the period during which it might maintain a hospital in Troy, the income to be used for a certain length of time in a particular-manner.
    The certificate of incorporation of a hospital association is not invalidated by reason of a statement therein that the object of the-corporation shall be erecting, establishing and maintaining a hospital and dispensary nor because it specifies an intention to receive persons, who wish to pay for treatment.
    Appeal dismissed 119 App. Div. 927.
    Motion by the next of kin to intervene, in a proceeding for the-judicial settlement of the account of an executor.
    Edward W. Douglas, for executor; William J Roche, executor in person; William H. Van Schoonhoven (Van Santvoord & Wellington, of counsel), for Samaritan Hospital; Henry J. Speck, for executor of will of Dr. E. D. Ferguson, deceased; Patterson, Bulkeley & Van Kirk, for Isabella K. Lombard Justin Kellogg, in person; Van Santvoord & Wellington, for Troy Public Library; J. K. Long, for next of kin.
   Heaton, S.

The will of the deceased upon its face disposea of the whole estate'and, therefore, the heirs-at-law and next of kin of the deceased have not been cited upon this accounting-Two of the next of kin, Susan A. Dearborn and Eliza E. Bates, appear by their attorney and ask to be made parties to this proceeding, alleging that they are interested in the estate by reason of the fact that the bequest of $10,000 to the Samaritan Hospital of Troy is invalid and if invalid does not fall into the-residuary estate; upon the further ground that the Samaritan Hospital, as the residuary legatee in said will named, is not a legal corporation, and, therefore, the gift of the residuary estate to it, as well as the bequest of $10,000 to it, is void and that such bequests go by operation of law to the next of kin of the deceased. The executors, the Samaritan Hospital and other legatees filed ’answers to the petition of the said next of kin; and, upon the issues thus raised, a hearing was had to determine the rights of the petitioners to be made parties to the judicial settlement. There were introduced in evidence the will of the deceased, the agreement of the Samaritan Hospital with the executor of the estate, dated January 30, 1905, which was made ' in accordance with the requirements of paragraph Ho. 4 of the will, and the certificate of incorporation of the Samaritan Hospital.

The will of Henry T. Nason provides as follows:

“ First. I hereby make the following gifts, devises and bequests to the following persons and institutions * * * the Samaritan Hospital of Troy, N. Y., an institution incorporated under the laws of the State of Hew York, the sum of ten thousand dollars for the purposes hereinafter described * * *.
“ Fourth. The said gift or bequest to the Samaritan Hospital is to constitute an endowment fund to be used while the said corporation shall maintain an hospital institution in Troy for the purpose of endowing and maintaining a room in the said hospital, which fund shall be known as the Nason free bed fund, and which room shall be known as the Nason room, wherein worthy poor persons may, in case of sickness or accident, receive treatment, nursing, food and attendance free of charge. The religious corporation known as the First Presbyterian Church of the City of Troy, acting through its officers or societies who care for the sick and poor, shall have the first right and privilege to have such room occupied by and such care and treatment given therein to any poor sick or injured person whom .such religious corporation may from time to time select and send to such hospital; and, in the event that said religious corporation shall at any time 'be not using such room for such purpose, then the religious corporation known as the Second Street Presbyterian Church, whose place of worship is on Second Street in the City of Troy, shall have the like right and privilege. The said sum of ten thousand dollars shall be paid to the said hospital corporation within two years after my decease without interest; provided, however, that the said corporation shall execute in writing and deliver to my executor an agreement that said hospital corporation will accept said sum as an endowment fund and will invest the principal and that the said room shall be maintained out of the income of such investment and that it shall be used in the manner and for the purposes above set forth while an hospital institution is maintained by said corporation in the city of Troy, and that said religious corporations shall have the rights and privileges above set forth; failing the execution of such an agreement, the gift to such institution shall lapse.
“ Fifth. In case neither my said mother nor my said grandfather shall survive me, then the following gifts, devises and bequests are hereby made and are substituted in place of those contained in the preceding item and they shall be paid to the following persons and institution to-wit * * * to the Samaritan Hospital of Troy, N. Y., the sum of ten thousand dollars for an endowment fund for the purpose of maintaining a free room and bed to be known and used as set forth in the fourth item of this will and to be invested and the income applied as set forth in said item * * * and all the rest, residue and remainder of my said estate and property to the said Samaritan Hospital in Troy, N. Y.
“ The gift of ten thousand dollars to the Samaritan Hospital made in this item must be accepted subject to the conditions mentioned in the like gift to it in the fourth item of this will.
Sixth. It is my desire that all my estate shall be converted into personal property and shall be paid out and distributed as such in case my mother shall not survive me and for the purpose of making such conversion, I hereby authorize and direct my executor hereinafter named * * * to sell and convey any and all real estate of which I may be the owner at the time of my death and execute and deliver sufficient instruments and deeds of conveyance thereof.”

The force and effect of the objections raised to the validity of the bequest of $10,000' to the Samaritan Hospital depends upon the true construction to be given to the language employed' by the testator and to the scheme devised by him for the disposition of this portion of his property.

The bequest of $10,000 to the Samaritan Hospital in the third clause of the will is included with many other bequests which are given directly and absolutely to the persons named and the language employed is that which expresses an intention to make direct and absolute gifts, viz.: I hereby make the following gifts, devises and bequests to the following persons and institutions.” The fourth item states that the said gift and bequest to the Samaritan Hospital is to constitute an endowment fund to be used, while said corporation shall maintain an hospital institution in Troy, for the purpose of endowing and maintaining a room and then following the general outline of a plan for the use of said income in accordance with the wishes of the testator and, it will be noted, strictly within the line of the expressed object of the institution. Referring to the certificate of incorporation of the Samaritan Hospital, we find it therein stated that the treatment of persons in such hospital and the admission of persons to such hospital shall be governed by the rules and regulations established by its board of directors. The intention and purpose of the testator plainly appears to be this: He gives $10,000 unreservedly to the corporation as an endowment fund to be used for a special purpose, which he in a general way outlines, such purpose being one of the very objects of the corporation. He requires the board of directors to make the necessary rules and regulations to carry into effect his plan and design, as they are clearly authorized to do by their certificate and the law. He further provides that the gift shall not be paid to the said corporation until it has prepared itself to execute the wishes of the testator and until it manifests such ability and willingness by the execution of an agreement to accept such endowment upon the terms and conditions specified in the will.

The corporation may refuse to accept the gift upon the conditions specified; but, having once accepted it, the gift is 'absolute and unconditional and not upon any trust expressed or implied. The ownership of the fund is in no way suspended. It becomes the absolute property of the corporation. Ho forfeiture is provided for in case the corporation fails to keep its agreement. The only condition made is that the corporation shall manifest its acceptance of the legacy by the execution of an agreement. Having executed the agreement, the bequest of the fund becomes absolute and unconditional. The Words, while an hospital institution is maintained by said corporation in the City of Troy,” in no way apply to the gift of the principal of the fund, nor do' they qualify or limit the absolute bequest thereof to the corporation. They apply, if at all, to the establishment of the Nason room, provided it ever transfers its hospital to some other place than the city of Troy or ceases in any place to maintain an hospital. Such expression affirms, rather than disaffirms, the intention of the testator to make the gift of the fund absolute to the corporation. It may have the property but need not maintain the Nason room when it ceases to be an hospital in the city of Troy.

Under this construction of the will, the bequest is an unconditional, perpetual gift to the hospital for its general purposes, the income to be used for a certain length of time in a particular manner. It leaves no ultimate reservation to the next of kin, nor does it suspend the period of absolute ownership. It is not a mere custodian of the income to be used as two other corporations shall direct, but to be used in accordance with the rules and regulations of its own board of directors. There is no trust either in the hospital, or the two church corporations, or the executor. It is not subject to forfeiture for breach of condition, and the executor is given no right in case of failure to perform the contract to do any act for the benefit of the next of kin.

Having outlined the intention of the testator, it remains to be seen whether said intention is opposed by any legal principle, and, therefore, cannot be declared valid.

In Bird v. Merklee, 144 N. Y. 544, the court said: Gifts to religious and charitable corporations to aid in carrying out the purposes for which they are organized, whether by expending the principal of a bequest, or the income of a bequest to be invested in perpetuity do not create a trust in any legal sense, do not offend against the statute of perpetuities, are not to be judged by any of the well known rules pertaining to the law of trusts as applied to private individuals.”

In Wetmore v. Parker, 52 N. Y. 458, the court said: “ A corporation created for charity, etc., may take and hold personal property, limited by the donor to any of the corporate uses of the donee; and a direction of the donor that the principal shall be kept inviolate, and the income only expended, will not invalidate the gift; provided, of course, that the same is immediate and vested. The question relates to the capacity of the corporation; and the law of perpetuities has nothing to do with it. * * * The income only of the permanent endowment of such institution can be used with safety to its very existence. Any other course would frustrate, and, sooner or later, destroy its usefulness. * * * It does not create a trust in 'any such sense, as that term is applied to property. The corporation uses the property, in accordance with the law of its creation, for its own purposes; and the dictation of the manner of its use, within the law by the donor, does not affect its ownership or make it a trustee.”

The fact that a legatee is requested or required to make an agreement regulating the application of' the income, received from personal property transferred to it, does not violate the statutory rule forbidding the suspension of the absolute ownership of personal property, 'and such agreement may provide that beneficiaries of the income may be selected by others than the corporation holding the fund, if such application of income is within the legal activities of such corporation. Tabernacle Baptist Church v. Fifth Avenue Baptist Church, 60 App. Div. 327; affd. 172 N. Y. 598.

The vesting of the legacy is not suspended until a point of time is reached when it shall be absolutely certain that the legatee will not fail to perform the condition, but vests absolutely and immediately upon the legatee’s 'acceptance of the legacy upon the condition named, without regard to its subsequent compliance with such condition. Matter of Hart, 61 App. Div. 587; affd. 168 N. Y. 640.

Since the intention and design of the testator was to establish an endowment fund and direct the 'application of the income thereof along the general lines of the work which said corporation was authorized to carry on, these 'and many other decisions establish that there is no legal objection to the corporation executing the intention of the testator.

The gift of $10,000 is, therefore, a valid, absolute, unconditional bequest of the principal of the fund to the Samaritan Hospital, and there is no condition attached to it which said hospital has not the legal right to execute and perform; and such hospital, having executed the 'agreement required by the-, testator, is entitled to be paid, if it has legal capacity to take; the bequest.

It is urged by the petitioners that the Samaritan Hospital is not a legal corporation, and, therefore, the said bequest and the bequest of the residuary estate to it are void. This issue makes it necessary for the surrogate to determine whether oa* not the Samaritan Hospital filed a proper certificate to become a legal corporation; for, if it did not become a legal corporation, the legacies to it are void and the next of kin are consequently interested parties on this judicial settlement. The jurisdiction of the surrogate to determine such question is sustained by Matter of Arden, 20 N. Y. St. Repr. 865; Carpenter v. Historical Society, 2 Dem. 574; Smith v. Havens’ Relief Fund Society, 44 Misc. Rep. 594, and by many other decisions which lay down the rule that, where it becomes necessary for the surrogate in the performance of his legal duty to do any act, he has jurisdiction to decide the questions arising which are necessary to be determined to enable him to fully and properly perform such duty.

A voluntary association for charitable purposes cannot, under the law of this State, take a legacy. Fralick v. Lyford, 107 App. Div. 543, which overrules Matter of Fitzsimmons, 29 Misc. Rep. 731.

The certificate of incorporation of the Samaritan Hospital contained all the statements required by law to be contained in such a certificate and was approved by a justice of the Supreme Court and by the State Board of Charities. If it contained more than it was required to contain, it was not on that account a void certificate. “ Persons seeking to form a corporation under any general law must have a reasonable latitude as to what they may insert in their certificate of incorporation. They must insert therein all the matter particularly required by the law, and they may insert other provisions not inconsistent with law or public policy which are germane to the purposes of the cor^ poration, and necessary, convenient or appropriate to the accomplishment of such purpose. If they keep within such limits the public authorities have no reason to interfere, the interests of the public are not jeopardized, and the right of no citizen violated.” People ex rel. Fairchild v. Preston, 140 N. Y. 552.

The point is strongly urged that in the certificate this statement is made: “ First the object of said corporation shall be the erecting, establishing and maintaining of an hospital and dispensary in the City of Troyand it is alleged that the law does not permit the organization of a corporation for more than one of the purposes specified in the Membership Corporation Law, section 80. It will be noticed, however, that the corporation which is formed by the certificate is stated to be an hospital corporation and not an hospital and dispensary corporation, and, therefore, under the foregoing cases, it is clear that, if it was improper to state, in defining the object of the hospital corporation, that it intended to maintain a dispensary as well as an hospital, that part of the certificate would not invalidate it.

Merely because, the declared purposes are very broad in their scope and in practice a bit indefinite does not affect the validity of the incorporation as such.” Smith v. Havens’ Relief Fund Association, 44 Misc. Rep. 594.

It is also claimed that, in stating the object of said corporation, it is specified that persons may be received who wish to pay for treatment and that, for such reason, the institution was not entitled to be incorporated under chapter 559 of the Laws of 1895. This objection is untenable under the decisions above -quoted and under the decision in Matter of Vassar, 127 N. Y. 1-14, where the court said that the charter of a charitable corporation (an old men’s home) was not invalidated by charging an entrance fee, since where the object and purposes are charitable such a charge possesses no element of private or corporate gain.

It is, therefore, apparent that, so far as the surrogate has jurisdiction to decide, the Samaritan Hospital is a corporation entitled to take a bequest, and, therefore, the two bequests to it are not void.

It, therefore, appears that the testator has legally disposed of all his estate and there is nothing upon this -accounting which can be distributed to his neat of kin; and, for such reason, they are not parties interested in this judicial settlement, and their petition to be allowed to intervene is denied.

Motion denied.  