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Keywords

trustwillcorporation
plaintiffjurisdictionequitytrustwill

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Burr v. Brooks, 83 Ill.2d 488, 416 N.E.2d 231, 48 Ill.Dec. 200

Facts

Joseph F. Bohrer, the trustee of a testamentary trust created by John M. Scott's will, sought instructions regarding the trust's administration after the City of Bloomington declined to accept the trust for a hospital as specified in the will. The will provided for a life estate for Scott's wife and directed the trustee to convert the estate into cash for the construction of a hospital. After the last annuitant died, the City proposed an alternative use for the funds, which led to the involvement of other beneficiaries, including a not-for-profit corporation and a school district, who argued that the original charitable intent could not be fulfilled.

Plaintiff, Joseph F. Bohrer, trustee of a testamentary trust created under the will of John M. Scott, deceased, brought this action in the circuit court of McLean County seeking instructions concerning the administration of the trust.

Issue

Did the circuit court correctly apply the doctrine of cy pres to determine the distribution of the trust funds, and should the manner of application of the cy pres doctrine be determined by the circuit court?

The City contends that there can be no failure of the gift made under paragraph 11 'so long as the charitable purpose embodied therein may be fulfilled,' that 'equity will consider the charitable purpose of the donor as the substance of the gift,' and that 'the mode of effectuating that purpose is a mere incident of the gift.'

Rule

The doctrine of cy pres allows a court to direct the application of trust property to a charitable purpose that aligns with the general intent of the settlor when the specific purpose becomes impossible or impracticable to fulfill.

The doctrine of cy pres is expressed in section 399 of the Restatement (Second) of Trusts, at 297 (1959), as follows: '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 some charitable purpose which falls within the general charitable intention of the settlor.'

Analysis

The court found that the City's proposal constituted a refusal of the trust, which invoked the alternative provision in the will. The appellate court determined that the City's alternative use of the funds did not align closely enough with the testator's original intent to construct a hospital, thus necessitating the application of the cy pres doctrine. The court emphasized that the determination of how to apply the cy pres doctrine should be made by the circuit court, considering the testator's intent and the viability of the proposals presented.

The appellate court said: 'The city cites many cases from other jurisdictions in support of its theory that its proposals met the requirements for equitable deviation. However, in those cases, either (1) the cy pres doctrine was applied, (2) it is impossible to determine that it was not being applied, or (3) the change from the specific designation of the settlor was less than here.'

Conclusion

The Supreme Court affirmed the appellate court's decision, holding that the circuit court should determine the manner of applying the cy pres doctrine and remanded the case for further proceedings.

The judgment of the appellate court is therefore affirmed and the cause is remanded to the circuit court of McLean County for further proceedings.

Who won?

The prevailing party was the not-for-profit corporation and the school district, as the court's ruling favored their claims over the City's proposal.

The appellate court affirmed that portion of the circuit court's judgment which held that the City's proposal constituted a technical refusal of the trust and that the implementation of the testator's alternative charitable purpose was impractical or impossible.

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