Opinion
October 5, 1965 —
November 2, 1965.
APPEAL from an order of the county court of Winnebago county: HERBERT J. MUELLER, Judge. Affirmed.
For the appellant there was a brief and oral argument by Bernard F. Mathiowetz of Milwaukee.
For the respondent there was a brief by Thompson, Thompson Grant of Oshkosh, and oral argument by Robert R. Thompson.
Conrad Raulf, a resident of Winnebago county, Wisconsin, died testate on January 9, 1959. His will, dated September 13, 1957, disposed of his estate in part by specific bequests, but the bulk of it went into a residuary testamentary trust of which First National Bank in Oshkosh is the trustee.
The will provides that the trust is to continue during the lifetime of Charles Raulf, a brother, and Lillian Raulf, wife Charles Raulf, with all of the income therefrom to be paid to Charles Raulf during his lifetime, and upon his death 50 percent of the income to be paid to Lillian Raulf during her lifetime, with the other 50 percent to be paid to diverse beneficiaries, including "Milwaukee Lodge Benevolent and Protective Order of Elks #46 of the United States of America (to be used only for charitable purposes) Two (2%) percent thereof"
The foregoing trust is to continue until the death of the last to survive of Charles and Lillian Raulf, at which time the trust is to terminate and the principal distributed to designated beneficiaries, including "the Milwaukee Lodge Benevolent and Protective Order of Elks #46 of the United States of America (to be used for charitable purposes) Ten (10%) percent thereof"
Both Charles and Lillian Raulf survived the testator. Charles Raulf died on November 18, 1964, and thus the bequest of two percent of trust income payable to the Milwaukee Lodge of Elks #46 became operative.
A judgment in the Conrad Raulf estate was entered on December 27, 1961, authorizing the trustee to pay federal and state income and death taxes. The will itself expressly imposed the burden of valid state and federal death taxes upon the estate. The First National Bank in Oshkosh, as executor, paid the federal estate taxes and Wisconsin inheritance taxes on an estimated basis, treating the remainder interest in the trust estate which was granted to Milwaukee Lodge of Elks #46 as a charitable bequest for tax purposes.
The federal taxing authorities requested the executor to furnish information regarding the charter and bylaws of the Elks Lodge and also the action taken by such lodge to designate the charitable uses to be made of its portion of the trust estate. The Elks Lodge refused to furnish the executor with such information, whereupon the executor petitioned the county court of Winnebago county for an order requiring the Elks Lodge to supply the requested data and to take the appropriate action. The county court entered an order on March 22, 1962, requiring the Elks Lodge to show cause why it should not comply with the petition of the executor and trustee.
The Elks Lodge filed an answer and attached thereto a copy of the constitution and statutes of the National Order of Elks, a copy of the charter, bylaws and rules of order of the Elks Lodge and alleged that it is not a condition precedent to the establishment of its rights as a legatee and beneficiary that it make a determination evincing a specific charitable use for its bequests.
On February 5, 1965, the trial court decided that the testator's intent was to create a public charitable trust. While the trial court also ruled that the Milwaukee Elks Lodge by resolution could designate a specific purpose for which its share of the proceeds was to be used, the court further concluded that the Elks Lodge did not qualify to administer the trust. The court ordered that the administration of the trust would be by trustees appointed by the court and under the supervision of the court.
Each of the two bequests to the Elks Club was expressly limited by the testator as to the purpose which it was to be used. In one instance, the will contained the words "to be used only for charitable purposes;" in the other instance, the same expression without the word "only" was employed.
The trial court interpreted these gifts to be impressed with a restriction that they be used for public charitable purposes. In view of the language of the instrument, we must agree with that conclusion. Estate of Lawrence (1964), 22 Wis.2d 624, 126 N.W.2d 517; Will of Richter (1934), 215 Wis. 108, 254 N.W. 103. We interpret the words of this will to establish that the testator intended to make a charitable bequest, and under all the circumstances it must be construed to be a public charitable gift rather than a private charitable gift or a noncharitable one. Estate of Brandenburg (1961), 13 Wis.2d 217, 108 N.W.2d 374; Estate of Rowell (1946), 248 Wis. 520, 22 N.W.2d 604.
In Estate of Bletsch (1964), 25 Wis.2d 40, 130 N.W.2d 275, we recognized that the court will endeavor to carry out a charitable purpose which is manifested in a testament. H a private type of charity is intended by a donor, the instrument must offer reasonably clear support for such concept. This court will not presume an intention that a charitable bequest is to be available for private charitable purposes. Harrington v. Pier (1900), 105 Wis. 485, 82 N.W. 345. This is true no matter how worthy may be the institution or the private charity involved.
The testator in the case at bar did not create a formal trust, but we have held that the words "in trust" are not essential in the establishment of a charitable trust. Maxcy v. Oshkosh (1910), 144 Wis. 238, 249, 128 N.W. 899, 128 N.W. 1136; Restatement, 2 Trusts 2d, p. 215, sec. 351, ch. 11. Cf. Estate of Silverthorn (1957), 274 Wis. 453, 457, 80 N.W.2d 430.
In Estate of Bletsch (1964), 25 Wis.2d 40, 47, 130 N.W.2d 275, we commented as follows concerning the doctrine of cy pres:
"In our opinion, it is sufficient if there is a bequest to a charity. In a sense, it can perhaps be said that a charity always receives the gift in trust for its purposes."
Sec. 231.11 (7) (d), Stats., asserts the legislative policy of our state to be as follows:
"Where the fulfillment of the special purpose expressed in a trust or other gift for charitable or public purposes is or becomes impracticable, impossible or unlawful, it shall be the duty of the courts by a liberal construction of the trust or gift to ascertain the general purpose of the donor and to carry it into effect in the nearest practicable manner to the expressed special purpose; provided, however, that the right of visitation of a living donor shall not be held to be impaired by anything contained in this subsection."
The appellant has objected to the court's appointment of trustees and has urged that trustees (if they are found to be needed) be selected from amongst the leadership of the appellant fraternal order. In the absence of a contrary intent determinable from the instrument, it is ordinarily within the province of the county court to select trustees and to fix the conditions and terms of the trust's administration. See Estate of Rowell (1946), 248 Wis. 520, 525, 526, 22 N.W.2d 604; Restatement, 2 Trusts 2d, pp. 286, 287, sec. 397, ch. 11.
We recognize that tax considerations may have formed the impetus for this litigation. Nevertheless, the taxing agencies are not parties before this court, and we do not purport to reach any determination concerning the taxability of the interests herein.
By the Court. — Order affirmed.