Fisch, E. L.

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Maryland Law ReviewVolume 9 | Issue 4 Article 5Cy Pres Comes to DelawareE. L. FischFollow this and additional works at: http://digitalcommons.law.umaryland.edu/mlrPart of the Estates and Trusts CommonsThis Casenotes and Comments is brought to you for free and open access by the Academic Journals at DigitalCommons@UM Carey Law. It has beenaccepted for inclusion in Maryland Law Review by an authorized administrator of DigitalCommons@UM Carey Law. For more information, pleasecontact smccarty@law.umaryland.edu.Recommended CitationE. L. Fisch, Cy Pres Comes to Delaware, 9 Md. L. Rev. 359 (1948)Available at: http://digitalcommons.law.umaryland.edu/mlr/vol9/iss4/5DELAWARE CY PRESCY PRES COMES TO DELAWARE*Until the case of Delaware Trust Company v. Graham,'decided in September 1948, the courts of Delaware hadrefused to recognize the doctrine of cy pres although itwas widely applied in the United States.' Cy pres, a termderived from the Norman-French expression "cy prescomme possible" which means "as near as possible",3 isthe mechanism utilized by the equity courts to save acharitable trust, when the particular charitable purposeof the settlor cannot be carried out, by applying the giftas near as possible to the donor's general charitable inten-tion.In America, the reluctant acceptance and retarded de-velopment of the cy pres doctrine, in some of the states,was largely due to the failure of the early courts to distin-guish between judicial and prerogative cy pres.Prerogative versus Judicial Cy PresCy pres as administered in England was of two kinds;judicial and prerogative. Not much is known about thecommon law origins of cy pres but it is believed that thejudicial power was first exercised by the chancellor underhis jurisdiction as an equity judge while the prerogativecy pres is supposed to have originated from the power ofthe king to insure justice to all of his subjects.' In timethe prerogative power was delegated to the king's counciland was finally taken over by the chancellor as the keeperof the king's conscience.6 Thus the chancellor acted in adual capacity, one judicial and the other ministerial.7 Al-though it is not known exactly where the line was drawnbetween prerogative and judicial cy pres there was atendency to increase the judicial power at the expense ofthe prerogative until the chancery had encompassed most* This Comment was written by E. L. Fisch, Esq., LL.B. Columbia Uni-versity, of the New York Bar. On this occasion the REVIEW has gladly devi-ated from its usual policy of emphasizing Maryland problems, because theComment involves the law of a neighboring State, which has no legal journalof its own. For the history of the cy pres doctrine in Maryland see Howard,Charitable Tru8t8 in Maryland (1937) 1 Md. L. Rev. 105; and the laterstatute, Md. Code Supp. (1947) Art. 16, See. 279 A.I Delaware Trust Co. v. Graham, 61 A. (2d) 110 (Del. 1948).12 BOGERT, TRUSTS AND TRUSTEES (1935) Sec. 433.82 Ibid, Sec. 431.'RESTATEMENT, TRusTs, Sec. 399 (1935).52 PEaRY, TRUSTS & TRUSTEES (7th ed. 1929), Sec. 718.Note, A Revaluation of Cy Pres (1939) 49 Yale L. J. 303, 304.Op. cit. supra n. 5.1948]MARYLAND LAW REVIEWof the prerogative powers over charitable trusts." TheCrown, however, as parens patriae retained the power todesignate a charitable purpose by means of the sign manualwhere the object of the gift was illegal or void as contraryto public policy, and where there was a gift made to charitygenerally without the interposition of a trustee.'An apparent confusion in the cases resulted from thefact that the chancellor administered both the prerogativeand judicial cy pres and it was not always clear whichbranch of the doctrine he was applying or in what capacityhe was acting."° So great was the disorder that LordEldon declared:"All I can say upon it is, I do not know, what doc-trine could be laid down, that would not be met bysome authority on this point; whether the propositionis, that the Crown is to dispose of it, or the Masterby a scheme.""It is not surprising, therefore, to find that the Delawarecourts went astray on this point. There was a completefailure to recognize any distinction between judicial andprerogative cy pres, and it was assumed that the doctrinewas one of prerogative only.Delaware Interpretation of the Doctrine of Cy PresThe first important statement dealing with cy pres inDelaware appears in Doughten v. Vandever,12 a case de-cided in 1875. The court there held that certain bequeststo charitable institutions were not void for uncertainty ormisdescription and that a court of equity had power togive effect to charitable bequests by virtue of the commonlaw. Although the doctrine of cy pres was not involvedthe chancellor gratuitously added the statement that thecy pres doctrine was not recognized in Delaware becauseit was a prerogative doctrine and therefore could not beapplied by the equity courts which have only judicialpowers. Obviously the court was unaware that the cypres doctrine also existed judicially for it incorrectly ob-served that:83 SCOTT, TRUSTS (1939), Sec. 399.1.9 Moggridge v. Thackwell, 7 Ves. Jr. 36, 32 Eng. Rep. 15 (1803), affirmed,13 Ves. Jr. 416, 33 Eng. Rep. 350 (1807). See also 3 ScoTT, TRuSTS (1939),Sec. 399.1.10 Note, 8 Corn. Law Quarterly 179, 180 (1923).1 Moggridge v. Thackwell, upra N. 9; 7 Yes. Jr. 36, 8Z 32 Eng. Rep. 15,31 (1803).1Doughten v. Vandever, 5 Del. Ch. 51 (1875).(VOL. IXDELAWARE CY PRES"The principle or doctrine of the exercise of thisministerial function of the English chancellor waswhat is known as cy pres; that is to say, where therewas a definite charitable purpose which could not takeplace, the court would substitute another, and formerlyof a very different character. It was not, however,in the exercise of the judicial function of his office,but in the exercise of his ministerial function, thatthe English chancellor applied the fund to a differentpurpose from that contemplated by the testator, pro-vided it was charitable."'13Unfortunately in Murphy v. McBride,i4 where the Dela-ware court had before it for the first time a clear-cut casein which cy pres could be applied, the dictum of Doughtenv. Vandever'5 repudiating the doctrine of cy pres, wasapplied. The testator, devised the residue of his propertyto the Sisters of Charity of St. Peter's School to be used"for the support and maintenance of the orphan girls underits care and charge". The charter of the corporation hadexpired three years before the testator's death and anentirely new corporation was formed some four monthsafter his death. The court, without reexamining the state-ments of the Doughten case regarding the nature of cy pres,refused to allow the new corporation to take the propertyon the specific ground that the doctrine of cy pres hadnever been adopted in Delaware. 16Islbid, 64. The court did distinguish between the judicial and preroga-tive jurisdiction over charities but took the position that the cy prespower was not judicial."Murphy v. McBride, 14 Del. Ch. 457, 130 A. 283 (1925), affirming 14Del. Ch. 242, 124 A. 798 (1924). But cf. Blackstone v. Chandler, 15 Del.Ch. 1, 130 A. 34 (1925) where a home for the aged to which a willdirected payment of the principal of the invested proceeds of realty afterthe death of the life tenant and, after revival regularly effected a mergerwith another such home, the legacy passed to the latter as against theheirs of the testatrix. The court did not mention the cy pres doctrinebut distinguished this case from Murphy v. McBride on the ground thatin the latter case the corporate beneficiary had ceased to exist before thetestator had died while in this case the corporation was in existence atthe time that the will took effect. The property was held to vest in theresulting corporation by virtue of section 1974 of the Revised Code ofDelaware (1915). The statute is now section 2092 Rev. Code of Del.(1935) and provides that the "title to any real estate, whether vested bydeed or otherwise ...vested in any such constituent corporations, shouldnot revert or be in any way impaired . . ." by a merger, but shall becomethe property of the new corporation.ISupra, n. 13."This statement was repeated in U. S. v. 1,010.8 Acres, More or Less,Situate in Sussex County, 56 F. Supp. 120, 144 (D. C. D. Del. 1944).1948]MARYLAND LAW REVIEWIt was not until Chancellor Harrington in the recentcase of Delaware Trust Company v. Graham7 reinvesti-gated the origins of the cy pres doctrine and came to theconclusion that "in principle there, therefore seems to beno good reason why judicial cy pres should not be appliedin appropriate cases by this court" that the misconceptionof the earlier court was finally exposed and effectivelydemolished. Delaware Trust Company v. Graham involveda testamentary bequest to a trust company in trust, theincome to be paid to a foreign missionary society of adesignated Methodist church for the purpose of furtheringthe objects and purposes of that society. The ForeignMissionary Society, an unincorporated society, was in ex-istence at the time of the death of the testator in 1926 andreceived the net income from the fund until 1940 when itceased to exist as a result of the merger of various churchorganizations. The chancellor recognized that the cy presrule as used in England was applicable to charitable usesin both judicial and ministerial cases and adopted the doc-trine by awarding the income of the fund to a similarchurch society to be used for the purposes designated bythe testator.With this judicial clarification of the law it is hopedthat the Delaware courts will continue to construe thedoctrine liberally so that in the future there will be no"wrecks of original charities,-charities that were dear tothe hearts of their would-be founders, and the executionof which would have been of inestimable value to thepublic.""8NOTICE OF TERMINATION REQUIRED TOTERMINATE A PERIODIC TENANCYIMPLIED UNDER A VOID LEASEDarling Shops Delaware Corporation v. BaltimoreCenter Corporation'The plaintiff, the Baltimore Center Corporation, aftergiving less than a three-month notice to quit, brought asummary proceeding to recover possession of the premisesoccupied by the defendant under two void or unenforce-able leases. The predecessor in title of the plaintiff, theS upra, n. 1. 113.11 Allen v. Stevens, 161 N. Y. 122, 140, 55 N. E. 568, 572 (1899).I60 A. (2d) 669 (Md. 1948).[VOL. IX

Cy Pres Comes to Delaware

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