COMMON PLEAS COURT OF PHILA. CO., ORPHANS' COURT
November 7, 1985
ESTATE OF RUTH D. JOHNSON, DECEASED
Mary G. Lawler, Esquire, and Norman H. Brown, Esquire, for the Exceptant
Henry I. Einbinder, Esquire, for the Trustees
Duffield Ashmead III, Esquire, for the Trustees of the University of Pennsylvania
Lawrence Barth, Esquire, for the Commonwealth of Pennsylvania, parens patriae
Barry S. Augenbraun, Esquire, amicus curiae
Pawelec, Adm. J., Bruno, Silverstein and Jamison, JJ.
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SUMMARY OF CASE
Ruth D. Johnson, the decedent, left a will which gave the residue of her estate, in trust, for the benefit
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of her aunt and provided that upon the death of her aunt the principal and any undistributed income of the trust should be paid over in equal one-half shares to the University of Pennsylvania and to Temple University to establish scholarship funds in the memory of her parents. She requested that the scholarship or scholarships be awarded "to worthy medical students, male or female, and the preference for such awards first be given to medical students of the Jewish faith residing in Philadelphia, Pa., and thereafter, to Jewish medical students from other areas, and thereafter to medical students of any other faith from Philadelphia or elsewhere."
At the audit of the trustees' account Temple University asked the court to delete the religious preference provision. The auditing judge refused to change the terms of the will and he awarded Temple's share of the trust back to the trustees pending a decision by Temple either to accept or reject the gift on the terms provided in the will. Temple took exceptions to the adjudication and the court en banc, in an opinion of Judge JAMISON, dismissed the exceptions, Judge BRUNO concurring in the result.
The court determined that the testatrix's primary intent was to provide scholarships for men and women medical students, preferably of the Jewish faith from Philadelphia. It rejected Temple's argument that the testatrix's primary intent was to benefit the two medical schools.
Reviewing cases from Pennsylvania and other jurisdictions, the court concluded that the policy against discrimination on the basis of religion was not as strong as the policy against discrimination on the basis of race. The court cited cases where racial or gender-based restrictions had been deleted from trust instruments but religious restrictions had been retained.
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The court also considered whether its refusal to delete religious restrictions would constitute judicial state action that violated the Equal Protection Clause of the Fourteenth Amendment. The court concluded that its application of the trust laws was by itself neutral and did not constitute impermissible discrimination. It distinguished the opinion of the Court of Appeals for the Third Circuit in Pennsylvania v. Brown, 392 F.2d 120 (3rd Cir. 1968), cert. denied 391 U.S. 921 (1968).
Ultimately the court determined that reformation of the testatrix's will was not appropriate since her intent was clear, feasible and not contrary to public policy.
In a concurring opinion Judge BRUNO stated that the court's refusal to delete the religious preference provision did not constitute sponsorship of a religion and, therefore, did not violate the Establishment Clause of the First Amendment. The holding of the court en banc protected the testatrix's constitutionally guaranteed right to freely exercise her religious faith.
Opinion SUR EXCEPTIONS
Temple University has filed exceptions to the Adjudication of BRUNO, J., wherein he denied the University's request that he remove the condition in a gift for scholarships to medical students that preference be given to young men and women of the Jewish faith. For the reasons set forth below, the exceptions are dismissed and the Adjudication of the Learned Auditing Judge is affirmed.
Ruth Johnson died on July 16, 1960, unmarried, and without issue. In her will, dated November 18, 1959, and codicil dated January 24, 1960, she made several gifts totaling less than $5,000 to various friends; directed that perpetual memorial plaques be established for her family at Congregation Keneseth Israel, Elkins Park, Pa., and bequeathed $15,000 to the
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Trustees of the Hebrew University in Israel to establish a Nathan and Tillie Johnson Memorial Scholarship Fund for worthy medical students. She gave the residue of her estate, in trust, for the benefit of her aunt, Hortense Wilson, and provided that upon the death of her aunt, the principal and any undistributed income of the trust should be paid over in equal one-half shares to the University of Pennsylvania and to Temple University to establish a scholarship fund in memory of her mother and father, to be known as the Nathan and Tillie Johnson Memorial Scholarship Fund for scholarships for medical students "giving preference to persons of the Jewish faith residing in Philadelphia . . ." She requested: "in the awarding of said scholarship or scholarships, that the same be awarded to worthy medical students, male or female, and the preference for such awards first be given to medical students of the Jewish faith residing in Philadelphia, Pa., and thereafter, to Jewish medical students from other areas, and thereafter to medical students of any other faith from Philadelphia or elsewhere."
Testatrix' aunt, Hortense Wilson, the life income beneficiary, died on August 25, 1979. At the audit of the Trustee's account, counsel for the University of Pennsylvania agreed to accept its share of the remainder subject to the conditions imposed by the testatrix.*fn1
Temple University (hereinafter "Temple") which asked the court to delete the religious preference has taken exceptions to the Auditing Judge's refusal to change the terms of the will and his award of Temple's share back to the accountants pending a decision by Temple either to accept or reject the gift, with the understanding that "if Temple rejects the gift, the
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court will entertain any petition filed by a properly interested party which lays claim to the gift."
The balance for distribution in 1979 totaled $135,000. Thus, the one-half share held by the Trustees for Temple should, with interest, now be approximately $85,000. The 1982-1984 Bulletin of Temple University School of Medicine states, at page 26, that the 1981-1982 annual cost of medical education to Temple University School of Medicine to educate a medical student was $23,652. The expenses for a single student during the 1982-1983 academic year were estimated to be $15,991 for a state resident and $18,991 for an out-of-state resident.
The 1984-86 Bulletin estimates expenses during the 1983-84 academic year as $17,309, including tuition of $9,198 for Pennsylvanians and $20,599, including tuition of $12,488, for out of state residents. A footnote states that the 1984-85 tuition is $9,888 for Pennsylvania residents and $13,426 for out of state residents. Since the costs of medical education are continuously increasing, it appears that Temple's total share of the principal amount of the Johnson Fund is scarcely sufficient to educate one student for his or her entire medical education.
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The significance of the amount, however, pales before the need to reconcile or choose between two basic, but potentially conflicting public policies. These principles are freedom of testation (i.e. the individual's right to leave his or her estate for the benefit of any favored individual, class, or religious group) and the policy of promoting equal opportunity for all, regardless of race, gender, origin or creed. Further, these policies must be weighted with the policy that encourages charitable contributions and the duty of this court to carry out the intentions of the testatrix, as long as those directions are not illegal, impractical or incapable of fulfillment. (See generally, Restatement (Second) Page 574} of Trusts § 368 et seq., § 399 (1959); Clark, Charitable Trusts, The Fourteenth Amendment and the Will of Stephen Girard, 66 Yale L.J. 979 (1957); Note, A Future for Girard's Dream, 10 Vill. L.Rev. 679 (1965); Annot., 25 A.L.R. 3d 736 (1969).)
Temple urges that the primary intention of the testatrix was to benefit the medical schools, rather than medical students of the Jewish faith. It further contends that it is impermissible for the court to enforce the religious preference because of limitations upon Temple under the Fourteenth Amendment, Federal and State Civil Rights Statutes, Federal and State funding regulations and various other restrictions, including those imposed by local redevelopment authorities, the Pennsylvania Human Relations Act and the Pennsylvania Fair Educational Opportunities Act. Temple also avers that the requirement for it to favor one religious group over another is contrary to its own governing principles and those of its students, faculty and personnel. Although acknowledging that the University was declared by statute to be "an instrumentality of the Commonwealth to serve as a state-related institution in the Commonwealth's system of higher education" 24 P.S. 2510-2 (1965), Temple did not concede that administration by the University of the Johnson Scholarship Fund would constitute state action. However, Temple questions its own position by citing the decision of the United States Court of Appeals for the Third Circuit in Krynicky v. University of Pittsburgh and Schier v. Temple University, 742 F.2d 94, 103 (3d Cir. 1984), cert. denied, 105 S.Ct. 2018, 85 L.Ed. 2d 300 (U.S. 1985), wherein it was held in matters alleging employment discrimination on the basis of gender, that "a symbiotic relationship exists between the Commonwealth of Pennsylvania on the one hand and . . . Temple on the other" and therefore actions taken by the University are "actions taken under color
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of state law and are subject to scrutiny under [42 U.S.C.] section 1983" and the mandates of the Fourteenth Amendment.
It does not follow from a finding that a university is a state actor under 42 U.S.C. § 1983, that the academic institution is a state actor when it recognizes a religious preference in awarding scholarships pursuant to the wishes of a private benefactor. Despite the finding in Rackin v. University of Pennsylvania, 386 F. Supp. 992 (E.D. Pa. 1974), that the University of Pennsylvania, a state aided institution, was a "state actor" within the meaning of the Equal Protection Clause and 42 U.S.C. § 1983, the University of Pennsylvania did not affirmatively seek to vary the terms of Miss Johnson's will.
Temple, however, would have the court alter the clear meaning of the will. Although an educational trust which is not restrictive as to religion may be preferable on public policy grounds to one which states a preference, this court may not exercise its cy pres powers according to its perception of current public policy, rather than in accordance with the intent of the testatrix. The Orphans' Court's power over distribution of a charitable trust is limited to removing restrictions only if they are incompatible with the testator's dominant purpose.*fn2
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In Weaver Trust, 43 Pa. D. & C. 2d 245 (1967), Gettysburg College sought to have a racial restriction removed from a scholarship fund. The Court refused to do so and held that it would accept an alternative plan for selection of students, reasoning that:
[T]he eligibility criterion . . . is clearly and unmistakably declared and can be literally and lawfully carried out. Cy pres is never applicable to destroy a charitable trust or to . . . defeat a settlor's dominant intent. . . .
43 Pa. D. & C. 2d at 254.
Similarly, in Connecticut College v. United States, 276 F.2d 491, 497 (D.C. Cir. 1960), the court held that cy pres cannot be used to vary the terms of a bequest "merely because the variation will meet the desire and suit the convenience of the trustee."
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Unless it was Miss Johnson's dominant purpose to have the selection of scholarship recipients lie wholly and solely within the discretion of the administration of Temple's Medical School, Temple University's inability or unwillingness to serve as trustee should not thwart the clearly specified charitable purposes of the trust. See, 4 A. Scott, The Law of Trusts, § 397 (3d ed. 1967).
As stated by Bogert in The Law of Trusts and Trustees (2d ed. rev. 1977):
The Court regards the expression of a charitable trust intent and the indication of a class of beneficiaries as the important factors in creation. The personality of the trustee is not vital. There are many possible trustees available. The court can easily supply a trustee. The important matter is that the benefits of the property in question should be applied toward the described social purpose.
Bogert, supra, § 328 at 609-10.
Similarly, it is noted by Professor Scott:
Where a testator devises or bequeaths property to a charitable corporation to be applied to a particular charitable purpose, it is to be inferred that the application of the property to the designated purpose is the testator's primary intention, and that the choice of the organization to make the application is secondary.
Scott, supra, § 397.3 at 3044-45.
Thus, it has been held that the purpose of a charitable trust will not be aborted by the failure of the trustees to exercise the powers given to them. See In Re Jones, 27 Misc. 2d 569, 570, 213 N.Y.S. 2d 92, 93 (1961).
There is scant basis for Temple's argument that it was more important to Miss Johnson that the funds be distributed to Temple than to provide scholarships to
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medical students, preferably of the Jewish faith. We have no record of Miss Johnson's background, interests, or intentions other than the will itself. We learn from the will that Miss Johnson was a devoted daughter who wished to perpetuate the memory of her parents. She manifested her strong Jewish identification by providing for perpetual memorials for her family at her synagogue, Keneseth Israel; by making a scholarship grant to Hebrew University in Jerusalem as a memorial to her parents; and when providing for a memorial to her parents by way of scholarship funds in the medical schools of two local universities, in requesting that preference be given to young men and women of the Jewish faith. Her allegiance, if any, to the universities is unknown. We do know she wanted to help young men and women of the Jewish faith attend medical schools in Philadelphia. The class of beneficiaries, rather than the universities, was Miss Johnson's overriding concern. Although Temple implicity has the duty to select the beneficiaries of the scholarship fund, this duty and the choice of Temple are incidental to the testatrix' predominant intent of providing medical school education to Jewish students.
Temple cites Howard Savings Institution of Newark v. Peep, 34 N.J. 494, 170 A.2d 39 (1961) as support for its contention that administration by the university of the scholarship fund was essential to Miss Johnson's plan. In Howard, the testator bequeathed $50,000 to Amherst College, in trust, to be used as a scholarship fund for deserving American born Protestant gentile boys. Amherst declined to accept the trust unless the religious and ethnic restrictions were eliminated. In a suit for construction of the will, the court found that the very nature of the bequest indicated that the testator was more interested in benefitting Amherst than he was in Protestantism. Other factors in Howard which are not here present include a long history of the
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testator's involvement with his alma mater, his annual contributions to the Alumni Fund from 1932 until his death in 1957, and his attendance at several class reunions. The record also showed the testator never contributed to the Protestant Church or a Protestant organization. The court concluded that the testator's primary purpose was to advance the interests of Amherst by making available to it funds for needy students and removed the ethnic and religious restrictions. This ruling was sharply criticized by Professor Roy Adams:
If the Howard decision can be interpreted to say that when an organization rejects a gift that clashes with its By-laws and policies, it may still claim the gift after causing removal of the objectionable features, one might properly ask how it serves a donor to bother drafting trust instructions.
Adams, Racial and Religious Discrimination in Charitable Trusts: A Current Analysis of Constitutional and Trust Law Solutions, 25 Clev. St. L. Rev. 1, 26 (1976).
Having thus determined that Miss Johnson's primary intent was to provide scholarships for men and women medical students, preferably of the Jewish faith from Philadelphia, it must be ascertained whether such intent is illegal or against public policy.
A democratic society attaches great importance to a testator's freedom of choice in selecting the beneficiaries of his bounty. In considering the validity of charitable and educational gifts, courts have consistently held that the mere restriction of beneficiaries to a limited class of persons does not invalidate the trust as long as the general purpose of the trust is charitable or educational in nature, and as long as the beneficiaries constitute a reasonable number of persons and are not limited to the natural object of testator's bounty. (See e.g. Restatement (Second) of Trusts § 368 (1959).
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Commenting on the Opinion of the Supreme Court in Pennsylvania v. Board of Directors of City Trusts, 353 U.S. 230 (957), the Supreme Court of New Jersey in Mills v. Philadelphia, 52 N.J. Super. 52, 144 A.2d 728 (1958), stated:
The court in no way indicates any restriction on . . . the individual's right to create trusts for the benefit of any person, class, or legal objective whatsoever, whether the trust created is limited or discriminatory in any way or not. To have held otherwise would have established a precedent prohibiting anyone from bequeathing or devising his property other than to or for the benefit of all persons, or all objects of a testator's bounty. Carrying such a prohibition to its natural conclusion, no one would be permitted to create trusts or give to a class favoring his church, his fraternal organizations, his charitable interests, or his national origins.
52 N.J. Super. at 58, 144 A.2d at 731-32.
When presented with issues of private discrimination, courts have generally upheld the restrictions. They rely on the principle that individuals have the right to dispose of their money or property as they wish, and in so doing, may lawfully discriminate in regard to the beneficiaries of their largesse without offending the Equal Protection Clause of the Fourteenth Amendment to the Constitution. See Shapiro v. Columbia Union National Bank & Trust Co., 576 S.W. 2d 310 (Mo. 1978), cert. denied, 444 U.S. 831 (1979); In Re Will of Cram, 186 Mont. 37, 606 P.2d 145 (1980); 16 Am. Jur. 2d Constitutional Law § 491 (1979).
Temple urges this court to follow the path of courts which have struck down racial restrictions on charitable trusts. Historically, the courts have not adopted the strong policy against discrimination on the
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basis of sex or religion as they have against discrimination on the basis of race. See e.g. Wachovia Bank & Trust Co. v. Buchanan, 346 F. Supp. 665 (D.D.C. 1972), aff'd without Opinion, 487 F.2d 1214 (1973): Adams, Racial & Religious Discrimination in Charitable Trusts, supra; Note, Restricted Scholarships, State Universities and The Fourteenth Amendment, 56 Va. L. Rev. 1454 (1970). By making exceptions on the basis of sex or religion to the prohibition against discrimination in Title IX of the Education Amendments of 1972, 20 U.S.C.A. § 1681 (West 1978), as, for example, in the case of private undergraduate institutions and certain military and religious schools, Congress has not placed sex or religion on an equal footing with race.
Similarly, in tax cases, while a strong federal public policy has been declared against support in the form of tax exemption and the charitable tax deduction for racial discrimination in education, Green v. Connally, 330 F. Supp. 1150 (D.D.C. 1971), aff'd Coit v. Green, 404 U.S. 997 (1971), a similar policy has not been adopted against religious discrimination.*fn3
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Accordingly, while it may be appropriate to override a donor's intent in cases involving gifts restricted on the basis of race on the ground that such gifts are contrary to public policy, no such public policy against religious restrictions would justify overriding the testatrix' intent in this case.
Temple is misguided in thinking that statutes providing for equal opportunity were intended to deprive individuals of the right to make testamentary dispositions of their own property in trust for the benefit of adherents to one religion and the possible exclusion of another.
The power to invalidate trusts or restrictions contained therein as against public policy has generally been reserved for cases in which the violation of public policy is indisputable, such as where the trust tends to induce the commission of crime, a violation of Canons of Ethics, or the restraint of marriage. See 4 Scott, supra, § 377; Restatement (Second) of Trusts, §§ 377, 399(N) (1959). The trust under Miss Johnson's will is clearly not within these categories, and does not warrant the extreme measure of nullifying her expressed intentions.
While reformation of a trust in accordance with current public policy may be called for when the testator's intent is ambiguous, impractical, illegal or unethical, it is not appropriate where the testatrix' intent is clear, possible to effectuate and not contrary to public policy. Professor Scott points out:
Where property is given in trust for a particular charitable purpose and it is legal and possible and practicable to carry out that purpose, the courts will not ordinarily permit the property to be applied to other purposes, although the other purposes appear to the court to be more useful and desirable than the purpose designated by the testator.
4 Scott, supra, § 399.4 at 3119.
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The decision of the Auditing Judge to refrain from deleting the clause which is offensive to Temple and to require Temple to accept or decline the gift does not violate the Equal Protection Clause of the United States or Pennsylvania Constitutions. Generally, neither discrimination by private settlors, nor neutral application of trust law by the courts in construing such trusts is constitutionally prohibited.
The racial classification cases cited by Temple question whether it is proper for the state (i.e. the courts) to enforce or compel discrimination. In the instant case, there has been no attempt by the Auding Judge to enforce the religious classification. He has merely set forth the non-discriminatory trust law of the Commonwealth for consideration by a trustee which maintains it is unable or unwilling to serve.
The cogent reasoning in the opinion of Chief Judge COOKE in In re Estate of Wilson and In re Estate of Johnson, 59 N.Y. 2d 461, 452 N.E. 2d 1228, 465 N.Y.S. 2d 900 (Ct. App. 1983), serves as authority for our refusal to deviate from Miss Johnson's dominant intent. Both Wilson and johnson involved private charitable testamentary trusts restricting scholarship funds to boys. Although stressing the important public policy of eradicating gender-based discrimination, the court found that it would be inappropriate to exercise cy pres power because the limitation of beneficiary by gender was not "impossible or impracticable" or invalid as violative of public policy. The court stated:
[T]he focusing of private philanthropy on certain classes within society may be consistent with public policy. Consequently, that the restrictions in the trusts before this court may run contrary to public efforts promoting equality of opportunity for women does not justify imposing a per se rule that gender restrictions in private charitable trusts violate public policy.
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N.Y. 2d at 474, 452 N.E. 2d at 1234, 465 N.Y.S. 2d at 906.
In Wilson, a school district had refused to certify a list of male candidates from a public school. The court effected a deviation from the terms of the trust by removing the school district from its role in administering the trust and permitting the students to apply for scholarships directly to the corporate trustee.
In Johnson, the testator had provided that trust income ". . . be used . . . for scholarships . . . for . . . deserving young men who have graduated from the high school of [a] school district, . . . who shall be selected by the Board of Education of such School District with the assistance of the Principal of such high school." Id. at 1231.
The Attorney General, the Board of Education and the Executrix of the Will had stipulated that "persons" be substituted for "men." The Surrogate refused to enforce the stipulation because he found that the testator's primary intent was to benefit "deserving young men." Since the trustee's refusal to administer the trust according to its terms rendered administration of the trust impossible, the Surrogate replaced the school district with a private trustee.
The Court of Appeals affirmed the action of the Surrogate and reversed the intermediate appellate court decision which had determined that the Surrogate could not reform a trust which, by its own terms, would deny equal protection of law. The Appellate Division had found a dual violation of equal protection -- first, in administration of the trust by an agent of the state (the School Board) and second, in judicial reformation of the trust by substituting trustees.
The Court of Appeals found:
The State generally may not be held responsible for private discrimination solely on the basis that it permits the discrimination to occur
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. . . Nor is the State under an affirmative obligation to prevent purely private discrimination . . . . Therefore, when the State regulates private dealings it may be responsible for private discrimination occurring in the regulated field only when enforcement of its regulation has the effect of compelling the private discrimination.
59 N.Y. 2d at 477, 452 N.E. 2d at 1236, 465 N.Y.S. 2d at 908. (Citations omitted.)
Chief Judge COOKE held that, rather than enforcing private discrimination, the courts were merely applying trust law that neither encourages, affirmatively promotes, nor compels private discrimination, but allows parties to engage in private selection in the devise or bequest of their property.
The court concluded:
In sum, the Fourteenth Amendment does not require the State to exercise the full extent of its power to eradicate private discrimination. It is only when the State itself discriminates, compels another to discriminate, or allows another to assume one of its functions and discriminate that such discrimination will implicate the amendment.
59 N.Y. 2d at 480, 452 N.E. 2d at 1237, 465 N.Y.S. 2d at 909.
In Pennsylvania v. Brown, 392 F.2d 120 (3rd Cir. 1968), cert. denied 391 U.S. 921 (1968), the Court of Appeals determined that the substitution by the Philadelphia Orphans' Court of private trustees for the Board of City Trusts, in order to carry out the intention of Stephen Girard to operate an orphanage for "poor male white orphan children" was forbidden by the Fourteenth Amendment. The instant case can readily be distinguished from the Girard College case. Miss Johnson stated a religious preference on the scholarships, whereas Girard's will involved racial discrimination.
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Here, there is no history of operation by an agency of the state, special enabling legislation and direct state involvement as there was in Brown. Further, the Commonwealth or its instrumentalities need not be involved in the supervision and administration of this scholarship fund. Thus, should Temple decline to administer the gift, the court's substitution of another trustee would not constitute state action.
As indicated in Brown and Wilson and Johnson, supra, mere supervision and, if necessary, appointment of trustees by a probate court do not alone amount to proscribed state involvement.
Pennsylvania courts have never held that the judicial state action doctrine set forth in Shelley v. Kraemer, 334 U.S. 1 (1948), prohibits the Orphans' Court from enforcement of an exclusionary feature in a charitable trust. In an opinion by Justice ROBERTS, it was held that a condition in a will that only such members of a class "who were members in good standing of the Presbyterian church" would share in a distribution was not contrary to public policy. Therefore, judicial enforcement of the condition is not forbidden "state action" within the meaning of the Fourteenth Amendment and would neither involve an establishment of religion, nor unconstitutionally prohibit free exercise of religion. In re Estate of Laning, 462 Pa. 157, 339 A.2d 520 (1975).
Temple's position would require the court to alter the provisions of a wholly private trust which suggests a religious preference. It would also follow from Temple's arguments that bpcause of the Attorney General's supervisory powers under Pennsylvania law, any charitable trust created in the Commonwealth would be subject to challenge if it contained a religious-based classification or any other classification that receives scrutiny under the Equal Protection Clause of the State or Federal Constitutions. Such a rule could have
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a chilling effect on charitable giving and might lead to extensive litigation by disappointed heirs challenging charitable trusts. The result would be much the same if mere court supervision of a private trust constituted state action, leaving such a trust open to Equal Protection challenge.
In this proceeding, we are not called upon to determine whether Temple is a "state actor." However, even if it is conceded that administration of the trust by Temple is state action, there is not necessarily a violation of the Pennsylvania or Federal Equal Protection guarantees. Some religious discrimination and gender classifications have been upheld even when state action is involved.
Of particular relevance is the decision of the Court of Chancery of Delaware in Trustees of University of Delaware v. Gebelein, 420 A.2d 1191, 1193, 1196 (Del. Ch. 1980). Although finding the administration by the Trustees of the University of Delaware of a testamentary charitable trust providing scholarships restricted to women "must be deemed state action," the court refused to remove the discriminatory language, stating that "the scholarship fund in question is but a small part of the University of Delaware's financial aid program, which is based on equal opportunity." The court concluded that "the benign discrimination set forth in the . . . scholarship fund does not subvert equal opportunity, but rather, promotes it by compensating for past acts of discrimination." See also Califano v. Webester, 430 U.S. 313 (1977); Schlesinger v. Ballard, 419 U.S. 498 (1975) reh'g denied 420 U.S. 966 (1975); Michael M. v. Superior Court of Sonoma County, 450 U.S. 464 (1981).
That religious restrictions are not illegal and considered even more benign than sexual or racial limitations is manifest in the opinion of the Supreme Court of Connecticut in Lockwood v. Killian, 179 Conn. 62,
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A.2d 909 (1979). Under the terms of the will in Lockwood, only needy and deserving Caucasian boys graduating from high schools in Hartford County who professed themselves to be Protestant Congregationalists were eligible for scholarships established under a testamentary trust. When it became impossible to choose a sufficient number of applicants who met all four criteria, the trustees instituted an action for instructions. The court invoked the doctrine of approximation (cy pres) and sought a result which as nearly as possible effectuated the intent of the testator. In examining the will, it found that the race and gender restrictions were of secondary importance to the testator's intention to advance the education of local students of the Protestant Congregational faith. It concluded: "As the removal of the racial and gender restrictions will suffice to fulfill the dominant intent of the testator, there exists no basis for removing the religious restriction." 179 Conn. at 72, 425 A.2d at 914. See also the earlier decision in this case, 172 Conn. 496, 375 A.2d 998 (1977).
Similarly, where the trust provided for "the education of a reliable boy, a member of the First Presbyterian Church Reading, Pa. for the profession of medicine," and no young men had qualified, the Orphans' Court of Berks County permitted an award to a well qualified woman, who was a member of the First Presbyterian Church, and thereby continued the religious restrictions. Reeser Estate, 1 Pa. D. & C. 2d 731 (1954). (State action by the trustee was not a factor in either Killian or Reeser.)
The testatrix in Estate of Zahn, 16 Cal. App. 3d 106, 93 Cal. Rptr. 810 (1971), cert. denied, Zahn v. Security Pacific National Bank, 404 U.S. 938 (1971), reh'g denied, 404 U.S. 996 (1971), expressed a desire to "start a rest home for Christian women and girls who are native Californians," and gave her home to
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the Salvation Army to be used as a music home for deserving Christian students. In upholding the validity of the gifts, the court found no violation of either the First or Fourteenth Amendments.
It is the thesis of Dean Wilbert B. Katz that private charitable trusts, although limited to specific denominations, are to be encouraged. He stresses the necessity of maintaining a free philanthropy to offset governmental monopoly and control of welfare and cultural activities. Katz, Freedom of Religion and State Neutrality, 20 U. Chi. L.Rev. 426, 432-433 (1953).
Scholarships, despite various restrictions, are clearly related to the promotion of education. Since institutions of higher learning have limited amounts of money for financial assistance from all sources, any aid from private sources, however restricted, will make available other money for students of different qualifications and thereby promote education. This premise doubtless explains the University of Pennsylvania's willingness to accept its one-half of the charitable trust under Miss Johnson's will. Unrestricted financial aid and scholarship funds are thereby available to cover needy students not included in the class preferred by Miss Johnson.
A restricted scholarship may help all qualified applicants in some measure, "except where the fund is so large that it would dominate the school's scholarship program." Note, Restricted Scholarships, State Universities and the Fourteenth Amendment, supra, at 1482.
Bequests motivated by bigotry, intolerance and prejudicial discrimination, though abhorrent to a court, may nonetheless be recognized as legal. However, a settlor is not necessarily motivated by bigotry when preference is shown for one's own religious group or various minorities, particularly those which have suffered past discrimination. In the instant case,
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the language in the will is precatory and does not limit the recipients of scholarship assistance to Jewish students only. Miss Johnson gave the administrators of the trust broad latitude by opening up the class to any qualified student in the absence of applicants of the Jewish faith from Philadelphia or elsewhere. (Cf. Eberhardt Estate, 2 Pa. D. & C. 3d 154 (1976).) In directing that preference be given to Jewish students, Miss Johnson was not so much discriminating against non-Jews as expressing her constitutional right to benefit that segment of society which she most desired to benefit.
In recent years there have been significant appropriations of federal and state funds for education of selected classes. Both public and private funds have been earmarked for women's education at an unprecedented rate, including, in 1981, a federal appropriation of $10 million for the Women's Educational Equity Act Program. (See Bernstein, Funding for Women's Higher Education: Looking Backward and Ahead, Grant's Magazine, Vol. 4, No. 4, Dec. 1981.)
The Commonwealth of Pennsylvania set aside $29.2 million for the education of minorities for the years 1985 to 1990. Of this sum, the State Secretary of Education asked that $285,000 be used for scholarships to medical schools for graduates of Cheyney University and Lincoln University, whose enrollments are predominantly black. As reported in the Philadelphia Inquirer for Tuesday, March 6, 1984, P. 4(b) the Secretary of Education stated the Commonwealth has been trying to get more minority students into the medical schools at the University of Pittsburgh, Pennsylvania State University and Temple University.
Is it consistent with Temple's policies to administer these federal and state funds and attempt to reform Miss Johnson's bequest?*fn4
[13 Phila. 569 Page 591]
Ruth Johnson executed her will on November 18, 1959. By that date, the Girard College case (Brown, supra) had twice been before the Orphans' Court of Pennsylvania, the Supreme Court of Pennsylvania and the Supreme Court of the United States. Doubtless her counsel was aware of those proceedings and may have advised the testatrix to use precatory language so that should a religious preference at some future date be unenforceable, her entire charitable purpose would not fail. However, neither her scrivener, nor Miss Johnson could reasonably have anticipated that Temple would become a state-related institution. It would be harsh in
[13 Phila. 569 Page 592]
the extreme to deprive Miss Johnson of her right to dispose of her money as she chose because of her inability to foresee the nexus between Temple and the Commonwealth or to familiarize herself with the intricacies of the state action doctrine.
As reflected in the decisions in In re Estates of Wilson and Johnson, Killian v. Lockwood and University of Delaware v. Gebelein, supra, the pendulum is swinging from acquiescence in any request to remove discriminatory provisions to concerted judicial efforts to enforce a trust's validity.*fn5
(Cf. Fisch, Judicial Attitude Towards the Application of the Cy Pres Doctrine, 25 Templ. L.Q., 177 (1951-52); McKee Estate, 83 Pa. D. & C. 492, 523 (1953)).
The principles set forth by the cited cases and authorities establish that the gift in Miss Johnson's will which evidenced her dominant intention that scholarships to medical schools be awarded with preference to young men and women of the Jewish faith is not illegal, impractical, incapable of fulfillment or contrary to public policy.
Accordingly, the exceptions to the Adjudication are dismissed and the conclusion of the Learned Auditing Judge awarding the fund back to the Girard Bank and Harry F. Kaiser, Trustees, pending decision by Temple whether to accept or disclaim the gift is hereby affirmed.
[13 Phila. 569 Page 593]
AND Now, this 7th day of November, 1985, it is ORDERED and DECREED that the exceptions to the Adjudication of BRUNO, J. are dismissed and the Adjudication is confirmed absolutely.
I concur in the result.
Temple University is of the opinion that the Orphans' Court of Philadelphia County would be engaging in discriminatory state action forbidden by the Fourteenth Amendment if we were to award one-half of the remainder of Ruth Johnson's estate to it subject to the condition imposed by Miss Johnson on the gift, that Temple give a preference in the award of funds from the Nathan and Tillie Johnson Memorial Scholarship Fund to "persons of the Jewish faith." According to Temple University, this Court is as prohibited from awarding Miss Johnson's gift to it as Miss Johnson intended, as we are prohibited from enforcing the terms of Stephen Girard's will as Stephen Girard intended.
Temple's position is untenable. It ignores our government's tradition of toleration of the religious differences among its people. There is a vast difference between enforcing a trust, participation in which is conditioned upon membership in a particular race and awarding a gift of remainder, participation in which is conditioned upon membership in the particular faith of the conveyor. The former is outlawed by the Fourteenth Amendment. The latter is protected by the First Amendment.
[13 Phila. 569 Page 594]
While the establishment and free exercise clauses of the First Amendment "are not the most precisely drawn portions of the Constitution" (Walz v. Tax Commissioner, 397 U.S. 664, 668 (1970)), it is clear that, as Justice DOUGLAS wrote, the First and Fourteenth Amendments do not contain "a philosophy of hostility to religion." Zorach v. Clauson, 343 U.S. 306, 315 (1952). So long as government does not establish a religion or interfere with its exercise, "there is room for play . . . productive of a benevolent neutrality which will permit religious exercise to exist." Walz v. Tax Commissioner, supra at 669.
Temple would be engaging in frivolous argument if it advanced the position that this Court is faced with an establishment issue in this case. As long as government neither sponsors, financially supports nor becomes actively involved in religious activities (Walz v. Tax Commissioner, supra), there is no establishment question presented. Awarding one-half of the remainder of Miss Johnson's estate to Temple as she intended is patently not sponsorship, financial support or active involvement in religious activity of this Court.
Temple is studiously avoiding the real issue in this case. This case has nothing to do with state condoned invidious discrimination. The issue is Miss Johnson's right to freely exercise her Jewish faith. Miss Johnson lived through just one of the never-ending periods in which those of the Jewish faith were discriminated against, imprisoned, tortured and indeed killed solely because of their religion. She was undoubtedly aware of the blessing bestowed by the Almighty upon Abraham, the father of ancient Israel: "I shall make of thee a great nation and I shall bless thee and make thy name great and thou shalt be a blessing." Miss Johnson chose to participate in that blessing by bestowing her bounty upon her fellow believers. That is her constitutionally guaranteed right.
[13 Phila. 569 Page 595]
In "A Bill for Establishing Religious Freedom", Thomas Jefferson wrote, "that it is time enough for the rightful purposes of civil government for its officers to interfere when principles break out into overt acts against peace and good order." Echoes of this Jeffersonian sentiment can be found in Chief Justice BURGER'S opinion in Wisconsin v. Yoder, 406 U.S. 205, 215 (1972), when he wrote: "The essence of all that has been said and written on the subject is that only those interests of the highest order and those not otherwise served can overbalance legitimate claims to the free exercise of religion."
Miss Johnson has committed no "overt act against peace and good order" by creating a scholarship fund for Jewish medical students. Temple has shown no governmental interest in this case, and indeed it would be difficult to demonstrate such an interest, which can override Miss Johnson's fundamental right to profess her Jewish faith by creating the Nathan and Tillie Johnson Memorial Scholarship Fund.