Kenney Presbyterian Home v. State, 174 Wash. 19, 24 P.2d 403 (1933).

MILLARD, J. - Samuel and Jessie Kenney, husband
and wife, were members of the First Presbyterian
Church of the city of Seattle, in which city they resided
from 1865 until the death of the husband in 1896 and
the death of the wife in 1900. Mr. and Mrs. Kenney
hoped and planned to establish a home for aged people.
Samuel Kenney left his property to his wife with the
request. that it be used for that purpose. In her will,
which was probated and her estate administered in the
superior court for King county, Mrs. Kenney provided
for the organization of a corporation (The Samuel
and Jessie Kenney Presbyterian Home) and the appointment
of five of her "dear friends" ( Frederick H.
Whitworth, Roland H. Denny, Alexander Myers,
Eben S. Osborne and William R. Ballard) as trustees
to effectuate the Kenneys' charitable plan of
establishing a home for aged people. The first three
abovenamed qualified, and are still acting as trustees.
Mr. Osborne qualified and acted as a trustee until his
death in 1922. His successor, W.B. Shoemaker, served
until his death in 1926, and was succeeded by Henry H.
Judson, one of the trustees at the present time. Mr.
Ballard died in 1929, and was succeeded by N.P.

22 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

Myhre, the fifth member of the present board of
trustees.

The pertinent provisions of Mrs. Kenney's will read
as follows:

"ITEM FIVE: I direct my executors, trustees, or their
successors, or the corporation hereinafter provided for,
to make the money payments in this will specified to
be made, as hereinafter provided, to the respective
legatees hereinafter appointed; and I charge my estate
in the hands of my executors, trustees or their
successors, or in the possession of said corporation, with
such money payments, and the same are to be discharged
and paid out of my estate, and the residue of
my estate after such payments, shall be for the use
and benefit of the home or retreat for infirm persons
hereinafter mentioned. I direct that none of my real
estate be sold to pay the legacies in this will provided
for, but that such legacies be paid out of my personal
property and money belonging to me at the time of my
death, or out of the rents, issues and profits of my real
estate, and I direct that first in order of payment by
my executors, trustees or their successors, or the
corporation here/halter provided for, shall be the
monthly payments to John Kenney, Mary Ann Kenney and
Robert Allan, and the annuity to Margaret Kenney,
and after that the other legacies, and none of the
legacies in this will provided for shall bear interest.

"ITEM SIX: I give, devise and bequeath all the rest
and residue of my estate, of every kind and nature
whatsoever and wheresoever situated, to my dear
friends, Frederick H. Whitworth, Rolland H. Denny,
Eben S. Osborne, William R. Ballard and Alexander
Myers, of the city of Seattle, county of King, and state
of Washington, to have and to hold the same unto
them and their successors forever, in trust, nevertheless,
under the trusts, and with the powers hereinafter
defined, that is to say:

"1st. Except as hereinafter otherwise limited they
shall take, receive, collect, hold, manage, invest,
reinvest, dispose of, convey, deed, and accumulate, the
same and the rents, issues, profits and increase thereof
as they and their successors shall deem for the best

KENNEY PRESBYTERIAN HOME v. STATE. 23
Aug. 1933 Opinion Per MILLARD, J.

interests of the trusts in this item created and defined,
and as soon as practicable after my decease, shall
found and thenceforth forever maintain therewith or
with the same and other donations and accessions and
accumulations in aid thereof, in the city of Seattle,
and state of Washington, or in the vicinity of said city,
a home or retreat for such infirm persons of both sexes
of above sixty (60) years of age, as they or their
successors in such trust shall from time to time approve
and appoint, who by reason of poverty are, in the
judgment of said trustees or their successors, unable
to adequately provide for themselves, and where such
persons, irrespective of their religious or political
views, shall be gratuitously supplied as far as may
reasonably be, with the shelter, care and comforts of
a home, which home or retreat shall be called and
known as THE SAMUEL AND JESSIE KENNEY PRESBYTERIAN
HOME and shall be subject to such reasonable
rules and regulations for the conduct and government
thereof as said trustees and their successors shall
from time to time prescribe. Notwithstanding the
limitation that infirm persons in this paragraph mentioned
to be admitted to said Home shall be above the age of
sixty years, said trustees or their successors in said
trust, may in their discretion in extreme and meritorious
cases admit to said Home, subject to the conditions
herein provided for, infirm persons under the
age of sixty years. I would also suggest to my said
executors or trustees or said corporation, that in the
first instance, at least, small cottages of two or three
rooms could be built upon the proposed tract, and thus
at a small cost provide homes for husbands and wives
or others.

"2nd. My will is that each of the persons above
named as original trustees, who shall consent to act as
such, shall before he shall act as such trustee, file in
the office of the auditor or recorder of the county in
which the city of Seattle shall then be, and within
twelve months after the date of my decease, his written
consent signed by him.

"3rd. It is my will and I hereby nominate and appoint
the Session of the First Presbyterian Church of
Seattle and their successors in office as members of

24 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

such session who shall constitute a board to fill all
vacancies in said Board of Trustees or in the Board
of Trustees or Directors of said corporation and if
any of the said trustees named in the first paragraph
of this item, six, shall not survive me, or shall not
consent to act, then I direct the said session of the First
Presbyterian Church to fill up the number of the said
trustees to five (5) and it is my will that there shall
never be more than five (5) trustees, either as trustees
of this my will, or as trustees or directors of the said
corporation, to execute said trusts, and that if ever
such trustees shall fall or be below five (5) in number
it shall be the power and the duty of the said Session
of the First Presbyterian Church of Seattle to elect
another or others to fill said number up to five (5)
and to evidence such election by their duly executed
and acknowledged deed granting to the person so
elected the office of such trustee or director. But no
one shall be eligible for such election who is not a
member in good and regular standing of some Protestant,
Evangelical church, and at the same time a resident
of the city of Seattle, or of the county in which said
city for the time being shall be. Every person who
shall become trustees except those named in this will,
shall, before acting as or becoming trustee, file for
record in the office of the auditor or recorder of said
county, the deed granting to him said office, and take
an oath and enter into a bond in the sum of five hundred
dollars ($500) penalty, and with two or more
sureties, subject to the approval of the Session of the
First Presbyterian Church, and payable to the said
Session of the First Presbyterian Church for the benefit
of the said Home, and shall file and record the said
oath and bond in the office of the auditor of said
county, and shall file a copy of such oath and bond
with the said Session of the First Presbyterian Church
of Seattle, faithfully to discharge the duties of such
trustee.

"4th. In case any trustee ceases to be a resident of
the county in which the city of Seattle shall for the
time being be, or continues to be absent from said
county for more than six months, or ceases to be a
member in good and regular standing in some Protestant,

KENNEY PRESBYTERIAN HOME v. STATE. 25
Aug. 1933 Opinion Per MILLARD, J.

Evangelical church, the other trustees may by
their duly acknowledged deed in duplicate one of which
shall be recorded in the office of the auditor or recorder
of such county, and the other filed with the clerk of the
Session of the said First Presbyterian Church, revoke
his powers and declare him to be no longer a trustee,
and he shall thereupon cease to be a trustee. Or in
case of like absence or for any good cause shown the
said Session of the First Presbyterian Church may remove
any one or more trustees from his or their trust
and another or others, qualified as herein provided,
select and appoint as aforesaid in place of the trustee
or trustees so removed, and in each case both the deed
of removal and of appointment shall be filed and recorded
in the office of the auditor or recorder of such
county.

"5th. A majority of those who are for the time being
trustees may transact any and all business relating
to the trust, and any trustee may by his duly executed
letter of attorney, duly recorded in the office of
the auditor or recorder of said county, authorize and
empower any of his co-trustees to act for him during
his own absence from the state of Washington, provided
such absence is less than six months.

"6th. It is my will that the succession of trustees in
the trusts hereby created, shall never fail and that the
said Session of the said First Presbyterian Church
shall be free and have power to exercise at any and
all times, any and sufficient jurisdiction to provide for
and secure such succession and the faithful carrying
into effect of all and singular the trusts in this will
created or defined.

"7th. It is my will that within a reasonable time
after my death my trustees or their successors shall
form or cause to be formed under the laws of the state
of Washington, a corporation, under the name of "THE
SAMUEL AND JESSIE KENNEY PRESBYTERIAN HOME,"
having perpetual succession and with powers proper
to receive and maintain such home, and to promote
and execute the trusts in this item created, and to
receive, manage, and apply in harmony therewith, or in
aid thereof, any new or additional benefactions, in
which corporation no one shall be eligible to the office

26 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

of trustee or director, unless he shall be a member in
good and regular standing of some Protestant, Evangelical
church, and a resident of the city of Seattle, or
of the county in which the city of Seattle shall then be.
Each trustee or director of such corporation shall, before
any of my estate or any of the aforementioned
trusts are turned over to it, give bond as is
hereinbefore provided in the case of a person becoming a
trustee, and each person afterwards becoming trustee or
director of such corporation shall, before acting as or
becoming such, enter into like bond, every bond so
given to be filed and recorded as hereinbefore provided
for the bond of a trustee. And when such corporation
shall have been so organized and be competent
to do business, said trustee or their successors
shall turn over to said corporation all of my estate and
all of the trusts in this item mentioned, and said
corporation and its successors shah thereupon become and
be to all intents and purposes. their successors in said
trusts.

"8th. The principal place of business of my said
trustees and their successors, and said corporation,
shall at all times be in the city of Seattle, King county,
Washington.

"9th. My said trustees and their successors and said
corporation shall cause to be kept on file in an orderly
manner, all papers relating to the business and
transactions within or pursuant to said trusts, and shall
cause to be kept in suitable books full and detailed
record of all their proceedings and transactions, and
clear, accurate, full and detailed accounts of all the
properties and dealings of their trusts.

"10th. Said Home and properties in possession of
said trustees and their successors, or in the possession
of said corporation, and all papers and books and all
the affairs of said trust, shall, at all reasonable times,
be open to the visitation, and inspection of the
governor of the state of Washington, the mayor of the city
of Seattle, or any person so desiring to visit and
inspect.

"11th. Except as in this will limited, my said trustees
and their successors and said corporation, shall
have as full power to sell, convey and manage any

KENNEY PRESBYTERIAN HOME v. STATE. 27
Aug. 1933 Opinion Per MILLARD, J.

property of the trust as if they were absolute owners
thereof, but shall have no power to mortgage or encumber
real estate, except that they may lease real
estate, but not for a term exceeding five (5) years, and
no person purchasing from or dealing with said trustees
or their successors or said corporation shall be
obliged to look to the application of any consideration
or purchase money, or be under any obligation or
responsibility or charged with any duty with reference
to said trust.

"12th. It is my will that at the end of each calendar
year after the administration of my estate by my
executors shall have closed, all lawful expenses (such as
taxes, special assessments, insurance, interest, ordinary
repairs, expenses of light, water, heat, power,
collecting rents, obtaining and ousting tenants, janitor's
or keepers salaries, legal expenses and sums payable
as hereinafter in this will provided to legatees),
attending the management of my estate that have become
due within the year then ending, and are unpaid,
shall be paid, and that ten per cent (10%) of the
remaining net rents, issues, profits and increase of my
estate for the said year shall be an annual and full
compensation of said trustees and their successors,
and of the trustees or directors and officers of the
corporation hereinbefore in the 7th Subdivision of this
item mentioned, for the year then ending, and that all
the balance of said rents, issues, profits and increase
shall be so used as in the judgment of the said trustees
and their successors or said corporation will best
foster, broaden and prosper the charity hereinbefore
proposed.

"13th. It is my will that at the beginning of their
trusts, and at the beginning of each calendar year
thereafter, that is to say: As of noon of the first day of
January of each calendar year thereafter, my trustees
or their successors, or said corporation, shall make a
faithful, true and full inventory and fair appraisement
of all the real and personal estate belonging to the
trusts mentioned in this item, and that such real estate
and personal property, so inventoried and appraised
shall be regarded until the time of the next subsequent
inventory as a principal fund out of the rents, issues,

28 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

profits and increase of which, all the expenses and
outlays incident to the administration and management
of said trusts, until the beginning of the year next
after such inventory, are to be defrayed; provided,
however, that expenses of any calendar year may be
defrayed out of the rents, issues, profits and increase of
that year even after the close of that year; and provided
that reasonable permanent improvements to real
estate other than ordinary repairs may be made out of
property constituting part of such principal fund; and
provided further, that no increase in value of real or
personal estate so to be appraised shah be deemed
increase, issue or profits out of which expenses or
outlays incident to the administration and management
or compensation for administration may be defrayed."

The Samuel and Jessie Kenney Presbyterian Home
was incorporated June 20, 1901, by the trustees named
in Mrs. Kenney's will. The executors (the persons
nominated by Mrs. Kenney as trustees were also
named by her as executors to administer her estate)
conveyed to the corporation all of the assets (appraised
at $156,755.17) of the estate. The corporation
immediately proceeded with the execution of the trust
created by the will. As soon thereafter as the condition
of the trust properties warranted, a home or retreat
for aged and infirm people was erected as provided in
Item Six of the will; and the home has ever since been
operated in the manner and way directed by the will
as interpreted by the trustees of the corporation.

From date (1901) of organization of the corporation
until February, 1931, no complaint was made to the
trustees respecting the manner in which they were
administering the trust. In February, 1931, certain
members of the session of the First Presbyterian
Church expressed the view that the trustees were not
administering the trust as the will directed, whereupon
a committee of the session was appointed to investigate

KENNEY PRESBYTERIAN HOME v. STATE. 29
Aug. 1933 Opinion Per MILLARD, J.

and report to the session. A certified public accountant
was employed by the corporation to assist the
committee in its investigation of the acts of the
corporation and the acts of the trustees of the
corporation. Under date of November 3, 1931, the
committee's report of the result of its investigation was
submitted to the session. That report reads, in part, as
follows:

"We therefore believe that a consistent if not a
technical compliance with the terms of the Will has been
accomplished. We doubt very much if there has been
a breach of trust, or a legal departure from the terms
of the Will, and our finding is that it does not
constitute a cause for the removal of the trustees.

"We therefore recommend that the Trustees be requested
to submit to the courts the entire question of
compensation and apply for approval of the present
plan of operation under the will.

"The board of trustees should be required to furnish
the Session with copies of their annual and other
important reports, also keep the Session reasonably
informed of any important matters affecting the Home.

"If time had permitted, it might have been wise to
look further into the operations of the Home. However,
we believe from our study of the will that the
testatrix intended to give the trustees very broad
authority in the management of the estate and of the
Home.

"Furthermore, we feel that there may be some question
as to the extent of the authority or jurisdiction of
the Session to interfere in matters pertaining to the
management of the trust and the Home and we might
suggest that the Session consider the advisability of
appointing a committee to co-operate with the Board
of Trustees in securing from the court a ruling as to
the Session's responsibility under the Will.

"In closing, we wish to call attention to the fact that
all the former and present trustees of the institution
are men of undoubted integrity and good standing in
the community and, to state that in our opinion where
mistakes have been made they have been errors of

30 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

judgment, and that we believe the Trustees have acted
in good faith."

Pursuant to the recommendation of the committee of
the session, The Samuel and Jessie Kenney Presbyterian
Home and its five trustees commenced an action
to obtain an adjudication, first, as to the powers and
duties of the session (the church's governing body)
of the First Presbyterian Church of the city of Seattle;
second, as to the powers and duties of the trustees;
and third, as to the method of computing the
compensation of the trustees for their services in
administering the trust. The state of Washington was made a
party defendant, as the home is a public charity.
Josiah Thomas, R.J. Logan and James M. Rutherford,
as members of the session of the First Presbyterian
Church, at request of the session, were made defendants
as representatives of the session, which consists
of approximately eighty-four members. The evidence
sustains the trial court's findings, which are
summarized as follows:

Immediately following the transfer of the assets of
the Kenney estate to The Samuel and Jessie Kenney
Presbyterian Home, which was incorporated in June,
1901, the corporation proceeded to execute the trust
created by Mrs. Kenney's will. A home or retreat for
aged and infirm people was erected as soon as the
condition of the trust properties warranted such
construction. To provide funds for that purpose, it was
necessary for the trustees to sell the real property
described in paragraph 14 of item six of the will. In
1907, pursuant to the provisions of that paragraph, the
trustees requested and obtained the unanimous consent
of the session of the First Presbyterian Church
to make the sale. The funds derived from that sale
were utilized in the purchase of a site in Seattle, on
which was erected the present home.

KENNEY PRESBYTERIAN HOME v. STATE. 31
Aug. 1933 Opinion Per MILLARD, J.

Only so much of the interior of the home was
completed as was necessary to accommodate members
which the trustees believed the income then derived
from the estate would maintain. Considerable publicity
was given to the formal opening of the home on
February 22, 1909. The moderator of the session of
the First Presbyterian Church was present and delivered
an address. From time to time, as funds became
available for that construction and the maintenance of
the home, the unfinished portion of the building was
completed. Shortly after the home was erected, a part
of the estate - mining claims in Alaska and acreage in
Pierce county - from which it was anticipated
considerable revenue would be derived, proved to be
worthless. The charity was dependent upon the income from
its invested capital and the gifts of friends and such
other funds as the trustees in the management of the
charity could make available.

In the administration of the charity, the plaintiff
trustees and their predecessors in office received and
maintained in the home as many members as the funds
available for their support would justify. In order to
serve the maximum number of aged people and insure
their maintenance for life, the trustees required
persons received into the home to make such contributions
of cash and property as they were able, for application
toward their own maintenance. It was found advisable
to establish a uniform rule as to these requirements.
At the time of the commencement of this
action, the contributions (termed "life membership
fees") required of those seeking life membership in
the home were as follows: Persons from sixty to
sixty-nine years of age, inclusive, three thousand
dollars; persons from seventy to seventy-four years of
age, inclusive, twenty-five hundred dollars; persons
from seventy-five years of age and up, two thousand

32 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

dollars. These contributions were credited to a special
membership account, against which was debited
sixty dollars monthly for each of the contributing
members until such time as the amounts contributed by
each of the respective members were exhausted.
Thereafter, such contributing members were cared for
and maintained by the home as charity members.

The trustees reserved the right to dismiss any member
from the home if reasons developed precluding
proper care of such member in the home, or if such
member found the home uncongenial and desired to depart
therefrom. In either event, the balance remaining
from his or her contribution, after deduction therefrom
of maintenance charge of sixty dollars monthly,
was returned to such member.

Others, termed "monthly contributing members,"
were received into the home. This class consisted of
those who were unable to pay any stated amount, but
who were able, through friends and relatives, to pay,
monthly, the reasonable cost of their maintenance in
the home.

In the management and operation of the home, no
private profit or gain was allowed to accrue to anyone.
All sums received in excess of the cost of maintenance
of persons in the home were credited to the
capital or endowment fund of the home. The trustees
carefully examined each person admitted to membership
in the home to ascertain whether such person was
eligible, under the requirements prescribed in Mrs.
Kenney's will, to membership. No person was refused
admittance to the home because he or she would be a
wholly charity member, unless at such time the plaintiffs
were without funds with which to maintain such
persons. During all of the time the home has been in
operation, as many charity members as the funds available
for their support would justify have been cared

KENNEY PRESBYTERIAN HOME v. STATE. 33
Aug. 1933 Opinion Per MILLARD, J.

for in the home. The funds available for the maintenance
of the home and the members therein were expended
each year to within what the trustees believed
to be the limits of safety for prudent and conservative
management.

The report made in 1930 by the trustees and filed
for the examination and inspection of those interested,
discloses that, in 1930, sixty-nine persons, forty-two
women and twenty-seven men, were in the home. They
were classified by ages as follows: Sixty to seventy
years of age, five; seventy to eighty years of age,
thirty-nine; eighty to ninety years of age, twenty;
ninety to one hundred years of age, five. No member
was ever required to leave the home because the trustees
lacked funds with which to maintain such member.
When this action was instituted, about one-half of
those in the home were being maintained therein as
wholly charity members.

The policy of accepting real property in payment of
life membership fees was changed. A rule was
adopted, and adhered to in most cases, of requiring
persons who desired entrance into the home to sell
their property holdings so that their membership fee
could be paid in cash. This enabled the trustees to
determine in advance what money would be available for
the support and maintenance of the members of the
home. Some deviations were made from that rule.
When real estate was received by the trustees in lieu
of cash for membership fees, or in the event of gifts
of real property to the home, it was the policy of the
trustees to charge to the property itself all expenses
incurred in maintaining and preserving such property
until the time the property could be made income-
producing; that is, until such time as the income from the
property so received exceeded the expenditures necessary

2 - 174 WASH.

34 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

to preserve and maintain it. In this way, the
trustees were enabled to ascertain to what extent gifts
or contributions of that kind were beneficial, thus
ensuring the necessary uniformity of income for the support
of the home.

"That the trustees have exercised not only care,
prudence and good judgment in the administration of the
said trust, but have acted during its entire administration
in absolute good faith, and have attempted to
proceed strictly in accordance with the provisions of the
Will of said decedent. The said trustees have carefully
examined each and every person received into
the Home as a member; have established the rules and
regulations for the management of the Home itself
and the conduct of the members therein; have exercised
their judgment in all matters relating to the management
of the trust fund, and have complied with all of
the requirements of the Will touching the accounting
of the trust funds and the inventorying and appraisement
of the trust property. That the Home itself and
all properties constituting the trust estate have at all
times been open to examination and inspection. That
all of the trust papers, books of account, records of the
affairs of the plaintiff corporation, and the doings and
acts of the trustees since the establishment of the said
trust, have been open to the inspection and visitation
of any and all persons desiring to visit and inspect the
same. That the report for the year 1930 records the
fact that during that year 3,359 visitors were admitted
to the Home. That the trustees, each and every year,
have prepared and kept on file for the inspection of
persons desiring to examine the affairs of the Home, a
careful and complete summary or balance sheet showing
the assets and liabilities, the income and expenditures,
the yearly report and inventory and appraisement
of properties belonging to the corporation, the
insurance carried, itemized lists of all real and
personal property, including mortgages, bonds, contracts
and other properties belonging to the corporation,
which summary gives a full and complete statement of
said items, a complete statement of the life membership
accounts, the number of persons in the Home at

KENNEY PRESBYTERIAN HOME v. STATE. 35
Aug. 1933 Opinion Per MILLARD, J.

the beginning of the year, the number received during
the year, the names of each and every person in the
Home, together with the date of birth, the age, the
number of deaths and the number of persons who remove
from the Home and the reasons therefor, - the
names of the employees and the character of employment
and salaries paid, as well as the list of rooms and
the occupant of each and every room, which reports,
covering the entire administration of this trust, have
been carefully kept and so simply arranged and analyzed
that any person could understandingly examine
the same."

The trustees took, as compensation for their services,
ten per cent of the net sum remaining after deduction
of all lawful expenses attending the management of
the trust estate, for each calendar year, and used the
balance of the rents, issues and profits and increase of
the estate in such manner as in their judgment would
best foster, broaden and prosper the charity. All funds
contributed to the trust estate to become a part of the
principal or endowment fund were made a part of
such fund; and all funds contributed as gifts, donations
or accessions to the current expense supplemented the
current budget expense of the home as an increase
thereof. Permanent improvements of all kinds,
including special street improvements, were charged to
the capital or principal of the trust, and all lawful
expenses in the management of the trust were charged
to "income." All accounts of the trustees, including
the investment and expenditure of all funds and the
manner and way in which the compensation of the
trustees had been calculated, from the organization of
plaintiff corporation in 1901 until February, 1931, were
open to the inspection of any person desiring to examine
the same.

Not until February, 1931, were the trustees apprised
of any criticism of the manner and way in which the

36 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

trust had been administered. At that time, certain
members of the session expressed the belief that the
trustees were not administering the trust as in the
will directed. A committee was appointed to make an
investigation and report the result thereof to the
session. Pursuant to the recommendation contained in
that report, as recited above, plaintiffs commenced this
action.

Consonant with the conclusions of law deduced from
the foregoing findings of fact, the following decree was
entered by the trial court:

"That the construction of the Will of JESSIE
KENNEY, admitted to probate in the superior court of
the state of Washington for King county, as cause No.
3558, in probate, adopted by the plaintiff trustees and
their predecessors in orifice, in the execution of the
trust in the said Will created, is hereby declared to be
the true and correct construction, and all of the acts of
said trustees in the execution of their said trust from
the commencement thereof to the institution of this
action are hereby ratified and approved.

"That by the terms of the said Will the Session of
the First Presbyterian Church of Seattle, Washington,
has the power, and it is its duty, to fill all vacancies
in the said Board of Trustees of the plaintiff
corporation, as vacancies occur from time to time, so that
there shall be at all times five trustees in number - no
more and no less - the said election to be from the class
indicated, and the said Session to evidence such election
in the manner specified in the said Will.

"That in event any trustee of the plaintiff corporation
shall cease to be a resident of the county in which
the city of Seattle shall for the time being be, or shall
continue to be absent from the said county for more
than six months, or shall cease to be a member in good
and regular standing in some Protestant Evangelical
church, and such trustee is not removed by the other
acting trustees of the plaintiff corporation, then the
said Session has the power, and it is its duty, to remove
such trustees.

KENNEY PRESBYTERIAN HOME v. STATE. 37
Aug. 1933 Opinion Per MILLARD, J.

"That the Session of the First Presbyterian Church
of Seattle, Washington, may also remove a trustee for
any good cause shown, but what constitutes good cause
shown, other than those enumerated, can only be
determined by a proceeding properly brought in a court of
equity having jurisdiction thereof. After a decree of
such court has been obtained, adjudicating that certain
act or acts of a trustee constitutes good cause for
removal, then it becomes the duty of said Session to file
a formal deed of removal and appoint a successor.

"That the plaintiff corporation was organized as
directed in the said Will and all of its corporate powers
are exercised through its Board of Trustees, and no
other person or persons, subject only to supervision by
the court, and by the state of Washington, by reason
of its being a public charity, and the trustees of said
plaintiff corporation have full power and authority in
the selection of members of the said Home from the
classes specified in the said Will, and have full power
and authority to make all rules and regulations for the
conduct and government of the said Home, and have
full power and authority to remove one of their own
number in the event such trustee shall cease to be a
resident of the city of Seattle or the county in which
the said city of Seattle is located, or shall be absent
therefrom for a period of more than six months, or
shall cease to be a member in good and regular standing
of some Protestant Evangelical church.

"That the said trustees also have full power and
authority to receive other donations, accessions,
accumulations, gifts, and any new and additional
benefactions, and to manage and apply the same in such
manner and way as their judgment shall dictate, provided
the same can be applied in harmony with and in aid of
the charitable uses created by the said Will.

"That the trustees of plaintiff corporation also have
full power and authority to sell, convey and manage
any property of the said trust, other than the present
site of the home, or any part thereof, as if they were
the absolute owners thereof, except that said trustees
have no power to mortgage or encumber real estate
other than a lease of the same for a term of years not

38 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

exceeding five, except when otherwise directed by a
court of equity in the exercise of its jurisdiction.

"That the trustees, at the end of each calendar year,
after deducting all lawful expenses, to-wit: taxes,
special assessments, insurance, interest, ordinary repairs,
expenses of light, water, heat, power, collecting rents,
obtaining and ousting tenants, janitor's or keeper's
salaries, legal expenses, and sums payable to legatees,
attending the management of said estate that have become
due within the year, shall have been paid, also
have the power and authority to deduct 10% of the
remaining net rents, issues, profits and increase thereof
for their annual and full compensation, and they also
have the power, and it is their duty, to use all of the
balance of said rents, issues, profits and increase thereof
in such manner and way as in their judgment will best
foster, broaden and prosper the charity created by the
said Will; Provided that special city assessments levied
for the construction of street improvements in the city
of Seattle, King county, Washington, which in the
judgment of said trustees constitute permanent
improvements, are not lawful expenses which, by the
terms of the said Will, when paid, are to be charged to
'income,' but are permanent improvement expenditures,
and all sums disbursed in the payment of such permanent
improvements may be charged to the 'principal'
fund by said Trustees."

From that decree, the three members of, and
representing, the session of the First Presbyterian Church
have appealed. The state of Washington did not appeal
from the decree.

[1, 2] Appellants first contend that the trial court
erred in holding that the authority of the session was
limited to the appointment of trustees when a vacancy
occurs, with a restricted power of removal.

While conceding that the will does not denominate
the session as a visitor, appellants urge that the
language, as follows, of paragraph 6, item six, of the will,
was a grant to the session of full visitorial powers:

KENNEY PRESBYTERIAN HOME v. STATE. 39
Aug. 1933 Opinion Per MILLARD, J.

"It is my will that the succession of trustees in the
trusts hereby created, shall never fail and that the said
Session of the said First Presbyterian Church shall be
free and have power to exercise at any and all times,
any and sufficient jurisdiction to provide for and secure
such succession and the faithful carrying into effect of
all and singular the trusts in this will created or
defined."

It is insisted that the session was clothed with
general visitorial power without limitations and
unhampered by prescribed procedure; and that the
power granted to the session "implies authority in the
session to act to correct abuses and irregularities, and
of supervision."

The authorities cited by appellants in support of
their contention that the session was vested with
visitorial and supervisory powers are either not in
conflict with our disposition of the question raised or
follow a rule applicable to facts which are not present
in the case at bar.

Mrs. Kenney's gift (see paragraph 1 of item six of
the will quoted above) of a home or retreat for infirm
persons of both sexes, more than sixty years old,
irrespective of their religious or political views, "who
by reason of poverty are, in the judgment of said
trustees or their successors, unable to adequately
provide for themselves," is a public charity.

"A gift is a 'public' charity when there is a benefit
to be conferred on the public at large, or some portion
thereof, or upon an indefinite class of persons. Even
if its benefits are confined to specified classes, as
decrepit seamen, laborers, farmers, etc., of a particular
town, it is well settled that it is a public charity. The
essential elements of a public charity are that it is not
confined to privileged individuals, but is open to the
indefinite public. It is this indefinite, unrestricted
quality that gives it its public character." 5 R.C.L.,
p. 293, SS 3.

40 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

The charitable trust created by Mrs. Kenney is of
public concern - it is a public charity; hence, only the
state can invoke the superintending power of the
courts over the administration of the trust.

"A charitable trust is of public concern and the
attorney-general is the protector of the interests of the
public, or, what is the same thing, of the indefinite and
fluctuating body of persons who are the cestui que
trust. Unless, however, a gift is definitely to a charity
such as equity recognizes, and one more or less public
or general, there is no right in the public to serve as
a ground for intervention on the part of the attorney-
general. If it is of a public character, not only may
he intervene in an action brought for the construction
of the will, but he is a proper party defendant as
representing the public interests, for no final and
conclusive settlement could be had unless the state were
represented. Moreover, he is the proper person to
institute proceedings for the enforcement of a public
trust or charity, for which purpose he may file an
information either on his own motion or on the relation
of any party concerned. In fact, the attorney-general
is the only one who can properly invoke the superintending
power of the courts over the administration
of such trusts." 2 R.C.L., p. 923, SS 12.

See, also, Dickey v. Volker, 321 Mo. 235, 11 S.W.
(2d) 278, 62 A.L.R. 858; Green v. Blackwell, 35 Atl.
(N.J.) 375; Dillaway v. Burton, 256 Mass. 568, 153
N.E. 13.

We do not disagree with the principle stated in the
following quotation by appellants:

"To all eleemosynary corporations a visitatorial
power attaches as a necessary incident; and in this
connection it must be borne in mind that the words
'charitable' and 'eleemosynary' are practically
synonymous, the latter designating technically a class of
corporations organized for charitable purposes. These
corporations are composed of individuals, and they are
subject to infirmities, and are liable not to carry out
the purposes of the original giver of the funds. The

KENNEY PRESBYTERIAN HOME v. STATE. 41
Aug. 1933 Opinion Per MILLARD, J.

law, therefore, from very early times has provided that
there shall somewhere exist a power to visit and to
inquire into and correct all the irregularities and abuses,
and to see that the charity is being applied according
to the intention of the donor. If the state is the only
donor, then the power to appoint visitors and the
visitatorial power vests in the state., But, if the
charity is one resting solely on a private foundation,
then the visitatorial power rests originally in the
donor and at his death in his heirs, and he may impart
that power to any person or persons that he may see
fit, and no formality or precise language is required in
imparting such power, although the giving of the
power of 'supervision' is not equivalent to the giving
of the power of 'visitation'." 11 C.J., p. 364, SS 79.

However, the rule applicable in the case at bar is
clear, if the two sentences of the same section of 11
C.J. 364 are quoted; they read as follows:

"Furthermore, where the founder has thus appointed
a general visitor, and for some cause the
latter's function shall have been suspended, the power
of visitation does not, ipso facto, return to the founder
or his heirs, but is exercised through the courts of the
land properly invoked. If the objects of the charity
are not incorporated, but certain trustees are
incorporated to manage the charity, the visitatorial power
is deemed to belong to such trustees in their corporate
capacity, and there is no other visitor."

Mrs. Kenney's will provides that there shall be no
more and no less than five trustees. The testatrix
designated five "dear friends" and directed them to
found and thenceforth forever maintain a home for
such aged people, as recited above, as the five trustees
named, or their successors, "shall from time to time
approve and appoint, who by reason of poverty are,
in the judgment of said trustees or their successors,
unable to adequately provide for themselves." The
testatrix further directed that, within a reasonable
time after her death, the trustees form a corporation

42 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

under the name of The Samuel and Jessie Kenney
Presbyterian Home,

". . . having perpetual succession and with
powers proper to receive and maintain such home, and
to promote and execute the trusts in this item created,
and to receive, manage and apply in harmony therewith,
or in aid thereof, any new or additional benefactions.
. . . My said trustees and their successors
and said corporation, shall have as full power to sell,
convey and manage any property of the trust as if they
were absolute owners thereof, but shall have no power
to mortgage or encumber real estate. . . . At the
end of each calendar year . . . all lawful expenses
(such as taxes, special assessments, insurance, interest,
ordinary repairs, expenses of light, water, heat, power,
collecting rents, obtaining and ousting tenants,
janitors' or keepers' salaries, legal expenses and sums
payable as hereinafter in this will provided to legatees),
attending the management of my estate that have
become due within the year then ending, and are unpaid,
shall be paid, and that ten per cent (10%) of the
remaining net rents, issues, profits and increase of my
estate for the said year shall be an annual and full
compensation of said trustees and their successors, and
of the trustees or directors and officers of the
corporation hereinbefore in the 7th Subdivision of this item
mentioned, for the year then ending, and that all the
balance of said rents, issues, profits and increase shall
be so used as in the judgment of the said trustees and
their successors or said corporation will best foster,
broaden and prosper the charity hereinbefore proposed."

Mrs. Kenney's will contains no language from which
it can be even inferred that the testatrix intended to
vest in any one authority in conflict with or in
derogation of the powers definitely and expressly delegated
to respondent trustees. The founder of the charity
directed that a corporation be created. The founder
nominated five persons as trustees of that corporation.
The founder conferred on those trustees and their

KENNEY PRESBYTERIAN HOME v. STATE. 43
Aug. 1933 Opinion Per MILLARD, J.

successors the full power of the management of the
property conveyed to the corporation created for the
purpose of the charity. United with the other powers
vested solely in the trustees, was the power of
visitation.

In Trustees of Union Baptist Ass'n v. Hunn, 7 Tex.
Civ. App. 249, 26 S.W. 755, the court of civil appeals
of Texas followed the rule applicable to the facts in
the case at bar. The court said:

"But the charter of the university corporation
conferred upon it capacity to own and hold real estate and
other property, and to convey same. It also gave to
the board of trustees the full management and government
of the university and all of its affairs and property;
and no right or interest in the property or control
over the affairs of the corporation or the school
was recognized to exist in any other person or body.
. . . An individual who conveys property in trust
for charitable purposes has, unless he should assign
it to another, what is called the 'visitatorial power,'
in the exercise of which he may prescribe rules for its
management and for the administration of the trust,
and may govern and control the trustees, inspect their
proceedings, and correct abuses in their conduct. But
this is a power which may be assigned; and the
incorporation of trustees, under a charter which confers
upon them, as does that in question, the full power of
management of the property and of the institution,
divests such right of the founder and vests it, as well
as the absolute title to the property conveyed, in the
corporation."

Dartmouth College v. Woodward, 17 U.S. 518, 4 L.
Ed. 629, is a leading case in support of the rule that,
where trustees are incorporated to manage the charity,
the visitorial power rests in such trustees. Appellants
also cite that case in support of their contention.
Their quotation (p. 673), as follows, therefrom is not
apt, in view of the fact that, in the case at bar, the
visitorial power was vested solely in the trustees, and

44 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

was not divided among various persons (the session
and the trustees) or subject to any modifications or
control.

"No technical terms are necessary to assign or vest
the visitatorial power; it is sufficient if, from the
nature of the duties to be performed by particular
persons, under the charter, it can be inferred, that the
founder meant to part with it in their favour; and he
may divide it among various persons, or subject it to
any modifications or control, by the fundamental statutes
of the corporation. But where the appointment
is given in general terms, the whole power vests in the
appointee."

The following language in that opinion, to the effect
that, where the objects of the bounty are incorporated,
the whole legal interest is in trustees and can be
asserted only by them, is pertinent:

"In the Construction of charters, too, it is a general
rule, that if the objects of the charity are incorporated,
as for instance, the master and fellows of a college,
or the master and poor of a hospital, the visitatorial.
power, in the absence of any special appointment,
silently vests in the founder and his heirs. But where
trustees or governors are incorporated to manage the
charity, the visitatorial power is deemed to belong to
them in their corporate character. . . .

"But an eleemosynary, like every other corporation,
is subject to the general law of the land. It may forfeit
its corporate franchises, by misuser or non-user
of them. It is subject to the controlling authority of
its legal visitor, who, unless restrained by the terms
of the charter, may amend and repeal its statutes, remove
its officers, correct abuses, and generally superintend
the management of the trusts. Where, indeed,
the visitatorial power is vested in the trustees of the
charity, in virtue of their incorporation, there can be
no amotion of them from their corporate capacity.
But they are not, therefore, placed beyond the reach
of the law. As managers of the revenues of the
corporation, they are subject to the general superintending

KENNEY PRESBYTERIAN HOME v. STATE. 45
Aug. 1933 Opinion Per MILLARD, J.

power of the Court of Chancery, not as itself
possessing a visitatorial power, or a right to control the
charity, but as possessing a general jurisdiction, in
all cases of an abuse of trusts, to redress grievances
and suppress frauds. . . . And where a corporation
is a mere trustee of a charity, a Court of Equity
will go yet further; and though it cannot appoint or
remove a corporator, it will, yet, in a case of gross
fraud, or abuse of trust, take away the trust from the
corporation, and vest it in other hands."

We agree with appellants that the question whether
testamentary appointees are visitors depends upon the
nature of the powers delegated to such appointees by
the founder of the charity, rather than on the name by
which the appointees are called in the instrument of
foundation; and that the visitorial power may be confided
by the founder of the charity to some person or
persons other than the trustees of the corporation
organized for the purpose of the charity. Zollmann on
Charities, p. 419, SS 604. The weakness in the argument
of appellants lies in the fact that the power was
not confided to any one other than the trustees.

Eustace v. Dickey, 240 Mass. 55, 132 N.E. 852, 859,
cited by appellants, is distinguishable on the facts from
the case at bar. In the case cited, the right of removal
of the trustees is based upon the following provision
in the trust deed executed by Mary Baker Eddy:

"The First Members together with the directors of
said Church shall have the power to declare vacancies
in said trusteeship *for such reasons as to them may
seem expedient.*" (Italics ours.)

State ex rel. College of Bishops, etc. v. Board of
Trust, etc., 129 Tenn. 279, 164 S.W. 1151, is an apt
authority. The supreme court of Tennessee held that,
where the charity vests (as in the case at bar) in

46 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

trustees for the benefit of those who are to partake of the
charity, the visitorial power belongs to the trustees
and "no visitor can arise by implication." The court
said:

"At common law, the right of visitation vests only
where the persons interested in the charity were
themselves incorporated, and not where disinterested
trustees were appointed and incorporated to administer the
trust for the beneficiaries.

"In the leading case on this subject it is said by
Lord Holt:

"'For it is fit the members, that are endowed and
that have the charity bestowed upon them, should not
be left to themselves (for divisions and contests will
arise amongst them about the dividend of the charity),
but pursue the intent and design of him that bestowed
it upon them.'

"'Now, indeed, where the poor or those that receive
the charity are not incorporated, but there are certain
trustees who dispose of the charity according to the
case in 10 Coke, there is no visitor; because the
interest of the revenue is not vested in the poor that
have the benefit of the charity, but they are subject to
the orders and direction of the trustees. But where
they who are to enjoy the benefit of the charity are
incorporated, then, to prevent all perverting of the
charity, or to compose differences that may happen
among them, there is by law a visitorial power.'

"Phillips v. Bury, 2 Term R. 352.

"In Green v. Rutherforth, 1 Ves. Sen. 471, Lord
Hardwicke said: 'If the charity is not vested in the
persons who are to partake, but in the trustees for
their benefit, no visitor can arise by implication.'

"A like rule is recognized in the Dartmouth College
Case, 4 Wheat. 563, 565, 566, 645, 675, 676, 4 L. Ed.
629; Allen v. McKean, 1 Sumn. 276 Fed. Cas. No. 229;
Sanderson v. White, 18 Pick. (Mass.) 328, 29 Am. Dec.
591.

"In 2 Kent's Commentaries (13th Ed.) 300, it is
said: 'Where governors, or trustees, are appointed by
a charter, according to the will of the founder, to

KENNEY PRESBYTERIAN HOME v. STATE. 47
Aug. 1933 Opinion Per MILLARD, J.

manage a charity (as is usually the case in colleges and
hospitals), the visitorial power is deemed to belong to
the trustees in their corporate capacity."

If, as contended by appellants, the powers granted
to the session in paragraph 6 of item six of the will
implies authority in the session to correct abuses and
irregularities and of supervision, such implied power
would be in derogation of the powers expressly granted
to the trustees. Appellants argue:

"This power should be lodged somewhere, and if
the will does not lodge it in the session, equity would
lodge it in the state, and the state is lily prepared to
give such duties proper attention."

As stated above, the managerial power of the charity
rests solely in the trustees; the testatrix expressly
so directed, and there is no language in the will from
which it can be reasonably inferred that Mrs. Kenney
intended to divide the control or power of the trustees
with the session. In the administration of the trust,
the trustees are, of course, subject to the superintending
power of the equity courts, which possess a general
jurisdiction in all cases of abuse of trusts. Only the
state, acting through the Attorney General, either on
its own initiative or on the relation of some other
party, can invoke that power.

The session does not have either visitorial or
supervisory power over the acts of respondent trustees.

[3] Removal of trustees: In case any trustee
ceases to be a resident of the county in which the city
of Seattle shall for the time being be, or absents
himself from that county for more than six months, "or
ceases to be a member in good and regular standing
in some Protestant Evangelical Church," the other
trustees may, by following the procedure prescribed in
the fourth paragraph of item six of the will, remove
such trustee from his trust. Paragraph four of item

48 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

six of the will further provides for removal by the
session of any of the trustees in case of like absence or
for good cause shown.

"Or in case of like absence or for any good cause
shown the said Session of the First Presbyterian
Church may remove any one or more trustees from his
or their trust and another or others, qualified as herein
provided, select and appoint as aforesaid in place of
the trustee or trustees so removed, and in each case
both the deed of removal and of appointment shall be
filed and recorded in the office of the auditor or
recorder of such county."

The trial court correctly, contrary to appellants'
contention, held that the trustees can only be removed
by the session for "good cause shown" after a hearing
by a court of competent jurisdiction.

"GROUNDS FOR REMOVAL: a. In General. What
constitutes a sufficient reason for removing a trustee
is a matter peculiarly within the discretion of the
court, which should be guided by considerations of
the welfare of the beneficiaries and of the trust estate.
But the power of removal, especially of trustees
appointed by will, ought to be exercised sparingly. There
must be a clear necessity for interference to save trust
property. It is not every mistake or neglect of duty
which will induce a court to remove a trustee. There
must be such gross negligence or misconduct as to
evidence a want either of capacity or fidelity, putting
the trust in jeopardy. Mere failure in the discharge
of duties on account of mistake or misunderstanding
is not ground for removal, unless such failure shows
a want of the proper capacity to execute the duties.
Still less will the court interfere because of an
injudicious exercise of discretion, or refusal to exercise a
purely discretionary power for the advantage of the
estate. And even acts of imprudence or neglect are
usually treated as reasons for making the trustee give
recompense for the wrong or error rather than as
ground for superseding him in his office. Good faith
and honesty will not, however, always save a trustee
from removal from his office." 39 Cyc. 261.

KENNEY PRESBYTERIAN HOME v. STATE. 49
Aug. 1933 Opinion Per MILLARD, J.

[4] Appellants next contend that the trial court
erred in refusing to hold that the trustees had no
authority under the will to charge and collect fees
from either monthly boarders or life members, and in
holding that the trustees were authorized to render
services to any member for compensation, or otherwise
than gratuitously.

Dillaway v. Burton, 256 Mass. 568, 153 N.E. 13,
cited by appellants and respondents, does not lend
support to the appellants' position. The court there
held that it was the exclusive function of the Attorney
General to correct abuses in the administration of a
public charity by the institution of proper proceedings.
In that case, as in the case at bar, the charity was not
to be limited to those who were entirely destitute of all
property. The persons eligible for admission to the
hospital were described as those without necessary
means of support and incapable of obtaining a comfortable
livelihood by reason of physical disability.
The court said:

"The persons eligible for admission to the hospital
are described as those 'who are without necessary
means of support and are incapable of obtaining a
comfortable livelihood by reason of chronic or incurable
disease or permanent physical disability.' We are
of opinion that applicants to be eligible need not be
entirely destitute of all property. Nor are they to be
excluded if friends or relatives legally bound to
support them refuse to do so; but if an applicant has
friends or relatives who are not only able but are
willing to support him or her comfortably and furnish
such applicant with proper medical and surgical treatment
outside the hospital, such person should not be
admitted. The plaintiff is so instructed."

Mrs. Kenney did not limit her charity to those who
were entirely destitute. Absolute destitution was not
the test of eligibility for admission to the home. Mrs.

50 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

Kenney directed, in language (paragraph 1, item six
of the will) very little different from the language in
the cited case, that the persons eligible for admission
to the home were those
". . . who by reason of poverty are, in the
judgment of said trustees or their successors, unable to
adequately provide for themselves, and where such
persons, irrespective of their religious or political
views, shall be gratuitously supplied as far as may
reasonably be, with the shelter, care and comforts of a
home."

We are convinced by our examination of the will,
as stated in the report of the committee appointed by
the session to investigate the administration of the
charity,

". . . that the testatrix intended that the charity
of the Home should be extended to those who could
partially, but not adequately provide for themselves,
as well as those who are wholly unable to provide for
themselves."

The will did not direct that a home be established
for the maintenance solely of indigent people. It was
not contrary to any provision of the will - in fact, the
will directs the trustees to receive donations - for the
home to receive donations. The language of the will
clearly expresses the purpose of Mrs. Kenney to assist
those who were not entirely destitute of property.

The facts in German Aged People's Home v.
Hammerbacker, 64 Md. 595, 3 Atl. 678, 54 Am. Rep. 782,
are much like the facts in the case at bar. The court
said:

"The object of the incorporation of 'The General
German Aged People's Home of Baltimore City' was
certainly a commendable one. Its aim was to furnish
to aged and indigent Germans a home for the residue
of their lives. It was intended for those only who were
over sixty years of age, who were unable to work, and

KENNEY PRESBYTERIAN HOME v. STATE. 51
Aug. 1933 Opinion Per MILLARD, J.

possessed of a good character, and without the means
to secure for themselves a comfortable home. But with
all these requisites before an applicant could be
admitted, an admission fee, ranging from $300, the
highest, to $150, the lowest, must be paid. This admission
fee might be paid by the applicant himself, if he
possessed sufficient means, or by his friends or relatives,
if he was unable to do so. Another requisite for
admission into the institution was, that the applicant
should transfer to the institution all the property that
he had at the time. It is this latter provision that
creates the difficulty in this case, and which will require
examination.

"It is the primary purpose of this corporation to
furnish homes for those who are unable to support
themselves in any degree of comfort, and not for those
who are so able. It is not its object to furnish for the
small admittance fee of $300 or $150 a home for life to
those who still hold property, to do as they please with.
To allow that would be to convert the institution into
a very cheap boarding-house, where, in addition to
comfortable board and lodging for life, the inmate
would be entitled to medical attendance if sick, and a
decent burial at his death, and all this for $300 at most.
But there is and must be a large class of persons, who
own and possess more property than enough to pay
the admission fee, but not enough to support themselves
in the comforts they would find at the Home.
It was for this class that the provision in the
constitution (Art. 5, sec. 2, paragraph c) required the inmate
to transfer to the corporation all the property he might
have, and it is this provision that is supposed to be
ultra vires. But in our opinion it is not.

"The certificate of incorporation provides, 'That the
corporation so formed, is a corporation for the purpose
to establish and maintain in the City of Baltimore,
or within its vicinity, an institution under the
name of 'The General German Aged People's Home,'
wherein aged people of both sexes, of good moral
character, under such conditions and rules as may be
prescribed by the constitution and bylaws of this
corporation, may find an asylum.'

52 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

"Among the rules laid down in the constitution, is
the one heretofore referred to, that one of the
conditions of admission was the transfer to the institution
of all the property of the applicant . . . But the
constitution provides that the revenues of the
corporation should be derived from the yearly dues of
members, admission fees, donations, presents, legacies, and
gifts. Now under this clause, to say nothing of the
general law, a person, not an inmate or applicant,
could certainly donate or give property or money to
the institution. If A, not an inmate, presented the
corporation with $1,000, no one would doubt its power
to receive it, under the head of a voluntary donation
or gift. It certainly would be a hair-splitting rule to
say that if B, who was an inmate, or an applicant, did
the same, it would not be a donation or gift. It is not
a purchase, for the inmate gets his right to be there,
from his age, his good moral character, and the payment
of his admission fee. He may not have a cent of
money or property to convey, but if the other conditions
are complied with, he is admitted. It is as properly
classed as a voluntary donation, in the one case,
as the other. . . .

"Nor is it against public policy for an organized
charity like this to receive such donations, it being, as
we have shown, within its corporate powers. On the
contrary, this and similar charities are directly within
the line of a sound and humane public policy. They
not only tend to relieve suffering in the individual, but
tend to keep them from being a charge upon the general
public. For this purpose money is necessary, and
they are allowed to receive and appropriate it as their
charter allows."

It was not the desire of Mrs. Kenney to make of the
home a "poor house." To make her charity effective,
she delegated to her "dear friends" discretion as to
administrative details. She and her husband dreamed
of and planned the creation of a home under such
efficient management - that kind of management of
which she anticipated her "dear friends" were capable -
as would assure permanent care of the members

KENNEY PRESBYTERIAN HOME v. STATE. 53
Aug. 1933 Opinion Per MILLARD, J.

of the home. Mrs. Kenney knew there were degrees of
poverty and individual necessity. Her gift of a home
was not confined to those so absolutely destitute that
the "poor house" was their only place of refuge.

"No legal difficulties are in the way of making
charities effective by delegating discretion as to
administrative details. What a testator can do by himself or
his agent while alive, he can do by his executor or
trustee after his death. Since he might have given the
property absolutely to the executors, there is no reason
why he may not invest them with discretionary powers
for so beneficent an end. 'In all cases of charities
founded by wills, broad discretion and ample powers
must necessarily be conferred upon the trustees,
inasmuch as the testator is attempting to provide for
contingencies which will arise after his own death.'
He may, therefore, vest in his executor a wide latitude
to exercise his own best judgment in carrying out his
gift. His will 'may be ascertained by the acts of those
to whom he has entrusted discretion and power. Such
acts may be justly regarded as the definite expression
of his own purpose.'" Zollmann on Charities, p. 258,
SS 389.
"It is neither usual nor desirable to confine the
administration of a hospital exclusively to the indigent.
An institution which is in its nature a public charity
does not lose such character though an income is received
from its beneficiaries. It is none the less a
charity because it is discriminating. 'Furnishing
board, lodging and nursing to needy persons is among
the most familiar and useful of charities, and that
which constitutes such an institution a charity is that
it does not furnish these things for profit.' An
institution from which the rich are not turned away
because of their wealth, nor the poor because of their
poverty is, therefore, a public charity, so long as
payments received from patients or other beneficiaries are
devoted to the general purposes of the charity and not
to the private benefit of individuals or corporations.
'By this operation, the funds of the institution are not
absorbed, but augmented; the charitable object of the
asylum is not diminished, but promoted; and the nature

54 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

of it is not changed but pursued.' The partial payment
by students of the cost of educating them 'makes
it possible to extend the benefits of the University to
larger body of men and women in search of education
than would otherwise be the case, and so long as such
contributions are not unreasonable and are not in such
an amount that it could be said that the benevolence in
the foundation is no longer substantially reflected in
the benefits which it confers, then the institution is still
charitable.' Charity, therefore, has a significance
broad enough to include practical enterprises for the
good of humanity operated at a moderate cost to those
who receive the benefit. 'Reason and authority are
opposed to the proposition that an institution otherwise
charitable will be deprived of that character by the
mere fact that charges for facilities and services are
made to individual members, which not only do not
result in profit, but which fail, in the aggregate, even
to make the institution self-sustaining'." Zollmann on
Charities, p. 154, SS 219.

"It will not be difficult to illustrate this principle by
concrete cases. Settlement work does not cease to be
charitable because nominal fees are or may be charged.
Corporations may be charitable though some income is
received from their beneficiaries." Zollmann on
Charities, p. 155, SS 220.
" PAYMENTS BY BENEFICIARIES. ADVANTAGES. Such
payments result in other advantages. 'The fact that
paying patients are taken, the profits derived from
attendance upon these patients being exclusively
devoted to the maintenance of the charity, seems rather
to enhance the usefulness of the institution to the
poor; for it is a matter of common observation
amongst those who have gone about at all amongst
the suffering classes, that the deserving poor can with
difficulty be persuaded to enter an asylum of any kind
confined to the reception of objects of charity; and
that their honest pride is much less wounded by being
placed in an institution in which paying patients are
also received'." Zollmann on Charities, p. 481, SS 715.

We are clear that Mrs. Kenney delegated to the
trustees discretion in the matter of selection of

KENNEY PRESBYTERIAN HOME v. STATE. 55
Aug. 1933 Opinion Per MILLARD, J.

members for the home. We are also clear that the trustees
had the right to receive from the members, or their
friends or relatives, any contributions of money or
property to be used in aid of their support and
maintenance in the home. We find no authorities to the
contrary.

[5] Appellants next complain of the manner in
which the trustees construed the will in dealing with
the funds of the trust and in ascertaining their
commissions. The construction placed by appellants upon
paragraphs 12 and 13 of item six of the will also differs
from the construction placed upon the will by the
committee of the session of the First Presbyterian
Church. That committee stated in its report:

"We are convinced that Mrs. Kenney intended and
expected that the Trustees would have two distinct
and separate duties to perform. First, to guard and
manage the estate or trust. Second, from the income
of such trust to found, operate and maintain the Home
or charity."

In paragraph 12 of item six, the words "my estate,"
in the phrase "attending the management of my
estate," refer to the endowment part of the estate -
that portion of the estate which is invested for the
purpose of producing income for the charity. The
direction is clear and distinct that, from the gross
income from this endowment estate, all lawful expenses
are to be deducted. These expenses are those which
are incurred in the maintenance of the endowment
estate. We agree with the trustees' interpretation
that "special assessments" were rightly charged to
the" capital" account and not to the" income"
account. The costs of permanent improvements should
not have been, and were not, paid with the income
from this endowment estate.

Respondents' interpretation made available for the

56 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

maintenance of the charity approximately thirty
thousand dollars more than would have been available
under appellants' interpretation. We do not find that
one cent has been lost to the charity by reason of
respondents' interpretation of the will, nor does it
appear that the plan of accounting adopted by the
trustees increased their compensation, which has
averaged twenty-nine dollars monthly. The evidence
was undisputed that these are capital expenditures.
Mrs. Kenney directed, in paragraph 13 of item six of
her will, that repairs in the nature of "permanent
improvements" be charged to" principal."

We do not agree with appellants' contention that,
since the home has been inventoried and appraised as
a part of the estate, the amounts expended for its
maintenance and the maintenance of its members
should be deducted from the gross income before the
net income is determined for computation of trustees'
compensation.

By paragraph 13 of item six of the will the testatrix
directed

". . . that at the beginning of their trusts and
at the beginning of each calendar year thereafter,
. . . my trustees or their successors, or said
corporation, shall make a faithful, true and full inventory
and fair appraisement of all the real and personal
estate belonging to the trusts mentioned in this item,
and that such real estate and personal property, so
inventoried and appraised shall be regarded until the
time of the next subsequent inventory as a principal
fund out of the rents, issues, profits and increase of
which, all the expenses and outlays incident to the
administration and management of said trusts, until
the beginning of the year next after such inventory,
are to be defrayed provided, however, that expenses
of any calendar year may be defrayed out of the
rents, issues: profits and increase of that year even
after the close of that year; and provided that

KENNEY PRESBYTERIAN HOME v. STATE. 57
Aug. 1933 Opinion Per MILLARD, J.

reasonable permanent improvements to real estate other
than ordinary repairs may be made out of property
constituting part of such principal fund; and provided
further, that no increase in value of real or personal
estate so to be appraised shall be deemed increase,
issue or profits out of which expenses or outlays
incident to the administration and management or
compensation for administration may be defrayed."

[6] The word "principal," as used in the foregoing
quoted paragraph, has the same meaning as the words
"my estate" in the phrase "attending the management
of my estate" in the twelfth paragraph of item
six of the will. Undoubtedly, it was the intention of
Mrs. Kenney that fluctuations in the market value of
assets of the principal estate should not be permitted
to impair the regularity of the income. Otherwise,
she would doubtless have indicated that depreciation
or capital losses were to be taken out of "income."

The argument of counsel for respondents is well and
tersely stated as follows:

"Appellants contend that 'depreciation.' should be
made up from the 'income.' If increase in appraised
value is not considered 'income,' then 'depreciation'
should not be considered an 'expense.' Again, if
'depreciation' (which is greatest in years of depression),
is to be made up from 'income' - then the net revenues
of the estate which can be used for the maintenance
of the charity would be at a minimum when the need is
greatest."

[7] The record before us discloses no justification
for the criticism of the trustees for their method of
accounting. There is no warrant for the suggestion that
the trustees construed the will, managed the charity
and kept their accounts in such a manner as would
make their offices as trustees lucrative. This was a
trust in perpetuity. In the execution of such trusts,
the courts look rather to the intent of the testator than

58 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

to the method or mode prescribed for its execution.
The rule governing the interpretation of such trusts
is stated as follows in 11 C.J., p. 352, SS 70:

"In general, the property or funds forming the subject
matter of a charity should be applied to the purposes,
and for the benefit of the persons or institutions,
and in the mode or manner, indicated by the
founder; but, where a particular application or mode
of administration is not prohibited by the instrument
creating the trust, or may be deemed by construction
to be within its terms, it may be adopted in order fully
and properly to execute the trust and to effectuate the
intent of the donor or testator. Sometimes a provision,
in the instrument creating the trust, as to a
particular application of the funds is considered
merely directory; and a power to decide on the best
means to employ for carrying out the charitable purpose
is sometimes given by implication."

The eight men who have served as trustees (three
of whom were appointed by appellants) for thirty
years have, as the trial court found,

". . . exercised not only care, prudence and
good judgment in the administration of the said trust,
but have acted during its entire administration in
absolute good faith and have attempted to proceed
strictly in accordance with the provisions of the will
of said decedent."

The original trustees were "dear friends" of Mrs.
Kenney. They were all successful business men. They
were all men of integrity, and were moved by a high
purpose in the performance of their services in the
execution of this trust. They knew the desire of Mrs.
Kenney to establish a home for aged people. They
desired to, and did, make that dream come true. Starting
thirty years ago with assets amounting to one
hundred and fifty-six thousand dollars, the trustees
builded the home. During that period, almost five
hundred thousand dollars have, been expended in the

KENNEY PRESBYTERIAN HOME v. STATE. 59
Aug. 1933 Opinion Per MILLARD, J.

maintenance of the charity. At the end of each year,
there has been a cash balance of not less than one
thousand dollars. The compensation of the trustees
during the thirty years has averaged twenty-nine dollars
a month per member. The following statement of
assets and liabilities of the charity when the action
was instituted reflects the faithful and careful endeavor
of the trustees in administering the trust:

"Cash . . . . . . . . . . . . . . . $ 5,676.88

Investments . . . . . . . . . . . . 236,965.88

Life insurance premiums . . . . . . 325.72

Land and building (constituting
the Home) . . . . . . . . . . . . 105,000.00

Furniture (depreciated value) 3,743.25
__________

Total assets . . . . . . . . . . . . $351,711.73

Current liabilities . . . . . . . . $5,314.11

Total account of life members . . . 26,135.24

Bequests held for specific uses . . 22,001.98

Capital . . . . . . . . . . . . . . 298,260.40
__________

Total liabilities . . . . . . . . . $351,711.73"

There is no basis for the assertion that the motive
which inspired the trustees to such a careful and painstaking
effort in the execution of this trust is found in
their desire for financial compensation.

[8] Appellants contend that, because of their position
of trust and confidence, the trustees should not
have utilized their relation to the trust property for
their own personal advantage. That is, one of the
trustees, who was engaged in the business of mortgage
loans and insurance, should not have written a part of
the fire insurance upon the home; and that another of
the trustees should not have sold mortgages to the
respondent corporation.

The trust was not subjected to any expense by
reason of the transactions, hence they were legitimate.
The premium rates for fire insurance are uniform.

60 KENNEY PRESBYTERIAN HOME v. STATE.
Opinion Per MILLARD, J. 174 Wash.

No more fire insurance was carried on the home than
was justifiable. It would be illegal for the insurance
broker to share his commissions with the insured.

The purchase of mortgages by respondent corporation
from one of the trustees was not at the expense
of the trust. The other trustees passed upon the
purchases. There was no showing of negligence or
carelessness on the part of the trustees in their
investigation of the value of the securities purchased,
nor was there any evidence that loss resulted therefrom.
The trustee received commissions ranging from one to
three per cent on the sale of the securities to
respondent corporation. The commissions were not paid by
the respondent corporation. The mortgages were
taken at their face value, and the security was
appraised and passed on by the other trustees.

In In re Cornett's Estate, 102 Wash. 254, 173 Pac.
44, we said:

"Where the trustee, personally performs services in
their nature properly chargeable as current expenses
of the estate and for which he might have employed
another, there is no good reason why he should not
receive reasonable pay for such services when and as
they are performed. For a well considered case
closely analogous in principle see: Turnbull v.
Pomeroy, 140 Mass. 117, 3 N.E. 15. See, also, May v.
May, 109 Mass. 252; In re Hagerty's Estate, 97 Wash. 491,
166 Pac. 1139."

It is unnecessary to further extend this already
overlong opinion by discussion of other questions
raised by appellants, as those questions are without
substantial merit. We have carefully examined the
voluminous record (the briefs alone comprise 746
pages) and are convinced that the decree should be,
and it is, affirmed.

BEALS, C.J., HOLCOMB, STEINERT, and MITCHELL, JJ.,
concur.