SEABURY, J. This case presents for judicial construction a clause in the will of Annie Coe MacDowell. The clause of the will which has given rise to conflicting contentions is that in which the testatrix attempted to found the "Mary Randol Memorial." This clause provides as follows:

"I give and bequeath to my executor and trustee, here in after named; all my portion of my father's estate, now held in trust for me, under nis last will, and which portion I have under his last will, the right to bequeath, and in addition, all my own money, which is now in bond and mortgages, and five savings banks, amounting to about ten thousand dollars.

determined is whether the trust attempted to be created by the testatrix is a charitable trust within the meaning of this statute. If it is, it is not affected by the statute against perpetuities. If it is not, it is void because it creates a perpetuity.

[2, 3] It has been held by this court that the statute referred to was intended to restore the law of charitable trusts as that law was declared to exist in the case of Williams v. Williams, 8 N. Y. 525. Trustees of Sailors' Snug Harbor v. Carmody, supra, at page 298 of 211 N. Y., 105 N. E. 543. In Williams v. Williams, supra, it was held that "To be well invested, and the income derived from both, to be used for hiring a house, and the law of charitable trusts as recognized in maintaining same, in a respectable neighborhood, England prior to the Revolution within the city limits of Yonkers, New York, to force in this state. Many definitions of a be used as a home for refined, educated, Prot-"charitable trust" have been formulated, but estant gentlewomen, whose means are small, and whose home is made unhappy, by having to live with relatives, who think them in the way:

* *

"This home to becalled the 'Mary Randol Memorial Home'; I wish the preference of being an inmate of this home, to be given to my sister Jessie, and my cousins, and their lineal descendants forever.

"Namely: Mrs. Philip H. Remington, Miss Elizabeth Remington of Windsor, Conn.; Miss Bessie Terhune, Mr. Richard Morrell, Passaic, New Jersey; Mr. Harry Masters, Passaic, New Jersey; Mr. Enos Randol Hyatt, 277 Broadway, N. Y. The same privilege is extended to my

friends:

"Namely: Miss Mary A. Hall, Port Richmond; Miss Adelaide Hall, Port Richmond, Staten Island; Miss Inlia Frances Bangs, Mrs. Enos Randol Hyatt, Miss Annie E. Scott, Washington, Iowa; Rev. Mrs. George W. Huntington, Newburgh, N. Y.

"To come and go with perfect freedom, and not confined to rules.

"All the inmates of this home, are to pay board, each week they are there, with their small means. The price not to exceed seven dollars per week; towards paying the running expenses of the house, which will have a housekeeper at the

head."

It is claimed on behalf of the proponent and the Attorney General that this clause creates a valid charitable trust. The contestant contends that the trust attempted to be created is not a valid charitable trust and is void. The changes that have been made in this state as to the law of charitable trusts and the history of the existing rule have been recently so thoroughly discussed in this court that we may proceed at once to a consideration of the existing statutory provisions. Tilden v. Green, 130 N. Y. 29, 45, 28 N. E. 880, 14 L. R. A. 33, 27 Am. St. Rep. 487; Allen v. Stevens, 161 N. Y. 122, 141, 55 N. E. 568; Trustees of Sailors' Snug Harbor v. Carmody, 211 N. Y. 286, 105 N. E. 543.

[1] Section 12 of the Personal Property Law (Cons. Laws, c. 41) sanctions the creation of a charitable trust. This section relieves such trusts as are religious, educational, charitable, or benevolent within the meaning of this provision of the law, from the operation of the statute against perpetuities. Allen v. Stevens, supra, at page 143 of 161 N. Y., 55 N. E. 568; Matter of Griffin, 167 N. Y. 71, 81, 60 N. E. 284. The question to be

was

in

all the definitions that have been attempted carry the implication of public utility in its purpose. Jones v. Williams, Ambler, 651, 652; Mitford v. Reynolds, 1 Phil. 185, 191; Coggeshall v. Pelton, 7 Johns. Ch. [N. Y.] 292, 294, 11 Am. Dec. 471; Perin v. Carey, 24 How. 465, 506, 16 L. Ed. 701; Vidal v. Girard's Ex'rs, 2 How. 127, 11 L. Ed. 205; Williams v. Williams, supra, at page 533 of 8 N. Y.; Atty. Gen. v. Moore, 19 N. J. Eq. 503; Ould v. Washington Hospital for Foundlings, 95 U. S. 303, 24 L. Ed. 450. If the purpose to be attained is personal, private, or selfish, it is not a "charitable trust." When the purpose accomplished is that of public usefulness unstained by personal, private, or self

ish considerations, its charitable character insures its validity. With these principles in mind, we approach the disputed clause of the will of the testatrix to determine whether the purpose of the trust attempted to be created is public and charitable or personal and selfish. Before we shall be able to determine whether the purpose of the trust attempted to be created is public or private, charitable, or selfish, it is necessary to ascertain the character of the trust which the testatrix intended to create.

If the clause of the will which gives a preference to certain persons had not been included, there would be no room for the claim that the purpose of the testatrix was personal, private or selfish. It is upon this preferential clause that the respondent and the courts below based their view that the intention of the testatrix was selfish rather than charitable. Thus the learned surrogate, in expressing the view that was subsequently adopted in the prevailing opinion of the Appellate Division, said:

"The last clause of the will referred to [meaning the clause as to preferences] shows conclusively to my mind that the testatrix intended to prefer these six relatives and their descendants. She also intended to prefer her six friends named. Her intention was to provide a home for these relations and their descendants and her friends to the exclusion of all others. This then would mean that the income of the so-called trust would be devoted in part, at least, if not entirely, to a private use. This being so, the entire gift would be invalid."

In Perin v. Carey, supra, at page 507 of 24 How., 16 L. Ed. 701, a testamentary gift to the city of Cincinnati for founding two colleges, one for boys and one for girls, was under consideration. In that case the testator had provided that in all applications for admission preference should be given to any and all of his relatives and descendants and to any and all of his legatees and their descendants and to a designated person and his descendants. The court upheld the validity of the trust, saying:

"Preference of particular persons, as to who should be pupils in the colleges which he meant to found, was a lawful exercise of his rightful power to make the devises and bequests."

If the purpose of the testatrix had been to create a trust only for the benefit of her own relatives and certain designated friends and their lineal descendants, the trust would not come within the designation of a charitable trust (Matter of Shattuck, 193 N. Y. 446, 86 N. E. 455; Kent v. Dunham, 142 Mass. 216, 7 N. E. 730, 56 Am. Rep. 667); but, if the purpose of the trust was public, the mere fact that the testatrix intended to give a preference to certain relatives or friends and their descendants, who should be within the object of the trust, does not make it invalid or preclude it from possessing the character of a charitable trust (Matter of Robinson, supra; Dexter v. Harvard College, supra; Darcy v. Kelley, supra). The trust not being rendered invalid because of the

We do not think that this interpretation | vided that preference should be given to the gives effect to the intention of the testatrix, testator's "poor relatives, if any such there as that intention is expressed in the will. be." The view adopted by the learned courts below assumes that the preferred class are not required to possess the qualifications specified in the trust. The dominant purpose of the testatrix was to create a home "for refined, educated, Protestant gentlewomen," and it is evident, we think, that any person that was not within this designated class was not within the contemplation of the trust, and therefore not to be accorded any preferential right. In other words, the preferential clause was intended to relate to those who qualified as coming within the class designated. The testatrix did not provide and it is not reasonable to suppose that she intended that all of the persons named "and their lineal descendants forever" should actually become members of the home which she sought to establish. We think that the reasonable interpre tation of the language employed is that such of her relations and friends as were named in the preferential clause who were within the class designated, viz., "refined, educated, Protestant gentlewomen," should have a preference over others in becoming members of the home if they so desired. If we so construe the clause, the fact that among the re lations and friends named were three men is not inconsistent with the declared purpose of the testatrix, because this construction of the clause would permit such of the female descendants of these three men as were within the designated class to avail themselves of the right to have a preference over others if they sought membership in the home. If preferential clause, it remains to be detersuch was the purpose of the preferential mined whether the general purpose of the clause, there is nothing in the fact that a trust is public. preference was given to certain persons, that of itself rendered the trust attempted to be created private rather than public, or selfish rather than charitable. The creation of a preference in favor of relatives or named persons does not of itself make invalid a trust which is in other respects valid. The the case under consideration, the object of trust which this court upheld in Matter of Robinson, 203 N. Y. 380, 382, 96 N. E. 925, 37 L. R. A. (N. S.) 1023, gave a preference "to persons who are elderly or disabled from work, and to persons who are Christians, of good moral character," members of certain specified churches, "and who are not addicted to the use of intoxicants or tobacco, nor to attendance at theatrical entertainments." In Dexter v. Harvard College, 176 Mass. 192, 57 N. E. 371, a trust for the promotion of education in Harvard College was under consideration, and Knowlton, J., said: "Nor have we been referred to any case which holds that in providing for the administration of such a charity the founder is precluded from directing that preference shall be given to his kin, or to any other class of persons that he favors." In Darcy v. Kelley, 153 Mass. 433, 26 N. E. 1110, the court upheld a will in establishing a trust as "a relief fund for the poor," pro

[4] It has often been held that a public charity need have no special reference to the poor. Dexter v. Harvard College, supra, at page 194 of 176 Mass., 57 N. E. 371; Perin v. Carey, supra, at page 506 of 24 How., 16 L. Ed. 701; Jones v. Williams, supra. In

the bounty of the testatrix was "refined, educated, Protestant gentlewomen," and the purpose of providing a home for such as should come within that designated class is a public charity. Such a charity is within the provisions of the law relating to gifts for charitable purposes (section 12 of the Personal Property Law), when those provisions of law are construed in the broad and liberal spirit which Judge Chase, in Matter of Robinson, supra, at page 385 of 203 N. Y., 96 N. E. 925, 37 L. R. A. (N. S.) 1023, pointed out should be exercised in construing these proVisions of this law. It is in this broad and liberal spirit that the courts have sustained a trust for the establishment and maintenance of a clubroom for young men and boys in the city of New York (Starr v. Selleck, 145 App. Div. 869, 130 N. Y. Supp. 693, affirmed 205 N. Y. 545, 98 N. E. 1116); a trust fund to any society that assists poor needlewomen,

and if no such organization exists, for the the testatrix to create such a trust and the benefit of incapacitated sailors and their contemplation of so ambitious a project with families (Manley v. Fiske, 139 App. Div. 665, so inadequate a fund was itself such an act of 124 N. Y. Supp. 149, affirmed 201 N. Y. 546, folly as should incline the court to resolve 95 N. E. 1133); a trust for a home for all doubts as to the construction of the will industrious girls and women (Daly's Estate, against its validity. Whether the purpose of 208 Pa. 58, 57 Atl. 180); a trust for a rest the testatrix was wise or unwise is no conhome for worthy working girls (Sherman v. cern of the court. The concern of the court Cong. Missionary Society, 176 Mass. 349, 57 is to determine whether the trust attempted N. E. 702); a trust for a home for old and to be created is valid or invalid, and if it is infirm ladies (Eliot's Appeal, 74 Conn. 586, susceptible of two interpretations, one of 51 Atl. 558); a trust for a temporary home which renders it invalid and one of which for poor and invalid women (Amory v. Atty. renders it valid, the court must, under wellGen., 179 Mass. 89, 60 N. E. 391); a trust for settled rules, give to it that interpretation a home for bettering conditions of and com- which will uphold its validity. The trust forting unfortunate widows and orphans of created by the testatrix is a valid charitable a certain city (Gidley v. Lovenberg, 35 Tex. trust. If circumstances render it impractiCiv. App. 203, 79 S. W. 831); a trust for cable to carry out the trust in the precise man"an old folks home" (Norris v. Loomis, 215 ner contemplated by the testatrix, the courts Mass. 344, 102 N. E. 419; Matter of Cleven's will so apply it as to accomplish the general Estate, 161 Iowa, 289, 142 N. W. 986; Matter charitable purpose which it was the design of Arrowsmith, 162 App. Div. 623, 147 N. Y. of the testatrix to carry out. The general Supp. 1016); and a trust for the creation of charitable design of the testatrix was that a sailors' home (Trustees of Sailors' Snug "refined, educated, Protestant gentlewomen" Harbor v. Carmody, supra). should be the object of her bounty. The money that she directed to be devoted to this purpose may be inadequate to carry out her purpose in the precise manner contemplated, but that fact of itself furnishes no reason why the class that she intended to aid should not receive the benefit of the aid which it was her intention to give. Jackson v. Phillips, 14 Allen (Mass.) 539, 586; Atty. Gen. v. Ironmongers' Company, 2 Beav. 313; Norris v. Loomis, supra.

[5] No general rule can be enunciated as to the manner in which the cy pres doctrine will be applied. Each case must necessarily depend upon its own peculiar circumstances. Inadequacy of the trust fund to accomplish the purpose of the testator in the manner originally intended may, however, justify the scheme of the charity being changed. If the Supreme Court cannot cause this trust to be

The trust attempted to be created by the testatrix seems to us, therefore, to be plainly within the benevolent spirit of the statute relating to charitable trusts and to be sanctioned by the adjudications of the courts which have upheld similar trusts. The charitable character of the trust is not impaired by the fact that the inmates of the home which the testatrix sought to create are required to pay board not exceeding seven dollars a week "toward paying the running expenses of the house." Schloendorff v. Society of N. Y. Hospital, 211 N. Y. 125, at page 127, 105 N. E. 92, 52 L. R. A. (N. S.) 505, Ann. Cas. 1915C, 581; Starr v. Selleck, supra; Little v. City of Newburyport, 210 Mass. 414, 96 N. E. 1032, Ann. Cas. 1912D, 425; Daly's Estate, supra, at page 64 of 208 Pa., 57 Atl. 180. It is urged by the respondent that the trust attempted to be created cannot be carried out accord-carried out in the precise manner contemplating to the intention of the testatrix, because the fund provided is not sufficient for this purpose. It may be that the income of a fund of about $63,000 which the testatrix has attempted to donate to the creation of this trust will not be adequate to carry out the trust in the exact manner in which the testatrix contemplated that it would be carried out, but this fact would not justify declaring the trust invalid and permitting this fund to go to others who it is clear the testatrix did not intend should receive it. The inadequacy of the trust fund cannot in any way affect the validity of the trust. Gilman v. Hamilton, 16 Ill. 225; Morgan v. Grand Prairie Seminary, 70 Ill. App. 575, affirmed, 171 Ill. 444, 49 N. E. 516. It is suggested by the respondent that the attempt of

ed by the testatrix, it will apply the trust fund to other charities as nearly as possible like that specifically mentioned in the will. Trustees of Sailors' Snug Harbor v. Carmody, supra, at page 300 of 211 N. Y., 105 N. E. 543.

It follows therefore that the final decree and order appealed from should be reversed, with costs and disbursements in this court, and the cause remitted to the Surrogate's Court for proceedings in accordance with this opinion.

WILLARD BARTLETT, C. J., and CHASE, COLLIN, CUDDEBACK, CARDOZO, and POUND, JJ., concur.

Ordered accordingly.

(217 N. Y. 443)

amount of capital stock employed in this state PEOPLE ex rel. LEHIGH & N. Y. R. CO. v. shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in business."

SOHMER, State Comptroller.

(Court of Appeals of New York. March 21,

1. TAXATION STATUTE.

1916.) 161

--

CORPORATION TAX

Tax Law (Consol. Laws, c. 60) § 182, imposing a tax upon every corporation doing business in the state for the privilege of doing business or exercising its corporate franchises, creates liability to the tax from the two facts of (1) doing business in the state (2) in a capacity other than individual.

[Ed. Note.-For other cases, see Taxation, Dec. Dig. 161.] 2. STATUTES

190-CONSTRUCTION.

Rules of construction for a statute are to be invoked only where its language leaves its purpose and intent uncertain or questionable. [Ed. Note. For other cases, see Statutes, Cent. Dig. §§ 266, 269; Dec. Dig. 190.] 3. TAXATION 144 CORPORATION TAX

"DOING BUSINESS"-STATUTE.

Under Tax Law, § 182, levying a tax on every corporation doing business in the state for the privilege of doing business or exercising its corporate franchises, a railroad company, formed to take over the properties of another road, which leased such properties to a third, and did not operate them itself, but merely kept its corporate existence alive, as required by the lease to the third road, to preserve its franchises, was not liable to the tax, as it was not "doing business" in the state.

[Ed. Note.-For other cases, see Taxation, Cent. Dig. 88 250, 251, 2582, 259; Dec. Dig.

144.

For other definitions, see Words and Phrases, First and Second Series, Doing Business.]

Seabury and Pound, JJ., dissenting. Appeal from Supreme Court, Appellate Division, Third Department.

Certiorari by the People, on the relation of the Lehigh & New York Railroad Company, against William Sohmer, as Comptroller of the State of New York. From an order of the Appellate Division of the Supreme Court (169 App. Div. 430, 154 N. Y. Supp. 1053), dismissing the writ and confirming the decision of the Comptroller in imposing corporate franchise taxes upon the relator, relator ap peals. Order reversed, and determination of the Comptroller annulled.

The statute further declares the basis for stating the amount of the tax in a given case. The tax here was for the year ending October 31, 1913, computed upon the basis of the amount of its capital stock employed the preceding year within this state. The appellant asserts that the tax was unauthorized because it was not "doing business in this state," within the meaning of the statute, during that year.

The appellant was organized August 24, 1895, under section 3 of the former Stock Corporation Law (Laws of 1890, c. 564, as amended by chapter 688 of the Laws of 1892). Pursuant to the purposes of its incorporation and statutory authorization, it succeeded, through purchase by a reorganization committee at a mortgage foreclosure sale, to the railroad property and franchises of the Southern Central Railroad Company. Under the reorganization plan $3,803,348 of its authorized capital stock was issued for the property and franchises. The railroad was in the state of New York. The Southern Central Railroad Company, a domestic corporation, was organized under the General Railroad Law (Laws of 1850, c. 140, and amendatory acts), and had, speaking generally and with sufficient accuracy, the powers, rights, and franchises which that law grants, and which by the force of the statute vested

in the appellant (Laws of 1890, c. 564, § 3). The appellant, by an indenture dated August 24, 1895, and as the reorganization plan contemplated, leased to the Lehigh Valley Railroad Company all its property, real and personal, and franchises, except the franchise to be a corporation, for the term of 999 years. The Lehigh Valley Railroad Company was a foreign corporation. It agreed to operate, through the term, at its cost, to the best of its ability, the railroad at advantageous rates to be fixed by it. It guaranteed the payment of the principal and interest of the bonds issued by the appellant. It agreed to pay, as rental, the part of the gross income from operation in excess of all the expenses of oper

Edward H. Letchworth, of Buffalo, for ap pellant. Egburt E. Woodbury, Atty. Gen. (Franklin Kennedy, Asst. Atty. Gen., of coun-ation, maintenance, and betterments, the taxsel), for respondent.

COLLIN, J. The proceeding is to review by writ of certiorari the imposition of a tax, under section 182 of the Tax Law (Cons. Laws, c. 60), upon the relator. Section 182, at the time of the imposition, provided:

es and the bonds, indebtedness, and necessary expenses of the appellant, including those of maintaining its corporate existence, and apply, as provided, the rental to the holders of the stock of the appellant. If the gross receipts in any year did not equal the authorized deductions, it might advance the deficien"For the privilege of doing business or exer- cy and deduct in future years the sums adcising its corporate franchises in this state every corporation, joint-stock company or association, vanced, or at its option collect them or surdoing business in this state, shall pay to the render the lease. It might sell the property state treasurer annually, in advance, an annual not necessary for the operation of the railtax to be computed upon the basis of the amount road, and indemnify the appellant against of its capital stock, employed during the preceding year within this state, and upon each dol- damages and costs arising from any act on lar of such amount. The measure of the its part. The appellant agreed to maintain

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

its corporate existence and, as requested by the lessee, exercise any corporate power enabling the lessee to enjoy the leased property. During the year ending October 31, 1912, it received no rental or income, declared no dividend, had no bank account, had no place of business in this state, made no invest[2] It is only when the language of a statments and did nothing in the state except toute leaves its purpose and intent uncertain keep alive its corporate existence the corpo- or questionable that rules of construction are rate officers being elected at the annual meet-invoked. People ex rel. New York Central & ing of the stockholders. The comptroller H. R. R. R. Co. v. Woodbury, 208 N. Y. 421, found and made the final determination now 102 N. E. 565, 566. The statute must be apunder review, that the appellant's capital plied as it speaks. stock employed for the year in question was in value $3,803,348 and taxable at the statutory rate.

tion made in behalf of the government that be"We cannot, however, agree with the contencause the Minehill Company retains its franchise of corporate existence, maintains its or"Section 182 of the Tax Law imposes an an-ganization, and holds itself ready to exercise nual franchise tax upon every corporation do-its franchise of eminent domain, or other reserving business in this state. ed powers, if and when required by the lessee, and ready to resume possession of the property at the expiration of the lease, it is therefore to be treated as doing business, in respect of the railroad within the meaning of the Corporation Tax Law. As to these matters the case is governed by what was said by the court in Flint v. Stone Tracy Co., 220 U. S. 107, 145 [31 Sup. Ct. 342, 347 (55 L. Ed. 389, Ann. Cas. 1912B, 1312)]: 'It is therefore apparent, giving all the words of the statute effect, that the tax