Estate of Wilson
59 N.Y.2d 461, 452 N.E.2d 1228, 465 N.Y.S.2d 900 (1983)
Wilson created a charitable
trust in his will to pay for the
education of boys that graduated from a Canastota High School.
The operative word is
'boys', so no money went to female graduates.
11 years later someone
complained to the US Department of Education that the trust violated the Title
IX section of the 20 U.S.C.
§ 1681, which prevented gender
discrimination in schools.
Although the trust was
private, it required the cooperation of the superintendent to provide
names of those worthy of scholarships, and so if became a Title IX issue.
Canastota stopped providing
the names of potential scholarship graduates to the trustee. The trustee
initiated a proceeding to determine the validity of the trust.
The Trial Court found that the
trust violated no Federal Statute or regulation prohibiting gender
discrimination. Somebody appealed.
The Appellate Court modified
the Trial Court's ruling, but basically affirmed. Somebody appealed.
The Appellate Court found
that the superintendent should be out of the loop, so they modified the
provision of the trust so that male students could apply to the trustee
directly.
Around the same time, a second
case with similar facts arose:
In Estate of Johnson, Johnson created a trust to be applied to
creating scholarships for male students. The trustees were to be the
Board of Education and the Principal of the high school. The school
balked at the provision and refused to participate.
The Trial Court in Johnson decided to replace the Board of Education and
Principal with a private trustee.
The Appellate Court in Johnson felt that this amounted to the State sanctioning
gender discrimination and overturned the Trial Court, deciding instead to
go with the original language of the trust, but replace the word 'men'
with 'students' to make it a gender-neutral scholarship administered by
the school.
The New York Supreme Court
consolidated the two cases.
The New York Supreme Court
affirmed Wilson and reversed Johnson.
Basically, in Wilson the New
York Supreme Court said that, as long as the school wasn't directly
involved, the trust and scholarship was a completely private endeavor and
wasn't covered by Title IX or the
14th Amendment.
"The 14th
Amendment does not require that the
State exercise the full extent of its power to eradicate private
discrimination. It is only when the State itself discriminates, compels
another to discriminate, or allows another to assume its function and
discriminate that such discrimination will implicate the
amendment."
The New York Supreme Court
said that a trust couldn't fail because of the lack of a trustee. In
Johnson, the problem was that the school refused to administer the trust
as written. The proper action was to replace the trustee (the school)
with someone willing to do the job (a private trustee), not to modify the
terms of the trust.
Modifying the terms of a
trust because it is impossible to meet them as written is known as cy
pres, and should only be done as a
last resort.
Cy pres is only available for charitable
trusts. You could never use cy
pres to fix a personal
trust.
In Johnson (as well as
Wilson), the courts could have met the intent of the settlor by appointing a different trustee. This was
a better solution than changing the terms of the trust to something the settlors didn't intend.
The Court had a good public
policy reason for wanting to find these trusts were valid. There were
many more trusts that benefited girls than benefited boys, and the
decision in this case could have invalidated all of those trusts.