Request By:
Mr. Paul Polly, Superintendent
Anderson County Schools
Lawrenceburg, Kentucky 40342
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Robert L. Chenoweth, Assistant Attorney General
As you are well aware, the former attorney for the Anderson County Schools, now District Judge Ollie J. Bowen, requested the Office of the Attorney General to consider the relative property rights the school system may or may not have in several parcels of real property located in the City of Lawrenceburg. For the reasons set forth below, this office is unable to satisfactorily draw a conclusion regarding this matter. It is our advice that the Anderson County Board of Education authorize the initiation of a declaration of rights suit to resolve the legal questions involved concerning this real property.
We will not purport to exhaust or survey all possible legal issues which in our opinion need to be presented to the court in a declaration of rights action. Our purpose is to merely highlight some of the problems which the resolution to will depend upon a proper development and construction of the relevant facts and an assessment of the law to those facts thereafter.
The history of the conveyances of the real property in question is the critical point from which our consideration must begin. There is a total of five deeds. Capsulized these deeds are in chronological order as follows: 1. Date:November 8, 1930Grantor:William Vanarsdell,an unmarried manGrantees:George L. HudsonI. B. ParrentTrustees for thePaul SmithBenefit of the ColoredEd PleasantPeople of the Lawrence-J. W. Russellburg School District
Note: The specific purpose of this conveyance was to "secure better and larger facilities in the way of Grounds and Buildings for Schools for Colored pupils entitled to attend Public School in the City of Lawrenceburg and the District inclued therein." The deed further provides that it was the "right and duty" of the trustees to promote the erection of suitable buildings and improvements for the above stated purpose and that "when the object is attained or assured said Trustees are empowered and required to convey said land and rights herein set out to the school Board of the City of Lawrenceburg, Kentucky." 2. Date:May 28, 1938Grantors:George L. HudsonT. B. ParrentTrustees for the BenefitPaul Smithof the Colored PeopleEd Pleasantof the LawrenceburgJ. W. RussellSchool DistrictGrantee:City School District.
Reverter: If the property ceased to be used for school purposes then it was to revert to grantors or to their successors (trustees)
Note: The property described in deeds 1 and 2 is the same. 3. Date:July 15, 1938Grantors:George L. HudsonEd PleasantTrustees of the Lawrence-Paul Smithburg Colored School ofJ. W. RussellLawrenceburg, KentuckyI. B. ParrentGrantee:City School District
Reverter: "[I]n the event this property is not used for school purposes it shall revert to the parties of the first part (the trustees) . . ."
Note: The property conveyed was Lots 8, 9 and a strip of 10, Block "C" of Courtland Subdivision, which had been conveyed from Charles O. and Susan B. Humston, husband and wife, to the Lawrenceburg Colored School. 4. Date:August 1, 1939Grantors:Charles O. and Susan B. Humston,husband and wifeGrantees:George L. HudsonEd PleasantTrustees of thePaul SmithLawrenceburg ColoredJ. W. RussellSchool FundI. B. Parrent
Note: The property conveyed was Lot 7, Block "C" of Courtland Subdivision. 5. Date:September 11, 1940Grantors:Charles O. and Susan B. Humston,husband and wifeGrantees: *I. B. ParrentPaul SmithTrustees of theEd PleasantLawrenceburg ColoredJ. W. RussellSchool Fund
Note: The property conveyed was remaining part of Lot 10, Block "C" of Courtland Subdivision. See deed 3, supra.
Looking first at deed 1, this conveyance was for $800 in consideration. Nevertheless, it would seem clear that a trust was created regarding the real property. 76 Trusts § 196, p. 429. "A 'trust' is a confidence reposed in one person (or more) called the 'trustee' for the benefit of another called the 'cestui que trust,' with respect to property held by the former for the benefit of the latter. It implies two estates or interests, one equitable and the other legal."
Moore v. Shiffet, 187 Ky. 7, 216 S.W. 614, 616 (1920). The colored people of the Lawrenceburg School District had the equitable right to benefit from this property although the legal title resided in the trustees.
There does exist some uncertainty as to the nature of the trusteeship of the five men named in deed 1. This uncertainty is compounded when it is noticed that in deed 3 these gentlemen are referred to as the "Trustees of the Lawrenceburg Colored School" rather than "Trustees for the Benefit of the Colored People of the Lawrenceburg School District" as it appears in deeds 1 and 2. Furthermore, in deeds 4 and 5 these men are referred to as "Trustees of the Lawrenceburg School Fund." Conjecture would make one believe that these men were the active Lawrenceburg colored school trustees. It should be remembered that at the time of these real property conveyances, segregation of the white and colored was referred to in the Kentucky Constitution and mandated by statute. The 1934 School Code read in this regard:
"8. White and colored not to be taught in same school; penalty. - It should be unlawful for any person, corporation, or association of persons to maintain or operate any college, school, or institution where persons of white and negro races are both received as pupils for instruction; and any person or corporation who shall operate or maintain any such college, school, or institution shall be fined one thousand dollars ($1,000) and any person or corporation who may be convicted of violating the provisions of this act shall be fined one hundred dollars ($100) for each day they may operate such school, college, or institution after such conviction. Any instructor who shall teach in any school, college, or institution where members of said two races are received as pupils for instruction shall be guilty of operating and maintaining same and fined as herein provided.
It shall be unlawful for any white person to attend any school or institution where negroes are received as pupils or receive instruction, and it shall be unlawful for any negro or colored person to attend any school or institution where white persons are received as pupils or receive instruction. Any person so offending shall be fined fifty dollars ($50) for each day he attends such an institution or school; provided, the provisions of this law shall not apply to any penal institution or house of reform." (1934 Acts of the General Assembly, Chapter 65, Article I, paragraph 8.)
Such a provision can be traced back to at least the School Act of 1908; see
Prowse v. Board of Education, 134 Ky. 365, 120 S.W. 307 (1909) and
Grady v. Board of Education of LaRue County, 149 Ky. 49, 147 S.W. 928 (1912), and unquestionably is recognized in Section 187 of Kentucky's Constitution, which states:
"Each race to share fund equally; separate schools. - In distributing the school fund no distinction shall be made on account of race or color, and separate schools for white and colored children shall be maintained."
The "school fund" referred to in this section is the public common school fund. This constitutional section was for a long time consistent with the later coined doctrine of "separate but equal" which made its appearance in 1896 in the United States Supreme Court in the case of
Plessy v. Ferguson, 163 U.S. 537. The origin of the demise of this doctrine was the United States Supreme Court's decision in
Brown v. Board of Education, 347 U.S. 483 (1954).
Several points are raised from the above digression which merit consideration. One is whether any of the $800 consideration was public common school money. At the bottom of deed 1 is the notation dated November 10, 1931: "Received of The Community Improvement Club in full $424.00 of all demands to date. Signed by - Will Vanarsdell." Irrespective of the answer to that question, it seems clear that Vanarsdell never intended for the ownership of the property described in deed 1 to become that of the trustees, individually or collectively. The trustees took the property not in any individual capacity but as trustees for others, the colored people and pupils of Lawrenceburg.
Of further importance in reviewing deed 1 is that it required the trustees to convey "said land and rights herein set out to the School Board of the City of Lawrenceburg Kentucky," upon the providing for a suitable school building for the colored pupils of the city. (Emphasis supplied.) There exists no language in this deed which would create a possibility of reversion in the grantor (Vanarsdell) or his heirs. Moreover, in that the conveyance was for a valuable consideration, there should be no reversionary right. See
Murphy v. Metz, Ky., 85 S.W. 1097 (1905), where the Kentucky Court of Appeals held that a deed which recited that the grantor, in consideration of $35 had conveyed to certain persons, as trustees of a school, land for school use and no other use would not be permitted to revert in the absence of an express reservation when the property ceased being used as intended.
While deed 1 does not authorize the trustees to create a reversionary interest and in fact directs the trustees to convey the land and rights to the city board of education upon the providing of a suitable school building, the trustees, in deed 2, appear to have created a determinable or qualified fee.
Deed 2 reads in pertinent part:
"It is understood by and between the parties hereto that in the event the property herein conveyed shall ever cease to be used for school purposes then in that event it is to revert to the grantors herein or to their successors. "
It is our understanding that this land ceased being used for school purposes some time in 1966. In this regard note that KRS 158.020, which provides as follows, was repealed by the 1966 General Assembly:
"(1) Each board of education shall maintain separate schools for the white and colored children residing in its district.
(2) No person shall operate or maintain any college, school or institution where persons of both the white and colored races are received as pupils.
(3) No instructor shall teach in any college, school or institution where persons of both the white and colored races are received as pupils.
(4) No white person shall attend any college, school or institution where colored persons are received as pupils or receive instruction.
(5) No colored person shall attend any college, school or institution where white persons are received as pupils or receive instruction.
(6) The provisions of this section do not apply to any penal institution or house of reform."
Also to be noted is that the Lawrenceburg Independent School District on November 28, 1948, merged with the Anderson County School District in accordance with KRS 160.040 and 160.041. The habendum clause (next to last paragraph) of deed 2 defined the extent of ownership to be held and enjoyed by the Lawrenceburg School District to include that corporate body's successors. The successor would be the now Anderson County School District.
The question then becomes whether the property described in deed 2 reverted back to the trustees upon the property ceasing to be used for school purposes in 1966. Prior to 1960, the law was that the board's title would have terminated when the school was discontinued. See
Barren County Board of Education v. Jordan, Ky., 249 S.W.2d 814 (1952). In 1960, the Kentucky General Assembly passed what is known as the "Kentucky Perpetuities Act of 1960." Of importance herein is the part of this act codified in KRS 381.218 - 381.222.
In OAG 70-797, copy attached, this office discussed KRS 381.218 and 381.219 as follows:
"In 1960 KRS 381.218 was enacted which abolished a fee simple determinable and a possibility of a reverter and provided that words which at common law would create a fee simple determinable shall be construed to create a fee simple subject to a right of entry for condition broken. This statute further provides that in any case where a person had a possibility of a reverter at common law, he shall have a right of entry. KRS 381.219 [also enacted in 1960] provides that a fee simple subject to the right of entry for a condition broken shall become a fee simple absolute if the specified contingency does not occur within thirty years from the effective date of enforcement creating such fee simple subject to right of entry. "
Then in OAG 74-192, copy attached, this office discussed KRS 381.221(1). This section of law reads as follows:
"(1) Every possibility of reverter and right of entry created prior to July 1, 1960, shall cease to be valid or enforceable at the expiration of thirty years after the effective date of the instrument creating it, unless before July 1, 1965, a declaration of intention to preserve it is filed for record with the county clerk of the county in which the real property is located."
See also OAG 77-542, copy attached.
In the present situation the possibility of reverter was created prior to July 1, 1960, in that it was created in 1938. See deed 2.
While there was no declaration of intention to preserve the possibility of reverter and right of entry filed with the county clerk between July 1, 1960 and July 1, 1965, we believe for one or the other or both of two reasons, the Anderson County School District's interest in this property was terminated when the property ceased being used for school purposes in 1966. KRS 381.221(1) states the possibility of reverter will not be valid or enforceable after thirty years of its effective date unless the declaration of intention to preserve is filed. In this situation, the cessation of the school use occurred within the thirty-year life given to it by the passage of KRS 381.221. That is, the thirty years would not expire until 1968. The cessation of school use occurred in 1966. There was no need for a declaration of intention as it turned out because the possibility of reverter automatically terminated in 1966.
Even if the facts develop that the cessation of use did not occur until after 1968, it would seem the possibility of reverter still would have been viable. KRS 381.222 creates some exceptions to KRS 381.219 and 381.221. KRS 381.222 reads as follows:
"KRS 381.219 and 381.221 shall not apply to any possibility of reverter or right of entry contained in a deed, gift or grant from the Commonwealth or any political subdivision thereof; nor shall they apply where both the fee simple determine and the succeeding interest, or both the fee simple subject to a right of entry and the right of entry, are for public, charitable or religious purposes; nor shall they affect any lease present or future or any easement, right of way, mortgage or trust, or any communication, transmission, or transportation lines, or any public highway, right to take minerals, or charge for support during the life of a person or persons, or any restrictive covenant without right of entry or reverter. " (Emphasis supplied.)
We view the present situation to be within the ambit of the emphasized statutory language noted above.
Therefore, there appears to be a reasonable possibility that the interest to the property described in deed 2 of the Anderson County School District as the lawful successor in interest to that held by the Lawrenceburg Independent School District terminated in 1966, and that the trustees were again vested with full legal title to this property. We caution again that the above review rests with whether the trustees in deed 2 had a right to create a determinable fee in the first place.
It is our understanding that there is only one surviving trustee, Mr. J. W. Russell. In the case of co-trustees, the trust survives to the last surviving co-trustee who may carry out the obligations under the trust. See generally, 76 Am.Jur.2d Trusts § 100. Assuming the property did revert, Mr. Russell, as the surviving trustee, is responsible for using the property or for selling the property and using the funds for a purpose legally consistent with the original trust. See
Baker v. McIntosh, 294 Ky. 527, 172 S.W.2d 29, 32 (1943). However, in this situation the trusteeship was for the benefit of the colored pupils in Lawrenceburg only. Such exclusive use would now without question be constitutionally prohibited. Although we do not see the cy pres (as nearly as may be) doctrine as being applicable here in that Vanarsdell did not establish a charitable trust through the donation of the land to the trustees, we believe the court could apply the equitable principles of the doctrine to meet the needs presented under the circumstances. For generic reference see 4A Kentucky Digest, Charities 37.
Turning now to deed 3, we believe the same result under KRS 381.221(1) is called for concerning this property. The thirty-year life of the reverter was not up until 1968 and the property ceased being used for school purposes in 1966. It would seem then that the school district's interest terminated in 1966.
Deeds 4 and 5 reflect only that the trustees were conveyed property for consideration from the Humstons. We are in receipt of no deeds showing these trustees or the survivor of them have ever conveyed this property to another. It is our understanding that the school building in question may be on part of Lots 7 and 10, which is the property described in deeds 4 and 5.
Summary
Based upon the above, it would appear possible that the legal title to all of the real property in question now rests with the surviving trustee, J. W. Russell, in that capacity and not individually. We cannot overemphasize our belief that resolution by court action of the ownership of this property should be initiated without undue delay.
Footnotes
Footnotes
* George L. Hudson is not named as a trustee as he is in the other deeds.