575 A.2d 1325 (N.H. 1990)
Frank A. Wright, a resident of Keene, died on October 29, 1929, and within his will, probated November 4, 1929, was language establishing a charitable scholarship trust requiring that eighty percent of the annual income on the principal shall be used to provide a college education for some poor and worthy Keene boy who is a scholar in the Keene High School, said boy to be recommended by the Principal of the Keene High School and approved by the Board of Education of the Union School District or its successors.1 The Wright Scholarship has generally been awarded every four years, including in 1982, 1986, and 1988.2
Maurice A. Alger, also a resident of Keene, died on February 28, 1970, and within his will, probated March 6, 1970, was similar language establishing a charitable scholarship trust requiring that thirty percent of the annual income on the principal shall be used to provide tuition for one year for some worthy protestant boy who is a scholar at the Keene High School, to attend some college in good standing, said boy to be recommended by the principal of the Keene High School and approved by the Board of Education of the Union School District or its successors.3 The Alger Scholarship has been awarded in the amount of $3,400 annually for five out of the last six years.4
From the record and the agreed statement of facts, there is no indication that a female student has ever applied for a scholarship under either of the trusts.5 There is no independent information available to the high school principal to verify the religious affiliation of the applicants.6 It is unclear whether any non-Protestant students have applied for or have been awarded a scholarship under the Alger trust.7 The principal of the Keene High School assumes that the applicants have read the requirements of the scholarship and have applied according to its terms.8 Once the students have applied, the school board selects who shall receive the scholarships based upon the recommendation of the principal of Keene High School.9 The awards are announced during an assembly, and the funds are provided from the trust funds which are held by the City of Keene Trustees of Trust Funds.10 There currently are, and most likely will continue to be, students at the Keene High School who meet both the Wright and Alger Scholarship requirements.11
On October 8, 1987, the School Board of the Union School District of Keene filed a petition in equity seeking the removal of the discriminatory provisions.12 At trial, the Superior Court (Hollman, J.) reformed the language of the trusts, utilizing its cy pres powers to replace the terms boy and protestant boy with the term student.13 The Attorney General, Director of Charitable Trusts, appealed, presenting two questions to the New Hampshire Supreme Court.14
Whether the actions of the Union School District of Keene, in participating in the administration of religion and gender-based discriminatory trusts, may be viewed as State action within the ambit of part I, article 2 of the New Hampshire Constitution and the equal protection clause of the fourteenth amendment to the United States Constitution?15
The determination of what acts may properly be considered State action within the meaning of part I, article 2 of the New Hampshire Constitution must be established on a case-by-case basis by sifting facts and weighing circumstances.16 The participation by the principal, School Board, and the City of Keene Trustees of Trust Funds, as agents of the State, in the administration of these discriminatory trusts amounts to State action within the ambit of part I, article 2 of the New Hampshire Constitution and the Fourteenth Amendment.17
Yes. Wright died on October 29, 1929, establishing a charitable scholarship trust for poor and worthy Keene boys recommended by the principal and approved by the School Board.18 Maurice A. Alger died on February 28, 1970, establishing a similar trust limited to worthy protestant boys.19 The principal screens applicants assuming they meet the terms, the School Board selects recipients, and the City of Keene Trustees of Trust Funds administer the funds with awards announced publicly.20 These three levels of public official involvement in gender and religion discriminatory trusts constitute State action that cannot withstand even the lowest level of scrutiny under the New Hampshire Constitution.21
The School Board filed its petition on October 8, 1987, after which the Superior Court found the participation unconstitutional State action.22 Because the State's involvement in beneficiary selection and fund management is direct and ongoing, the constitutional prohibition on discrimination by the State on account of sex or creed is triggered.23
The actions of the Union School District of Keene constitute State action under part I, article 2 of the New Hampshire Constitution and the Fourteenth Amendment.24
Related opinions on this issue
Chief Justice Brock concurs that the school board's role as trustee in administering the discriminatory trusts constitutes State action sufficient to implicate equal protection guarantees.25 He agrees that neither the City of Keene nor the school board may continue to administer the trusts and that reformation is appropriate to preserve them.26 Brock emphasizes that when a State agency serves as trustee of a charitable trust bestowing bounty disparately upon similarly situated persons, administrative compliance with the testator's restrictions constitutes a level of State participation sufficient to implicate constitutional guarantees.27
Whether the court may employ its equitable powers of deviation to reform the trust by striking the language requiring the participation of public officials and appointing private persons to act in their absence, thereby terminating any State participation?28
Under RSA 498:4-a, the cy pres doctrine permits the superior court to direct application of trust property to a charitable purpose that fulfills as nearly as possible the general charitable intent of the testator when the purpose or application becomes illegal or prejudicial to the public interest.29 Deviation addresses only administrative provisions and may not be used to preserve an illegal discriminatory purpose by substituting private trustees.30
No. The trial court properly invoked cy pres to replace the terms boy and protestant boy with student.31 The court reasoned that it was appropriate to use its cy pres powers to preserve the primary intent of the testators, which was to aid deserving students at Keene High School in their pursuit of a college education.32 The court may not employ deviation to appoint private trustees.33 That would perpetuate the discrimination by preserving the testators' exclusionary criteria rather than reforming the illegal purpose.34 Following Commonwealth of Pennsylvania v. Brown, judicial substitution of private administration to continue the discrimination would itself constitute unconstitutional State action.35
There currently are, and most likely will continue to be, students at the Keene High School who meet both the Wright and Alger Scholarship requirements. Therefore, cy pres properly redirects the funds to the general charitable intent without nullifying the educational purpose.36
The court may not employ its equitable powers of deviation; cy pres is the appropriate remedy to reform the discriminatory beneficiary terms.37
Related opinions on this issue
Chief Justice Brock dissents from the conclusion that cy pres may be used to amend the dispositive provisions.38 He argues that the facts do not show a proper occasion for cy pres because the testators' purposes can be carried out to the fullest extent with sufficient candidates available.39 Brock maintains that the incapacity of the school board defeats only an administrative direction.40
Therefore, the doctrine of deviation should be applied to appoint a private successor trustee while preserving the lawful educational objectives and the testators' specific intentions regarding the class of beneficiaries.41