In re Milton Hershey School and Hershey Trust Company

In 1909, Milton and Catherine Hershey created the Milton Hershey School, a charitable institution funded by the Milton Hershey School Trust. The deed of trust, as amended in 1976, stated that the Hershey Trust Company, as trustee, and the board of managers (consisting of the trust company and members of the board of directors) were to administer the trust, run the school, and manage trust assets. The deed further provided that upon leaving school, the students ceased to be trust beneficiaries. In 1930, Milton ordered the formation of the Milton Hershey School Alumni Association (association) (plaintiff), composed primarily of school graduates. The association was not part of the school or trust company, not named in the deed of trust, and not an intended beneficiary. Around 1990, the association believed that the trust’s resources were not being used to help orphaned children as intended, and the association contacted the attorney general, whose investigation concluded that the trust company was not acting consistently with the trust’s intent. Thus, an agreement was made in 2002 governing certain aspects of school and trust administration. In 2003, the agreement was modified, and the association brought an action in the orphans’ court to rescind the modification and reinstate the 2002 agreement. The school and trust company argued that the association lacked standing, and the orphans’ court agreed. The Pennsylvania Commonwealth Court reversed, holding that the association had a special interest that supported standing to enforce the trust. The school and trust company appealed.