Mills v. Ball

Alfred DuPont’s will established a testamentary, charitable trust in 1939, which also provided lifetime income to Alfred’s widow, Jessie DuPont. The trust directed the trustees to establish the nonprofit Nemours Foundation to construct and operate charitable hospitals. The trust corpus included a variety of corporations, railroads, and banks. Between 1939 and 1965, the book value of the trust increased from approximately $54.6 million to $103.2 million, and its corporate portfolio greatly expanded and diversified. Because the trust required active management, Alfred’s will appointed four initial trustees, including Jessie and Edward Ball (defendant). The trust expressly gave the trustees the power to appoint replacement trustees. By 1965, one trustee had died, and Ball and Jessie were elderly, infirm, and unable to fully perform their management duties as trustees. To ensure the trust continued to be properly managed, the trustees appointed two additional trustees in 1965, including William Mills (defendant) as a replacement for the deceased trustee, and one additional trustee in 1967. Jessie subsequently died. In 1971, before expending $60 million in trust assets to construct a new Nemours Foundation hospital, the trustees sought a declaratory judgment regarding their legal status as trustees. In response, Mills argued that the appointments of the other additional trustees in 1965 and 1967 were invalid because the trust only gave trustees the power to fill vacancies. Ball countered, arguing that the trust instrument gave trustees the power to do whatever was necessary to conserve, improve, and protect the trust assets. The trial court held that (1) the trust instrument gave trustees broad power to appoint additional trustees and (2) even if it had not, the court could ratify the appointment of additional trustees because changed circumstances since 1939 required additional trustees to effectuate the settlor’s intent. Mills appealed.