Thursday, April 3, 2008
MacDonald’s Client Haynes Wins in State High Court
By ROGER M. GRACE
Los Angeles attorney J. Wiseman MacDonald had a client who wanted to give away money.
The client was John Randolph Haynes, a wealthy medical doctor and a social reformer.
Appalled by the political stranglehold the railroads had over officeholders of both major parties, he was primarily responsible for the inclusion of a recall provision in the Los Angeles City Charter of 1903, and largely credited in connection with the establishment in 1911 of the power of the people of this state to recall its officials. A vocal advocate of public ownership of utilities, Haynes was appointed in 1921 to the Board of Water and Power Commissioners, and continued to serve on that board, on several occasions as chair, through the years.
Haynes wanted to establish a trust that would parcel out funds to promote his causes—but wanted to make certain the trust would be recognized as a charitable one. As recounted here last week, MacDonald set up a collusive lawsuit in which a friend of Haynes tried to knock the trust down. The trial court upheld the trust, and the supposed antagonist of it appealed. The California Supreme Court grumbled about the collusive nature of the litigation, but decided the appeal on its merits, anyway, handing down an opinion on March 26, 1928.
An issue was the effect on the trust, if any, of Art. XX, §9 of the state Constitution, reading: “No perpetuities shall be allowed except for eleemosynary purposes.” (The provision was repealed Nov. 3, 1970.)
Did the purposes set forth in the trust instrument qualify as “eleemosynary”?
The purposes included these:
•“To promote and assist in promoting and obtaining, maintaining and making improvements in the structure and methods of government, national, state and/or local, by obtaining, protecting, preserving, and/or furthering, by any or all legitimate ways.” Improvements included “public ownership and operation of public utilities” and “[d]irect legislation, now known as the Initiative, Referendum, and Recall.”
•“To promote justice for the American Indian in the United States by assisting in procuring legislation and/or by stimulating the proper enforcement of legislation to that end, and/or by assisting individual, or bodies of, Indians in obtaining that justice.” (This was a pet project of John Collier, the man who was purportedly contesting the trust.)
Richards’ opinion affirms the trial court. It says:
“The trend of modern authority has been toward the upholding of trusts which have for their object the creation of a more enlightened public opinion, with a consequent change in laws having to do with human relations and rights in a republic such as ours; and hence it is that bequests of money to trustees for the attainment of woman’s suffrage and other rights in the United States have been upheld.”
MacDonald got his client what he wanted.
Following Haynes’ death in 1937, MacDonald acted as attorney for the executors of the estate.
Another case in which MacDonald represented Haynes before the California Supreme Court was decided July 1, 1935. Opposing counsel was Graham L. Sterling Jr. of O’Melveny, Tuller & Myers. (Sterling was to become president of the State Bar of California in 1958-59. The firm has been known as O’Melveny & Myers since 1939.) Haynes prevailed.
The doctor had tendered his resignation from the Annandale Golf Club on Sept. 18, 1931. A bylaw read: “No resignation of a member shall be effective until accepted by the Board of Directors.” The Board of Directors simply declined to accept the resignation, and Haynes sought declaratory relief.
Los Angeles Superior Court Judge Thomas C. Gould ruled that the board was not obliged to accept a resignation and that Haynes thus remained a member of the club, like it or not. The Court of Appeal affirmed in 1934 in an opinion that holds:
“There is no showing that the board of directors acted without sufficient cause, or arbitrarily, in its failure to accept appellant’s resignation. So far as is disclosed by the record, it may have had ample cause to withhold such acceptance. Such being the case, we cannot say that the by-laws relating to resignations are unreasonable or that the board of directors acted arbitrarily in failing to accept appellant’s resignation.”
Taking over the case, the high court notes, in an opinion by Justice John Preston, that “[d]oubtless this is the only case in history where a golf club has failed to heed the plaintiff cry of one of its flock” who wanted to stray.
The opinion reverses Gould’s judgment, declaring:
“So much of said by-law as allows defendant to deny the right of resignation on the ground that it has merely withheld its consent or has declined to make the necessary book entries is invalid because unreasonable and arbitrary.”
The golf club, in Pasadena, is still in existence.
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