Aberg v. First Nat. Bank in Dallas

• Decision Date: 23 January 1970
• Docket Number: No. 17377,17377
• Citation: 450 S.W.2d 403
• Parties: Elizabeth Goodman ABERG et al., Appellants, v. FIRST NATIONAL BANK IN DALLAS et al., Appellees.
• Court: Texas Court of Appeals

Page 403

450 S.W.2d 403

Elizabeth Goodman ABERG et al., Appellants, v. FIRST NATIONAL BANK IN DALLAS et al., Appellees.

No. 17377.

Court of Civil Appeals of Texas Dallas.

Jan. 23, 1970.

Rehearing Denied Feb. 13, 1970.

James A. Kilgore, Kilgore & Kilgore, Dallas, for appellants.

David M. Kendall, Jr., Dallas, for appellees.

CLAUDE WILLIAMS, Justice.

This is a case of first impression in Texas involving the question of acceleration of contingent remainders caused by renunciation of a prior estate.

The suit was filed by First National Bank in Dallas, as trustee, seeking a declaratory judgment pursuant to Art. 2524--1, Vernon's Ann .Civ.St. of Texas, commonly referred to as the Uniform Declaratory Judgments Act, and also seeking instructions from the court pursuant to the provisions of Art. 7425b--24, V.A.C.S., commonly known as the Texas Trust Act.

The facts are undisputed. T. W. Vardell and wife, Lela Barry Vardell, executed two trust indentures, one dated February 28, 1931 and the other December 31, 1931, in each of which the First National Bank in Dallas was named as trustee. Each trust named the settlors' daughter, Lela Vardell Johnson, as primary beneficiary to receive the net income of each trust during her lifetime. Another daughter, Elizabeth Vardell Goodman, was named as secondary beneficiary in each of the trust instruments. Although there is some variance in the language of the two trust documents, the essential provisions relating to the primary and secondary beneficiaries may be exemplified by quoting from the instrument dated December 31, 1931, as follows:

'(a) The Trustee shall pay the net income to Lela Vardell Johnson for life. After her death such net income shall be paid to T. W. Vardell as trustee for the then living children of the said Lela Vardell Johnson, but he shall have the option of leaving all or a portion of such income with the Trustee to become a part of the corpus; the Trustee shall be discharged from liability with respect to the income paid to T. W. Vardell upon making payment to him. After the death of T. W. Vardell if Lela Vardell Johnson should predecease him, or after the death of Lela Vardell Johnson if she should survive him, the Trustee shall pay the net income to the lineal descendants of Lela Vardell Johnson per stirpes, the payment of any minor's part to be made to the guardian of the minor's estate . If the said Lela Vardell Johnson should die before the expiration of twenty-one years from the date of the birth of the last child born to her, and there should be no lineal descendant of the said Lela Vardell Johnson living to receive such income, it shall be paid to Elizabeth Vardell Goodman, daughter of T. W. Vardell and of Lela Barry Vardell, or to her lineal descendants per stirpes if she be dead.

At the expiration of twenty-one years from the date of the birth of the last child born to Lela Vardell Johnson, or at the death of Lela Vardell Johnson if that be later, the corpus shall be distributed to the then living lineal descendants of the said Lela Vardell Johnson per stirpes. If, however, there should be no lineal descendant of the said Lela Vardell Johnson then living, the corpus shall thereafter be held in trust by the Trustee for the said Elizabeth Vardell Goodman, if she then be living, and the net income paid to her for life, and after her death the net income shall be paid to her lineal descendants per stirpes until the time hereinafter provided for the distribution of the corpus, the payment of any minor's part to be made to the guardian of the minor's estate. If, however, in the contingency of there being no lineal descendant of Lela Vardell Johnson living at the expiration of twenty-one years from the date of the birth of her last child, or at the death of Lela Vardell Johnson if that be later, the said Elizabeth Vardell Goodman then be dead, the corpus shall be held in trust for the lineal descendants of Elizabeth Vardell Goodman and the income paid to them per stirpes until the time hereinafter provided for the distribution of the corpus. If the said Lela Vardell Johnson shall leave no lineal descendants who shall take the corpus of the trust estate as hereinabove provided, then at the expiration of twenty-one years from the date of the birth of the last child born to Elizabeth Vardell Goodman, or at her death if that be later, the corpus shall be distributed to the then living lineal descendants of the said Elizabeth Vardell Goodman per stirpes.

(b) If no lineal descendants of the said Lela Vardell Johnson or Elizabeth Vardell Goodman live to receive the corpus, then such corpus shall be paid to T. W. Vardell and Lela Barry Vardell, or to the one of them then living if one be dead, and if both be dead, one-half shall be paid to those entitled to receive the same under the provisions of the last will and testament of T. W. Vardell, or to his legal heirs if he shall die intestate, and the other one-half shall be paid to those entitled to receive the same under the provisions of the last will and testament of Lela Barry Vardell, or to her legal heirs if she shall die intestate.

(c) Wherever the word 'children' is used herein, such term shall include children hereafter born as well as those now in being.'

Another provision of the instrument provided:

'No assignment or order by any beneficiary by way of anticipation of any part of the income or corpus of this trust shall be valid, but said income and/or corpus shall be paid by the Trustee direct to such beneficiary; nor shall the interest of any beneficiary in the income and/or corpus hereof be subject to the claims of such beneficiary's creditors, or subject to attachment, garnishment or execution or other legal or equitable process or lien brought by or in favor of any of said creditors.'

Lela Vardell Johnson subsequently married Kenneth Ellis. She died July 30, 1968 leaving no children, either natural or adopted. Elizabeth Vardell Goodman, the secondary beneficiary, survived her sister, Lela, but she promptly notified the trustee that she was not sure that she cared to accept under the terms of the trust instrument. She later executed a document on October 23, 1968, reading as follows:

'KNOW ALL MEN BY THESE PRESENTS:

That I hereby irrevocably renounce and decline to accept any and all interest in or to the corpus and the income therefrom of the two Trusts created by my father, the late T. W. Vardell, by instruments dated February 28, 1931 and December 31, 1931, respectively, primarily for the benefit of my sister, Lela Vardell Ellis, then Lela Vardell Johnson, who died July 30, 1968, of which Trusts, First National Bank in Dallas is now and at all times since their creation, has been Trustee. The effect hereof shall for all purposes be the same as though I had predeceased my sister, Lela.'

This document was delivered to the trustee on October 24, 1968. Prior to that date Mrs. Goodman received no benefit of either income or corpus from either of the trusts, and no one demanded of her that her decision concerning renunciation be made at an earlier date. She was solvent and owed no substantial debts.

Elizabeth Varell Goodman is a widow, approximately sixty-eight years of age. She has had three and only three children, namely, Elizabeth Goodman Aberg, Robert Vardell Goodman and Anne Goodman Wunderlick. All of these children are over the age of twenty-one years. Robert Vardell Goodman is unmarried and without issue. Elizabeth Goodman Aberg and her husband, Charles P. Aberg, Jr., have five children, four of whom are minors. Anne Goodman Wunderlick and her husband, Joseph Thomas Wunderlick, have nine children, all of whom are minors, the oldest of whom is sixteen years of age and the youngest is two years of age. David M. Kendall, Jr., attorney at law, was appointed by the court to be guardian ad litem for the minor children named.

Based upon these facts the trustee asked the court to declare: (a) whether the document executed by Elizabeth Vardell Goodman on October 23, 1968, constituted a valid renunciation; (b) whether the renunciation operated to accelerate the remainders which followed the life estate of Elizabeth Vardell Goodman so that remainders would vest at the time of the renunciation; and (c) whether the corpus and income of the two trusts should be delivered to Elizabeth Goodman Aberg, Robert Vardell Goodman and Anne Goodman Wunderlick (less appropriate fees and expenses).

The matter was submitted to the court, without a jury, upon an agreed statement of facts. The judgment of the court declared: (a) that Mrs. Goodman's renunciation was a valid renunciation; (b) that the renunciation did not operate to accelerate the vesting of the remainder interest but that the remainder interest would not vest until Mrs. Goodman died; (c) that under the trust documents the corpus of the trust should be held until Mrs. Goodman died when such corpus would vest in the descendants of Elizabeth Vardell Goodman per stirpes. In the meantime the income would be distributed to the lineal descendants of Elizabeth Vardell Goodman, per stirpes.

Elizabeth Goodman Aberg, Robert Vardell Goodman and Anne Goodman Wunderlick appeal. They contend, in one point of error, that since the trial court found that Elizabeth Vardell Goodman had made a valid renunciation of her interest in the two trusts involved, the court erred in failing to declare that under the proper construction of the trust instruments such renunciation had the same effect as the death of Elizabeth Vardell Goodman, and operated to accelerate the vesting of the corpus of the trusts in the appellants.

Charles Preston Aberg, the Third, and David M. Kendall, Jr., as guardian ad litem for the minors and unborn descendants of Elizabeth Vardell Goodman, in an able brief, present four counterpoints in which they support the trial court's judgment in denying the doctrine of acceleration because (1) the remainder interests are contingent; (2) the...