Bell v. Shannon

• Decision Date: 10 May 1963
• Citation: 367 S.W.2d 761,16 McCanless 28,212 Tenn. 28
• Parties: , 212 Tenn. 28 J. B. BELL et al. v. Dawson F. SHANNON et al.
• Court: Tennessee Supreme Court

Page 761

367 S.W.2d 761

16 McCanless 28, 212 Tenn. 28

J. B. BELL et al. v. Dawson F. SHANNON et al.

Supreme Court of Tennessee.

May 10, 1963.

John D. Sprouse, Allen M. O'Brien, Springfield, Stephenson, Lackey & Holman, Nashville, for appellants.

Cecil Sims, Nashville, Thomas Pepper, Springfield, for appellees.

WHITE, Justice.

In this suit the complainants seek a construction of the wills of John and Augusta McMurry. Their heirs at law are made defendants, together with the District Attorney General who was included as a necessary party because the action involved a charitable trust, and Robertson County, Tennessee whose interest will be made to appear in this opinion.

Thirteen of said heirs at law appeal from the action of the Chancellor in overruling their demurrer and assign errors.

The pleadings show that John McMurry was born and reared in Robertson County, Tennessee. During the later years of his life he lived in Houston, Harris County, Texas. On February 10, 1923, he executed his will which was probated in Harris County, Texas, on December 5, 1931.

Item 4 of this will provided that his residuary estate should be converted into cash and invested in United States Government Bonds and that the income therefrom should be paid to his wife during her lifetime.

By Item 5 of said will it was provided:

'After the death of my said wife, all the remainder of my estate, both real and personal, including the said Bonds and the income therefrom and the said residence in Springfield, Tenn., and also including any and all property, both real and personal, that I may hereafter acquire in any manner whatever, I do hereby give, devise and bequeath, in trust, to J. W. Brown, J. S. Brown, Chas. E. Bell, Chas. E. Bell, Jr., and Robert E. Shannon, all of Springfield, Tennessee, and their successors in office, for the purpose of erecting, operating and maintaining a Charity Hospital in the City of Springfield, Tennessee, to be known as and call the 'John-Augusta-Jesse McMurry Charity Hospital'; and for the purpose of carrying out this trust I do hereby give and grant unto the said Trustees named and their successors in office, full power to take possession of, sell, trade, mortgage and otherwise dispose of my said property or any part thereof. Having great confidence in the integrity, good faith and ability of the said Trustees named and their successors in office as chosen by them or the survivors of them, I do hereby give them no directions whatever as to the erection and maintenance of the said Hospital, leaving it all to their good judgment and such rules and regulations as they and their successors in office may from time to time establish, except that I do direct them to erect and complete and put into operation the said Hospital as soon after my decease and the decease of my said wife as is possible and practicable.'

The testator and his wife held all of their property in the State of Texas. His wife exercising her rights under the Community Property Statutes of Texas took a one-half interest absolutely in the entire estate. The residue of the estate was turned over to the Trustees named in said will.

At the time John McMurry made his will and also at the date of his death in 1931, there was no hospital in existence in Springfield, or Robertson County, Tennessee. However, sometime after his death and in the year 1935 there was established in Springfield, pursuant to Chapter 477, Private Acts of the General Assembly, of Tennessee, for the year 1935, a hospital which was maintained and operated as such until the year 1955.

A new and modern hospital was built by Robertson County with Federal and State aid under the Hill-Burton Act, pursuant to Chapter 271 of the Private Acts of the General Assembly, Tennessee, for the year 1955. This Act expressly repealed the 1935 Act, and all the amendments thereto, insofar as the same applied to the hospital created under the 1955 Act.

The latter Act provides:

'That a non-profit Hospital to be known as the 'Jesse [Holman] Jones Memorial Hospital,' is hereby created and established for and in behalf of Robertson County, Tennessee, and for a board to govern and control the hospital and admissions of paying and indigent patients and for the County to support the hospital by levying taxes.'

Mrs. John (Augusta) McMurry survived her husband for more than twenty-seven years after his death. She died testate in Springfield, Robertson County, Tennessee, on June 25, 1958. Her will was executed June 21, 1945, at which time there was in operation the Robertson County Hospital erected in 1935 as aforesaid. Upon the date of Mrs. McMurry's death on June 25, 1958, the Jesse-Holman-Jones Hospital, a new and modern hospital was fully completed and in operation and of course, Mrs. McMurry being a resident of that community knew that fact.

The provision of Mrs. McMurry's will of interest to the decision in this is in Section 3, towit:

'It was the desire of my deceased husband, John McMurry, and so expressed in his will, that after my death the principal of his estate should be devised to certain trustees therein named for the purpose of erecting in Springfield, Tennessee, a charity hospital to be known as the 'JOHN-AUGUSTA-JESSE McMURRY CHARITY HOSPITAL', and it is also my desire to co-operate in carrying out his said wishes, and for the carrying out of said purpose, I hereby give, devise, and bequeath all of my property, real, personal and mixed and of whatever character and wherever located, in trust, to J. B. Bell and Thomas Pepper, both of Springfield, Tennessee, and their successors in trust, for the purpose of creating, operating, and maintaining the said 'JOHN-AUGUSTA-JESSE McMURRY CHARITY HOSPITAL', under the terms, conditions, and provisions hereinafter set forth.

'As soon after my death as possible, and after the trustees named herein have been placed in possession of my said property, said trustees shall set aside a fund of $90,000.00 to $180,000.00 as in their discretion may appear best, and out of said funds purchase grounds and construct a hospital building.

Said Trustees shall invest and reinvest the remainder of my said estate in income bearing securities, preferably bonds or notes secured by mortgages upon real estate, if available, the income from said property to be devoted to the maintenance of said hospital and grounds, and said trustees shall have power to take possession of, sell, trade, mortgage or otherwise dispose of any of my property in order to accomplish said purposes. I direct that Thomas Pepper, one of the trustees herein named, shall look after all legal matters in connection with said trust estate and shall represent the trustees in all legal matters, so long as he is a trustee, for which services he shall be paid a reasonable compensation in addition to his compensation as trustee.'

Mrs. McMurry further provided in Section Five of her Will:

'The trustees shall have power to adopt such rules and regulations as are necessary for the proper conduct and management of said hospital, in accordance with such well recognized practice in similar institutions, as they may deem practicable in the hospital to be erected by them. I further desire and direct that said trustees and their successors in trust, in so far as they legally may, shall cooperate with the trustees named in the will of my deceased husband, John McMurry, for the purpose of carrying out the plans for said hospital as expressed in his will.'

The will of Mrs. McMurry was probated in the County Court of Robertson County, in common form on July 22, 1958, and was later probated in solemn form on January 17, 1961. Neither of these actions of probate were contested.

All of the original trustees named by John McMurry as testamentary trustees in his will predeceased Mrs. McMurry except for Charles E. Bell, Jr.

Shortly after the death of Mrs. McMurry the Chancery Court of Robertson County, upon application of the one surviving trustee appointed by Mr. McMurry, appointed four of the present successor trustees. Thereafter, Mr. Charles E. Bell, Jr. resigned and a fifth trustee was appointed in his place and stead. Mrs. McMurry appointed J. B. Bell and Thomas Pepper to serve as her testamentary trustees, and they were also to serve as executors of her will. These two gentlemen have been appointed by the Chancery Court to serve as two of the trustees under the will of John McMurry.

The five trustees under the will of Mr. McMurry have in their possession the sum of $186,251.50 plus accumulated interest. The two executors, J. B. Bell and Thomas Pepper, of the estate of Mrs. Augusta McMurry have on hand approximately $255,700.49 plus accumulated interest. They also hold real estate and certain personalty other than cash of the approximate value of $10,000.00. The combined sum to be available from the two trusts for use in carrying out their terms is approximately $400,000.00.

The original bill alleges that the combined sums of the two estates would be entirely inadequate for the construction of an independent hospital building and for the capital necessary to produce income to operate such an independent hospital.

It is averred in the bill that a great deal of interest has been taken in Robertson County in the matter of these trusts after the death of Mrs. McMurry because there is a very urgent need for additional hospital facilities and services and additional hospital space and services in Springfield and Robertson County. After an investigation had been made by complainants and various conferences had been had with the county judge and with those persons interested in the community and business and agricultural life of the community, and after conference with members of the committees of the county court of Robertson County, a proposed contract was prepared jointly by counsel for complainants and representatives of Robertson County. On May 29, 1961, at a special meeting of the County Court,...