Brown v. Scherck

• Decision Date: 29 July 1965
• Docket Number: No. 69,69
• Citation: 393 S.W.2d 172
• Parties: Betty Showers BROWN et al., Appellants, v. Mary Elizabeth Showers SCHERCK et al., Appellees.
• Court: Texas Court of Appeals

Page 172

393 S.W.2d 172

Betty Showers BROWN et al., Appellants, v. Mary Elizabeth Showers SCHERCK et al., Appellees.

No. 69.

Court of Civil Appeals of Texas, Corpus Christi.

July 29, 1965.

Rehearing Denied Aug. 26, 1965.

Smith & Lehmann, J. Edwin Smith, Houston, for appellants.

Strickland, Winkler, Hall & Mills, Harry L. Hall, Mission, for appellees.

SHARPE, Justice.

This suit was instituted by appellants, who are the daughters of E. A. Showers, deceased, joined by their husbands, respectively, against appellees as trustees of a testamentary trust created by the will of their father, and was brought under the Uniform Declaratory Judgment Act (Art. 2524-1, Vernon's Ann.Tex.Civ.St., Sections 2 and 4), and pursuant to the provisions of the Texas Trust Act (Articles 7425b-1-7425b-47, particularly Art. 7425b-24, V.A.T.S.), for construction of said will and declaratory judgment that said testamentary trust terminated when Nancy Showers Slaughter, the youngest daughter, became twenty-one years of age on December 28, 1957; for distribution of the corpus of the trust if the Court held that the trust had terminated on said date; and, if not so terminated, for declaratory judgment determining such termination date. The minor children of appellants, who are contingent beneficiaries, were also named as defendants in the suit, and a guardian ad litem was duly appointed to represent them.

This suit was numbered 609,373, in the 113th Judicial District Court of Harris County, Texas, and was filed on January 3, 1963. Appellees defended primarily on the ground that the final judgment rendered in the same court by the same judge on April 25, 1962, in Cause No. 589,943, styled Ann Showers Butler, et al. v. Mary Elizabeth Showers Scherck, et al., and in which all parties to the instant suit were also parties, was res adjudicata and conclusively established that the testamentary trust did not terminate on December 28, 1957, and was in existence as an active trust at the time of such prior judgment. Various other defenses were urged by appellees in the alternative, and the same will be discussed more fully in subsequent portions of this opinion.

The case was tried to the Court without a jury. Aside from brief oral testimony given by the three appellant daughters of E. A. Showers, the three testamentary trustees and an accountant for the trustees, all evidence was documentary in character. The trial court ordered that the Stipulation of Facts and Authenticity of Documents with Exhibits attached as well as other Exhibits be transmitted in the original to the appellate court as a part of the record in this case. Such exhibits include all of the court papers in the prior suit, and are stipulated to be the only pleadings raising issues of fact or of law in said suit.

The trial court sustained appellees' plea of res judicata; determined that the testamentary trust did not terminate on December 28, 1957; determined the date upon which it will terminate; made provisions for protection of the interest of the minor involved; and directed the manner in which the assets of the trust should be distributed upon termination so as to effect a provision for equalization contained in Paragraph VI(d) of the Will.

The record reflects that E. A. Showers died on October 22, 1946. He was survived by his widow, Mary Elizabeth Showers, now Mary Elizabeth Scherck, and their three daughters Ann, Betty and Nancy, whose married names are Ann Showers Butler, Betty Showers Brown and Nancy Showers Slaughter. Prior to the execution of his will on April 27, 1943, five inter vivos trusts were executed. On April 1, 1937, E. A. Showers, joined by Mary Elizabeth Showers, executed a trust indenture known as the E. A. Showers Trust for the benefit of Ann and Betty, the two older daughters. On December 29th and 30th, 1938, Showers, joined proforma by his said wife executed two separate trust agreements for the benefit of Nancy, the youngest daughter, identified as the Nancy Showers Trust No. 1 and No. 1-A, and on said dates, Mrs. Showers, joined pro-forma by her husband, also executed two additional trust indentures for Nancy, known as the Nancy Showers Trust No. 2 and No. 2-A, making a total of five inter vivos trusts. Provisions were made in all of said inter vivos trusts as well as the testamentary trust that should any daughter die before termination thereof and distribution of the corpus, leaving children surviving, that such children would take, per stirpes, the share of their deceased mother had she survived. Each of the daughters of E. A. Showers, deceased, had minor children who were made defendants in the suit and their exact relationship was found by the court.

Ann Showers Butler became 35 years of age on July 24, 1963. Betty Showers Brown will become 35 years of age on November 10, 1965, on which date the E. A. Showers Trust, for the benefit of Ann and Betty will terminate. Nancy reached 21 years of age on December 28, 1957 and will have her 35th birthday on December 28, 1971.

The will of E. A. Showers, deceased, was duly probated. His widow since remarriage, Mary Elizabeth Showers Scherck, elected not to take under said will, but rather to take her one-half of the community property owned by her and E. A. Showers at the time of his death.

The same persons are trustees of the testamentary trust and the five inter vivos trusts.

Appellants urge seven points of error in substance as follows: (1) The trial court having found that the proper construction of the Will was that the testamentary trust terminated on December 28, 1957, title to appellants' interest in the trust assets vested unconditionally in them on that date, (2) Since said date the trustees have functioned as trustees of a 'passive' or 'dry' trust, and the trust purposes having been accomplished, appellants have a right to demand immediate delivery of the trust assets, (3) the prior suit was not res judicata on the termination date of the trust, since the trustees had not wound it up between December 28, 1957 and the time of institution of the prior suit and had the obligation to function according to the terms of the trust until it is finally wound up, (4) the prior judgment was not res judicata on the termination date of the trust because a declaratory judgment is res judicata only as to matters declared by the judgment and not on matters which might have been declared, (5) the trial court rules contrary to the principle that a will should be construed to vest title at the earliest possible time by setting a termination date of the testamentary trust as December 28, 1971, (6) a proper construction of the will requires setting a termination date of the testamentary trust earlier than December 28, 1971, and (7) as the trial court has found that the proper construction of the will is that the termination date of the trust is December 28, 1957, the 21st birthday of Nancy Showers Slaughter, the trustees in their fiduciary relation to the beneficiaries cannot rely upon a technical plea of res judicata on issues that were not affirmatively in issue or affirmatively declared.

We have concluded that appellants' points should be overruled and the judgment of the trial court affirmed.

Appellant's contentions involve several of the trial court's conclusions of fact and of law.

Conclusion of fact XXII reads as follows:

'The Court is of the opinion that the Will of E. A. Showers, deceased, is ambiguous, and that a proper construction of the date of termination of the Testamentary Trust established and created by such Will, were it not for the provisions of the final judgment in Cause No. 589,943, would be December 28, 1957, the date upon which Nancy Showers Slaughter attained the age of 21 years.

'From December 28, 1957, until Cause No. 589,943 was filed by the present plaintiffs a controversy and dispute existed between the plaintiffs and trustees as to the date upon which the Testamentary Trust would terminate, plaintiffs contending that the trust terminated when Nancy Showers Slaughter became 21 years of age on December 28, 1957, and the Trustees construing the Will of E. A. Showers, deceased, to provide for termination of the Trust when Nancy Showers Slaughter became 35 years of age, provided she was then living and such controversy has existed until the present time.

'The pleadings of plaintiffs in Cause No. 589,943, and the relief sought by them in such cause were premised upon the then existence of the Testamentary Trust. The pleadings and relief sought in such cause by the Trustees as defendants and cross-plaintiffs was likewise premised upon the continued existence of the Testamentary Trust. The judgment in said cause was premised upon the continued existence of the Trust and the relief granted thereby would have been improper if the Trust was not an existing Trust and had already terminated on December 28, 1957. Said judgment constitutes a binding adjudication and determination that the testamentary trust did not terminate on December 28, 1957.

Conclusion of Law Number One reads as follows:

'The final judgment dated April 25, 1962, in Cause No. 589,943, Ann Showers Butler, et al v. Elizabeth Showers Scherck, et al, in the District Court of Harris County, Texas, 113th Judicial District, determined and adjudicated that the testamentary trust had not terminated and was still in existence and the rights of the beneficiaries of said trust and the duties and responsibilities of the trustees thereof, together with the matters that should be considered by the trustees in the continued administration of the trust during the existence of the same were likewise declared and adjudicated and the contentions of plaintiffs that said testamentary trust terminated on December 28, 1957, when Nancy Showers Slaughter became 21 years of age was adjudicated and determined by said judgment contrary to their present contentions in this cause and said judgment binds all parties to this cause and is res...