Burney v. Burney, 14743.

• Decision Date: 11 January 1946
• Docket Number: No. 14743.,14743.
• Citation: 192 S.W.2d 161
• Parties: BURNEY v. BURNEY et al.
• Court: Texas Court of Appeals

192 S.W.2d 161

BURNEY v. BURNEY et al.

No. 14743.

Court of Civil Appeals of Texas. Fort Worth.

January 11, 1946.

Rehearing Denied February 8, 1946.

Appeal from District Court, Tarrant County; Bruce Young, Judge.

Suit by Belle L. S. Burney, individually and as independent executrix-trustee, against Henry P. Burney, individually and as independent executor-trustee, and others, for construction of will and to declare the rights, duties and obligations of the several parties to the suit. From an adverse judgment, the plaintiff appeals, and the defendants assert four counterpoints.

Judgment reformed, and, as so reformed, affirmed.

Thompson, Walker, Smith & Shannon, of Fort Worth, for appellant.

Kampmann & Burney, of San Antonio, and Samuels, Brown, Herman & Scott, of Fort Worth, for appellees.

McDONALD, Chief Justice.

This suit involves the will of I. H. Burney, a long-time resident of Fort Worth, who died in 1940. The will covers twenty-five typewritten pages of the statement of facts, and contains some features not usually found in wills. In addition to the paragraphs in which specific disposition is made of the testator's property, there are many paragraphs of an explanatory nature in which are set out in a somewhat informal manner the views of the testator with reference to the handling of his estate, the objects desired to be accomplished by the will, and advice to the executors and to the beneficiaries of the will concerning methods of managing and disposing of properties of the estate. For this opinion to be clear to a reader who had not had occasion to study the will in its entirety it would be necessary to set out the full text of the will, but we shall not do that since it would result in an opinion of such great length.

Generally speaking, the will bequeathed a half interest in the community property, with the exception of the homestead and certain furniture and personal effects, to various relatives of the testator, and at least suggested, if it did not direct, that the personal property of the community be divided soon after his death. The will did not dispose of Mrs. Burney's interest in the community. Mrs. Burney survived her husband.

The suit principally concerns certain provisions of the will which undertook to guarantee that Mrs. Burney should have a net income of not less than $12,000 per year.

In the first numbered paragraph of the will are numerous suggestions of a directory nature, offering advice to the executors and trustees as to the management of the estate.

The second numbered paragraph of the will bears the title "Some explanatory recitals, observations and suggestions probably unnecessary but harmless." In this paragraph it is recited that the testator recently prepared a tentative will, and that, after discussion with his wife, they had agreed that the tentative will could be improved. The testator says in this paragraph that the chances are about 100 to 1 that he will predecease his wife, and that the dominant idea with him is to consider first the comfort and well being of his wife after his death. He declares that the most important part of his will is the provision, to quote, "whereby I guarantee to my wife a twelve thousand dollar annual net income after my death, and pledge all my interest in our community real estate and the rents therefrom to secure said income."

The testator goes on to declare that his wife disfavored the idea of a life estate in real estate being left to either, with reversion over to relatives, and to quote, "it will be seen hereinafter that in lieu of such life estate in certain real property, as in said tentative will, I have adopted the plan of a guaranteed income to my wife based on the idea that my Executors shall hold, in large part at least, my part of the real estate until her death, and collect rents thereon and disburse same to my said relatives with due regard to the protection of my wife on such guaranty."

In the third numbered paragraph of the will it is provided that the home of the testator and his wife and certain specified articles of personal property shall go to her. After making reference to certain property which had been placed in trust for the wife's benefit during the testator's lifetime, and after expressing the hope that his wife by her will would leave half of the unused portion of such trust property to the testator's relatives, he says: "Of course this plan will not and must not affect my wife's spending and it is my desire that she shall always live well and comfortably and spend reasonably, and hence the guaranty to her of a twelve thousand dollar annual net income."

Subdivision (c) of numbered paragraph 3 reads as follows: "I give to my wife the guaranty of a `net income annually' for each calender year of her life beginning with January 1st after my death of $12,000.00, secured by a pledge of all my interest in the community real estate as of the date of my death as well as all rents and income therefrom, and this guaranty shall also cover the possible decline or devaluation of the `dollar,' to the extent that after my death if, for any future calendar year of my wife's life that the purchasing power or value of the dollar shall be shown, by Treasury Department at Washington and other reliable statistics, to have declined as much as ten per cent in comparison with its value for the year 1940, the amount of such decline shall be paid for each such year in addition to the $12,000.00. Minor fluctuations under ten per cent would be uncertain of accurate ascertainment and are not to be considered, and no fluctuation upward, large or small, is to be considered. To make this my guaranty more sure I herein forbid the sale during the life of my wife of any of my interest in community real estate without her consent and joinder therein, thus preventing the reduction of the income sacredly pledged to meet this guaranty. Of course, I really hope that my Executor-Trustees nor my wife ever have to resort to this guaranty for I actually believe her own income from her one-half interest in the community property and from the trust property will as at present continue to give her an annual net income of Twelve Thousand Dollars; and finally much more, but I realize this guaranty might become of crucial importance to her, and I know the total net income from all the community real property and the Trust property now much more than $12,000.00 can never fall below $12,000.00, without a collapse of all values or of our entire property system in which event the same result would follow if the property was at present worth a million dollars with income accordingly. But there must be mutuality of interest in and treatment of this guaranty. If my wife should sell a large portion of the property from which her income is derived, this would be inconsistent and hence whatever annual reduction of her income, if any, results from her sale of any of her interest in community real estate will be deducted from the annual liability under this guaranty. In other words she will after such sale of real estate be conclusively considered as receiving at least an equal amount of income from the proceeds of such sale or sales as the annual net receipts theretofore from the properties sold."

The trust property referred to in the paragraph just quoted consisted of real and personal property, held and managed by Henry P. Burney as trustee, amounting in value to approximately a hundred thousand dollars. In previous portions of the will the testator had declared this property to be the separate property of the wife.

In subdivision (d), immediately following, bequests are made to certain relatives of the testator, "subject, of course, to the disposition and guaranty already hereinabove set out, and subject to be held and managed, traded, exchanged or sold by my Executor-Trustees during their administration."

Later in the same subdivision it is provided that income from the real property left to such relatives shall be paid to the relatives, "subject to my guaranty that my wife's net income for every calendar year of her life shall not be less than $12,000.00." It is clear from the will that neither the personal property nor the income from personal property left to the testator's relatives was to be charged with the guaranty of a $12,000 income to the wife.

The fourth numbered paragraph bears the title "Generalities." It contains the two following references to the so-called guaranty.

"Of course my Executors will require their Executive Agent bookkeeper to keep a full, careful and accurate account on said $12,000.00 annual income guaranty from year to year, and my wife will do the same."

"By `Net Annual Income' as herein used, as coming from Rents, Interests, and Dividends of Assets, I mean the remaining annual income after all property expenses reasonably necessary or expenses incident to such income are paid, as for instance all taxes of every kind (including advalorem taxes, income taxes, and other taxes), all cost of reasonable insurance on the assets, all reasonable repair and upkeep cost on improvements, to keep same in good tenantable condition, and all necessary or reasonable salary or wage charges, and the like. But capital gains and losses and depreciation are not to be taken into account."

We have either quoted or given the substance of all provisions of the will relating to the guaranty of the $12,000 to Mrs. Burney.

This suit was brought by Mrs. Burney, individually and in her capacity as independent executrix and trustee under the will. Named as defendants were the other executors and trustees, and the relatives of Mr. Burney who were beneficiaries of the will. The petition calls upon the court to construe the will and to declare the rights, duties and obligations of the several parties to the suit, and to answer a number of specific questions, the nature of which will be reflected in our discussion of the various points of...