Frost Nat. Bank v. Boyd

• Decision Date: 28 March 1945
• Docket Number: No. 11453.,11453.
• Citation: 188 S.W.2d 199
• Parties: FROST NAT. BANK et al. v. BOYD et al.
• Court: Texas Court of Appeals

Page 199

188 S.W.2d 199

FROST NAT. BANK et al. v. BOYD et al.

No. 11453.

Court of Civil Appeals of Texas. San Antonio.

March 28, 1945.

Rehearing Denied May 23, 1945.

Appeal from District Court, Bexar County; Robt. W. B. Terrell, Judge.

Suit by Sarah A. Stafford Boyd and others against the Frost National Bank, independent executor of the will and estate of Myra Stafford Pryor, deceased, and others for the purpose of setting aside an order probating the last will and testament of Myra Stafford Pryor, deceased, and to annul certain provisions of the will. Judgment upholding the will in part, and in part holding it invalid, and defendants appeal.

Reversed and remanded, with directions.

S. S. Searcy and Marion A. Olson, both of San Antonio, Black, Graves & Stayton, of Austin, Denman, Franklin & Denman and Johnson & Rogers, all of San Antonio, Powell, Wirtz, Rauhut & Gideon of Austin, and Carter & Lewis, Davis, Hall, Clemens & Knight, Andrew Dilworth, and Robt. G. Harris, all of San Antonio, for appellants.

Johnson & Rogers, of San Antonio, and Powell, Wirtz, Rauhut & Gideon, of Austin, for appellees.

NORVELL, Justice.

This suit was brought for the purpose of setting aside an order probating the last will and testament of Myra Stafford Pryor, deceased, and to annul certain provisions of said will. Article 5534, Vernon's Ann.Civ.Stats. The contestants were certain descendants of a brother and sister of the testatrix. They were unsuccessful in the County Court, but the District Court entered a judgment based upon a peremptory instruction, which invalidated a trust sought to be created by Mrs. Pryor in her will, as well as other provisions thereof relating to or connected with said trust.

The bases of the District Court's judgment are apparently the propositions asserted by the appellees here, i. e., (1) the provisions of the will attempting to create the trust are so indefinite that they cannot be enforced by a court of equity; (2) the will, in sofaras it relates to the trust, is not a legal testamentary disposition of property; and (3) the enforcement of the provisions of the trust would violate the rule against perpetuities. Article I, Section 26, Constitution of Texas, Vernon's Ann.St.

Appellees' propositions or contentions are more or less interrelated and may for the most part be discussed together. The case has been thoroughly briefed on both sides and an irreconcilable conflict among the American decisions upon the points here involved is disclosed. It also appears that there is no Texas Supreme Court decision which controls the disputed legal propositions raised in this case. The latest Supreme Court decision affecting a will somewhat similar in nature to that of Mrs. Pryor is Powers v. First National Bank of Corsicana, 138 Tex. 604, 161 S.W.2d 273. In this opinion, however, the Supreme Court expressly stated that it did not decide a question which is squarely presented here. This question is largely controlling in the disposition of this case and may be stated as follows: In Texas, may a charitable trust be enforced, when the will creating the trust also authorizes the trustee to devote the trust property to any charitable purpose he (the trustee) may select?

The testatrix, Myra Stafford Pryor, was the widow of Colonel Ike T. Pryor, deceased. She died in San Antonio, Texas, on June 30, 1943, and was about seventy-nine years of age at the time of her death. The estimated value of her estate was $750,000. Mrs. Pryor sought to control the disposition of her property after death by means of a will which she executed on December 14, 1938, and a later codicil dated January 29, 1943.

Paragraph IV of the will reads as follows:

"It is my primary purpose and intent that the Trust hereby created shall be a charitable trust, and shall be and is designated the `Myra Stafford Pryor Charitable Trust' and when the last survivor of the living persons named above as beneficiaries shall have died, it will be wholly a trust created for charitable purposes in perpetuity. Any and all net income remaining in the possession of the Trustee, after the specific payments hereinabove provided for in paragraph III of this my will have been made, shall be paid to such charitable association or associations, whether incorporated or not, as my Trustee shall in its absolute discretion select and in such amounts and at such times as my said Trustee, in its absolute discretion, may fix, to be used and applied by such association or associations so selected by my Trustee as such association or associations may deem advisable. The corpus of this Trust shall remain intact and the income alone used for the purposes of this trust."

Paragraph III of the will, as modified by the codicil, provided that certain sums per month should be paid out of the funds held by the trustee to various individuals and that upon the death of each of said individuals, "such payments shall immediately cease, and shall thereafter be applied by my trustee, as hereinafter provided in paragraph IV of this my will." The testatrix also in said Paragraph III named four beneficiaries and directed the trustee to pay to them certain specified sums annually in perpetuity, namely, the Treasurer of Saint Mark's Episcopal Church of San Antonio, Texas, the Martha Berry School at Mount Berry, Floyd County, Georgia, the Protestant Orphans' Home of San Antonio, Texas, and the San Antonio Association for the Blind. We think it reasonably appears from the record that each of the four bequests last named are comprehended within the meaning of the term "charitable purposes," hereinafter discussed.

Mrs. Pryor, in the codicil of January 29, 1943, devised certain lands in Zavala County to her step-son, Ike T. Pryor, Jr., and made a special bequest to the Endowment Fund of St. Mark's Episcopal Church. This devise and bequest, together with the provision of the will appointing Frost National Bank of San Antonio, Texas, executor of the estate, were upheld by the District Court. The remainder of the will was stricken down, apparently, upon the theory that the remaining bequests in the will and codicil were dependent upon the trust which the District Court held invalid. There were certain other devises which had no connection with the trust, but these were made for the benefit of certain persons who were also heirs at law of Mrs. Pryor. For this reason, the District Court evidently considered that Mrs. Pryor would not have intended to prefer the designated beneficiaries over other heirs at law, had she realized that the trust which she sought to create was invalid. The effect of the District Court judgment was to decree (and the judgment so recites) that except for the devise to Ike T. Pryor, Jr., and the Endowment Fund of St. Mark's Episcopal Church, Mrs. Pryor "died intestate."

The Frost National Bank, which was designated as trustee in Mrs. Pryor's will, has signified its willingness to serve in such capacity in conformity with the provisions of the will, and here vigorously asserts the validity of Paragraph IV of the will, which relates to the "Myra Stafford Pryor Charitable Trust."

In said Paragraph IV, Mrs. Pryor expressly asserted that her primary purpose and intent was to create a "charitable trust, * * * a trust created for charitable purposes in perpetuity." The term "charitable trust" has a well-recognized meaning in law. According to the American Law Institute's Restatement of the Law of Trusts (hereinafter cited as Restatement-Trusts), "a charitable trust is a fiduciary relationship with respect to property arising as a result of a manifestation to create it, and subjecting the person by whom the property is held to equitable duties to deal with the property for a charitable purpose." II Restatement-Trusts 1095, § 348.

In American Jurisprudence it is said that:

"In a sense, all charities are trusts in that the property must be devoted to a specified purpose. There are, however, some distinctions in legal concept between a trust and the holding of property by a charitable corporation. Some cases have broadly defined a charitable trust. Any trust coming within the definition of a legal charity for the benefit of an indefinite class of persons sufficiently designated to indicate the intention of the donor and constituting some portion or class of the public is a charitable trust. It has been said that a charitable trust, in a legal sense, is one which originates from the gift and which limits property to any public use to which it is lawful to devote property forever. * * *" 10 Am.Jur. 587, § 4.

Corpus Juris Secundum states that: "A charitable trust is one the purpose or object of which is within the legal definition of the term `charity.' * * * The terms `public trust' and `charitable trust' have substantially the same meaning. * * * A public charity or trust is one for the benefit of the public at large or some substantial and indefinite portion of it. * * * Public or charitable trusts are distinguishable from private trusts, on the grounds, among others, that the rule against perpetuities does not in general apply to a public or charitable trust and that uncertainty as to beneficiaries does not in general affect the validity of a public or charitable trust." 14 C.J.S., Charities, § 1, pp. 413, 414, 415.

According to the Restatement of Trusts, "Charitable purposes include (a) the relief of poverty; (b) the advancement of education; (c) the advancement of religion; (d) the promotion of health; (e) governmental or municipal purposes; (f) other purposes the accomplishment of which is beneficial to the community." II Restatement-Trusts 1140, § 368. See also, Powers v. First Nat. Bank of Corsicana, Tex. Civ.App., 137 S.W.2d 839, loc. cit. 842.

This classification of charitable purposes is similar to that given in 10 Am.Jur. 622, and 14 C.J.S., Charities, § 12, p. 440. The texts last mentioned group the fourth, fifth and sixth subdivisions of the Restatement into...