Gaines v. Arkansas Nat. Bank

• Decision Date: 08 March 1926
• Docket Number: (No. 218.)
• Citation: 280 S.W. 993
• Parties: GAINES et al. v. ARKANSAS NAT. BANK.
• Court: Arkansas Supreme Court

Page 993

280 S.W. 993

GAINES et al. v. ARKANSAS NAT. BANK.

(No. 218.)

Supreme Court of Arkansas.

March 8, 1926.

Appeal from Garland Chancery Court; J. P. Henderson, Chancellor.

Suit by Mary C. F. Gaines and others to construe the will of A. B. Gaines, deceased, against the Arkansas National Bank. From the decree, plaintiffs appeal. Affirmed.

Martin, Wootton & Martin, of Hot Springs, for appellants.

J. V. Walker, of Fayetteville, and Duty & Duty, of Rogers, for appellee.

WOOD, J.

A. B. Gaines died testate on October 12, 1921, leaving surviving him his wife Mary C. F. Gaines and two sons, D. Fellows Gaines and A. B. Gaines, Jr. His will was duly probated and it contains, among others, the following clause:

"Third. All of the real estate owned by me at the time of my death, which is situated in Garland county, state of Arkansas, I give, devise and bequeath unto the Arkansas National Bank of Hot Springs, Arkansas, as trustee. To have and to hold the same unto the said the Arkansas National Bank, and unto its successors and assigns for and during the natural lives of my wife, Mary C. F. Gaines, and my sons, D. Fellows Gaines and A. B. Gaines, Jr., and the last survivor of them. But upon the following express terms and conditions, viz.: My said trustee shall collect all rents and profits arising or issuing from said real estate, and, after paying all taxes, insurance and repairs and reasonable compensation for its services, shall pay the net income therefrom to my wife, Mary C. F. Gaines, and my sons, D. Fellows Gaines and A. B. Gaines, Jr., in equal portions of one-third to each, such payments to be made quarterly, or oftener if the beneficiaries of this trust require. My said trustee is hereby empowered and authorized to execute leases upon said real estate and to receive all rents and other profits therefrom. My said trustee is further authorized in its discretion, but only with consent of my wife and sons, all three agreeing thereto, to sell any or all of my said real estate, and to execute deeds and conveyances thereof. But all sums arising from such sales to be reinvested, and to become thereupon a part of the trust property and shall be administered and descend as herein provided. My said trustee is directed to keep all buildings and structures on my said lands insured and in the event of loss by fire to collect the insurance thereon, and rebuild or repair same.

"For the purpose of erecting permanent improvements on my said real estate, my trustee, may, with consent of my beneficiaries, borrow money, and for the purpose of securing the same may execute mortgages or deeds of trust upon such terms and running for such periods of time as my said trustee and beneficiaries may agree.

"Fourth. In the event either or both of my sons die, leaving lawful issue of his or their body living, or descendants of such issue, such issue, or descendants, shall immediately take fee simple title to all of the property hereby devised in trust for the parent of such issue. If either of my sons die without lawful issue, the interest of such son shall vest in the survivor. In the event of the death of my wife, and if both of my said sons shall die without lawful issue of their bodies, or descendants of such issue, then in such event, the trust herein created shall immediately determine, and all of the trust estate herein devised shall pass in fee simple to my heirs at law; my true intent being that the income from the trust estate hereby created and devised shall be enjoyed by my said wife and sons, and the last survivor of them, during their lives, and, if my said sons or either of them shall die leaving lawful issue of their body, my entire estate shall vest in such issue in fee simple, after the determination of the life estate hereby created. But, in the event of the death of my wife, and if my sons shall both die leaving no lawful issue, then my estate shall vest in fee simple in my heirs at law."

The testator, at the time of his death, owned certain lots in Hot Springs, Garland county, Ark., on which a building was situated. After the death of the testator this building was destroyed by fire. The trustee collected the sum of $18,000 insurance on the building. This amount was not sufficient to erect on the lots the same character of building that was destroyed and the devisees in the will and beneficiaries in the trust created thereby demanded of the trustees that it invest the proceeds of the insurance in its hands in approved securities such as stocks and bonds of various kinds and notes secured by mortgages on real estate. They also requested that the trustee sell certain other real property belonging to the estate of the testator and invest the proceeds of such sale in approved securities of the kind mentioned. The trustee, while willing to sell certain of the real estate, was unwilling to invest the proceeds of the sale as requested by the beneficiaries. This action was instituted by the devisees and beneficiaries under the will, hereafter called appellants, against the Arkansas National Bank of Hot Springs, the trustee named in the will of A. B. Gaines hereafter called appellee.

The appellants alleged the above facts in their complaint, and that they had assured the appellee of their consent for it to make the investments as requested by them, but, notwithstanding this fact, it had refused to comply with their request, and they prayed for a construction of the will in order to determine whether the trustee had authority thereunder to invest the money in its hands derived from the insurance policies and to sell the real estate and reinvest the proceeds in approved securities as indicated, and prayed that, if it should be determined that it had such authority, that an order be entered to that effect.

The appellee, in its answer, admitted the facts set up in the complaint, and averred that its reason for refusing to comply with the request of the appellants was because it was uncertain as to whether it had authority to do so under the will, and it joined in the prayer of the appellants that the will, as above set forth, be construed, and that the appellee be directed as to what character of securities it was authorized to invest the insurance money it had already collected in, and as to whether it can sell and invest the money arising from the sale of real estate in securities of the character designated, or whether it was required to invest the same only in real property.

The trial court, after finding the facts as set up in the pleadings, entered a decree adjudging that:

"The true intent and meaning of the last will and testament of A. B. Gaines, deceased, is that the defendant, as trustee of said real estate, situated in Garland county, Ark., is authorized under the terms of said last will and testament to invest the moneys in its hands derived from fire insurance collected on building situated on said real estate and destroyed by fire, if such funds are not used for the purpose of rebuilding on said real estate, in first real estate mortgages, United States Government securities, state bonds, county bonds, municipal bonds, improvement district bonds, and school district bonds, but not in railroad bonds,...