Henderson v. Troy Bank & Trust Co.
| Decision Date | 22 January 1948 |
| Docket Number | 4 Div. 469. |
| Citation | 250 Ala. 456,34 So.2d 835 |
| Court | Alabama Supreme Court |
| Parties | HENDERSON et al. v. TROY BANK & TRUST CO. et al. |
Rehearing Denied April 22, 1948.
Oliver W. Brantley, of Troy, Files Crenshaw and B. P. Crum, both of Montgomery, Alto V. Lee, III, of Dothan, and Chas. A. Ball Steiner, Crum & Weil, and Ball & Ball, all of Montgomery, for appellants.
Marion Rushton, of Montgomery, J. H. Wilkerson, of Troy, and A. A. Carmichael, Atty. Gen. (pro se), for appellees.
This case involves the validity of certain provisions of the will of Charles Henderson, who died January 7, 1937, a resident of Pike County, Alabama. The complainants, appellants here who are heirs at law of the deceased, seek by declaratory judgment to establish the specific construction that the charitable trusts created by the will violate the rule against perpetuities and the Alabama statute which places a restriction upon trusts for accumulation only. § 146, Title 47, Code of 1940.
Troy Bank & Trust Company, as trustee under the will, demurred to the bill as a whole and separately to each aspect thereof. Over the objection of complainants, the attorney general was allowed to intervene and join in the demurrer of the trustee. The attorney general took this action in order to protect, if possible, the charitable trusts under attack. There is, however, no question presented here as to the propriety of allowing the intervention of the attorney general. The court sustained the demurrer to the bill as a whole and to each aspect thereof and in doing so expressly held that there was neither violation of the rule against perpetuities nor violation of the statute against accumulation only. This appeal is from that decree.
The bill alleges that Charles Henderson died a resident of Pike County, Alabama, on January 7, 1937; that Charles Henderson had no children and both his parents predeceased him; that complainants are or represent his heirs at law and sue as such; that his will, a copy of which is attached to the bill and made a part thereof, was duly probated and the Troy Bank & Trust Company was appointed both executor and trustee; that as executor it turned over and as trustee received all the property belonging to his estate; that 'at the time of his death his estate consisted of real and personal property located in the State of Alabama, valued at, towit, $3,000,000, which produced an annual net income of towit, $130,000.'
By the first three items of his will testator directed payment of his debts and bequeathed personal effects, household articles and automobiles to his widow. He also provided that his stock in the Troy Bank & Trust Company of which he owned a controlling interest should not be sold so long as the bank continued to act as trustee under the will. Item four of the will begins with the following language.
'I hereby give, devise and bequeath all the rest and residue of my property real, personal and mixed, including all choses in action, stocks, bonds and securities, of which I may die seized and possessed or over which I may have testamentary control, or to which I may be in any way entitled, of whatsoever the same may consist, and wherever situated, to Troy Bank & Trust Company, its successors and assigns, to have and to hold absolutely and in fee simple forever, the said residue and remainder in trust, however, with the power and for the following uses and purposes, towit: * * *.'
Item six closes with the following language:
'And the trust is created in perpetuity for the educational and charitable purposes set forth in the instrument.'
The trustee is then given power and authority to invest, re-invest and manage the property in the trust forever and to distribute the net income earned by it as follows:
1. To seventeen named persons an aggregate of $38,600 annually in fixed amounts; $25,000 to his wife and $5,000 to his sister for life, tax free; $8,600 to fifteen other persons for twenty years if they live so long.
2. Thereafter for twenty successive years the whole net income to be devoted to building and equipping public school houses in Pike County, Alabama.
3. Thereafter, forever, the entire net income to construct and maintain a hospital for crippled children to be built at or near Troy, Alabama.
The trustee was directed to set aside in separate funds sufficient tax free securities so that the net income therefrom should be paid to the widow and testator's sister and in connection therewith it was provided that any excess income from the two funds 'shall be treated as any other part of the income of said estate and shall be subject to all the terms, conditions and limitations hereinafter provided with regard to said residue.'
In the event that either of the two separate funds should ever fail to produce the required income, the trustee was directed to transfer from the residue of the trust estate such additional tax free securities as might be needed to supplement the funds so as to produce the net income specified. The will then provided:
'Upon the death of my said wife or sister, the securities in the fund of the one so dying shall become a part of the residue of the trust estate, subject to all the terms, conditions and limitations as hereinafter provided.'
In referring to named persons other than the widow and his sister the will provided:
'In the event of any one or more of the foregoing beneficiaries dying before the expiration of twenty years, at their death the further payment of the amount due under this instrument shall revert to the corpus of the estate and be treated the same as the original amount of the estate invested and the income would be part of the general income of the estate, the same as other investments.'
As to those beneficiaries who were minors it was provided that the trustee should retain the annual payments and reinvest them until the minors should respectively arrive at the age of twenty-one years, but if either should die before reaching the age of twenty-one years, the entire accumulated fund allotted to the one so dying should 'revert' to and become a part of the corpus of the trust estate.
A spendthrift clause provided that any bequest alienated shall at once cease and determine and 'be forfeited to the trust estate and revert to the residuum thereof.'
The will then provided that the several bequests to individuals shall be paid only out of income and profits accruing after the death of the testator and after the bequests to the wife and sister have been paid. And the will further provides:
'Should such income and profits be insufficient during any year to pay them all in full, then in that event none of them shall receive any part of the bequest made to them for that particular year, nor shall such bequests be cumulative, that is, carried to another year and be a demand against the estate.
The will further provides:
'The trustee shall pay from and out of the income of the trust property, all expense, reasonably necessary for the administration of the trust, including interest, taxes, insurance and compensation to the trustee, as well as any other expense incurred for the denefit of the trust estate.'
The trustee is required to add annually all unexpended income to the corpus of the estate. The will further provides:
'The corpus of the estate should increase, especially with the provision that when any of the bequests mature, either from death of the beneficiary or otherwise, the amount of such beneficiary's bequest shall remain and become a part of the corpus of the estate after each year when the bequests have been paid and all expenses with taxes have been satisfied, that whatever remains from the income of that particular year shall be entered as part of the corpus of the estate and subject to the same treatment thereafter as the original corpus of the estate.'
Item Five of the will contains the following language:
Directors of the association, three in number, are to be elected by the trustee and 'the State Superintendent of Education shall be ex officio a member of the Board.' The will provides:
* * *'
The expenditures authorized and permitted by the association are for building school buildings within the County of Pike. The following provisions are set out governing these expenditures:
'All buildings * * * shall be erected in incorporated cities and towns and in duly constituted school districts, which are...
To continue reading
Request your trial
-
Tumlin v. Troy Bank & Trust Co., 4 Div. 538
...H. Brantley, Jr., Birmingham, amicus curiae. FOSTER, Justice. This is the second appeal in this case (see, Henderson v. Troy Bank & Trust Co., 250 Ala. 456, 34 So.2d 835). The same legal questions are presented and argued. The changes made in the allegations of the bill do not alter the res......
-
Troy Bank & Trust Co. v. Brantley, 4 Div. 767
...Selma, for appellees. MAYFIELD, Justice. The genesis of the present litigation is found in the cases of Henderson v. Troy Bank & Trust Co., reported at 250 Ala. 456, 34 So.2d 835; and Tumlin v. Troy Bank & Trust Co., 258 Ala. 238, 61 So.2d 817. These two cases are commonly known to the Benc......
-
Traywick v. Transcontinental Gas Pipe Line Corp.
...if at all, not later than twenty-one years after some life in being at the creation of the interest.' See: Henderson v. Troy Bank & Trust Co., 250 Ala. 456, 465, 34 So.2d 835, 841; Ramage v. First Farmers & Merchants Nat. Bank of Troy, 249 Ala. 240, 245, 30 So.2d 706; Crawford v. Carlisle, ......
-
Jones v. Ellis
...not later than twenty-one years after some life in being at the creation of the interest." Ramage, supra; Henderson v. Troy Bank & Trust Co., 250 Ala. 456, 465, 34 So.2d 835 (1948). For the trust to be valid, the interest must vest within 21 years from Ellis's death. This trust will vest at......