Kelly v. Womack

• Decision Date: 09 June 1954
• Docket Number: No. A-4346,A-4346
• Citation: 153 Tex. 371,268 S.W.2d 903
• Parties: KELLY v. WOMACK et al.
• Court: Texas Supreme Court

Page 903

268 S.W.2d 903

153 Tex. 371

KELLY v. WOMACK et al.

No. A-4346.

Supreme Court of Texas.

June 9, 1954.

Rehearing Denied July 7, 1954.

Turpin, Kerr & Smith and Irby L. Dyer, Midland, for petitioner.

Stubbeman, McRae & Sealy and James G. Noland, Midland, Callaway & Reed and O. D. Montgomery, Dallas, R. W. Caton, Stanton, for respondents.

CULVER, Justice.

W. E. Kelly filed this suit against Eda Tenkhoff Womack et al., respondents, for the title and possession of 400 acres of land in Martin County. H. C. Burnam intervened as a plaintiff. Kelly is the only petitioner here.

Respondents defended on the ground that the deed under which petitioner claimed title from the common source was void because it was contrary to Section 26 of Article I of the Constitution of Texas, Vernon's Ann.St., declaring that perpetuities 'are contrary to the genius of a free government, and shall never be allowed'.

After the parties filed a stipulation of the material facts a take-nothing judgment was rendered in favor of respondents and affirmed by the Court of Civil Appeals. 261 S.W.2d 599.

On November 10, 1919, Vincent Heisserer executed a deed of an undivided half interest 'in consideration of love and affection' and $1 conveying to W. H. Heisserer 'as trustee, for and on behalf of the following beneficiaries.' It named 23 of these and fixed the 'interest in said trust estate' to be enjoyed by each beneficiary in fractions; 1/10 to seven, 1/30 to three, 1/60 to six and 1/70 to seven. ¹

The trustee was authorized to lease, sell, or encumber the land or any part of it and to sign, acknoledge and deliver any lease, mortgage, deed or contract without any liability on the grantee to see that the money paid to the trustee would be devoted to the execution of the trust.

The deed also provided that if W. H. Heisserer, trustee, should die before he had fully disposed of the fee simple title to the land conveyed, then Zeno Heisserer of Missouri, would become trustee with the same authority as had been vested in the deceased trustee.

On July 23, 1930, Frank L. Diebold deeded an undivided half interest in the land described in the Heisserer deed, supra, to Frank Diebold, Jr. and Wm. LeGrand as trustees for 13 named beneficiaries; 1/10 to 9 of them and 1/40 to 4 of them. Other terms and conditions were substantially the same as in the Heisserer deed.

All beneficiaries named in the Heisserer deed were 'blood relatives' of the grantor. All those named in the Diebold deed were children and grandchildren of the grantor.

After the execution of these deeds each trustee was in active charge and management of a half interest in the land in question, paying annually the taxes thereon and leasing it from time to time for agricultural and grazing purposes and collecting the entire rental income from his half and as trustee each for many years listed the land with local real estate agents for sale, but no satisfactory offer was received until December, 1947, when one Burnam and petitioner Kelly offered to pay $15,000 cash for it. After some negotiation, this offer was accepted. On July 18, 1949, Zeno Heisserer, as successor trustee under the Vincent Heisserer deed, and William LeGrand, survivor trustee under the Diebold deed, conveyed the 400 acres to Burnam and petitioner Kelly by general warranty deed for $15,000 cash, which money is being held in escrow pending final disposition of this suit.

Prior to the execution of this deed no beneficiary under the trust deeds above described had resorted to any litigation to terminate the trust or to establish any legal title in the beneficiaries named in the trust deeds.

In his trial petition Kelly pleaded the conventional terms of trespass to try title. Alternatively he pleaded validity of the trust deeds, in consequence of which the deed executed to him by the trustees conveyed good title.

The application was granted on petitioner's first point, which is that the Court of Civil Appeals erred in holding that the trust deeds are void under the rule against perpetuities because they 'create only present vested legal and beneficial interests in named, living persons and therefore could not have violated the rule,' which 'is applicable only where a future estate might not vest during lives in being plus twenty-one years.' We are of the opinion that the point should be sustained.

The rule, 'as appears by its statement, relates only to the vesting of estates and interests, and not to their duration or ending.' And it has no application to present interests, legal or equitable, in realty or personalty, whether or not alienable. 70 C.J.S., Perpetuities, § 8, page 584; Singer v. Singer, 150 Tex. 115, 237 S.W.2d 600.

The generally accepted definition in this state of a perpetuity is:

'A perpetuity is a limitation which takes the subject-matter of the perpetuity out of commerce for a period greater than a life or lives in being and 21 years thereafter, plus the ordinary period of gestation.' Neely v. Brogden, Tex.Com.App., 239 S.W. 192.

The rule is also defined in 70 C.J.S., Perpetuities, § 3, as follows

'The rule against perpetuities, at common law, is that no interest within its scope is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest, * * *.'

It seems to be the law in this jurisdiction that the rule has no relationship to restraints on alienation or so-called indestructible trusts. If the deeds violate the rule against perpetuities they are void from the beginning, but that is not true where alienation has merely been restrained or where even a so-alled spendthrift trust has been created. If the terms of the trust create a prohibited restraint, that limitation may be stricken without voiding the effect of the deed. Anderson v. Menefee, Tex.Civ.App., 174 S.W. 904, opinion approved by Supreme Court, Rust v. Rust, 211 S.W.2d 262, 267:

"It is immaterial that full possession and enjoyment of the property is postponed beyond the period of a life or lives in being and 21 years thereafter with the ordinary period of gestation added."

In Henderson v. Moore, 144 Tex. 398, 190 S.W.2d 800, 802, the bequest was to a class subject to the admission of new-born members and to the exclusion of those who might die under the 25-year period of the trust. 'In the meantime', says Chief Justice Alexander, 'no one could make title to the property because it could not be known who would ultimately prove to be the beneficiaries. This would take the property devised by the will out of commerce for the period of twenty-five years, and would be in violation of the rule against perpetuities.' We are of the opinion that the beneficial or equitable title vested in the named living beneficiaries at the time of the execution of the deeds regardless of the attempted restraint on alienation. They had the fixed right of future enjoyment upon the termination of the trust.

On the very face of these instruments there is apparently no intention, express or implied, that the properties are to be taken out of commerce. In fact the trustee was charged with the duty of disposing of the land at his discretion and in his best judgment at the most favorable and opportune time.

The requirement of the rule in this respect is complied with when a future estate or interest becomes vested in interest regardless of when it becomes vested in possession. Hunt v. Carroll, Tex.Civ.App., 157 S.W.2d 429.

Handbook on Law of Future Interest by Lewis M. Simes, 1951, at page 369 has this to say:

'The word 'vest' refers to a vesting in interest and not in possession. It is but an enlargement of the feudal concept of vesting which was applied in determining whether a...