Powers v. First Nat. Bank of Corsicana, Tex.

• Decision Date: 22 February 1940
• Docket Number: No. 2161.,2161.
• Parties: POWERS et al. v. FIRST NAT. BANK OF CORSICANA, TEX., et al.
• Court: Texas Court of Appeals

Page 839

137 S.W.2d 839

POWERS et al. v. FIRST NAT. BANK OF CORSICANA, TEX., et al.

No. 2161.

Court of Civil Appeals of Texas. Waco.

February 22, 1940.

Rehearing Denied March 14, 1940.

Appeal from District Court, Navarro County; Lex Smith, Special Judge.

Suit by Millie Powers and others against the First National Bank of Corsicana, Tex., executor, and others to contest the will of Mrs. Bessie I. Hofstetter, deceased. From judgment sustaining the validity of the will, the contestants appeal.

Affirmed.

Cantey, Hanger, McMahon, McKnight & Johnson, of Fort Worth, and Burns & Hadsell, of Niles, Mich., for appellants.

Richard & A. P. Mays, Taylor & McWilliams, J. S. Callicutt, Chris L. Knox, and Lawrence Treadwell, all of Corsicana, and Watkins & Mays and Ross B. Lea, all of Dallas, for appellees.

ALEXANDER, Justice.

Mrs. Bessie I. Hofstetter bequeathed all of her property, consisting of approximately a half million dollars, to The First National Bank of Corsicana, in trust for certain charitable purposes. Her heirs are contesting the will on the grounds (1) that it is too indefinite as to the charitable objects as well as the beneficiaries to be aided thereby, and (2) because it permits the trustee to expend the funds for private as well as charitable purposes and therefore violates the rule against perpetuities. The trial court sustained the validity of the will and the heirs have appealed.

The material portions of the will are as follows:

"Fourth: After the payment of debts and expenses enumerated in items two and three next above, and the expense of probating this will, I hereby will and bequeath and devise unto The First National Bank of Corsicana, Texas, a banking corporation organized under the Federal Banking Act of the United States of America, in trust for the purposes hereinafter stipulated, all of the property of which I may die seized and possessed including real, personal and mixed property, and property of every kind and description, whether in my possession or held in trust for me; and it is my will and my desire that the Trustee aforesaid, shall have the entire management and control of all of said property; * * *

"Fifth: The Trustee, aforesaid, and its successors shall hold said property hereby devised and bequeathed to it in trust as a permanent charity fund and shall invest and reinvest same * * *

"Sixth: The net income of the public charity fund herein and hereby vested in the Trustee herein shall be expended by the Trustee for worthy objects of charity, including the support of the Christian religion as hereinafter indicated. The charity so dispensed in the relief of poverty shall be without regard to race, color, sex or religious belief, and shall be distributed from time to time in the judgment and discretion of the Trustee; the objects of such charity to be selected by the Trustee. The said Trustee is further authorized and directed to pay out of the income of said trust a reasonable amount annually for the support of the Presbyterian Church of the United States of America at Corsicana, Texas, commonly known as the Third Avenue Presbyterian Church, and also to pay annually a reasonable amount to the Board of Trustees of Reynold's orphanage at Dallas, Dallas County, Texas, said orphanage being conducted under the auspices of the Presbyterian Church of the United States of America. And if in the judgment of the Trustee the income from said Trust shall warrant, said Trustee may make contributions from such income to the above named church and orphanage for permanent improvements.

"The Trustee shall have the power and authority and is hereby directed, out of the income only, if in the judgment of the Trustee the income of the Trust is sufficient after the contributions above provided for, to make loans to ambitious and worthy boys and girls, who are financially unable to secure an education and would otherwise be deprived thereof. Such loans shall be in amounts and upon terms and conditions, and to such boys and girls that may be determined worthy thereof in the discretion of the Trustee, but without regard to residence of the recipients."

Before beginning a discussion of the specific questions raised by the appeal, it should be noted in the outset that charitable gifts and trusts are favorites of the courts. Voluntary gifts of this nature by those in comfortable circumstances for the relief of the poverty and distress of those less fortunate, or for bringing their minds and hearts under the influence of education and religion, or relieving their bodies of disease, suffering or restraint, evidence man's finest qualities. Moreover, they tend to relieve the government of a part of its responsibility to a portion of its citizens and thus reduce the general tax burden on the public. They are therefore to be encouraged rather than discouraged. Consequently, in passing on the validity of such gifts, every reasonable intendment, consistent with the terms and purposes of the gift, will be made, and every presumption consistent with the language used will be indulged, and the trust will be upheld and declared to be valid where it is possible to do so consistent with the established principles of the law. Of two possible constructions, the court will adopt that one which operates to sustain the trust or gift. 14 C.J.S., Charities, page 427, § 6; 10 Amer.Jur. 657, sec. 102; Perry on Trusts & Trustees, p. 1200, sec. 709; Bogert on Trusts & Trustees, Vol. 2, p. 1129, § 369; 9 Tex.Jur. 55.

With the foregoing rules in mind, we take up for consideration the construction to be placed on the will in question. It will be noted that in the fourth paragraph of the instrument the property is willed to the bank "for the purposes hereinafter stipulated," and by the fifth paragraph the trustee and its successors is directed to hold the property in trust as "a permanent charity fund." In the sixth paragraph it is provided: "The net income of the public charity fund herein and hereby vested in the Trustee herein shall be expended by the Trustee for worthy objects of charity, including the support of the Christian religion as hereinafter indicated. The charity so dispensed in the relief of poverty shall be without regard to race, color, sex or religious belief, and shall be distributed from time to time in the judgment and discretion of the Trustee; the objects of such charity to be selected by the Trustee." We think the provision of the will, as contained in the fifth paragraph thereof, directing the trustee to hold the property "as a permanent charity fund," and the provision as contained in the sixth paragraph, authorizing the trustee to expend the "public charity fund" "for worthy objects of charity," make it clear that the funds are to be expended for charitable purposes only and not for private purposes. No other conclusion can be drawn from the will as a whole than that the testatrix intended to set up a fund for use for charitable purposes only.

The provision contained in paragraph 6 to the effect that the fund "shall be expended by the trustee for worthy objects of charity, including the support of the Christian religion as hereinafter indicated," does not contain any comma after the word "religion" and from this it is argued by appellants that the modifying clause "as hereinafter indicated" constitutes a limitation only on the authority of the trustee to use the fund for the support of the Christian religion and that as a consequence the trustee is free to select any other charitable objects to be beneficiaries of the fund. The will is, however, susceptible to the construction that the phrase "as hereinafter indicated" was intended as a limitation on "the worthy objects of charity," to be selected as beneficiaries, and if so construed, then by reading the remainder of the will, we find that the testatrix has limited the trustee in the expenditure of the trust fund to four general charitable objects: (1) the relief of poverty, the objects to be selected by the trustee; (2) the support of the Presbyterian Church at Corsicana, with possible contributions for permanent improvements; (3) the support of Reynold's Orphanage, with possible contributions for permanent improvements; and (4) loans to ambitious, worthy boys and girls to be selected by the trustee, otherwise unable to secure an education. Since the language used is susceptible of this latter construction, it is our duty to so construe it, for, as above stated, it is a well established rule that where a will is susceptible of two constructions, one of which would render it valid and the other invalid, that construction should be adopted which would render it valid in preference to one which would nullify it. 44 Tex.Jur. 716; Neely v. Brogden, Tex.Com.App., 239 S.W. 192, par. 5; Brooker v. Brooker, Tex.Civ.App., 76 S.W.2d 180.

Appellants assert that even though the will requires the trustee to expend the funds for "worthy objects of charity," there is nothing therein that limits the use of the funds for "public charity," and for that reason the trustee could expend the funds for purely "private charity," and therefore the trust is invalid. In the first place, we think it is hardly correct to classify charity as being "private." If property is conveyed in trust for the benefit of certain definite individuals or individuals capable of being definitely ascertained, it is a private trust; or, if property is conveyed in trust for non-charitable objects, then the trust is not a public one. On the other hand, if property is conveyed in trust for an indefinite class for any charitable purpose, it is a charitable trust, and if the funds are expended in the accomplishment of any of the objects set forth in the conveyance, the expenditure is for charity in compliance with the public trust. If the funds should be expended for any other purpose, it would be in violation of the trust. In other words, all purely charitable trusts are public trusts....