State of Cal. Dept. of Mental Hygiene v. Bank of Southwest Nat. Ass'n

• Decision Date: 05 July 1961
• Docket Number: No. 3840,3840
• Citation: 348 S.W.2d 731
• Parties: STATE OF CALIFORNIA DEPARTMENT OF MENTAL HYGIENE, Appellant. v. BANK OF the SOUTHWEST NATIONAL ASSOCIATION et al., Appellees.
• Court: Texas Court of Appeals

Page 731

348 S.W.2d 731

STATE OF CALIFORNIA DEPARTMENT OF MENTAL HYGIENE, Appellant. v. BANK OF the SOUTHWEST NATIONAL ASSOCIATION et al., Appellees.

No. 3840.

Court of Civil Appeals of Texas, Waco.

July 5, 1961.

Rehearing Denied Aug. 17, 1961.

Dillingham, Schleider & Lewis, Sam L. Sterrett, Jr., Houston, Stanley Mosk, Atty. Gen. of California Elizabeth Palmer, Deputy Atty. Gen of California, for appellant.

Baker, Botts, Andrews & Shepherd, Wm. R. Choate, Houston, for appellees.

McDONALD, Chief Justice.

This is an appeal from a summary judgment that plaintiff take nothing. Plaintiff, State of California Department of Mental Hygiene, filed this case against the Bank of the Southwest, as Trustee of the Estate of Ennis Cargill, deceased; and against the heirs of Henrietta Cargill Adkins (one of the beneficiaries of the trust), seeking to recover moneys expended in taking care of Ruby Tennie Cargill (the other beneficiary of the trust); and for a construction of the trust in harmony with the money recovery sought.

The settlor of the trust was Ennis Cargill, who was the father of Ruby Tennie Cargill and Henrietta Cargill Adkins. Ennis Cargill died testate 26 November 1938. His will created a testamentary trust for the benefit of his two daughters. At all times material to this suit Ruby Tennie Cargill has been a partient in the State Hospitals in California and is regarded as incurably insane. Henrietta Cargill Adkins died in 1956 and her surviving husband and children, and the Trustee of Ennis Cargill's testamentary trust are the defendants herein.

Pertinent portions of the trust instrument follows:

'VII

'All of the rest, residue and remainder of my property * * * I give, devise and bequeath (to the Trustee), in trust, however to be held, managed and controlled by it, for the following uses and purposes:

'The Trustee shall utilize, apply, expend and dispose the net income from the Trust for each year and shall distribute the principal thereof in the following manner.

'(a) The Trustee shall, subject to the further provisions hereof, pay to my daughter, Henrietta Cargill (born 12 Jan. 1912) out of the net income of and from the Trust Estate, the sum of $300. per month until she reaches the age of 30 years. When my said daughter reaches the age of 30 years * * * the Trustee shall pay to her out of such net income the sum of $500. per month until she reaches the age of 40 years.

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'(b) My daughter Ruby Tennie Cargill (born 4 Dec. 1898) is at the time of the execution of this will confined in a state hospital of the State of California; * * * having been committed to said institution on December 22, 1932. I have been called upon to make payments in amounts not exceeding $25. per month for the purpose of maintaining her in said institution and defraying additional incidental expenses. So long as my said daughter is confined in said institution, or in any other institution, I direct the Trustee to pay to the proper authorities of such institution for the use and benefit of my said daughter and to defray the expense of her miantenance therein a like sum of money each month, unless a greater or lesser amount is required, in which event the Trustee shall pay the amount so required, provided, however, that in no event shall the amounts so paid exceed the maximum amount required by such institution from time to time for persons confined under such circumstances and for reasons similar to those which brought about the commitment of my said daughter. In any event the amounts so to be paid and expended by the Trustee shall be determined in its unlimited judgment and discretion taking into consideration all facts and circumstances attendant upon my said daughter's condition and requirements. In lieu of payments to said institution the Trustee may make payments in like amounts to the mother of my said daughter in reimbursement of sums paid out by her for such purposes.

'In the event that my said daughter has been released from said institution prior to my death, or should she be released by due, proper and legal proceedings after my death, by reason of the cessation of the cause of her commitment thereto, then and in either of such events, I direct that the Trustee shall pay to her out of the net income $150. per month for and during the term of her natural life, or until such time as she may again be committed to the same or a similar institution, in which event the provisions set forth in the next preceding paragraph of this sub-paragraph (b) shall become applicable. * * *

'(c) The net income over and above the payments made therefrom as provided in the next 2 preceding subparagraphs (a) and (b) shall be accumulated by the Trustee and shall be held, invested and reinvested by the Trustee as and as a part of the principal of the Trust Estate.

'(d) When my daughter Henrietta Cargill reaches the age of 40 years, or upon her death prior thereto, if my daughter Ruby Tennie Cargill, be then living, the Trustee shall, subject to the further provisions hereof, set apart and hold under the further provisions hereof such portion of the Trust Estate as shall at time thereof yield at the then reasonable rate of return on investments the sum of $1800. per annum net over and above the then reasonable expenses of administering said fund hereunder, including the compensation of the Trustee. Such fund so set apart shall be held during the natural life of my daughter, Ruby Tennie Cargill, and the net income therefrom shall be utilized, expended and paid to or for her as provided in subparagraph (b) above. The balance of the Trust Estate then remaining, or if my daughter Ruby Tennie Cargill be then dead, the entire Trust Estate shall be paid and delivered, free of the Trust, to my daughter Henrietta Cargill, and the Trust shall terminate with respect thereto. Upon the death of my daughter, Ruby Tennie Cargill, the portion of the Trust Estate set apart and held for her as above provided shall be paid and delivered, free of the Trust, to my daughter, Henrietta Cargill, and the Trust shall terminate with respect thereto.

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'(g) In the event that an emergency arises such as the serious illness of my said daughter, Henrietta Cargill, or should her necessities be such that in the judgment of the Trustee they should be relieved, or should she require for her proper maintenance, education or support more than the net income available or specific for such purpose, the Trustee may advance, pay and expend out of the excess net income or the principal from time to time such sums as shall be determined by it, the amounts to be paid, the time of, desirability of, and necessity for any such payments or expenditures to be determined solely in the discretion of the Trustee.

'During the time that my daughter Ruby Tennie Cargill is confined in an institution, or thereafter, the Trustee may make from time to time disbursements from the excess net income and/or principal of the Trust Estate, or from the portion set apart for her, as above provided, to meet any emergency or necessity arising, in like manner and for like purposes as specified in the next preceding paragraph, the amount, time, and desirability of and the necessity for such disbursements to be determined wholly in the discretion of the...