Will of Coe, Matter of
| Decision Date | 16 January 1992 |
| Docket Number | No. 12434,12434 |
| Citation | 1992 NMCA 6,113 N.M. 355,826 P.2d 576 |
| Parties | In the Matter of the Last WILL and Testament OF Wilhelmina Neat COE, Deceased. Faidyne TONEY, Charles A. Toney, and Byron Ross Toney, Plaintiffs-Appellees, v. Ralph M. COE, Defendant-Appellant, Byron Coe, Eldon A. Coe, Donald G. Coe, First National Bank in Albuquerque, Oliver B. Cohen, Nathaniel Wollman, James A. Hoffman, William F. Aldridge, The Peace Foundation, Inc. (1969), and The Peace Foundation, Inc. (1957), Defendants-Appellees. |
| Court | Court of Appeals of New Mexico |
Ralph M. Coe (Coe) appeals from a judgment denying his motion to set aside the last will and testament of his deceased wife, Wilhelmina Neat Coe (Wilhelmina), and dismissing his counterclaim, cross-claims and third-party claims. Coe sought, among other things, to have the Peace Foundation, Inc., a nonprofit corporation incorporated in 1957 (Foundation 1957), adjudicated to have been legally dissolved and to be a different entity from the nonprofit corporation bearing the same name, incorporated in 1969 (Foundation 1969). Coe also appeals from the district court's judgment quieting title in the name of the Foundation 1969 to certain realty, and denying his action seeking to quiet title in his name to property claimed by the Foundation 1969 and property held by the testamentary trust established under the will of his late wife. Two issues are presented on appeal: (1) whether a testamentary trust created under Wilhelmina's last will and testament is void and unenforceable; and (2) whether the Foundation 1969 legally obtained title to real property previously held in the name of the Foundation 1957. We affirm in part and reverse in part.
The events giving rise to this appeal are lengthy and complex. Coe and Wilhelmina were married in 1928. They were divorced in 1950. Pursuant to the terms of the decree of divorce, Wilhelmina received several parcels of realty as her separate property; she received additional real property from Coe in 1952, while the parties were single. In 1953 Coe and Wilhelmina remarried.
On December 23, 1957, Coe and Wilhelmina incorporated the Foundation 1957, a nonprofit corporation. Wilhelmina was named as president and Coe was named as vice-president of the corporation. As specified by the articles of incorporation, the objects of the Foundation 1957 were "[t]o assist and financially aid educations [sic], scientific, religious and charitable institutions, associations, and organizations, as well as to carry out such assistance in the broadest and most helpful manner," and to perform such other things necessary to attain the "wholly and exclusively" charitable and benevolent objects of the corporation.
On December 24, 1957, Coe and Wilhelmina executed a warranty deed conveying several tracts of realty to the Foundation 1957. The property described in the deed was, at the time of the deed's execution and delivery, the separate property of Wilhelmina, and consisted of realty received by Wilhelmina under the decree of divorce and under a deed executed by Coe to her in 1952.
The December 24, 1957, deed executed by Coe and Wilhelmina recited, among other things, that the property described therein was being conveyed to the Foundation 1957:
To Glorify the ONE GOD by the building of, [sic] an "ALL FAITHS CENTER" for the teaching & rehabilitation of the spiritually and physically handicapped. To encourage and help the churches in securing bibles and good books for their libraries. To help with the establishing of "Meditation Rooms" in hospitals, hotels & office buildings. * * * [T]o further the cause of world unity & international peace in truth, love & life, that all may live in brotherly love & peace the life abundant.
Following incorporation of the Foundation 1957, Coe served as its vice-president and secretary-treasurer until 1969. In 1969 the state corporation commission entered an order dissolving the corporation because of Coe's failure to file the annual corporate reports for the years 1966, 1967, and 1968 and to remit the required filing fee. On August 7, 1969, Coe and Wilhelmina, together with several other individuals, incorporated a new corporation called the "Peace Foundation, Inc." (Foundation 1969), with the same directors and officers as the Foundation 1957, and adopted the same corporate bank account number, principal place of business, and federal tax identification number. As evidenced by the articles of incorporation, the purposes of the Foundation 1969 differed in part from those of the Foundation 1957. The purposes of the Foundation 1969 were:
[T]o assist and financially aid people and organizations in the broadest and most helpful manner. To acquire by purchase, exchange, lease, grant, gift, devise or bequest, or otherwise, real and personal property. To exercise all of the powers granted to associations not for profit by virtue of [Sections] 51-14-20 to 51-14-40 [NMSA 1953 (Repl. Vol. 8, Pt. 1) ].
No deeds or assignments were executed transferring or conveying the assets of the Foundation 1957, following its dissolution, to the Foundation 1969; however, the officers and directors of the latter corporation took possession of and treated the assets of the dissolved corporation as belonging to the newly created corporation.
On June 1, 1970, after consulting with an attorney, Wilhelmina executed a last will and testament. The will provided for the disposition of certain assets to Coe and others, and directed that the residue of her estate be placed in a testamentary trust for the benefit of Coe and the "Peace Foundation, Inc." The will also provided that the trustee should pay over to Coe the sum of $500 per month from the income of the trust "or so much as may be necessary because of changed economic conditions"; additionally, the trustee was authorized in his discretion to "pay over to or apply for the benefit of ... COE so much of the principal" as deemed necessary, and that "[d]uring the lifetime of [Coe], to the extent available, and subject to the previous conditions of this will, the Trustee shall utilize so much of the trust estate as it deems desirable to aid in the work of the PEACE FOUNDATION, INC." The testamentary trust named twenty-eight individuals, consisting of relatives and friends of Wilhelmina, including Faidyne Toney (Wilhelmina's niece), and Faidyne's husband, Charles A. Toney, and their son, Byron Ross Toney (the Toneys), and specified that they "are to receive, free of charge, any services offered by The Peace Foundation, Inc., [including] sponsored clinics, health services, housing and social services." The will also provided that "[t]his trust shall terminate twenty-one years after the death of [Coe] and thereupon the remaining property held in trust shall be distributed, discharged of trust, to the PEACE FOUNDATION, INC., a New Mexico corporation, or its successor."
Wilhelmina died on December 28, 1970, and on February 5, 1971, Coe petitioned the district court for probate of her will and for appointment as administrator. Thereafter, on February 11, 1971, Coe was appointed as special administrator of Wilhelmina's estate. The will was admitted to probate on March 10, 1971. The estate remained open until March 9, 1977, when pursuant to Coe's request the probate proceedings were closed. The order closing the estate specified that the court would retain jurisdiction to enter further pleadings, orders, and judgments therein.
In April 1982 the Toneys filed a civil action against Coe, the First National Bank in Albuquerque, and Oliver Cohen, as trustee of the testamentary trust, seeking an accounting of trust assets, an award of damages, and the removal of the trustee of the testamentary trust and the officers of the Foundation 1969. The complaint alleged, in part, that the estate had been improperly administered and that the Foundation 1969 had misused and failed to properly dispose of trust assets. The Toneys also filed a motion in the estate proceedings to reopen the probate action and sought an accounting of the estate assets. Thereafter, the district court dismissed both proceedings initiated by the Toneys for lack of standing. On appeal, our supreme court, in an unpublished decision dated May 31, 1984, consolidated the appeal in the two actions, reversed the orders entered by the district court, and held that the Toneys had standing to invoke the district court's aid to secure and preserve the assets of the trust estate and that Faidyne Toney had the right to obtain a trust accounting as a current or future trust beneficiary under NMSA 1978, Section 45-7-303.
In 1982 Coe petitioned the district court to reopen the proceedings in Wilhelmina's estate. The court granted the motion, accepted an amended final account and report filed by Coe, and ordered certain assets of the estate to be placed in the testamentary trust. On September 3, 1982, the district court entered an order approving the final account and report and again ordered that the estate be closed.
Following remand of the Toneys' appeal, the district court began a series of hearings on the relief sought by the Toneys and ordered that the Toneys' civil action be...
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