The Attorney General of Texas 

July 9, 1982 

MARK WHITE 

Attorney General 

Supreme Coun Building 

P. 0. BOX 12546 

Austin. TX. 713711-254~3 

512,475.2501 

Telex 9101874-1367 

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An Equal Opportunity/ 

Affirmative Action Employer 

Mr. Charles D. Travis opinion No. NW-493 

Executive Director 

Texas Parks and Wildlife Department Re: Authority of Texas Parks 

4200 Smith School Road and Wildlife Department to 

Austin, Texas 78744 reinvest trust funds 

Dear Mr. Travis: 

Your letter concerns the proper administration of certain funds 

contained within the Varner-Hogg State Park Trust Fund administered by 

the department as trustee for the benefit of the Varner-Hogg State 

Park in Brazoria County. This trust was established in 1956 by a deed 

which conveyed to the department certain real property and personalty 

in the form of stock. You inform us that a portion of the stock was 

in the Liggett Corporation and that that stock has been cancelled as a 

result of a merger agreement, leaving the shareholders only the right 

to receive a cash conversion value. Since the conversion to cash 

would no longer be income-producing, the department wishes to consider 

the possibility of investing the cash in some income-producing asset. 

Your question in essence is twofold: (1) would such investment 

be consistent with the trust deed and (2) does the department have the 

authority to make such an investment? 

The relevant portion of the subject trust deed reads as follows: 

And, for and in consideration of the agreements 

and conditions hereinafter set out, I, the said 

IIM Hogg I have transferred, assigned and 

delivered, and by these presents do transfer, 

assign and deliver, unto the said State Parks 

Board of the State of Texas, stock certificates 

evidencing three hundred thirty (330) shares of 

Kennecott Copper Corporation conrmon stock, and one 

hundred (100) shares of Liggett & Myers Tobacco 

Company common stock, upon condition that all of 

the cash dividends from said stock shall be used 

only for the operation, maintenance .and 

improvement of, the premises hereinabove granted, 

and no other, and that the title to said stock 

shall vest and remain in said State Parks Board 

P. 1755 
‘ . 

Mr. Charles D. Travis - Page 2 (Mw-493) 

for so long a time as said premises shall be used 

for State Park purposes, as herein provided. 

TO HAVE ABD TO HOLD the above described 

premises and shares of stock, together with all 

and singular, the rights and appurtenances thereto 

in anywise belonging unto the said State Parks 

Board of the State of Texas so long as said 

premises are continuously held and used by said 

Grantee, and its successors, as a State Park under 

the covenants, terms and provisions hereof, and no 

longer; and if the same be not used for said 

purposes, or at any time cease to be used for such 

purposes, or at any time be used for any other 

purposes save and except those which are herein 

expressly described and mentioned, then and 

thereupon this conveyance and transfer shall be 

null and void and said premises and shares of 

stock, together with any additional or substitute 

shares which may be hereafter acquired by way of 

merger, consolidation, stock dividends, split-ups, 

and/or spin-offs, by the issuing corporations or 

their successors, shall immediately thereafter 

revert to Grantor herein, her heirs or assigns, 

and it shall be lawful, without suit, but only 

upon the giving of reasonable notices to the State 

Perks Board of the State of Texas, or its 

successors, for Grantor herein, her heirs or 

assigns, to re-enter and repossess said premises 

and repossess said shares of stock, and thereafter 

peaceably to hold and enjoy said premises and 

shares of stock as if these presents had not been 

made; and no act or omission on the part of 

Grantor, her heirs or assigns, save the failure to 

give such notice, shall be or constitute a waiver 

of the operation or enforcement of such condition; 

and upon such occurrence the State Parks Board of 

the State of Texas hereby expressly binds and 

obligates itself to re-transfer. re-assign, and 

deliver unto Grantor, her heirs or assigns, any 

and all certificates evidencing said shares. 

The cancellation of the Liggett stock and its conversion to cash 

clearly was not one of the possibilities contemplated by the grantor 

when the trust deed was executed and therefore we have no express 

instructions from the grantor as to how such a contingency should be 

handled. We are left with having to make a determination of whether 

or not the investment of the cash conversion would be contrary to the 

intent of the grantor. The grantor clearly intended that the trust be 

p. 1756 
. - 

Mr. Charles D. Travis - Page 3 (NW-493) 

composed of income-producing assets, for that is what she in fact 

conveyed. Furthermore, the instrument is silent with regard to how 

the trustee should handle assets that were not income-producing. The 

grantor clearly intended to establish a trust that would be adequate 

to maintain the park grounds indefinitely. Given a choice between 

leaving a sum of cash in the fund which is not income-producing or 

converting cash into an income-producing asset, the latter choice 

appears to be more consistent with the intent of the grantor. 

In answer to your second question, we note initially that a state 

agency only has those powers which are expressly conferred upon it by 

law or necessarily implied therefrom. 2 Tex. Jur. III Administrative 

Law 511. The Parks and Wildlife Code itself does not grant to the 

department the general authority to invest monies under its control, 

but it does contain authority for the department to accept gifts for 

the benefit of the state park system, Parks and Wildlife Code section 

13.004, and therefore has authority to act as trustee of those gifts. 

Attorney General Opinion WW-122 (1957). The situation we are 

presented with here is not one which involves money appropriated by 

the legislature or in any' way derived through taxation nor does it 

involve money under the department's general management and control. 

Rather, the department acts as a trustee and as such accrues the same 

powers and responsibilities over the trust as any other trustee under 

the laws of the state of Texas. 

There is an implied duty to invest non-income producing assets 

held in trust where there is a direction by the grantor to pay 'over 

the interest or income to a beneficiary, Moore v. Sanders, 106 S.W.2d 

337, (Tex. Civ. App. - San Antonio 1937, no writ), and it is the 

trustee's duty to use reasonable diligence in so doing, McMullen v. 

Sims, 37 S.W.2d 141 (Tex. Comm'n App. 1931, holding approved). While 

no case in point can be found in Texas, it is a generally wellestablished principal under the common law that trustees have a duty, 

in the exercise of sound judgment and discretion, to convert 

unproductive property into an income-producing fund as soon as can 

reasonably be done, Odgen v. Allen, 114 N.E. 862 (1917). We find no 

hindrance to the application of these principals to the situation you 

have presented. 

We therefore conclude that (1) the Texas Parks and Wildlife 

Department has the authority under the law of trusts to invest funds 

of the trust, (2) the trust instrument contains no language which 

would limit that authority and (3) such investment most fully complies 

with the intent of the grantor. 

p. 1757 
” . 

. . . 

Mr. Charles D. Travis - Page 4 (MN-495) 

SUMMARY 

The Texas Parks and Wildlife Department has the 

authority as trustee of the Varner-Hogg State Park 

Trust Fund to invest its cash assets. 

-MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

R1CHARD.E. GRAY III 

Executive Assistant Attorney General 

Prepared by Eva Loutsenhiser 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Rick Gilpin 

Patricia Hinojosa 

Eva Loutzenhiser 

Jim Moellinger 

p. 1758