THE A-JTORNEY GENERAL 

OFTEXAS 

AUSTIN. T-s 78711 

October 10, 1974 

Major General Thomas S. Bishop 

Adjutant General of Texas 

P. 0. Box 5218 

Austin, Texas 78763 

Dear General Bishop: 

Opinion No. H- 418 

Re: Whether the Texas 

National Guard and 

similar groups are 

entitled to income 

from a trust established for the “White 

Military Companies 

of Dallas County. ” 

You have asked several questions relating to the income from a 

trust and have described the factual background. 

In December, 1888, a lot in the business section of Oak Cliff, City 

of Dallas, was conveyed by deed to the Dallas Artillery Company on 

condition that the Artillery Company would erect an armory on the 

property within six months. This was accomplished and title vested. 

The property was to be vested in the Dallas Artillery Company for its 

sole use, enjoyment and control as long as the Company remained an 

organization either military, civil or social, and after the dissol.ution 

of the Company the land was to go to any military company or social 

organization formed by as many as five of the members of the Company, 

either by themselves or associated with others. After the dissolution 

of the Company and any such organization or organizations, then the 

property was to revert to the County Judge of Dallas County and his 

successors in office to the use and benefit of such “White Military 

Companies of Dallas County” as might be in a position to use and enjoy 

it. 

No military company has used or enjoyed the property since 1919 

when the Dallas Artillery Company was mustered out after the First 

World War. Two law suits tried to recapture the trust estate, but 

failed. The County Judge of Dallas County sold the original property 

and later bought another tract of land. This was sold in 1971 for 

$120,000; $10,000 of which was paid then and the remainder was to be 

paid over a 20 year period with interest. A private association called 

p. 1947 
Major General Thomas S. Bishop, page 2 (H-418) 

Dallas County National Guard Association was formed and, the Trustee. 

the County Judge of Dallas County, authorized the purchaser of the tract 

to make payments under the note directly to the Dallas County National 

Guard Association. The association spends the interest and gives the 

County Judge an accounting each year. Principal payments are treated 

as the corpus of the Trust and are not spent. 

Your first question recites that it was held in Scott V. Sterrett, 234 

S. W. 2d 917. 920 (Tex. Civ. App. --Dallas 1950, writ ref’d. n. r. e. ) that 

the trust beneficiaries, the white military companies of Dallas County, 

are “constituents of the organized militia of this state” and asks “whether 

or not is is legal to transfer interest payments received from this trust 

to the Dallas County National Guard Association which is not a state 

Militia entity but a private association? ” 

Before the property was sold in 1971, a declaratory judgment action 

was brought to determine, inter alia, whether the payments from the 

sale of the property could be made to the Dallas County National Guard 

Association. The parties to the actionwere the County Judge, the commanding officers of all National Guard units in Dallas County and the 

Attorney General. See Article 4412a, V. T. C. S. An agreed judgment 

was entered by the Court on December 3, 1970, and provided in part: 

IT IS FURTHER ORDERED, ADJUDGED and DECREED 

that the Promissory Note in the amount of $110,000 to 

be executed by the purchaser of such property be made 

payable to W. L. (Lew) Sterrett, County Judge of Dallas 

County, Texas, as Trustee for the White Military Companies 

of Dallas County, Texas, and/or his successors in office 

and trust, and that the County Judge allow payments to be 

made under said Note directly to the Dallas County National 

Guard Association, which Association shall provide annual 

accountings to said County Judge, showing that proceeds 

received under such Note were used by such Association 

in furtherance of the purposes for which the Trust herein 

referred to was created. Sterrett,et al. V. Didear, 

No. 70-12528. Dist Ct. of Dallas County, 116th Judicial 

Dist. of Texas, December 3, 1970. 

p. 1948 
Major General Thomas S. Bishop, page 3 (H-418) 

As the payments on the note are made to the Dallas County National 

Guard Association pursuant to the judgment of the court, it is our opinion 

that they are being made legally so long as the purposes and activities 

of the Association do not change so that they no longer reflect the purposes of the trust. Whether that is the case depends on a determination 

of the facts and is outside the scope of this office’s opinion process. 

Your second question is: 

If the answer to the first question holds such 

payments to be legal does the Adjutant General’s 

Department have authority to supervise this fund 

under joint regulation, TARNG Regulation 230-2, 

TANG Regulation 176-2 and TSG Regulation 230-2? 

The regulations about which you inquire outline detailed procedures 

for the handling of National Guard funds. Although the Association is 

closely related to the National Guard, it technically is not a part of the 

Guard. Therefore, we have found no authority by which the Adjutant 

General can extend the requirements of TARNG Reg. 230-2, TANG Reg. 

176-2 and TSG Reg. 230-2 to the Association. However, the judgment 

of the Court directs the Association to provide an annual accounting to 

the County Judge in his role of trustee. 

Your third and fourth questions ask whether the Texas State Guard is 

entitled to participate in the trust and whether the Dallas County National 

Guard Association violates the terms of the trust since some non-county 

residents, some retired members of the Guard and some regular Army 

and Air Force personnel assigned to the Guard are entitled to membership. 

Again, we believe these questions were answered by the District Court 

judgment which directed that the payments be made to the Association. 

Absent review or modification of the judgment, we must answer these 

questions in the negative. 

Your fifth through eighth questions involve the federal tax status of 

the Association and the steps necessary for the Association to realize 

maximum federal tax benefits. We believe these questions are outside 

our opinion giving authority as outlined in Article 4399, V. T. C. S., as 

they are primarily private in nature. 

p. 1949 
Major General Thomas S. Bishop, page 4 (H-418) 

Your final question is 

Since Militia units now have Negro members what 

effect does the provision of the trust have which set 

it up for the benefit of the White Military Companies 

of Dallas County? Is this an enforceable provision 

of the trust and if so by what procedures? 

Although the trust refers to “White Military Companies,” we do not 

believe it must be interpreted to exclude benefits for non-whites. Coffee 

v. William Marsh Rice University, 408 S. W. 2d 269 (Tex. Civ. App. --Houston 

1966, writ ref’d., n. r. e. ). If the trust were interpreted as being limited to 

a racially segregated class, the restriction would be unenforceable. Shelley 

v. Kraemer, 334 U.S. 1, 92 L. Ed. 1161 (1948). It is our conclusion, therefore, that the beneficiaries of the trust are not limited to members of any 

racial group. 

SUMMARY 

The entitlement to income from a trust established for the Dallas Artillery Company and upon 

that group’s dissolution for the use and benefit 

of the “White Military Companies of Dallas County’ 

is determined by a district court judgment directing 

that payments be made to a private association of 

National Guard personnel. Under Texas case law, 

the trust is not to be interpreted to exclude benefits for non-white persons, and an interpretation 

limiting benefits to a racially segregated class 

is unenforceable. 

Very truly yours, 

JOHN L. HILL 

Attorney General of Texas 

p. 1950 
Major General Thomas S. Bishop, page 5 (H-418) 

APPFj,OVGD: 

v---l \\ VI-t-i.- 

!?. YOR , First A ListaDAVID M. KENDALL, Chairman 

Opinion Committee 

p. 1951