Court Opinion

ID: 9638367
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:42:19.830594+00
Date Added: 2024-06-11T18:10:06.068547
License: Public Domain

GREENHILL, Chief Justice,
dissenting.
I respectfully dissent.
The terms of Louise Cozby’s will clearly indicate her primary purposes in establishing the trust estate were twofold: (1) to provide an income for life for Rexford Coz-by in the event he survived the testatrix; and (2) to provide for the education of the three student beneficiaries, Warren Wilkinson, Jr., Susan Arnette and Karolen Wilkinson Dittmar. If Rexford Cozby died before the expiration of the term of the trust, as indeed he did, the proportion of the trust principal reserved for his use was to be aggregated with the proportionate share reserved for the students and the income gen*155erated thereby was to be used to defray their college expenses. If the income from the trust property was insufficient to pay the expenses of the student beneficiaries, the trustee was authorized to invade the trust principal in order to provide the funds necessary to cover the expenses. If, on the other hand, the income from the trust property exceeded that necessary to pay the educational expenses of the three designated beneficiaries, the trustee was authorized to distribute such excess to Louise Purvis and Karolen Newton in equal shares.
The first purpose of Louise Cozby in establishing the trust, the provision of income for her husband, was rendered impossible of performance by his death prior to the death of the testatrix. The second purpose, the provision of educational benefits for the great-nieces and great-nephew of Louise Cozby, was accomplished with the 1971 graduation from college of Warren S. Wilkinson, Jr. In support of its judgment terminating the trust the trial court found the purposes of the trust had been accomplished. The Court of Civil Appeals concurred in this finding, specifying that at best the provision for the payment of excess income to Louise Purvis and Karolen Newton was an incidental or minor purpose of the trust.
The structure and terms of the will support these findings. The language of Paragraph Three directs the trustee to pay “to or for the use and benefit of the following named respective beneficiaries the following periodical payments. . . The remainder of the sentence specifies the nature of the payments to be made to Rexford Cozby and to the student beneficiaries. It says nothing of the possible payments to Karolen Newton and Louise Purvis and does not, in this section of the will, refer to them as beneficiaries of the trust.
The succeeding paragraph directs the bank to make the payments to the beneficiaries “in monthly installments, or in such other periodical installments as the Trustee may determine.” Again, there is no mention of the contingent payments to Purvis and Newton.
The next paragraph provides the only mention of the payments, and dictates that if the income is more than sufficient to cover the educational expenses, then and only then is the bank authorized to distribute the excess to Louise Purvis and Karolen Newton “from time to time, ... at such times and in such installments as the Trustee may determine.” The will mandates that any such excess income payments “shall” be made by the bank, but the frequency and amount of such payments are left to the discretion of the trustee. It is clear from these provisions that the testatrix did not intend to provide continuing, regular payments for Louise Purvis and Karolen Newton during the term of the trust, and that any benefits due them were an incidental and minor purpose of the trust.
There is no evidence or term of the will suggesting that this trust was in the nature of a spendthrift trust. It therefore occurs to me the better rule would be that where a trust is not a spendthrift trust, and the material purposes of the trustor have been accomplished, an agreement by all beneficiaries to terminate the trust should be given effect, provided none of the beneficiaries is under an incapacity. Restatement (Second) of Trusts § 337 (1959), G. Bogert, Trusts and Trustees § 1007 (2d ed. 1962); Annot., 163 A.L.R. 852 (1946). See Tinsley v. Magnolia Park Co., 59 S.W. 629 (Tex.Civ.App.1900, writ ref’d). Here all beneficiaries of the trust, Karolen Newton, Louise Purvis and their children, have entered into an agreement requesting judicial termination of the trust; the will does not create a spendthrift trust; and, as detailed above, the provision for the payment of excess income to Newton and Purvis was merely an incidental purpose of the trustor, Louise Cozby.
The bank and the guardian ad litem for the unborn and unadopted children of Karo-len Newton and Louise Purvis would deny effect to the agreement to terminate the trust on the ground that the beneficiaries of the trust corpus cannot be finally determined until the death of the last to survive *156of Karolen Newton and Louise Purvis. Thus, they argue, there are contingent re-maindermen whose interests are unprotected in case of termination. Under the terms of the will here in question, if either or both Karolen Newton and Louise Purvis die pri- or to termination of the trust, the share of the estate due each is to be distributed in equal shares to “her then living children.” The Petitioners argue that these contingent beneficiaries are unknown because Karolen Newton and Louise Purvis are presumed able to bear additional children. Furthermore, argue the Petitioners, either Newton or Purvis could adopt additional children.
The argument that Karolen Newton and Louise Purvis might adopt additional children and thereby expand the class of residuary beneficiaries is precluded by the decision of this Court in Cutrer v. Cutrer, 162 Tex. 166, 345 S.W.2d 513 (1961). We there held that where a trust provided for the distribution of assets to the “children” of a designated beneficiary, the appellation “children” did not include adopted children. Therefore, even if Karolen Newton or Louise Purvis did adopt additional children, the class of “then living children” mentioned in the will of Louise Cozby would not be affected.
Regarding the possibility that Karolen Newton and Louise Purvis could bear additional children, the question is somewhat more problematical. The undisputed testimony at the trial indicated that both nieces of the testatrix had passed menopause and therefore were physically incapable of childbearing. Nevertheless, Texas courts have heretofore followed the old common-law doctrine, sometimes called the “fertile octogenarian rule,” that a person is conclusively presumed to be able to have issue as long as he or she is alive. Aberg v. First National Bank in Dallas, 540 S.W.2d 403 (Tex.Civ.App.—Dallas 1970, writ ref’d n.r.e.); Donald v. Troxwell, 346 S.W.2d 398 (Tex.Civ.App.—Eastland 1961, writ ref’d n.r.e.). The trend seems to be toward relaxing the doctrine so as to allow rebuttal of the presumption. See, e. g., In Re Bassett’s Estate, 104 N.H. 504, 190 A.2d 415 (1963); Restatement of Property § 274 (1940); Annot., 98 A.L.R.2d 1285 (1964). The better view is that adopted by the Restatement of Property, cited just above, which recognizes the presumption of fertility but recognizes that “this presumption can be rebutted by relevant evidence as to such person and by past experience concerning births to persons of like age and physical condition.”
In the instant case, the evidence bearing upon the issue of the fertility of Karolen Newton and Louise Purvis is their own testimony. The testimony is undisputed and supports the trial court finding that they are incapable of bearing children. That being true, I would hold that the presumption of fertility was rebutted and that all requisite beneficiaries joined in requesting termination of the trust.
The bank and the guardian ad litem also assert that the legal heirs of Louise Cozby were necessary parties to this lawsuit because if, when the trust terminated, neither Louise Purvis, Karolen Newton, nor any of their children were living, then the legal heirs of Louise Cozby would inherit the property comprising the trust corpus. As these legal heirs were contingent beneficiaries of the trust, the bank and the guardian ad litem contend they were necessary and indispensable parties to this suit to terminate the trust. The trial court ordered the joinder of Alibel Pardue, the sister of the testatrix; and so the contingent remaindermen not parties to the suit were the descendants of Alibel Pardue. These remote contingent beneficiaries were not necessary parties to this suit. The interest of these contingent beneficiaries could vest only if the trust remained in effect until the death of the last to survive of Karolen Newton and Louise Purvis. The arguments advanced by the bank as trustee sought the continuation of the trust until such time as it terminated by the express language of the will, that time being the death of the last to survive of Karolen Newton and Louise Purvis. Thus the interests of the bank as trustee and the interests of the remote contingent beneficiaries were identical. In such a case, the contingent benefi*157ciaries are considered to be adequately represented by the trustee; and while the remote beneficiaries would be proper parties, they are not indispensable. Mason v. Mason, 366 S.W.2d 552 (Tex.1963); Fisher v. Southland Royalty Company, 270 S.W.2d 677 (Tex.Civ.App.—Eastland 1954, writ ref’d n.r.e.).
I would affirm the judgments of the trial court and the Court of Civil Appeals.
DANIEL and JOHNSON, JJ., join in this Dissent.