Court Opinion

ID: 9351709
Source: CourtListenerOpinion
Date Created: 2023-01-03 14:08:25.072441+00
Date Added: 2024-06-11T17:02:03.743862
License: Public Domain

Fourth Court of Appeals
                                       San Antonio, Texas
                                  MEMORANDUM OPINION

                                          No. 04-21-00365-CV

                                IN RE THE JOHN O. YATES TRUST

                          From the Probate Court No. 1, Bexar County, Texas
                                       Trial Court No. 116847
                              Honorable Oscar J. Kazen, Judge Presiding

Opinion by:       Liza A. Rodriguez, Justice

Sitting:          Beth Watkins, Justice
                  Liza A. Rodriguez, Justice
                  Lori I. Valenzuela, Justice

Delivered and Filed: December 28, 2022

AFFIRMED

           Trust beneficiary Robert Mack Yates (“Robert”) appeals from a declaratory judgment

construing the John O. Yates (“Yates”) testamentary trust (“the trust”). The judgment declared that

Yates’s will authorizes the trustee, with the consent and approval of an advisory committee, to sell

part of the trust corpus—real property located in Bexar County, Texas—and to allocate the sale

proceeds to the trust’s principal account. We affirm.

                                             BACKGROUND

           On July 6, 1953, Yates executed a will providing that his residuary estate be placed in trust

for his brothers and sisters and their issue per stirpes. Although the will created a trust for each of

Yates’s siblings and their issue, it directed that the trusts be administered as an undivided unit. It

further stated that the trusts would continue until twenty-one years after the death of the last niece
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or nephew alive at the time of Yates’s death, at which time the trusts would terminate, and the trust

corpus would be distributed to the then-beneficiaries, the lineal descendants of Yates’s siblings. 1

The will also called for the creation of a trust advisory committee, consisting of designated family

members, and instructed the trustee to consult with the advisory committee on important matters

concerning the administration of the trusts.

        After Yates’s death on August 30, 1964, his will was admitted into probate and his

residuary estate, which primarily consisted of various mineral interests and real property, was

placed in trust. The residuary estate included the real property in Bexar County, which Yates

referred to in his will as “my Bexar County home” and “my ranch home in Bexar County, Texas.”

Over the next five and a half decades, the real property and the mineral interests remained part of

the trust principal and the trust income was paid to the trust beneficiaries.

        On February 13, 2020, the trustee, Frost Bank, San Antonio, filed an original petition

seeking two declarations regarding the administration of the trusts. 2 First, the trustee asked the trial

court to determine if Yates’s will authorized the sale of the real property in Bexar County (“the

Bexar County ranch”). Second, the trustee asked the trial court to determine if the will required

the proceeds from the sale of the Bexar County ranch to be allocated to the trusts’ principal

account.

        Robert appeared in the suit and argued that the will’s terms prohibited the sale of the Bexar

County ranch. Alternatively, Robert argued that even if the will authorized the sale of the Bexar

County ranch, it required the sale proceeds to be considered income rather than principal.

1
  Because the last nephew alive at the time of Yates’s death died on November 11, 2018, the trusts will terminate on
November 11, 2039, and the principal will be paid to the beneficiaries at that time.
2
 Two current advisory committee members, John Griffin Yates, Jr. and Hugo Edwin Auler, joined in the trustee’s
original petition.

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       After a non-evidentiary hearing, the trial court rendered a final judgment declaring: (1) the

will authorizes the trustee to sell the Bexar County ranch, and (2) the sale proceeds from the Bexar

County ranch must be allocated to the trusts’ principal account. On appeal, Robert challenges both

declarations.

                                    RULES OF CONSTRUCTION

       The construction of an unambiguous will is a question of law, which we review de novo.

Younger v. Younger, No. 07-19-00039-CV, 2020 WL 6253237, at *2 (Tex. App.—Amarillo Nov.

17, 2020, no pet.). A will is not ambiguous simply because of a lack of clarity or because the

parties offer different interpretations of a term; rather, a will is ambiguous only when the

application of established rules of construction leave its terms susceptible to more than one

reasonable meaning. Estate of Rhoades, 502 S.W.3d 406, 415-16 (Tex. App.—Fort Worth 2016,

pet. denied). If we can give a certain and definite legal meaning or interpretation to the words used,

the will is unambiguous, and we construe it as a matter of law. Id. at 416.

       We apply identical rules to the construction of wills and trusts. In re Ray Ellison

Grandchildren Trust, 261 S.W.3d 111, 117 (Tex. App.—San Antonio 2008, pet. denied.). In

construing a will, we focus on the testator’s intent, which we ascertain by looking to its provisions

as a whole, as set forth within its four corners. Stephens v. Beard, 485 S.W.3d 914, 916 (Tex.

2016). “We determine intent by construing the instrument holistically and by harmonizing any

apparent conflicts or inconsistencies in the language.” Hysaw v. Dawkins, 483 S.W.3d 1, 4 (Tex.

2016). “Ascertaining intent from the four corners of a will requires careful examination of the

words the testat[or] chose, and the sense in which the words were used by the testator is the

ultimate criterion.” Id. at 7 (quotation marks/brackets omitted). Our task is to “focus not on what

the testator intended to write, but on the meaning of the words he actually used.” Stephens, 485

S.W.3d at 916 (quotation marks/brackets omitted). “Such words, whether technical or popular, are

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construed in their plain and usual sense, unless a clear intention to use them in another sense is

present in the instrument.” Id. (quotation marks omitted). Additionally, we look to the law as it

existed at the time the will was executed. See In re Ray Ellison Grandchildren Trust, 261 S.W.3d

at 118. If possible, we construe the will to give effect to all provisions so that none is rendered

meaningless. Id. “Fundamentally, there are many rules of law surrounding the construction of a

will but there is one over-all rule[:]. . . there is no set rule that will fit the construction of every

will, and therefore each case must stand under its own facts.” See Hysaw, 483 S.W.3d at 8

(quotation marks/brackets omitted).

                                               DISCUSSION

          Although both sides offer differing constructions of Yates’s will, neither side argues that it

is ambiguous. Because we can give a definite and certain interpretation to the words used in the

will, we agree that it is unambiguous and construe it as a matter of law. See Rhoades, 502 S.W.3d

at 416.

Authority to Sell the Bexar County Ranch

          In his first issue, Robert argues the trial court erred by declaring that Yates’s will authorizes

the trustee, with the consent and approval of the advisory committee, to sell the Bexar County

ranch.

          Robert directs our attention to article IX(c) of the will, which provides: “Except as may

otherwise be provided herein, my Trustee or its successor shall not have or exercise the right,

power, privilege or authority to sell, convey or dispose of any of the trust property or any part

thereof.” (emphasis added). Robert asserts that this provision demonstrates that Yates intended to

prohibit the sale of trust property. Even though this provision creates a general rule against the sale

of trust property, it also states that exceptions may exist. Accordingly, article IX(c) does not resolve

this issue.

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        The language at the center of this issue appears in article IX(m), paragraph two of the will

and states in relevant part:

        I direct my Executor and Trustee to pay all taxes, insurance and normal repairs and
        other expenses in connection with the maintenance of my ranch home in Bexar
        County, Texas[,] and my ranch in Duval County, but the cost of same shall be
        chargeable in equal proportions to such one or more of my brothers and sisters or
        nieces and nephews that shall desire to use the same. Otherwise, my Executor
        and/or Trustee shall, with the consent and approval of the Advisory Committee,
        lease or otherwise dispose of said properties and the rentals or proceeds shall
        become part of the income or principal of the trusts created under my Will in equal
        parts or by stirpes as the case may be.

(emphasis added). We must determine what Yates intended this language to mean at the time he

executed his will.

        Robert argues that this language does not authorize the trustee to sell the Bexar County

ranch because it does not use the word “sale” to describe the permissible dispositions of the

property. However, we reject this approach because it calls for a rigid, mechanical construction of

the will, which the law disfavors. See Hysaw, 483 S.W.3d at 4 (recognizing that courts favor a

holistic and harmonizing approach and reject mechanical rules of construction). In construing a

will, we must focus on the meaning of the words the testator actually used and construe them in

their plain and usual sense, unless a clear intention to use them in another sense is present in the

four corners of the will. Stephens, 485 S.W.3d at 916.

        A contemporary dictionary definition of the word “dispose” is “[t]ransfer into the hands of

another by sale or bequest.” SHORTER OXFORD ENGLISH DICTIONARY 712 (6th Ed. 2007) (emphasis

added). Historically, the term “dispose of” had a well-recognized legal meaning: “[t]o alienate or

direct the ownership of property, as disposition by will”; “to pass onto the control of someone

else”; “to alienate, relinquish, part with, or get rid of”; “to bargain away”; “[o]ften used in restricted

sense of ‘sale’ only, or so restricted by context.” BLACK’S LAW DICTIONARY 557 (Rev. 4th Ed.

1968); see Phelps v. Harris, 201 U.S. 370, 380 (1879) (“The expression ‘to dispose of’ is very

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broad, and signifies more than ‘to sell.’ Selling is but one mode of disposing of property.”)

(emphasis in original); Lowe v. Ragland, 297 S.W.2d 668, 674 (Tex. 1957) (stating that the power

of “full” “disposition” in a will “rather obviously means a power of alienation and one of broad

scope without regard to whether it be by sale or gift.”); Moore v. Wardlaw, 522 S.W.2d 552, 557

(Tex. Civ. App.—Austin, 1975, writ ref’d n.r.e.) (“To ‘dispose of’ ordinarily means to sell or

alienate.”).

        As these definitions illustrate, the plain and usual meaning of the term “dispose of”

encompasses the sale of property. Nothing in Yates’s will demonstrates a clear intent to use the

term “dispose of” in a different sense. See Stephens, 485 S.W.3d at 916. Focusing, as we must, on

the meaning of the words Yates actually used in his will, we conclude that the phrase “otherwise

dispose of said properties” includes the sale of the Bexar County ranch. See id.

        The language at issue authorizes the trustee “to lease or otherwise dispose of” the property.

(emphasis added). Seizing on this phrasing, Robert argues that the pairing of “lease” and “dispose

of” “creates a presumption” that the only permissible dispositions of the Bexar County ranch are

“in the nature of leasing.” We disagree. According to the dictionary, “otherwise” means “in another

way, or in other ways; by other means; differently.” SHORTER OXFORD ENGLISH DICTIONARY 2035

(6th Ed. 2007). The use of the word “otherwise” before “dispose of” signifies that the other

permissible modes of “disposing of” the property are in fact “different” from leasing.

        Robert also argues the language at issue here is not an exception to the general “no sale”

rule referred to in article IX(c) because it does not expressly contain the words “sale” or “sell.”

According to Robert, the will’s only exception to the general “no sale” rule appears in article IX(g),

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which expressly uses the word “sell.” 3 However, as previously discussed, the term “dispose of” is

broad and encompasses the sale of property. See Stephens, 485 S.W.3d at 916 (requiring courts to

construe the words used in a will in their plain and usual sense). We conclude the language at issue

is an exception to the general “no sale” rule. 4

         Robert also argues that our construction of the phrase “otherwise dispose of said

properties” in article IX(m) renders the words “sell” and “convey” in article IX(c) superfluous.

Article IX(c) states that the trustee “shall not have or exercise the right, power, privilege or

authority to sell, convey or dispose of any of the trust property.” (emphasis added). Contrary to

Robert’s argument, our construction of the phrase “otherwise dispose of said properties” does not

render any words in article IX(c) superfluous. Again, the term “dispose of” has a broad meaning;

“selling” is but one mode of “disposing of” property. Thus, the phrase “sell, convey or dispose of”

is akin to “dispose of.” The latter is simply a more concise way of expressing the same meaning.

         Finally, Robert argues that his proposed construction is mandated by several provisions in

the will expressing a general intent to preserve trust property. 5 We recognize that the will expresses

an intent to preserve trust property, but we also recognize that this intent is not absolute. Article

IX(c) creates a general “no sale” rule, but it also provides that exceptions to the general rule may

exist. Furthermore, the exception created in article IX(m) applies to only two trust assets, the Duval

3
 Article IX(g) provides: “In the event any part of the Trust Estates shall consist of intangible personal property my
Executor and/or Trustee with the advice and consent of the Advisory Committee is given full power to retain, sell,
invest and reinvest the same in accordance with the provisions of the Texas Trust Act.”
4
 As stated in article IX(m), paragraph two, this exception was triggered when none of Yates’s “brothers and sisters or
nieces and nephews” desired to use the Bexar County ranch. No one disputes that the triggering event has occurred.
5
 In one provision, Yates states that his “estate consists primarily of mineral interests which should not be sacrificed
by sale or otherwise.” In another provision, Yates authorizes the trustee “to borrow money . . . and to make such
pledges and mortgages . . . as may be reasonably necessary in order to avoid the sale and/or sacrifice of any part of
the assets comprising the Trust Estates.”

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County ranch and the Bexar County ranch. Accordingly, our construction of the language in article

IX(m) is consistent with Yates’s general intent to preserve trust property.

         The trial court did not err in declaring that the language at issue in article IX(m) authorizes

the trustee, with the consent and approval of the advisory committee, to sell the Bexar County

ranch.

Allocation of the Sale Proceeds

         In his second issue, Robert argues that even if the will authorizes the trustee to sell the

Bexar County ranch, it requires the sale proceeds to be treated as income rather than principal.

         Yates’s will provides that, as a general rule, the trusts are to be administered in accordance

with Texas’s statutory scheme governing trusts. Article IX(a) of the will states: “Except as

otherwise expressly provided herein, the administration of the trusts and the rights, powers, duties

and responsibilities of the Trustee shall be in accordance with and governed by the terms and

provisions of the Texas Trust Act as it now exists or as it may hereafter be amended.” This

language illustrates that Yates understood that to alter the effect of the Texas Trust Act or any

successor statute, he needed to include in his will an express provision doing so.

         The current statutory scheme governing trusts, the Texas Trust Code, provides that “money

or other property received from the sale . . . of a principal asset” “shall” be allocated to the principal

of the trust. 6 TEX. PROP. CODE § 116.161(2).

         Robert’s argument that the sale proceeds must be treated as income and not principal is

based on article IX(m), paragraph one of the will, which states in relevant part: “Although my

estate consists primarily of mineral interests which should not be sacrificed by sale or otherwise,

6
 The statute in effect when Yates executed his will on July 6, 1953, the Texas Trust Act, contained a similar provision
requiring monies received from the sale of a principal asset to be allocated to principal.

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all receipts of money shall, as far as possible, be considered income . . . .” (emphasis added).

According to Robert, the sale proceeds from the Bexar County ranch must be considered income,

unless the trustee proves that it is impossible to do so. We reject this argument.

        “The specific provisions [in a will] control over [] general statement[s].” Perry v. Hinshaw,

633 S.W.2d 503, 505 (Tex. 1982); see Classen v. Freeman, 236 S.W. 979, 981 (Tex. [Comm’n

Op.] 1922) (“It is an elementary principle of law that specific provisions of a will control its general

provisions.”). Article IX(m), paragraph two, which we analyzed at length in our discussion of the

first issue, specifically addresses the disposition of the Bexar County ranch. Therefore, article

IX(m), paragraph two controls over the general provision in article IX(m), paragraph one stating

that “all receipts of money shall, as far as possible, be considered income.” See Perry, 633 S.W.2d

at 505; Classen, 236 S.W. at 981.

        Article IX(m), paragraph two, which specifically addresses the permissible dispositions of

the Bexar County ranch, does not contain any language creating an exception to the general rule

set out in article IX(a) that the administration of the trust “shall be in accordance with and governed

by the terms and provisions of the Texas Trust Act . . . as it may hereafter be amended.” The

allocation rule in section 116.161(2) of the Texas Trust Code requires that money received from

the sale of a principal asset be allocated to the principal of the trust. See TEX. PROP. CODE

§ 116.161(2). Furthermore, consistent with section 116.161(2) of the Texas Trust Code, article

IX(m), paragraph two of the will provides that “the rentals or proceeds” from the lease or

disposition of the Bexar County ranch “shall become part of the income or principal of the trusts.”

(emphasis added).

        The trial court did not err in declaring that the proceeds from the sale of the Bexar County

ranch must be allocated to the trusts’ principal account in accordance with section 116.161(2) of

the Texas Trust Code.

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                                  CONCLUSION

The trial court’s judgment is affirmed.

                                             Liza A. Rodriguez, Justice

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