Farmers and Merchants Bank v. Woolf

523 P.2d 1346, 86 N.M. 320
CourtNew Mexico Supreme Court
DecidedJuly 3, 1974
Docket9830
StatusPublished
Cited by4 cases

This text of 523 P.2d 1346 (Farmers and Merchants Bank v. Woolf) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers and Merchants Bank v. Woolf, 523 P.2d 1346, 86 N.M. 320 (N.M. 1974).

Opinion

OPINION

MONTOYA, Justice.

The. plaintiff-trustee (trustee), Farmers and Merchants Bank of Las Cruces, New Mexico, filed this action for declaratory judgment to determine the rights of the parties involved in a trust estate. From a judgment awarding the balance of the trust estate of Mabel Evelyn Jones (testatrix) to the Alcoholics Foundation of San Antonio, Texas (Foundation), Dale Woolf (Woolf), the administrator with will annexed of the estate of Gordon Vance Jones brings this appeal.

The testatrix was a resident and domiciliary of Tucson, Arizona, at the time of her death in September 1969. After making specific bequests to named beneficiaries, her will provided in part:

“VI.
“All the rest, residue and remainder of my estate, whatsoever kind and nature and wheresoever situate I give, devise and bequeath unto FARMERS and MERCHANTS BANK of Las Cruces, New Mexico, to be held in trust upon the terms and conditions hereinafter set forth.
“(A). My trustee shall pay over and distribute to my brother, GORDON VANCE JONES of Williamsburg, New Mexico, any and all monies as he may request, from time to time, for any needs he may have including but not limited to medical expenses of any and all kinds, including doctors, drugs and hospital bills; personal needs including but not limited to groceries, clothes, current bills, maintenance of a home, auto expense or any other needs that he may have, including expense of his last illness, funeral and burial expenses. Said Trustee in no way to be accountable for said disbursements.
“ * * *
“(D). Upon the death of my brother, GORDON VANCE JONES, whatsoever shall remain in trust, I hereby give and bequeath to ALCOHOLICS ANONYMOUS of San Antonio, Texas. I hereby direct and request that said ALCOHOLICS ANONYMOUS use one-half of said residue for the construction of buildings and/or furnishing of living quarters used for rehabilitating persons using their services, and the remaining one-half as the organization so desires.
«* * * »

In November 1970, Gordon Vance Jones died. He was the sole and only heir at law of the testatrix. Woolf was appointed administrator with will annexed of his estate.

The trial court found that Alcoholics Anonymous was an unincorporated association located in the State of Texas, having no legal entity or authority to receive gifts and bequests and, therefore, incapable of accepting the bequest of the testatrix.

In September 1971, the Foundation was organized as a charitable entity pursuant to the laws of the State of Texas. The trial court found that by the terms of its trust agreement the Foundation was established for the exclusive purpose of establishing and maintaining charitable rehabilitation centers for persons unable to consume alcoholic beverages in moderation. The court further found that the expressed purpose of the last will and testament of the testatrix was to create a charitable trust for the benefit and rehabilitation of alcoholics, and that there is no public policy or general rule of law preventing the carrying out of this expressed desire of the testatrix and, therefore, that the doctrine of cy pres or approximation applied to the case. It further found that the bequest had not lapsed, that the Foundation was the legal entity approximating the fulfillment of the expressed desires of the will of the testatrix and, accordingly, the Foundation was entitled to receive the remainder of the assets held by the trustee.

Appellant Woolf, under four points, contends the court erred as follows: (1) In holding that the law of the domicile of the testatrix (Arizona) was not controlling as to the disposition of her estate, which consisted entirely of personal property; (2) in ruling that the testatrix made a charitable gift and that the doctrine of cy pres was applicable to such gift; (3) that the actions of Woolf amounted to a contest of the will of testatrix and, therefore, violated the “in terrorem” clause of testatrix’s will; (4) in determining that the Foundation was a duly organized charitable entity under the laws of the State of Texas and legally capable of receiving gifts and bequests, and which was created to aid the court to carry out the intentions of testatrix as set out in her will.

We first consider which law governs the disposition of the trust property. The testatrix was domiciled in Arizona and the main probate proceeding was held there. Ancillary probate proceedings were completed by the Dona Ana County Probate Court, since the funds involved in the trust were in the custody of the trustee in New Mexico. The legatee of the trust property is 'organized under the -laws of the State of Texas, and the administration of the trust will also be in the State of Texas.

Under Restatement, Second, Conflict of Laws, Ch. 10 Trusts, § 269 at 152-153, it is stated:

“§ 269. Validity of Trust of Movables Created by Will

“The validity of a trust of interests in movables created by will is determined

“(a) as to matters that affect the validity of the will as a testamentary disposition, by the law that would be applied by the courts of the state of the testator’s domicil at death, and
“(b) as to matters that affect only the validity of the trust provisions, except when the provision is invalid under the strong public policy of the state of the testator’s domicil at death,
“(i) by the local law of the state designated by the testator to govern the validity of the trust, provided that this state has a substantial relation to the trust, or
“(ii) if there is no such effective designation, by the local law of the state of the testator’s domicil at death, except that the local law of the state where the trust is to be administered will be applied if application of this law is necessary to sustain the validity of the trust.”

Since the testatrix did not designate what law was to govern the validity of the trust, the provisions of § 269(b)(ii), supra, would apply. In the commentary to the fdregoing section in Restatement, supra, the following appears in comment (h) at 157:

“h. Charitable trusts. In the case of charitable trusts, the courts have been even more ready than in the case of private trusts to uphold thé trust if valid under the local law of the state of administration, even though the trust would be invalid under the local law of the testator’s domicil. * * *
“When a testator bequeaths movables to be administered for charitable purposes in a state other than that of his domicil, the disposition is valid if valid under the local law of the state of administration, even though it would be invalid under the local law of the state of the testator’s domicil. * * * ”

In Fletcher v. Safe Deposit & Trust Co., 193 Md. 400, 410-411, 67 A.2d 386

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Bluebook (online)
523 P.2d 1346, 86 N.M. 320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-and-merchants-bank-v-woolf-nm-1974.