Frank Holt, Justice.
This appeal is a sequel to other cases involving the interpretation of the provision of a charitable trust established in 1929 by Governor George W. Donaghey and his wife for the benefit of Little Rock Junior College, a private institution, and contingently, a public school or schools of the Little Rock school system. The history and trust provisions are set forth in Little Rock Junior College v. The Geo. W. Donaghey Foundation, 224 Ark. 895, 277 S. W. 2d 79 (1955). There the court held that the Trustees did not have the authority to withhold the trust’s profits from the private college merely because it expanded from a two-year junior college to a four-year school. The expansion did not alter the school’s identity or status as the primary beneficiary of the trust.
In Greene v. Thompson, 227 Ark. 1089, 305 S. W. 2d 136 (1957), we recognized that if the Directors of the Little Rock Public School District refused to continue to supervise the operation of the private college then the power of equity could be invoked to prevent a discontinuance of payment of the trust funds to the designated primary beneficiary of the trust.
In Donaghey Foundation v. LRU, 231 Ark. 748, 332 S. W. 2d 497 (1960), the Little Rock School Board’s officials had actively refused to continue supervising the operation of the college (then Little Rock University) and surrendered the directorship of the school to a private corporation. The trust’s provisions were again interpretated and this court held that the refusal of the School District to supervise the college would not prevent an innocent beneficiary from receiving the proceeds of the trust. Therefore, Little Rock University should continue as the primary beneficiary and the funds could not be diverted to the Little Rock Public School system, the contingent beneficiary, until there was “a change of circumstances.” In doing so, we observed that the primary purpose of the Donagheys, the settlors, was “in aiding the establishment of an institution of higher learning in this locality, designed primarily to accommodate prospective students from this area.”
In 1969 Little Rock University was merged by mutual agreement and a legislative act (Act 35 of Acts of Arkansas, 1969) with the University of Arkansas. The merger provides that the educational functions of the college are to be continued at the same location in Little Rock, using the same faculty, buildings, facilities and land. Subsequent to this merger, the Trustees of Donaghey Trust brought this action against Little Rock University and its Trustees, the Little Rock School District and its Board of Directors, the University of Arkansas and its Trustees, and the Donaghey heirs, seeking a declaratory judgment defining the Donaghey Trustees’ powers, duties, and obligations, and the respective rights of the parties. Specifically, the court was requested to determine:
“(1) May Foundation use net income to provide additional funds for the chair or chairs at UALR, in excess of appropriations made by State legislature, and to provide other supplemental services to said institution within sole discretion of trustees of Foundation?
(2) Is the merger by Act 390 such a change of circumstances that Foundation and its trustees have an obligation to pay net income to some public school or schools in City of Little Rock which are under supervision of Little Rock School District?
(3) In the event the Court should determine that plaintiff’s do not have authority to exercise discretion to apply the net proceeds of the trust for a chair or chairs or to provide other supplemental services to UALR as may be otherwise determined in the sole discretion of plaintiffs, may the plaintiff’s exercise the discretion granted to them in the said deed in trust executed by Donaghey and wife and pay net proceeds to a public school or schools in the city of Little Rock operated by or under the management or supervision of the Special School District of Little Rock?”
The Chancellor rendered a decree finding that the merger did not constitute “a change of circumstances” as envisioned by our decision in Donaghey Foundation v. LRU, supra; that UALR, governed by UA Board of Trustees, continues to be an eligible beneficiary of the trust; that the contingent beneficiary, also, continues as an eligible beneficiary; that the Trustees had no authority under the trust provisions to designate the proposed specific use of the trust funds by the beneficiary; that the Trustees have the discretionary authority to pay the trust income to a public school or schools of Little Rock rather than UALR; however, the Trustees could not arbitrarily or capriciously withdraw the benefits from UALR by designating the contingent beneficiary.
Appellants bring this appeal seeking a modification of that part of the decree which recognizes that the Donaghey Trustees may designate the contingent beneficiary where such designation is not arbitrary or capricious. Appellants contend, since no “change of circumstances” was found to exist, that, consistent with Donaghey Foundation v. LRU, supra, UALR is the only current primary beneficiary and is entitled to the unrestricted use of the trust funds. The appellee-Donaghey Trustees cross-appeal asserting that the lower court erred in refusing to permit them the authority to designate the proposed uses for which the funds could be expended once they are given to the beneficiary, UALR, which is the beneficiary the Donaghey Trustees expressly prefer. Appellee-Little Rock School District and its Board of Directors cross-appeal asserting that the merger of LRU with UA constituted a “change of circumstances” which renders UALR ineligible to receive further benefits from the Donaghey Trust; and, therefore, the Little Rock School District is presently the only eligible beneficiary. The Donaghey heirs do not appeal. Among these various contentions, we agree only with the assertion made by the Donaghey Trustees; namely, that they do have the authority to pay the trust funds to UALR and restrict the use of the funds as proposed by the Donaghey Trustees.
It appears that all of the parties are in agreement with the cardinal rule that in construing a trust instrument the intention of the settlor must be ascertained. The Donaghey Trust instrument provides in part:
“It is the object and purpose of this deed to convey the property herein described to the Trustees, their successors and assigns, for the purpose of creating a fund or foundation to be used for the sole and exclusive benefit of the present Little Rock Junior College, an institution of learning in said city, at the present time operated under the management of the Board of School Directors of the Special School District of Little Rock, Arkansas, investing said trustees with full discretion to select some other public school or schools in said city, operated by or under the management or supervision of the Board of School Directors of such Special School District of Little Rock and their successors in charge of the public schools in the said City of Little Rock in the event the present Little Rock Junior College or its successors should, at any time, cease to be operated by or under the supervision of the public school authorities in said city. ...”
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Frank Holt, Justice.
This appeal is a sequel to other cases involving the interpretation of the provision of a charitable trust established in 1929 by Governor George W. Donaghey and his wife for the benefit of Little Rock Junior College, a private institution, and contingently, a public school or schools of the Little Rock school system. The history and trust provisions are set forth in Little Rock Junior College v. The Geo. W. Donaghey Foundation, 224 Ark. 895, 277 S. W. 2d 79 (1955). There the court held that the Trustees did not have the authority to withhold the trust’s profits from the private college merely because it expanded from a two-year junior college to a four-year school. The expansion did not alter the school’s identity or status as the primary beneficiary of the trust.
In Greene v. Thompson, 227 Ark. 1089, 305 S. W. 2d 136 (1957), we recognized that if the Directors of the Little Rock Public School District refused to continue to supervise the operation of the private college then the power of equity could be invoked to prevent a discontinuance of payment of the trust funds to the designated primary beneficiary of the trust.
In Donaghey Foundation v. LRU, 231 Ark. 748, 332 S. W. 2d 497 (1960), the Little Rock School Board’s officials had actively refused to continue supervising the operation of the college (then Little Rock University) and surrendered the directorship of the school to a private corporation. The trust’s provisions were again interpretated and this court held that the refusal of the School District to supervise the college would not prevent an innocent beneficiary from receiving the proceeds of the trust. Therefore, Little Rock University should continue as the primary beneficiary and the funds could not be diverted to the Little Rock Public School system, the contingent beneficiary, until there was “a change of circumstances.” In doing so, we observed that the primary purpose of the Donagheys, the settlors, was “in aiding the establishment of an institution of higher learning in this locality, designed primarily to accommodate prospective students from this area.”
In 1969 Little Rock University was merged by mutual agreement and a legislative act (Act 35 of Acts of Arkansas, 1969) with the University of Arkansas. The merger provides that the educational functions of the college are to be continued at the same location in Little Rock, using the same faculty, buildings, facilities and land. Subsequent to this merger, the Trustees of Donaghey Trust brought this action against Little Rock University and its Trustees, the Little Rock School District and its Board of Directors, the University of Arkansas and its Trustees, and the Donaghey heirs, seeking a declaratory judgment defining the Donaghey Trustees’ powers, duties, and obligations, and the respective rights of the parties. Specifically, the court was requested to determine:
“(1) May Foundation use net income to provide additional funds for the chair or chairs at UALR, in excess of appropriations made by State legislature, and to provide other supplemental services to said institution within sole discretion of trustees of Foundation?
(2) Is the merger by Act 390 such a change of circumstances that Foundation and its trustees have an obligation to pay net income to some public school or schools in City of Little Rock which are under supervision of Little Rock School District?
(3) In the event the Court should determine that plaintiff’s do not have authority to exercise discretion to apply the net proceeds of the trust for a chair or chairs or to provide other supplemental services to UALR as may be otherwise determined in the sole discretion of plaintiffs, may the plaintiff’s exercise the discretion granted to them in the said deed in trust executed by Donaghey and wife and pay net proceeds to a public school or schools in the city of Little Rock operated by or under the management or supervision of the Special School District of Little Rock?”
The Chancellor rendered a decree finding that the merger did not constitute “a change of circumstances” as envisioned by our decision in Donaghey Foundation v. LRU, supra; that UALR, governed by UA Board of Trustees, continues to be an eligible beneficiary of the trust; that the contingent beneficiary, also, continues as an eligible beneficiary; that the Trustees had no authority under the trust provisions to designate the proposed specific use of the trust funds by the beneficiary; that the Trustees have the discretionary authority to pay the trust income to a public school or schools of Little Rock rather than UALR; however, the Trustees could not arbitrarily or capriciously withdraw the benefits from UALR by designating the contingent beneficiary.
Appellants bring this appeal seeking a modification of that part of the decree which recognizes that the Donaghey Trustees may designate the contingent beneficiary where such designation is not arbitrary or capricious. Appellants contend, since no “change of circumstances” was found to exist, that, consistent with Donaghey Foundation v. LRU, supra, UALR is the only current primary beneficiary and is entitled to the unrestricted use of the trust funds. The appellee-Donaghey Trustees cross-appeal asserting that the lower court erred in refusing to permit them the authority to designate the proposed uses for which the funds could be expended once they are given to the beneficiary, UALR, which is the beneficiary the Donaghey Trustees expressly prefer. Appellee-Little Rock School District and its Board of Directors cross-appeal asserting that the merger of LRU with UA constituted a “change of circumstances” which renders UALR ineligible to receive further benefits from the Donaghey Trust; and, therefore, the Little Rock School District is presently the only eligible beneficiary. The Donaghey heirs do not appeal. Among these various contentions, we agree only with the assertion made by the Donaghey Trustees; namely, that they do have the authority to pay the trust funds to UALR and restrict the use of the funds as proposed by the Donaghey Trustees.
It appears that all of the parties are in agreement with the cardinal rule that in construing a trust instrument the intention of the settlor must be ascertained. The Donaghey Trust instrument provides in part:
“It is the object and purpose of this deed to convey the property herein described to the Trustees, their successors and assigns, for the purpose of creating a fund or foundation to be used for the sole and exclusive benefit of the present Little Rock Junior College, an institution of learning in said city, at the present time operated under the management of the Board of School Directors of the Special School District of Little Rock, Arkansas, investing said trustees with full discretion to select some other public school or schools in said city, operated by or under the management or supervision of the Board of School Directors of such Special School District of Little Rock and their successors in charge of the public schools in the said City of Little Rock in the event the present Little Rock Junior College or its successors should, at any time, cease to be operated by or under the supervision of the public school authorities in said city. ...”
“After paying all interest, principal, fixed charges, upkeep, insurance and all operating expenses maturing during any year, the Trustees may, annually (or more frequently if they deem best), pay over on January first of each year, all or such part of the net income from the said properties as they deem best; such payments shall be made to the proper public school authorities so that the same shall be applied for the maintenance and operation of said Little Rock Junior College or its successors or any other public school in said City of Little Rock, selected by the said Trustees in accordance with the authority heretofore expressed. In the event there should, at any time, be accumulations of net income under the terms hereof, the same may be expended for the purposes of this trust at such times and in such amounts as Trustees think best.”
The settlors intended that the Trustees would have the right to exercise broad discretion in performing their unpaid task in administering this trust fund. Further, in this respect, the trust provides:
“***and in every respect to deal with and handle and manage said properties as an individual could do, said Trustees or their successors to be guided and limited only by the exercise of their best judgment in the interest of the fund and foundation arid its objects and purposes.”
Manifestly, these carefully selected original Trustees and their successors, who reside in Little Rock, are given the authority to spend the accumulated net income of the trust funds for the purposes of the trust at such a time and in such amounts as the Trustees deem best. In Donaghey Foundation v. LRU, supra, we recognized and approved the Trustees’ discretionary authority, based upon their expressed desire, to continue payments to LRU as the primary beneficiary and that this school would be entitled to continue to receive future income from the trust funds “until such time as there is a change of circumstances which would require the Trustees to withdraw financial support from the university, i.e., the Trustees cannot capriciously or arbitrarily withdraw this aid.”
In the case at bar, it is the argument of the Donaghey Trustee? that the merger of the schools, LRU with UA, constitutes a change of circumstances; and, therefore, they now have the discretionary authority to continue payment of the trust funds to UALR only upon condition that the funds be expended only for a chair or chairs or other supplemental services in excess of all legislative appropriations for the maintenance and operation of UALR. We think the Trustees are correct. Until LRU’s dissolution it was a private institution and the successor to the orginal Little Rock Junior College. It is now a part of the University of Arkansas and a public institution. Legislative appropriation of public funds is now provided for its operation and maintenance. All of the assets of LRU were transferred to the UA and the school now is administered by the Board of Trustees of the UA. LRU’s Board of Trustees relinquished all control, responsibility, and supervision of LRU to the Trustees of the UA. Now that UALR is a public institution supported by legislative appropriation of public funds, we note that Act 390 of the Acts of Arkansas, 1969, appropriated a total of $7,199,404 for personal services and operating expenses of UALR for the period ending June 30, 1971. Of that appropriation regular salaries constitute $5,000,000 and $2,169,404 is provided for maintenance and general operation together with $30,000 for extra help. We agree with the Donaghey Trustees that Governor Donaghey and his wife did not visualize in 1929 that in 1971 the fledgling junior college endowed by them would be primarily maintained and supported as a state public institution. Certainly we cannot agree that these settlors intended that the trust funds, now approximately $90,000 annually, would be commingled with the public funds appropriated by the legislature for the maintenance and general operation of what is now a public institution without the settlors’ Trustees having the right to exercise some authority and discretion which was expressly vested in them as previously indicated.
Furthermore, it presently appears that UALR is attended by students from 42 other states and 57 students from 17 foreign countries. Approximately 1/3 of the enrollment for the academic year 1970-1971 were non-residents of Pulaski County, coming from 72 of the counties other than Pulaski. The original Trustees and their successors are Little Rock residents. Presently the management of UALR is conducted by the UA Board of Trustees and only one of them lives in Little Rock.
The appellants point out that the trust funds of approximately $90,000 are to be used exclusively at and for UALR and in addition to any appropriations made by our legislature for the maintenance and operation of UALR; however, as a practical matter, we observe that the legislature is not prevented from taking into account the amount and source of these trust funds in determining the financial needs of UALR.
We hold that a sufficient “change of circumstance” has occurred as envisioned in Donaghey Foundation v. LRU, supra; furthermore, courts of equity have the power to authorize and sancdon Trustees to deviate from the exact language of a charitable trust in order to preserve and accomplish the intention of the settlor and purposes of the trust. Anderson v. Ryland, 232 Ark. 335, 336 S. W. 2d 52 (1960); Rest., Trusts, § § § 167, 381, and 399; and 89 C.J.S. § 87 e (2).
In Donaghey Foundation v. LRU, supra, we recognized that the “prime objective in creating the [George W. Donaghey Foundation] was to aid the cause of higher education in Greater Little Rock.” There we approved the express wishes of the Trustees to continue payment of the trust funds to LRU as being well within the discretionary authority delegated to them by the terms of the trust. Likewise, in the case at bar, we are of the view that the Trustees’ express desire and intention to continue paying these funds to UALR as the primary beneficiary for the stated restricted purposes is well within the Trustees’ discretionary authority vested in them and conforms to the purposes of the trust and the intentions of the settlors. To that extent only the decree is modified.
Affirmed as modified.
Fogleman, J., dissenting.