                                    Cite as 2015 Ark. App. 417

                ARKANSAS COURT OF APPEALS
                                     DIVISIONS I & II
                                      No. CV-14-891



                                                    Opinion Delivered   June 17, 2015

 COVENANT PRESBYTERY        APPEAL FROM THE MISSISSIPPI
                  APPELLANT COUNTY CIRCUIT COURT,
                            OSCEOLA DISTRICT
 V.                         [NO. CV-11-101]

 FIRST BAPTIST CHURCH,        HONORABLE RANDY F.
 OSCEOLA, ARKANSAS            PHILHOURS, JUDGE
     APPELLEE/CROSS-APPELLANT

 V.
                              PETITION FOR REHEARING
 SUN TRUST BANK, AS TRUSTEE   DENIED; SUBSTITUTED OPINION
 UNDER THE WILL OF STANLEY D. ISSUED
 CARPENTER
      APPELLEE/CROSS-APPELLEE


                          BRANDON J. HARRISON, Judge

       This appeal presents a dispute between church entities about who takes what under

a testamentary trust.    The circuit court ruled for First Baptist Church.              Covenant

Presbytery appeals that decision.     We agree with Covenant Presbytery and therefore

reverse on direct appeal, which moots First Baptist’s cross-appeal.

                                            I. Facts

       Stanley Carpenter died testate in 1967.              His last will and testament was

administrated through the Mississippi County Probate Court, and the court appointed

National Bank of Commerce in Memphis, Tennessee, as the executor and trustee of the

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estate. From 1967 to 2005, National Bank of Commerce managed some farmland that

Carpenter owned at his death. The farmland is 238 acres located near Osceola, Arkansas.

Since 2005, Sun Trust Bank has managed the farmland as National Bank’s successor.

       National Bank of Commerce distributed annual income produced from the

farmland to Stanley Carpenter’s family members—Ruth Carter Love, Carolyn Schabel,

Mary Greenway, and Henry and Mae Carpenter—after the probate case closed in the late

1960s. By 2003, some of Carpenter’s family members who were trust beneficiaries had

died, and National Bank of Commerce distributed the farm’s net income this way: (1)

one-fourth to Carolyn Schabel; (2) one-fourth to Mary Greenway; (3) one-fourth to First

Presbyterian Church of Osceola, Arkansas; and (4) one-fourth to First Baptist Church of

Osceola, Arkansas.    Carolyn Schabel is the only surviving family member who still

receives net income from the farmland.

       First Presbyterian Church of Osceola existed from the mid-1800s until April 2004,

when it dissolved because of a decline in membership. The minutes of a church meeting

reflect that all assets and property that had not previously been sold or distributed were to

be transferred to Covenant Presbytery. Covenant Presbytery is the appellant. And in May

2004, Covenant Presbytery approved First Presbyterian’s request to dissolve; a commission

was appointed to receive any remaining assets of First Presbyterian Church.

       After First Presbyterian’s dissolution and the transfer of its assets to Covenant

Presbytery, National Bank of Commerce began paying First Presbyterian’s share of the

farm income to Covenant Presbytery. First Baptist Church and Covenant Presbytery

received cover letters, quarterly statements, and annual distribution checks from National

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Bank of Commerce and Sun Trust Bank showing how the farm income had been

distributed. Covenant Presbytery received $14,000 in annual net-income distributions

from 2004 to 2010.

       A dispute arose between Covenant Presbytery and First Baptist over whether

Covenant Presbytery could succeed to the interest of First Presbyterian Church under

Carpenter’s will. To resolve the dispute, in December 2011, Sun Trust Bank, acting as

“Trustee under the Will of Stanley D. Carpenter,” filed a Petition and Request for

Instructions and Declaration of Rights against First Baptist Church and Covenant

Presbytery. It asked the court to determine the rights and interests of First Baptist and

Covenant Presbytery in the farmland (and its income) as “remainder beneficiaries” under

the will’s testamentary trust. The court was also asked to decide if Sun Trust had the

discretion to sell the farm property and distribute the sale proceeds while Carolyn Schabel

was still living. Soon thereafter, Sun Trust amended its petition to include the possibility

that the Carpenter will created a charitable trust and joined the Arkansas Attorney General

as a party under Ark. Code Ann. § 28-73-110(d). A flurry of claims, cross-claims, and

counterclaims ensued.

       After holding a bench trial and receiving posttrial briefs, the circuit court

interpreted the terms of the trust and the will in its final order to mean the following:

       2.     [W]hen Stanley Carpenter executed his Last Will and Testament and
       created a testamentary trust . . . it was his intention to benefit two churches
       in Osceola, Arkansas, because he lived in Osceola. These two churches
       were the First Baptist Church of Osceola and the First Presbyterian Church
       of Osceola.

       3.   This Court finds that, after the congregation of First Presbyterian
       Church of Osceola voted to dissolve their church in 2004, they transferred
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       their church’s assets to Covenant Presbytery, a division of the Presbyterian
       Church in America. The Court finds that First Presbyterian Church of
       Osceola, and the conference to which it belonged, no longer exists. The
       Court further finds that Covenant Presbytery, one of 81 regional divisions of
       the Presbyterian Church in America that includes churches in portions of
       Arkansas, Mississippi, Tennessee and Missouri, succeeded to the interests of
       the previous conference. After this transfer, Covenant Presbytery notified
       the original trustee in this matter, National Bank of Commerce, to direct
       future payments from the Carpenter Trust to Covenant Presbytery.

       4.     Because the First Presbyterian Church of Osceola no longer exists,
       this Court rules that it is appropriate to employ the doctrine of cy pres and
       name a new beneficiary for the interest of the Carpenter Trust previously
       held by the First Presbyterian Church of Osceola.

       5.       This Court, utilizing the doctrine of cy pres, reforms the Carpenter
       Trust to provide that any payments, distributions or property transferred by
       the trustee of the Carpenter Trust from the summer of 2011 forward, that
       would have otherwise been paid to the First Presbyterian Church of Osceola
       had it remained in existence, shall be transferred to First Baptist Church of
       Osceola. This Court hereby orders that any distributions of income or
       property held in the Carpenter Trust, that has accrued since the summer of
       2011 or hereinafter, shall be paid by Sun Trust Bank or its successors, to
       First Baptist Church of Osceola. This Court finds that the intention of
       Stanley Carpenter was to benefit churches in his hometown of Osceola,
       rather than to benefit Covenant Presbytery, which did not exist at the time
       of his death and no longer administers a church in Osceola. In this regard,
       the Court agrees with the arguments of First Baptist Church of Osceola and
       relies on Trott v. Jones, 85 Ark. App. 526, 157 S.W.3d 592 (2004); Lowery v.
       Jones, 272 Ark. 55, 611 S.W. 2d 759 (1981); and State v. Van Buren School
       District, 191 Ark. 1096, 89 S.W.2d 605 (1946).

       In essence, the circuit court found that Carpenter’s last will and testament created a

testamentary trust to benefit two churches in Osceola, Arkansas: First Baptist Church and

First Presbyterian Church. The court also found that First Presbyterian Church no longer

existed and that, by virtue of the cy pres doctrine, any payments, distributions, or property

transferred by the trustee of the Carpenter Trust must be paid to First Baptist Church of

Osceola. Covenant Presbytery appeals that decision on direct appeal.


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       First Baptist also filed a counterclaim against Sun Trust Bank alleging that it

violated its fiduciary duty by sending payments to Covenant Presbytery. The circuit court

denied the counterclaim.1 First Baptist cross-appeals that decision.

                                             II. Law

       We review probate cases de novo and affirm the circuit court’s findings unless they

are clearly erroneous or clearly against the preponderance of the evidence. Taylor v.

Woods, 102 Ark. App. 92, 282 S.W.3d 285 (2008). The cardinal rule in construing a trust

instrument is that the settlor’s intentions must be ascertained. Bailey v. Delta Trust & Bank,

359 Ark. 424, 432, 198 S.W.3d 506, 512–13 (2004). In construing a trust, we apply the

same rules that apply when construing wills. Id. And the main interpretive principle

when reading wills is that the testator’s intent (or the settlor, in the case of a trust) governs.

Id. This intention is determined from viewing the four corners of the instrument,

considering the language used, and giving meaning to all of its provisions, whenever

possible. Id. This court will construe the words and sentences used in a will or trust in

their ordinary sense to arrive at the testator’s true intention.        Id.   To determine the

intentions of the testator, we consider every part of the will. Id. Extrinsic evidence may

be received on the issue of the testator’s intent only if the will’s terms are ambiguous.

Taylor, supra. Whether there is an ambiguity is a matter of law. Thinn v. Parks, 79 Ark.

App. 20, 83 S.W.3d 430 (2002). Absent a finding of ambiguity by the circuit court,

testimony about the settlor’s intent should not be considered. Id. When the terms of a


1
 First Baptist also filed a cross-claim against Covenant Presbytery seeking a judgment for
the amount of trust distributions made to Covenant Presbytery, but the cross-claim was
denied and is not on appeal.
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trust are unambiguous, it is the circuit court’s duty, and ours, to construe the written

agreement according to the plain meaning of the language used. Bailey, supra.

       A trust may have a definite beneficiary or may be a charitable trust under Ark.

Code Ann. § 28-73-402 (Repl. 2012). A beneficiary is definite if the beneficiary can be

ascertained now or in the future, subject to the rule against perpetuities. Ark. Code Ann.

§ 28-73-402(b). A charitable trust may be created for “the advancement of education or

religion.” Ark. Code Ann. § 28-73-405(a). “If the terms of a charitable trust do not

indicate a particular charitable purpose or beneficiary, the court may select one (1) or

more charitable purposes or beneficiaries.         The selection must be consistent with the

settlor’s intention to the extent it can be ascertained.” Ark. Code Ann. § 28-73-405(b).

       We have mentioned that the circuit court applied cy pres to the testamentary trust.

Cy pres is the “equitable doctrine under which a court reforms a written instrument with a

gift to charity as closely to the donor’s intention as possible, so that the gift does not fail.”

Black’s Law Dictionary 415 (10th ed. 2014). Before the cy pres doctrine can be applied,

however, a court must find that the settlor intended for a trust or devise to have its sole

purpose be charitable, meaning that it achieves some public benefit. See Lowery, 272 Ark.

at 56, 611 S.W.2d at 760 (“The will of Robert P. Frazier consists entirely of bequests for

charitable purposes.”); Bosson v. Woman’s Christian Nat’l Library Ass’n, 216 Ark. 334, 335,

225 S.W.2d 336, 336 (1949) (“The question for determination is whether the trustees of a

charitable trust may sell land owned and held for library purposes.”); State ex rel. Att’y

Gen. v. Van Buren Sch. Dist. No. 42, 191 Ark. 1096, 1099, 89 S.W.2d 605, 609 (1936)

(“It is agreed by all parties that this is a charitable trust.”); see also Powhatan Cemetery, Inc. v.

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Colbert, 104 Ark. App. 290, 297, 292 S.W.3d 302, 308 (2009) (dealing with the failure of

an “ancient” charitable trust). Simply put, cy pres is available for a court’s use once it

determines that the settlor’s intent was charitable; this issue is naturally decided on a case-

by-case basis. Bosson, supra.

                                        III. Discussion

       In this appeal, we do not have to determine whether the language used by Stanley

Carpenter in his last will and testament created a testamentary trust. In its answer to the

Sun Trust petition, Covenant Presbytery admitted that it was a remainderman under the

testamentary trust; and in its posttrial brief it stated, “there is no dispute in this case but

that the Last Will & Testament of Carpenter created a testamentary trust.” In its brief

before this court, Covenant Presbytery stated: “The parties in this case do not dispute that

Mr. Carpenter, who died in 1967, created a testamentary trust in his Will[.]” So the

question before us is whether Stanley Carpenter’s testamentary trust was a “charitable

trust” and whether the circuit court was justified in applying the cy pres doctrine. We hold

that there was insufficient evidence to find that Carpenter intended to create a charitable

trust; we therefore reverse the circuit court.

       We now turn to the instrument’s terms to explain why we disagree with the circuit

court’s finding that Carpenter established a charitable trust. The Carpenter trust is a

combination of a last will and testament and four codicils. The trust’s terms state that

Carpenter’s relatives each received a one-fourth interest in the “net farm rents” for life and

at the death of each the “said rents [were] to revert to [his] estate.” Paragraph VII states:

       All the rest, residue and remainder of my estate I give, devise and bequeath
       in equal shares, and to each, an undivided one-half each, to the First
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       Presbyterian Church, Osceola, Arkansas, and the First Baptist Church,
       Osceola, Arkansas.

       First Baptist says that the purpose of Carpenter’s trust was to promote religion in

the City of Osceola because the trust’s two beneficiaries were charities and religious

institutions. The record shows that Carpenter was a generous man, and his trust does

contain a measure of charity. Yet the instrument’s terms as a whole reveal that Carpenter

gifted or bequeathed approximately forty-three items that were not charitable in nature, as

Arkansas law uses the term of art. For example, he gifted at least two houses to faithful

employees; he gave watches and guns to relatives and friends; he made numerous gifts of

cash. And regarding the net income from the farmland, Carpenter divided it between

four relatives during their respective lifetimes. As for Carolyn Schabel, the only surviving

family member, she has received a share of farm-related income for decades. The circuit

court’s decision to apply cy pres to this instrument was an error because it is clearly against

the preponderance of the evidence. A plain reading of the whole instrument does not

show that Carpenter had a solely or purely charitable purpose when he created his

testamentary trust.

       When Carpenter died, First Presbyterian and First Baptist each received an

undivided one-half interest in the farm that Carpenter owned and which Sun Trust holds

in trust for their benefit. This legal interest is an undivided one-half indefeasibly vested

remainder in fee simple. A vested remainder is a present interest held by a known and

ascertained beneficiary that cannot be defeated by any contingency. Dickerson v. Union

Nat’l Bank of Little Rock, 268 Ark. 292, 595 S.W.2d 677 (1980); see also Hurst v.

Hilderbrandt, 178 Ark. 337, 10 S.W.2d 491 (1928). This interest can be transferred by
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deed, by will, or by inheritance, although the right of possession may not accrue until

sometime in the future. The simplest example of this conveyance or devise between

people is to A for life, remainder to B. Because A must eventually die, B’s remainder is a

present vested interest that cannot be defeated by any contingency. Dickerson, supra. Both

church entities existed when Carpenter died, and their interests vested when he died.

       The parties stipulated that Covenant Presbytery was First Presbyterian’s successor in

interest; and First Baptist has not cross-appealed the court’s finding that First Presbyterian

“transferred their church’s assets to Covenant Presbytery.” Despite this stipulation, First

Baptist argues here that Covenant Presbytery has no interest in the Carpenter trust because

First Presbyterian failed to deed its interest in the farmland to Covenant Presbytery. First

Baptist relies on Ark. Code. Ann. § 4-59-101(a)(4)(statute of frauds) and Mobley v. Evans,

2009 Ark. App. 348, 308 S.W.3d 165 (insufficient legal description in a deed) to support

its argument.

        We are not persuaded by First Baptist’s argument for three reasons. One, First

Presbyterian’s assets could include the remainder of Carpenter’s estate that is held in trust

by SunTrust Bank, in which case it falls within the scope of the parties’ stipulation.

Second, the purpose of the statute of frauds is to protect the conveyor, which is First

Presbyterian; the statute is not intended to protect third parties to the transaction like First

Baptist. See Ark. Code Ann. § 4-59-101(a); Betnar v. Rose, 259 Ark. 820, 823, 536

S.W.2d 719, 721 (1976) (describing purpose of statute of frauds).                Finally, First

Presbyterian did not hold title to the property. Sun Trust Bank was the legal owner, so

First Presbyterian could not convey its remainder interest by deed to Covenant Presbytery.

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See Little v. McGuire, 113 Ark. 497, 501, 168 S.W. 1084 (1914) (trustee holds the legal

interest).

                                        IV. Conclusion

        Because Carpenter’s trust was not in the law’s eyes a charitable one, the circuit

court erred in applying the cy pres doctrine and ordering Sun Trust Bank to distribute to

First Baptist any payments, distributions, or property transferred by the trustee of the

Carpenter Trust that would have otherwise been paid to First Presbyterian. We reverse

and hold that Covenant Presbytery is the successor in interest to First Presbyterian under

the last will and trust of Stanley Carpenter. Our holding renders First Baptist’s cross-appeal

for breach of fiduciary duty and attorney’s fees moot. See McClard v. Smith, 2014 Ark.

App. 272 (decision on direct appeal may moot the cross-appeal).

        Petition for rehearing denied; substituted opinion issued.

        VIRDEN, HIXSON, GRUBER, WHITEAKER, and BROWN, JJ., agree.

        Sanford Law Firm, PLLC, by: Josh Sanford, for appellant.

       Branch, Thompson, Warmath & Dale, P.A., by:               Robert F. Thompson III, for
appellee/cross-appellant First Baptist Church.

        Rose Law Firm, by:     Craig S. Lair and Bourgon B. Reynolds, for cross-appellee

SunTrust Bank.




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