dissenting. I do not agree that the trustees of the Donaghey Foundation have the authority to dictate or determine the uses to be made by the recipient of the income from the Donaghey Trust. It is not the function of the courts to write into the trust any terms not incorporated by its creators. Neither do the trustees have that authority, either by law or by the terms of the trust instrument. Greene v. Thompson, 227 Ark. 1089, 305 S.W. 2d 136. It is the responsibility of the trustees and the courts to see that the terms of the trust are carried out as nearly as possible. In order to say that the trustees may put conditions upon the use of funds paid over, it is necessary to engraft upon this trust instrument a term not to be found within its four corners.
I do not agree that a change of circumstances envisioned as a possibility in Donaghey Foundation v. Little Rock University, 231 Ark. 748, 332 S.W. 2d 497, has taken place. According to the language of that opinion, the change of circumstances must be such as would require the Donaghey trustees to withdraw financial support. While the court avoided defining the term “change of circumstances” because of the realization that many unforeseen situations might arise, the current developments do not approximate any of the examples given in that opinion, i.e., a permanent closing of the college, the relocation of the college some distance away, or other change of similar moment. Little Rock University has not been closed, either permanently or temporarily, it has not been relocated at all, and the merger is not of similar moment to a closing or relocation. The chancellor specifically found, upon the evidence before him, that there was no such change, and I agree.
A review of the terms of the trust is a necessary background to such a determination. Little Rock Junior College was the intended beneficiary of the trust. Its status as a private institution, if indeed a junior college operated by the board of directors of a public school district which used teachers of the district and was housed in a physical plant owned by it for public school purposes was then a private institution, was either not recognized or was considered insignificant by Governor and Mrs. Donaghey. See Donaghey Foundation v. Little Rock University, supra. The beneficiary was not designated as a private institution in the trust instrument. It was never called a private institution in this court until our decision in Donaghey Foundation v. Little Rock University, supra, at which time it was described in the Donaghey trust as “an institution of learning in[1] said city.” As a matter of fact, it was not chartered as an eleemosynary corporation until some ten years after the death of Governor Donaghey. See Little Rock Junior College v. George W. Donaghey Foundation, 224 Ark. 895, 277 S.W. 2d 79. The Donaghey trustees were given discretion to select “some other public school[2] or schools in[3] said city ... in the event the present Little Rock Junior College or its successors[4] should at any time, cease to be operated by or under the supervision of the public school authorities in said city. . .Payments of income are to be made to proper public[5] school authorities. . . for the maintenance and operation of Little Rock Junior College or its successors[6] or any other public school in[7] said City of Little Rock.” Clearly the idea that the institution to be nurtured by the Donaghey trust be a public institution supported from the public treasury rather than a private one, so abhorrent to the majority, posed no fears to Governor and Mrs. Donaghey.
The trustees of the foundation were not given discretion except for specific purposes. For instance, in the management, control and direction of the property of the trust, they are limited only by the exercise of their best judgment in the interest of the fund and foundation and its objects and purposes. A similar discretion was granted with reference to the sale of trust property and investment of the net proceeds thereof. There is also broad discretion in the trustees to terminate the trust and to determine the times and amounts of payments to the beneficiary, matters which I will treat later.
I submit that the University of Arkansas at Little Rock is the successor of Little Rock Junior College and stands precisely in the position of Little Rock University. In Little Rock Junior College v. George W. Donaghey Foundation, supra, this court held that the incorporation of the school and its conversion from a junior college to a four-year college did not change the identity of the beneficiary. This pertinent language appears in that opinion by Mr. Justice Robinson:
***the mere fact that the school authorities decided to expand into a four year college in no way changes the identity of the school and does not make of it a school other than the one that the trust was set up to help. Little Rock Junior College is merely the name of the school; it is inconceivable that the settlors of the trust used the words in any other way. Loving the college as they did, it is unthinkable that they wanted to help it only if it remained limited in the educational advantages it had to offer, and did not want to give it any further aid if through their generosity the school was able to grow and become a great institution of learning. It is true the deed uses the words “the present Little Rock Junior College”. The deed provides: “It is the object and purpose of this deed to convey the property herein described to said 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”. But “the present Little Rock Junior College” is the very same school that wants to expand into a four year college, and by so expanding it does not become another school. When John Doe, a boy 15 years of age, grows up and becomes a man 21 years of age, he is still the same John Doe. It is suggested that the name of the school has now been changed to Donaghey College; in the future another school may adopt the name Little Rock Junior College. That is when the wording of the deed in trust “the present Little Rock Junior College” would come into play; the new school adopting that name would not be the present Little Rock Junior College.
* # *
Here the principal issue in dispute is the meaning in which the settlor of the trust used the words “the present Little Rock Junior College”. Were the words used as meaning a Junior College only, or were they used in the sense of meaning the name of the school endowed?
It does not seem to me that the status of UALR. the “resulting institution,” as the successor to LRU (the changed name of the institution once called Little Rock Junior College) or to Little Rock Junior College itself is subject to challenge. No recitation of facts in addition to those stated in the majority opinion and elsewhere in this opinion is necessary to answer any question that might exist. In any merger, the designated survivor is presumably the successor to the merged components. See, e.g., Ark. Stat. Ann. § 64-705 (Repl. 1966). The resultant or surviving corporation in a merger situation is the successor to a constitutent corporation. First National Bank of Birmingham v. Adams, 281 Ala. 404, 203 So. 2d 124 (1967). In Arlington Hotel Co. v. Rector, 124 Ark. 90, 186 S.W. 622, an important issue was whether the “new” Arlington Hotel Company was the successor to the “old” corporation bearing the same name. No merger was involved, but there is a great factual similarity to the situation before us insofar as LRU and UALR are concerned. The original Arlington Hotel Company leased the hotel property from the United States. It was chartered for a term of 20 years. Two years after the charter expired, the government demanded that the corporation furnish evidence of either a new charter or an extension of the old one. The “new” corporation was then organized with the same officers as the old one. The hotel operation was carried on by the officers of the first corporation during the interim between the expiration of the charter of the old company and the organization of the new one. The old company agreed to, and did, convey all its assets and property to the new company, and the new company agreed to assume all indebtedness of the old one, and to issue its paid up stock to the stockholders of the old company, share for share. Thereafter, a new lease of the hotel property was entered into, and the existing lease with the old company canceled. The question was whether the new company was liable upon a consent judgment against the old to make annual payments to one of its incorporators “as long as the Arlington Hotel Company, or its successors or assigns continued to occupy the Arlington Hotel site. It was held that the new company was the successor of the old.
Ordinarily the word “successors,” in the case of a corporation, means another corporation which, by a process of amalgamation, consolidation, or duly authorized legal succession, has become invested with the rights, and has assumed the burdens of the first corporation. Schmoele v. Atlantic City R. Co., 110 N.J. Eq. 597, 160 A. 524 (1932); Hanna v. Florence Iron Co. of Wisconsin, 222 N.Y. 290, 118 N.E. 629 (1918). UALR fits that definition. By the terms of the merger agreement it has certainly assumed the obligations of LRU and is invested with its rights. The constituent corporation lives as a component part of the surviving corporation insofar as the rights, franchises and privileges enjoyed by the constituent corporation are concerned. First National Bank of Birmingham v. Adams, supra.
The 15-year-old John Doe retained his identity when he reached maturity. I submit that he is still the same person in spite of his marriage.
In Greene v. Thompson, supra, we recognized that should the board of directors of the Little Rock School District refuse to operate or supervise the Little Rock Junior College (soon to become Little Rock Univeristy) the power of equity to prevent the loss of the foundation funds might be brought into play. That situation did come into existence. The charter of Little Rock University was amended to vest the management and administration of the corporation in a board of trustees if the board of directors of the Little Rock School District should refuse to operate or supervise the corporation. This board promptly declined to continue to operate the university. Still, this court held that Little Rock University, as the primary beneficiary of the Donaghey trust, should not be permitted to suffer the loss of support from that trust. I do not agree with the majority’s analysis of our decision in that case as an approval of the trustees' discretionary authority, based upon their expressed desire. The following is a portion of the chancery decree which was before the court and was unaffected by the modification made here:
"(a) The George W. Donaghey Foundation and its Trustees may not withhold from Little Rock University the income from The George W. Donaghey Trust because of the refusal of the Board of Directors of Little Rock School District to supervise or operate Little Rock University.”
Furthermore, I find no basis for saying that the idea of the use of tax funds for support and maintenance of the institution nurtured into maturity with the substantial aid of the Donaghey trust could have been a bugaboo which would have caused Governor and Mrs. Donaghey to have any qualms about support of the institution or to have thought that such an eventuality, either likely or unlikely, would cause their trustees to withdraw support from the institution. Their dream was not of the ready availability of higher education by a private institution. It was of the existence of such educational facilities in Little Rock. This idea seems to have been prevalent in the thinking of the court in all previous cases involving this trust, and I can perceive of no reason why it should be now abandoned or beclouded. In deciding that a four-year college could qualify as well as a two-year college this court said:
It is argued that Governor Donaghey was interested only in a junior college because he know of the trials and tribulations of those unable to obtain a higher education, and he wanted to make a junior college available to those unable to bear the expense of a full four year course and that he endowed a “junior college” as such and gave the trustees of the Donaehev Foundation the discretion of selecting some other school as a beneficiary of the trust in the event the Little Rock Junior College ceased to be a junior college. But it is shown conclusively by the writings of both the Governor and Mrs. Donaghey that it was their fondest hope that the Little Rock Junior College would grow into a four year school. Governor Donaghey wrote in his Autobiography: “* * * When the Donaghey Foundation Board meets, we have great plans for improving the property, and perhaps for constructing a building on the site where the burned theater stood. Shall our plans and dreams lead to a four year college, with a fine new plant of its own? The very thought makes me feel stronger and younger.” And the Governor wrote in his volume Home Spun Philosophy: “Then, whoever aids in the development of this human power, for any of the vocations of life, renders his community and State a forward service. That is the object of the establishment of the Donaghey Foundation. Today it is sponsoring the fortunes of Little Rock Junior College. This college is affording the young people of Greater Little Rock and the contiguous territory the opportunity of a two-year course in college work with the object of eventually making it four years.” (Emphasis mine.) Little Rock Junior College v. George W. Donaghey Foundation, supra.
Again,in Donaghey Foundation v. Little Rock University, supra, we said:
Unquestionably, and this is admitted by all parties, Governor Donaghey’s prime objective in creating the trust was to aid the cause of higher education in Greater Little Rock. This is well shown in his Autobiography and Flomespun Philosophy, which are discussed in Little Rock Junior College v. Geo. W. Donaghey Foundation, supra. A detailed discussion of his intent is therefore unnecessary, but we quote a few excerpts as a means of emphasizing the Governor’s strong views. From Homespun Philosophy:
“I wonder how many of our citizens have made an estimate of what higher education has cost Greater Little Rock during the last fifty years. That is to say, how much actual cash has been sent out of the city to pay for it, leaving oüt the questions of the thousands of poor boys and girls who are unable to foot the expense of going away from home to college. Suppose we say that Little Rock has, during the past fifty years, sent an average of 200 boys and girls a year away to college, which would seem to be a reasonable approximate. Then suppose we estimate that the cash outlay has been an average of a thousand dollars per annum. It is then but a simple calculation to find that the cost would amount to the stupendous sum of 10 millions of dollars, ten millions of dollars wasted on the winds of negligence; for the neglect of not building an institution of higher education at home and thereby having ten millions of dollars now invested in Little Rock in one of the best universities in all of the South. * * *
“Boys and girls educated at home not only are in the majority and stand together in molding the opinions of the State, but also are just about as well equipped for the affairs of life as those sent away to school. In other words, sending a child to Yale or Harvard or any other college does little more to educate him than sending him to a home institution. Textbooks and lectures by trained instructors can be studied and heard at one place as well as another.”
From the autobiography:
“After frequent consultations with the school authorities and trustees I was convinced that no greater field for educational development exists anywhere than can be found right here in Little Rock where hundreds of boys and girls after graduating from high school are unable to advance further through a course in college.”
The majority position on the meager contribution of the Donaghey trust to the overall operational expense and the commingling of the trust income with tax funds appropriated is not quite consistent with the history of the trust and litigation pertaining thereto. In Little Rock Junior College v. George W. Donaghey Foundation, supra, I find this interesting information:
At the time the trust was set up the Little Rock Junior College was a two year school. During the first years of the trust, due to a mortgage indebtedness on the property conveyed to the trust, only a comparatively small amount was paid to the college; but subsequent to 1939 payments increased. In 1950 the payment by the trust to the college was in the sum of $45,037.50, and in 1953 it was $75,050.
And in Donaghey Foundation v. Little Rock University, supra, this is added:
Originally, the Little Rock Junior College used the Little Rock Public School buildings at a time when those buildings were not being used for common school education. Teachers of the Little Rock public schools were used by the college. In other words, the operation of the college was a part-time operation, * * *■ The college itself has likewise steadily grown. From 421 students in 1929, the enrollment has increased to 1,485. Compared to a 1929-30 budget of $36,874.33, we find that the present budget calls for $543,276, of which the University is dependent upon the Foundation for $90,000.
This growth and the demand for greater educational facilities has simply continued and resulted in the merger of LRU into the University of Arkansas, because LRU was no longer able to cope with the demands made upon it. The General Assembly found and declared that the LRU board and that of the University of Arkansas jointly concluded “that imperative measures must be taken to satisfy the increasing demands for educational opportunity for the young people of Central Arkansas.” See Preamble to Act 35 of 1969.
The merger agreement recites as one of its bases the concern of the LRU board for providing “quality higher education and educational leadership suitable to the physical growth and to the economic and cultural development of Central Arkansas and of the State.” It also recited that “a plan had been agreed upon for the expansion of both institutions”; that the plan would bring to the Central Arkansas region the “benefits of a State University while retaining the loyal support and contributions so demonstrably evidenced in the creation and the rapid growth of LRU, leading thereby to the assured enrichment of the quality of the contribution LRU, in undergraduate fields, . . . [is] now making to the educational well being of the State of Arkansas as a whole and of Central Arkansas in particular”; that “it has been determined that it is to the best interests of the parties” to transfer assets “so that the institution of higher education now known as LRU will become a part of the University of Arkansas”; that the “ ‘resulting institution’ means LRU from and after the date of transfer and refers to a major campus of the University of Arkansas located at Little Rock, Arkansas”; that the name “University of Arkansas at Little Rock” will be assigned to the resulting institution, as “descriptive of its broad function, its location and the fact that it is a major campus of the University of Arkansas”; that “University of Arkansas shall conduct in the resulting institution. . . a program of undergraduate and graduate instruction, research and educational services, as dictated primarily by the needs of Central Arkansas . . .”
It can readily be seen that the mission of LRU and of the Donaghey trust is being carried out and enhanced by the appropriations made by the state. The argument that the Donaghey trustees would somehow be deprived of some discretion formerly vested in them simply has no support, because they never had the discretion to dictate how the contributions of the trust were spent by the recipient and there is no language in the trust instrument from which any such discretion can be inferred.
The most that can be said is that LRU, the resulting institution, will have the means of enlarging from a four-year college to one also offering graduate degrees, and that the final responsibility for administration will again be in the hands of public school trustees. There is no substantial difference in this transition and the developments which brought the institution from a junior college to a four-year one and transferred the administrative responsibilities from the public school directors to the directors of an eleemosynary corporation, except that the changes bring still more and better education to the area heretofore served by LRU.
The merger could not be accomplished on the basis originally desired by the boards of the two institutions, i.e., so that tuition at UALR would be no greater than that at other campuses. An amendment to the merger agreement was necessary. In that amendment the parties agreed that the appropriation made by the 1969 General Assembly was sufficient to permit the merger to become effective, “when taken together with the present financing of LRU, including the maintenance of student fees at or approximating their present level.” (Emphasis mine.) It was agreed that student tuition fees must remain at or near their existing level and gradually reduced as financial resources of the resulting institution, including state allocations in payment of its appropriations, become available in amounts sufficient to justify their reduction to the levels of other campuses. Withdrawal of the Donaghey Foundation support or its allocation to purposes specified by the Donaghey trustees will inevitably postpone this desired goal.
Worry about the legislature’s withholding funds because of this anticipated $90,000 income seems chimerical to me. Two factors make it too uncertain to be taken into consideration. First, the Donaghey trustees are to pay over all or such part of the net income from the properties as they deem best, and accumulations of income may be expended for trust purposes at such times and in such amounts as the trustees think best. Secondly, at any time after July 1, 1979, the trustees may, by unanimous vote expend all or any part of the principal and accumulated income for erecting or contributing to the erection of a permanent building or buildings to be devoted to the objects and purposes of the trust. Incidentally this latter possibility might enable a useful monument to the donors to be erected and thus give permanent identity to their contribution. It might well be that a tuition reduction will have been accomplished before this is done.
I cannot visualize Governor or Mrs. Donaghey’s becoming concerned about “their institution’s” drawing students from most of our counties, several states and even some foreign countries. I surmise that these facts are supposed to show a change in the character of the institution, but there is no showing that LRU, before merger, did not draw students from many counties, other states and even foreign countries. There is no indication that there was any tidal wave of students from outside Pulaski County upon announcement of the merger. This interesting bit of statistical information, I submit, is not indicative of any change of circumstances. Rather, it seems to demonstrate the need for such an institution, as Governor Donaghey envisioned, the excellence of the institution, the inability of LRU in its pre-merger status to continue to perform its mission, and the wisdom of the merger. A reading and rereading of the trust instruments, the facts stated and conclusions in our previous opinions convince me that Governor Donaghey was interested in having an excellent institution of higher learning in Little Rock, not for the benefit of Pulaski County students but for the benefit of the surrounding area. I find nothing to indicate any such provincialism in the thoughts of the Donagheys as is indicated by reference to enrollment data.
Since I feel that the preponderance of the evidence supports the chancellor’s finding that there was no change of circumstances and since I can find no discretion to be exercised by the Donaghey trustees in the matter of expenditures, I would affirm the decree on cross-appeal and reverse on appeal.
-7]Emphasis mine.