## Facts

- Lester Morgan Wells executed a will creating two equal scholarship trusts from the residue of his estate, one to be held by Drake University and one to be held by Parsons College.
- Each institution was to hold its share “in a permanent trust,” invest the principal, and use trust income “for scholarship purposes only” to assist needy students in obtaining a college education.
- The will expressed a nonbinding preference that the Parsons trust benefit students from Jefferson County, Iowa, or elsewhere in Iowa.
- The will included a failure clause providing that if either institution failed to carry out the trust provisions, the trust “shall fail,” be “cancelled and revoked,” and the principal would pass to Wells’s legal heirs at law.
- After the will was executed but before Wells’s death, Parsons College became bankrupt and ceased operating as an educational institution.
- The executor filed a declaratory judgment action seeking construction of the will as to the scholarship trusts.
- The district court ruled the Parsons trust failed and the property designated for that trust passed to the heirs at law.
- Drake University appealed, seeking application of cy pres to redirect the Parsons share to Drake to be used for the same general scholarship purpose.

## Issues

1. Whether the scholarship trust intended to be administered by Parsons College failed when Parsons became bankrupt and ceased operating as an educational institution.
2. Whether cy pres could redirect the failed Parsons trust property to Drake University despite an express will provision directing that, upon failure, the property passes to the testator’s legal heirs at law.

## Decision

- The Supreme Court of Iowa affirmed.
- The court held the Parsons scholarship trust failed because Parsons could not carry out the trust’s terms after bankruptcy and closure.
- The court refused to apply cy pres to transfer the Parsons share to Drake, because the will expressly provided that, upon failure, the property would pass to the testator’s legal heirs at law.
- The Parsons share of the residue therefore passed to the heirs at law, while the Drake trust remained effective as written.

## Legal Principles

- Cy pres permits judicial modification of a charitable trust’s terms or administration when the specified charitable purpose or method becomes impossible, impracticable, or illegal, and the donor had a general charitable intent.
- Cy pres generally does not apply where the donor’s instrument contains a clear, specific alternative disposition in the event of failure of the charitable gift.
- An express gift over to private takers upon failure is strong evidence that the donor did not intend the property to remain dedicated to charitable use at all costs.
- Courts prioritize the testator’s expressed intent as shown by the will’s text, including any explicit failure and reversion provisions.

## Conclusion

Parsons College’s inability to operate as a college caused the Parsons scholarship trust to fail, and the will’s explicit failure clause required the trust property to pass to the testator’s legal heirs at law, foreclosing cy pres redirection of the funds to Drake University.


Simmons v. Parsons Coll., 256 N.W.2d 225 (Iowa 1977)