110 S.E.2d 802 | N.C. | 1959
J. W. CALLAHAM, Trustee,
v.
Bert S. NEWSOM.
Supreme Court of North Carolina.
Brock Barkley, Charlotte, for plaintiff appellee.
Sedberry, Sanders & Walker, Charlotte, for defendant appellant.
RODMAN, Justice.
The trust agreement expressly authorizes the trustee to sell the stock constituting the trust estate and reinvest the proceeds. There is no question of implied power. The only question presented is the duration of the power expressly given. Did the power to sell and reinvest terminate upon the death of Carl K. Callaham, the grantor, or does the power continue as long as the trustee has duties to perform?
When called upon to interpret a trust agreement or other contract, courts seek to ascertain the intent of the parties and, when ascertained, give effect thereto, unless forbidden by law. In re Will of Stimpson, 248 N.C. 262, 103 S.E.2d 352; De Bruhl v. State Highway & Public Works Comm., 245 N.C. 139, 95 S.E.2d 553; Hall v. Wardwell, 228 N.C. 562, 46 S.E.2d 556; Wachovia Bank & Trust Co. v. Steele's Mills, 225 N.C. 302, 34 S.E.2d 425.
The intent of one who creates a trust is to be determined by the language he chooses to convey his thoughts, the purpose he seeks to accomplish, and the situation of the several parties to or benefited by the trust. Gould Morris Electric Co. *805 v. Atlantic Fire Ins. Co., 229 N.C. 518, 50 S.E.2d 295.
Here the trust agreement demonstrates a desire on the part of the grantor to provide financial aid upon his death to designated persons, some at least of whom are minors. The income from the trust property went to the grantor during his life. Upon grantor's death the corpus of the estate is to be divided into thirteen parts, eleven parts for the benefit of eleven designated beneficiaries and two parts for another named beneficiary, the daughter of the person selected to act as trustee.
The trust estate consists of the entire capital stock of a corporation whose only assets were three lots in the City of Charlotte. The nature and extent of the improvements on the several lots is not disclosed. The lot which defendant purchased had been used for residential purposes. The trust agreement manifests an intent to use the corpus to produce income for the beneficiaries. Appellant concedes the trustee had the right to sell and manage in such manner as to efficiently produce income during grantor's life.
The moment grantor died the power and responsibility of the trustee became enormously enlarged. He was invested with broad discretionary powers with respect to the distribution of income and corpus. He had the right to select the purpose for which the income could be expended for any beneficiary, or he could make payment directly to a beneficiary, or he could entirely withhold payments of income. The only limitation on his power was the requirement to distribute the trust estate not later than the day when the youngest beneficiary named became 21. The power to withhold and accumulate necessarily implied the power and duty to invest such accumulations. He could not needlessly let them lie idle. Isler v. Brock, 134 N.C. 428, 46 S.E. 951; 90 C.J.S. Trusts § 320, p. 505; 45 Am.Jur. 294.
It is apparent from the trust agreement the grantor imposed confidence in the business acumen and integrity of the trustee. It is not to be supposed that having expressly invested the trustee with authority to manage, sell, and reinvest the entire trust estate that the grantor intended to limit such authority to grantor's life, and at the same time impose by implication a duty to invest income which he had the power to withhold.
The dissolution of the corporation and transfer of legal title to the real estate as a liquidating dividend for the stock did not exhaust the power of the trustee to sell, manage, and reinvest. 90 C.J.S. Trusts § 288, p. 426. Defendant, in refusing to comply with his contract to purchase, made no suggestion that plaintiff was not acting in good faith and for the best interest of the estate. He did not furnish plaintiff with a statement of his objections to the title as required by his contract. He merely refused to comply. His assignment of error challenging plaintiff's authority is not sustained.
Affirmed.
HIGGINS, J., not sitting.