97 S.E.2d 478 | N.C. | 1957
Ronald E. FINCH, Administrator with the will annexed of William C. Honeycutt, Deceased,
v.
Georgie Greer HONEYCUTT, Widow, William C. Honeycutt, Jr., a Minor, Nancy Ann Honeycutt, a Minor, Judy Greer Honeycutt, a Minor, and Kester Walton and Georgia Greer Honeycutt, Trustees under the Last Will and Testament of William C. Honeycutt, Deceased.
Supreme Court of North Carolina.
*483 Harkins, Van Winkle, Walton & Buck, Asheville, for Georgia Greer Honeycutt, Widow and Kester Walton and Georgia Greer Honeycutt, Trustees.
John C. Cheesborough, Asheville, Earl J. Fowler, guardians ad litem for Unborn Persons.
WINBORNE, Chief Justice.
The assignments of error based upon specific exceptions taken by the several appellants to conclusions of law made by the trial judge of Superior Court, and presented in this Court, challenge the correctness of the judgment from which appeal is taken in two basic aspects in holding: (1) That William C. Honeycutt, by his will, devised and bequeathed to his wife Georgia Greer Honeycutt one-half interest in all of the real and personal property of which he died seized and possessed; and (2) that William C. Honeycutt, by his will, did not create a legal and valid trust for the benefit of his three children in one-half of his property, and hence the children took such one-half without regard to trust provisions set out therein.
A careful consideration of the provisions of the will, in the light of applicable principles of law, leads to the conclusion that in the first such aspect the ruling is correct and proper, but that in the second such aspect the ruling is in error.
Pertinent to such aspects of the case in hand, the intent of the testator is the paramount consideration in the construction of his will.
"In searching for the intent of the testator, as expressed in the language used by him, we start with the presumption that one who makes a will is of disposing mind and memory and does not intend to die intestate as to any part of his property." Ferguson v. Ferguson, 225 N.C. 375, 35 S.E.2d 231, 232, where the subject is fully discussed. See also Jones v. Jones, 227 N.C. 424, 42 S.E.2d 620.
In the Ferguson case, supra, it is also stated that "Even where a will is reasonably susceptible of two constructions, the one favorable to complete testacy, the other consistent with partial intestacy, in application of the presumption, the former construction will be adopted and the latter rejected."
*484 No particular form of expression is necessary to constitute a legal disposition of property. Hence, although apt legal words were not used and the language is inartificial, the courts will give effect to it where the intent is apparent. Even the form will be disregarded. Kerr v. Girdwood, 138 N.C. 473, 50 S.E. 852, 107 Am. St.Rep. 551
Moreover, the doctrine of devise or bequest by implication is well established in our law. Burcham v. Burcham, 219 N.C. 357, 13 S.E.2d 615. See also Burney v. Holloway, 225 N.C. 633, 36 S.E.2d 5; Efird v. Efird, 234 N.C. 607, 68 S.E.2d 279.
In the Burcham case, supra [219 N.C. 357, 13 S.E.2d 616], this statement of the principle is quoted with approval: "`If a reading of the whole will produces a conviction that the testator must necessarily have intended an interest to be given which is not bequeathed by express or formal words, the court may supply the defect by implication, and so mould the language of the testator as to carry into effect, so far as possible, the intention which it is of opinion that he has on the whole will sufficiently declared.'" 1 Underhill on Wills, Section 463.
True it is said in the Burney case, supra [225 N.C. 633, 36 S.E.2d 8], "The settled policy of the law, however, founded upon strong reason, does not favor a devise, or even a bequest, by implication, permitting it only when it cogently appears to be the intention of the will * * *. Probability must be so strong that a contrary intention `cannot reasonably be supposed to exist in testator's mind,' and cannot be indulged merely to avoid intestacy."
Nevertheless, in the light of these principles, applied to the wording of the will of William C. Honeycutt here considered it is apparent that a gift by implication was effected of one-half of his estate to his wife, Georgia Greer Honeycutt. In the first sentence he refers to "my estate" as being "a community estate with my wife, Georgia Greer Honeycutt," and that "it has been held as such for several years when paying Fed. and State Income Tax." Then the next sentence reads, "Therefore it is my will that my half of my and her (wife) estate be given to my three children * * *," and no mention is again made of the other half. Indeed, no devise or bequest otherwise is made to his wife. The conclusion is inescapable that he intended she should have one-half of his estate. And it will not be presumed that he intended to die partially intestate.
Therefore this Court holds that the ruling of the trial court in this aspect is proper, and should be affirmed.
Now as to whether the testator, William C. Honeycutt, by the language used in his will, created a legal and valid trust whereby the Trustees named are entitled to hold and to receive any property willed to his three minor children: The Statute of Uses, 27 Henry VIII, preserved in this State by G.S. § 41-7, merges the legal and equitable titles in the beneficiary of a passive trust, but the rule established by the statute does not apply to active trusts. Chinnis v. Cobb, 210 N.C. 104, 185 S.E. 638.
As to active trusts the legal title vests and remains in the trustee for the purpose of the trust. Fisher v. Fisher, 218 N.C. 42, 9 S.E.2d 493. See also Security National Bank v. Sternberger, 207 N.C. 811, 178 S.E. 595, 97 A.L.R. 720.
The distinction between a passive and active trust is clearly pointed out in opinion by Adams, J., in Patrick v. Beatty, 202 N.C. 454, 163 S.E. 572.
In the Chinnis case, supra [210 N.C. 104, 185 S.E. 641], in opinion by Devin, J., later C. J., it is said that "an `active trust' is one where there is a special duty to be performed by the trustee in respect to the estate, such as collecting the rents and profits, or selling the estate, or *485 the execution of some particular purpose." Then the opinion quotes with approval this statement from Underhill on Wills, Section 773: "In other words, when any control is to be exercised or any duty performed by the trustee, however slight it may be * * * the trust is active"; and the opinion goes on to say, "Since it would be impossible for the trustee to perform the duties imposed upon him unless permitted to retain the legal estate in himself, equity will not permit it to be transferred to the beneficiary under the Statute of Uses."
Moreover, it is well settled in this State that to constitute a valid trust "three circumstances must concur: (1) Sufficient words to raise it; (2) a definite subject; and (3) an ascertained object." Thomas v. Clay, 187 N.C. 778, 122 S.E. 852, 854.
In the light of these principles, applied to the wording of the provisions of the will of William C. Honeycutt, it is manifest that the three essentials are present. It is clear that the testator intended to create a trust for the benefit of his children. It is expressly so stated, and he named the trustees. And aside from other provisions of the will the concluding sentence that "It is my desire that my trustees will look after my childrens educational, moral and religious interests as well as their money or material interests," implies that the trustees shall have control of the estate in the performance of these duties. As stated above, it would be impossible for the trustees to perform the duties thus imposed unless permitted to retain the legal title. Hence equity will not permit it to be transferred to the beneficiaries under the Statute of Uses.
But it is contended that the trust attempted to be set up is violative of the Rule against Perpetuities. "Under this rule, no devise or grant of a future interest in property is valid unless title thereto must vest, if at all, not less than twentyone years, plus period of gestation, after some life or lives in being at the time of the creation of the interest. If there is a possibility such future interest may not vest within the time prescribed, the gift or grant is void." McQueen v. Branch Banking & Trust Co., 234 N.C. 737, 68 S.E.2d 831, 835.
The contention is not well founded here. For "it is generally held, nothing else appearing in the will to the contrary, that where an estate is devised to a trustee in an active trust for the sole benefit of persons named as beneficiaries, with direction to divide up and deliver the estate at a stated time, this will have the effect of vesting the interest immediately on the death of the testator. The intervention of the estate of the trustee will not have the effect of postponing the gift itself, but only its enjoyment." Coddington v. Stone, 217 N.C. 714, 9 S.E.2d 420, 423.
The gift in the instant case to the children vested in interest to them immediately upon the death of the testator, although the full enjoyment is postponed to later dates. When these conditions exist, a trust does not violate the Rule against Perpetuities. McQueen v. Branch Banking & Trust Co., supra.
Even though the postponements here ultimately invade the Twenty-first Century, reference to the ages of the children indicates that the postponements are within the life or lives of the beneficiaries in being and twenty-one years and ten lunar months thereafter, the limitation of the Rule against Perpetuities. American Trust Co. v. Williamson, 228 N.C. 458, 46 S.E.2d 104.
Hence the ruling of the trial judge in holding that the testator, William C. Honeycutt, by his will, did not create a legal and valid trust whereby Kester Walton and Georgia Greer Honeycutt, as Trustees, are entitled to hold or receive any property willed to his three minor children must be, and it is hereby reversed. And in accordance therewith the holding of the *486 trial Judge that the three children of William C. Honeycutt are entitled to receive, under the terms of the will of the said William C. Honeycutt, a one-half interest in all the property of Willaim C. Honeycutt, deceased, share and share alike, after all taxes and other debts owed by the deceased and his administrator have been fully paid and settled is modified so that the legal title be vested in the trustees, and the beneficial interest vested in the children in keeping with the trust provisions set out in the will.
Finally, the questions propounded by the guardian ad litem for persons not in being were not considered by the trial Judge. Indeed presently they are merely speculative, and are not considered.
Hence in accord with this opinion, the judgment from which appeal is taken is
Modified and affirmed.
