Little v. Wachovia Bank and Trust Company

Moore, J.

All the diverse interests agree that there are at least two presently subsisting controversies affecting the trust estate of Zeb Vance Grubb which should be resolved for the guidance of the trustee in administering the trusts: (1) the correct disposition of the four per cent income share willed to Zeb Grubb Little which has accrued since his death and will continue during the existence of the trust, and (2) the proper disposal of the sum of $20,803.28 which was retained from the twenty per cent income share of Robert Grubb as the net value of the bequest in Article VI of the will of Zeb Vance Grubb. The other controversies involving construction of provisions of the will are, according to the contention of Wachovia Bank and Trust Company, trustee, remote, premature and unnecessary for the present management of the trust and the court lacks jurisdiction to determine them at this time.

This action was instituted pursuant to the Declaratory Judgment Act, G.S. 1-253 et seg. The complaint makes no specific reference to the Act, .but there is no statutory requirement that such reference be made. “It is the facts alleged that determine the nature of the relief to be granted.” Bolich v. Insurance Company, 206 N.C. 144, 150, 173 S.E. 320; Wright v. McGee, 206 N.C. 52, 55, 173 S.E. 31.

Plaintiff is sole devisee and legatee of Zeb Grubb Little. And Zeb Grubb Little is a named beneficiary in the testamentary trust of Zeb Vance Grubb’s estate. Plaintiff claims property rights and interests in the trust estate. “Any person interested under a . . . will . . . may have determined any question of construction or validity arising under the instrument . . . and obtain a declaration of rights, status or other legal relations thereunder.” G.S. 1-254. “Any person interested as or through (a) . . . devisee, legatee ... in the adminis tration of a trust, or of the estate of a decedent . . . may have a declaration of rights or legal relations in respect thereto ... to determine any question arising in the administration of the estate or trust, including questions of construction of wills and other writings.” G.S. 1-255.

The courts have no jurisdiction to determine matters purely speculative, enter anticipatory judgments, declare social status, deal with theoretical problems, give advisory opinions, answer moot questions, adjudicate academic matters, provide for contingencies which may hereafter arise, or give abstract opinions. Finch v. Honeycutt, 246 N. C. 91, 101, 97 S.E. 2d 478; Trust Co. v. Schneider, 235 N.C. 446, 454, 70 S.E. 2d 578; Light Co. v. Iseley, 203 N.C. 811, 819, 167 S.E. 56; Reid v. Alexander, 170 N.C. 303, 304, 87 S.E. 125. “The Uniform Declaratory Judgment Act does not license litigants to fish in judicial ponds for legal advice.” Lide v. Hears, 231 N.C. 111, 117, 56 S. E. 2d 404. An order directing distribution of corpus in the event of the death of the contingent beneficiary prior to the time fixed by the will must be vacated. Trust Co. v. Schneider, supra. But “this act is remedial; its purpose is to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and is to be liberally construed and administered.” Walker v. Phelps, 202 N.C. 344, 349, 162 S.E. 727. “Where, ... it appears from the allegations of the complaint in an action instituted under the authority and pursuant to the provisions of the act, (1) that a real controversy exists between or among the parties to the action; (2) that such controversy arises out of opposing contentions of the parties, made in good faith, as to the validity or construction of a . . . will . . .; and (3) that the parties to the action have or may have legal rights, or are or may be under legal liabilities which are involved in the controversy, the court has jurisdiction, and on the facts admitted in the pleadings or established at the trial, may render judgment, declaring the rights and liabilities of the respective parties, as between or among themselves, and affording the relief to which the parties are entitled under the judgment.” Light Co. v. Iseley, supra, at page 820. It has been held by this Court that the question as to whether or not adopted children are contingent remaindermen under the provisions of a testamentary trust is justiciable even though the contingency has not happened and the children may not be living at the time the contingency arises. Trust Co. v. Green, 238 N.C. 339, 344, 78 S.E. 2d 174. There it is said: “It is purely a question of law, now determinable, and: nothing except the death of all three of the adopted children .' . . prior to the death of the last survivor of the niece and nephew of the testator can obviate the necessity for its determination. This contingency, in our opinion, does not justify the postponement of a decision thereon. . . . The adoptive parents are entitled to know whether or not these children will share . . . Doubtless, plans for the future of the children will be governed somewhat by the answer to this question.” The court has jurisdiction if the judgment will prevent future litigation. Bradford v. Johnson, 237 N.C. 572, 577, 75 S.E. 2d 632. The validity of the assignment of an interest by a legatee may be adjudicated. Trust Co. v. Henderson, 226 N.C. 649, 39 S.E. 2d 804. The Act enables courts to take 'cognizance of disputes at an earlier stage than that permitted by ordinary legal procedure, if the controversy is real and actually exists between parties having adverse interests. Lide v. Mears, supra, at page 118.

Plaintiff contends, as the sole devisee and legatee of Zeb Grubb Little, he has a vested estate and interest in fee in a substantial portion of the corpus of the trusts created by the will of Zeb Vance Grubb and has certain rights with respect to the trust income. He asks that his rights be declared. His contentions are strongly controverted. It is our opinion that plaintiff is entitled to have his rights andi interests determined, though his enjoyment thereof, if any he has, must of necessity be postponed. It is a controversy which must in any event be determined at this or a future date. Plaintiff asserts that his rights are not contingent but vested, he is the ascertained owner thereof, and his ownership is indefeasible. He insists further that, as administrator, c. t. a., of the Zeb Grubb Little estate, he is entitled to know with certainty of what that estate consists in order to make correct accounting and proper tax returns. He also contends that as a business man it is important that he know with reasonable accuracy the extent of his property in making financial statements and establishing credit rating, and:, further, that without this information he cannot plan the proper disposition of his property during his lifetime or by' will.

In any event, it is necessary to construe the pertinent provisions of the will in order to determine the matters which all agree are presently in controversy. While the cause is here, we have jurisdiction and ought to determine those matters in controversy which of necessity must be ultimately determined in any event, whether the declaration of rights is needful to the trustee presently or not. This course will prevent litigation and save the expense of a multiplicity of suits. Of course, we do not undertake and have no jurisdiction to resolve all possible contingencies and we dio not anticipate the happening of events which in the course of administering the trust may never transpire.

It must be conceded, in the light of occurrences since the death of the testator, that the trust provisions of the will of Zeb Vance Grubb contain ambiguities and apparent contradictions. Questions for judicial construction are presented. In such circumstance, the fundamental object in construing the will is to discover and effectuate testator’s intention. This intention must be arrived at by an examination of the will, from its four corners, when read in the light of all surrounding facts and circumstances known to the testator. Entwistle v. Covington, 250 N.C. 315, 318, 108 S.E. 2d 603; Van Winkle v. Missionary Union, 192 N.C. 131, 134, 133 S.E. 431.

From the uncontroverted findings of fact and the will itself we reach the following conclusions which bear on the intent of the testator: (1) Zeb Vance Grubb was an experienced, successful and discriminating man of affairs, had various business interests and left a substantial estate; (2) the net value of his residuary estate at the time of his death in 1949 was approximately $400,000.00; (3) he had no children and was survived by his wife, brother, sisters, nieces and nephews; (4) he had taken his nephew, Zeb Grubb Little, into his home, educated him and had for him “the love and affection of a father for his son”; (5) he desired his residuary estate to be held in active trust for twenty years, in any event, and all income therefrom to be paid to specified beneficiaries, all of whom are family connections; (6) he provided that these income gifts should be personal to the beneficiaries, not to be assigned, transferred or conveyed; (7) at the termination of the twenty year trust the corpus is to be divided among the beneficiaries in the same proportion as the income gifts, except that in case of the widow the trust is to continue until her death should she live beyond the twenty year term, and at her death the corpus to go to Zeb Grubb Little, and (8) the primary objects of testator’s bounty were the widow, Alma Lee Grubb, and nephew, Zeb Grubb Little.

In construing the provisions of the will, we find the problem less difficult if the several phases are considered separately and are reduced to their simpliest terms without omission of essentials.

In Articles XIV and XV it is provided that six of the beneficiaries, including Zeb Grubb Little, shall each receive four per cent of the income from the trust estate for twenty years, then, as to all of these, the trust shall terminate and each shall receive four per cent of the corpus of the trust absolutely. Should any of them die before the termination of the trust, the interest and corpus shall go to their re spective surviving issue, but if any die without issue surviving, “their respective shares shall be added to the residue of (the) estate.” Testator's brother, Robert Grubb, was given a twenty per cent share of income and corpus on the same terms.

Under the foregoing provisions, each of the seven beneficiaries, at the death of Zeb Vance Grubb, had a vested interest, subject to the twenty year trust, in his or her respective share in fee, defeasible upon dying without issue before the termination of the trust. G.S. 41-4; Ziegler v. Love, 185 N.C. 40, 42, 115 S.E. 887; Love v. Love, 179 N. C. 115, 117, 101 S.E. 562; Bizzell v. Building Association, 172 N.C. 158, 160, 90 S.E. 142; Smith v. Lamber Co., 155 N.C. 389, 392, 71 S. E. 445; Elkins v. Seigler, 154 N.C. 374, 375, 70 S.E. 636; Dawson v. Ennett, 151 N.C. 543, 545, 66 S.E. 566. Zeb Grubb Little died in 1954 at the age of twenty-six without surviving widow or issue. By reason of his death, without issue, prior to the termination of the trust, his estate and interest in the four per cent share of income and corpus of the trust was divested and as to him was neither devisable or de-scendible. Seawell v. Cheshire, 241 N.C. 629, 638, 86 S.E. 2d 256. The question as to the vesting of this share of the trust estate upon the death of Zeb Grubb Little will be discussed herein in proper order.

In Articles XIV andi XV of the will testator’s widow, Alma Lee Grubb, takes the “residue and remainder” of the income of the trust estate “during the term of her natural life and after her death to . . . Zeb Grubb Little.” At the time of the death of Zeb Vance Grubb this income amounted to fifty-two per cent of the total income, the other beneficiaries having been specifically allotted a total of forty-eight per cent. Should Alma Lee Grubb die before the termination of the twenty year trust, her income share for the remainder of the trust term and the corresponding corpus at the termination of the twenty year trust is given to Zeb Grubb Little; and should she live beyond the termination of the twenty year trust, she is to have her income share for life andi at her death the corresponding share of the corpus is given to Zeb Grubb Little. Without more, there was vested in Alma Lee Grubb, at the death of Zeb Vance Grubb, an estate for life in this residual share, and an indefeasible estate in fee in remainder in Zeb Grubb Little. Trust Co. v. McEwen, 241 N.C. 166, 168, 84 S.E. 2d 642; Pinnell v. Dowtin, 224 N.C. 493, 497, 31 S.E. 2d 467.

At this point serious controversy arises. It is contended that the further provisions of the Articles by express terms prevented the vesting of the remainders in Zeb Grubb Little at the death of testator, the remainders could not vest until the death of the widow andi since Zeb Grubb Little predeceased the widow the remainders never vested in him and go elsewhere. It is further asserted that, if the remainders did vest upon the death of the testator, the gifts in remainder were subj eet to the defeasance clauses of the Articles and were divested when Zeb Grubb Little died without issue surviving.

After naming the beneficiary of each share of income, including that of Alma Lee Grubb with remainder to Zeb Grubb Little, in section (1), Article XIV provides in section (2) that “if either of the above named (naming all beneficiaries except Alma Lee Grubb, Emma Grubb and Lou Grubb) . . . should die before the full and final termination of the trust herein created,” then the shares of the ones so dying shall inure to the benefit of their respective issue, and if “either of said parties shall die without leaving lawful issue surviving . . . their respective shares shall be added to the residue of my estate.” Substantially the same provision, in the same sequence, appears in Article XV with respect to the devolution of the corpus of the estate upon termination of the trust.

Plaintiff contends that the defeasance clauses do not apply to the remainder interests of Zeb Grubb Little after the life estate of Alma Lee Grubb. He insists that it was the intention of the testator to vest in Ze'b Grubb Little-an indefeasible estate in fee in remainder. Defendants, on the other hand, contend that testator intended that the defeasance clauses apply with the same force to the remainders as to the four per cent share given to Zeb Grubb Little in the first instance. They point out that the testator made a specific exception in respect to Lou Grubb’s share. They also call attention to the provisions of Article XIV making the gifts of income personal to the beneficiaries. It is true that the Articles provide that in case of the death of Emma Grubb, mother of testator, before the termination of the twenty year trust, her share, both income andi corpus, is to go to Lou Grubb. Lou Grubb is specifically excluded from the defeasance clauses. Defendants, therefore, contend that if testator had 'also intended to exclude Zeb Grubb Little he would have specifically so provided.

Nevertheless, from a consideration of the will as a whole and the circumstances affecting and known to testator at the time of its execution, it is our opinion, and we so hold, that the testator did not intend to include the remainder interests of Zeb Grubb Little in the de-feasance clauses. In the first place, Alma Lee Grubb is excluded from the defeasance clause of Article XIV. And it goes without saying, with respect to Article XV, testator did not intend that his widow remarry and leave issue. Testator provided for distribution of widow’s income share, should she die before termination of the twenty year trust, in a different manner from that of the other beneficiaries. In her case, just as in the case of Emma Grubb, a definite remainderman is named. It is too obvious to be ignored that the defeasance clauses were intended to apply to first takers rather than remaindermen, and Alma Lee Grubb, for the reason above stated, was excluded from the clauses. In making the gifts of income andi .requiring that they be paid to the beneficiaries in person and not to be assignable, it seems clear that testator had in mind the persons first named in each instance, that is, the first takers. Furthermore, in providing for the defeasances, the language used seems to emphasize the shares. This clause in Article XIV provides, in case of 'beneficiaries dying without issue surviving, “their respective shares shall be added to the residue of my estate.” Article XV is substantially the same — “the . . . share or shares . . . shall inure to the residue or remainder of my estate.” Alma Lee Grubb’s shares were in each instance either expressly or by irresistable implication excluded. Again, it will be observed that testator gave “the residue, or remainder (of the income estate) to . . . Alma Lee Grubb” and “the remainder (of the corpus of the trust), after her death, the same shall immediately vest in Zeb Grubb Little, in fee simple forever.” Therefore, it is clear that all defeasances of income go to the widow, together with the “residue” she is already receiving, and at her death the remainder of the income, if the twenty year trust has not terminated, and the corresponding share of the corpus to Zeb Grubb Little. In other words, the testator intended that the ultimate residue andi remainder of the residuary estate should go to Zeb Grubb Little, for whom he had- “the love and affection of a father for his son.” Had the testator intended otherwise, he would have contemplated intestacy as to the major portion of his residuary estate. It is not suggested by us that he expected Zeb Grubb Little would predecease the widow. But had he intended to include him in the defeasance clauses as to the ultimate remainders, he must, of necessity have given thought to Little’s early death and the consequences. In this case, it would seem that the testator would have made substitute provisions for the ultimate disposition of these substantial remainders. It is generally held that in seeking to discover the intent of the testator there is a presumption against intestacy. Seawell v. Seawell, 238 N.C. 735, 740, 65 S.E. 2d 369.

A careful reading of Articles XIV and XV also leads to the conclusion that testator intended the defeasance clauses to apply to the twenty year trust only and not to the trust for the life of the widow. The references most certainly seem to be to the twenty year trust. Article XV, dealing with the distribution of the corpus, refers to the disposition “at the expiration of twenty years.” That the defeasance clauses do not apply to the remainders to Zeb Grubb Little, Article XVI is strongly persuasive. It contains the following unqualified language: “This trust is to continue as to the share of Alma Lee Grubb for and during the term of her natural life, and at her death to be terminated and said interest to vest in Zeb Grubb Little, in fee simple.” This is also strong argument for the position that the defeasance clauses applied only to the gift strictly involved in the twenty year trust.

But defendants contend that by the express terms of the will it was testator’s intention that the remainders not vest until the death of Alma Lee Grubb. In Article XV are these words: “. . . and after her death, the same shall immediately vest in Zeb Grubb Little, in fee simple forever.” We do not agree that this expression prevented the vesting of the remainders upon the death of Zeb Vance Grubb. . . the court inclines to that construction which will make the title to property left in remainder vested, rather than contingent.” Freeman v. Freeman, 141 N.C. 97, 98, 53 S.E. 620. “ ‘The remainder is vested, when, throughout its continuance the remainderman and his heirs have the right to the immediate possession whenever and however the preceding estate is determined; or, in other words, a remainder is vested if, so long as it lasts, the only obstacle to the right of immediate possession by the remainderman is the existence of the preceding estate; or, again, a remainder is vested if it is subject to no condition precedent save the determination of the preceding estate.’ It is the general rule that remainders vest at the death of the testator, unless some later time for vesting is clearly expressed in the will, or is necessarily implied therefrom. It is likewise a prevailing rule of construction with us that adverbs of time, and adverbial clauses designating time, do not create a contingency but merely indicate the time when the enjoyment of the estate will begin.” Trust Co. v. McEwen, supra; Priddy & Co. v. Sanderford, 221 N.C. 422, 424-5, 20 S.E. 2d 341. In determining the intent of a testator greater regard must be given to the dominant purpose of the testator than the use of any particular words. Trust Co. v. Waddell, 234 N.C. 454, 461, 67 S.E. 2d 651. Furthermore, the intervention of an active trust will not ordinarily have the effect of postponing the gift itself, but only its enjoyment. Van Winkle v. Berger, 228 N.C. 473, 478, 46 S.E. 2d 305; Coddington v. Stone, 217 N.C. 714, 719, 9 S.E. 2d 420. We hold that the expression, “. . . after her death, the same shall immediately vest . . .,” fixes the time for the enjoyment of the corpus of the gift and not the vesting of title. Title to’the remainders in Articles XIV, XV and XVI vested in Zeb Grubb Little upon the death of the testator, were, devisable and descendible and passed to plaintiff under the will of Zeb Grubb Little. As will 'hereinafter appear, the quantum of ownership is, as of the date of the judgment below in this case, the original share of the widow at the death of the testator, or fifty-two per cent.

We next consider the question: Who is entitled to receive the Zeb Grubb Little four per cent share of trust income which has accrued since his death and will continue to accrue? A phase of the twenty year trust was formerly before this Court for interpretation. Trust Co. v. Grubb, 233 N.C. 22, 62 S.E. 2d 719. Article XIV provides, “the entire net income derived from my trust estate shall be paid monthly, or quarterly, after the expiration of three years from the date of my death and probate of this will, to the following: (named beneficiaries).” The holding: “The payment of anything less than the entire net income accruing from the trust property from and after the date of the death of the testator would/ not suffice to meet the express directions of the testator. The beneficiaries must receive all, undiminished and unimpaired by any deduction or by application, in whole or in part, to other purposes.” From this former decision, it is clear that the income arising from Zeb Grubb Little’s four per cent share is absolutely payable and may not be placed in the corpus of the trust, notwithstanding the provision of the trust that if beneficiary die without issue surviving his share “shall be added to the residue of my estate.” In the sense used, “to the residue of my estate” does not mean to the corpus. Such meaning would be repugnant to the absolute direction that all income be distributed. Article XIV deals only with the disposition of the income of the trust estate, therefore, “to the residue of my estate” of necessity refers to the residue of the income estate. Testator gave to Alma Lee Grubb “the residue and remainder” of the income “for and during the term of her natural life.” It is significant that at no place in the will is the exact quantum of her share specified. At the outset of the trust, her share, by computation, was fifty-two per cent, but the testator consistently avoided any statement specifically designating or limiting the percentage the widow should receive. It follows logically that he intended that she should receive not only the original remainder but also the 'additions or “residue” arising by reason of other beneficiaries dying without issue. Alma Lee Grubb is entitled to receive the income from the four per cent share of Zeb Grubb Little which has accrued since his death and which will continue to accrue during her lifetime, even if she lives beyond the termination of the twenty year trust.

The disposition of the corpus of the Zeb Grubb Little four per cent share, or the income and corpus if the widow d/ies before the termina tion of the twenty year trust, presents greater difficulty. In the first place, as already indicated, it is not devisable and descendible as to Zeb Grubb Little and June Carter Little did not acquire it as sole devisee and legatee of Zeb Grubb Little. The case of Van Winkle v. Berger, supra, is in point and controlling. There testator set apart $90,000.00, in trust, the income of which was to be paid semi-annually in equal shares to testator’s three daughters during the terms of their respective natural lives, and at the death of each her share of the principal to go to her issue, if any, and if no issue survived such share to go into the residuary estate and be distributed as such. Ella, one of the daughters, died without issue. She had a vested one-sixth interest in the residuary estate without contingent limitation, and this one-sixth interest was devisable. She left a will disposing of all her property. Her d/evisees and legatees claimed one-sixth of that part of the trust fund which went into the residuary estate by reason of Ella’s death without issue. In holding that they were not entitled to share in this part of the residuary estate, this Court said:

“The answer to our problem lies in the nature of the contingency upon the happening of which the partial termination of the trust takes place, and the designated part of its principal, or corpus, is thrown into the residuary estate.

“That event is to be regarded as the termination of a particular estate, that of the trustees, and also the disappointment of an intervening estate, contingently limited to the issue, if any, of Ella Buchanan. The death of Ella, involved in the contingency, is not merely an event, but a condition to be consummated before the principal should lose its character as a particular legacy and become part of the residuary estate.

The chronology, if we may use that term, contemplated in the will, the time element, is a vital consideration in its construction. That Ella Buchanan could take an interest in the will virtually created by the contingency of her own death, involves a formidable legal paradox which appellants seem to circle but not surmount.

“Ninety thousand dollars was separated from the estate and put into a trust fund, dealt with in particularis, and made the subject of an intervening contingent bequest. Both in point of law and under the expressed phraseology of the will it was not then a part of the residuary estate, the subject of disposition under Article 6. As a matter of law it could not be in the trust fund and under obligation to a particular legacy, however contingent, and in the residuary estate at the same time; and we find no suggestion of an intent that its inclusion in that category was, or could be, retro active. At that time only was the residuary clause activated and clothed with testamentary authority with respect to the distribution of this fund. (Citing authorities) Or, to put it more bluntly, it came under-the operation of the residuary clause at a time when Ella Buchanan must be, and was dead and unable to take.

“It is true, of course, that the intervention of a trust does not necessarily postpone the title or prevent the vesting of an interest where the person who must ultimately take is certain; although it may postpone enjoyment. That was the situation in Coddington v. Stone, 217 N.C., 714, 719, 9 S.E. (2d), 420, but not here. It is the ■contingent disposition of the corpus of the trust and the nature of that contingency with which we are dealing. And here the contingency renders the ultimate taker uncertain.

“If we could dismiss the ever-haunting paradox to which we have referred, it still remains that the passing of the corpus of the trust fund into the residuary estate is itself a contingency depending upon the failure of issue, to whom it is first limited, and is, therefore, a contingency involving uncertainty of the beneficiaries, and no interest could vest in Ella Buchanan under such contingency. (Citing authorities).”

The principles stated in the Van Winkle case are equally applicable here. To hold that plaintiff acquired, as sole devisee and legatee of Zeb Grubb Little, any title or right to any of the principal or interest of the four per cent share in question, would be to overrule the Van Winkle case. This we are not disposed to do.

Having applied the presumption against intestacy in another phase of this case, we now find a situation in which it may not consistently be applied. It is only a rule of construction and must yield when outweighed by logic and general intent. Entwistle v. Covington, supra. It is our opinion, and we so hold, that after the death of Alma Lee Grubb, the principal of the four per cent share in question, and the interest, if the twenty year trust has not then terminated, shall be distributed as in case of intestacy. It is seriously contended by certain of the defendants that this share should pass into the residuary trust estate and enlarge pro rata the shares of those entitled to take thereunder, in accordance with the holding in Buffaloe v. Blalock, 232 N.C. 105, 59 S.E. 2d 625. It is our opinion, however, that the Buffaloe case is factually distinguishable and has no application here. It is true that Articles XIV and XV provide that if any of the specified beneficiaries die without issue the income or corpus share or shares “shall be added to the residue of my estate” and “shall inure to the residue or remainder of this trust estate.” But, as already stated, these references to “residue” and “remainder” apply to the remainder of the trust funds after distribution of the specified shares thereof to beneficiaries entitled, that is, to the remainder or portion of income to be received by the widow and to the remainder or portion of the principal from which widow’s income is derived. Indeed, all of the questions of construction involved on this appeal are more easily resolved and better understood if the .gifts in the twenty year trust set out in section (1), subsections (a) to (h), inclusive, of Article XIV, and sections (1) to (8), inclusive, of Article XV are considered specific bequests, which they really are, and the gifts set out in section (1), subsection (i), of Article XIV, section (9) of Article XV and Article XVI are considered the residuary estate, which they actually are. So, the intent of the testator is not to place this four per cent share in the general residue so as to enlarge the shares of those for whom specific provision was made. Since the estate of Zeb Grubb Little, for the reasons hereinbefore stated, has no right to this share, it of necessity must go intestate. Had a beneficiary, or beneficiaries, other than the one who is also ultimate remainderman, died without issue, another question would be here presented, which we do not now decide. It may never arise.

Article VI of the will is as follows: “I give and bequeath to my brother, Robert Grubb, all of my stock in the Grubb Motor Lines, Inc., together with any and all indebtedness due me by Grubb Motor Lines, Inc.” Article XIV wills to Robert Grubb a twenty per cent share of the income of the trust estate “from which is to be deducted the net value of the bequest in Article VI.” The trustees valued the bequest in Article VI at $20,803.28. There is apparently no controversy as to the amount involved and, as explained by the court below, “No finding or adjudication has been made as to the amount the Trustees were required to withhold and this judgment is limited solely to the construction of the provisions of the will. . . .” The trustees deducted from the twenty per cent income share of Robert Grubb the full amount of $20,803.28 and placed the same in the corpus of the trust estate, that is, the general residue of the estate. Defendant, Alma Lee Grubb, contends that this fund is a part of the income of the estate and under the former decision of this Court must be distributed. Trust Co. v. Grubb, supra. She further contends that since, under the terms of the will, it cannot be paid to Robert Grubb or his surviving issue, it goes into the residue of income and is payable to her. The trustee insists that the fund was properly disposed of. In Article XVII of the will, it is provided: “I also authorize (trustees) ... in the exercise of their discretion, to . . . determine what is prin cipal and what is income and what expenses or other charges shall be charged against income and what against principal . . .” Trustee contends that the discretion thus given has not been abused, but disposition of the fund has been made after due consideration of the provisions of the will andi the factual situation presented, and that trustees acted impartially and in the exercise of their best judgment.

We agree that the allocation of this fund to the corpus of the trust’ estate was proper. “Where discretion is conferred upon the trustee with respect to the exercise of a power, its exercise is not subject to control by the court, except to prevent an abuse by the trustee of his discretion.” Restatement of the Law of Trusts, sec. 187, p. 479. “. . . (I)n general, where a will or trust instrument purports to confer upon an executor or trustee the power to determine what is income and what is principal, the courts . . . have sustained the exercise of the power by such executor or trustee, in the absence of fraud or arbitrary action . . .” Annotation: 118 A.L.R., Income or Principal, p. 843. Of course the trustee will not be given “unlimited power to make allocations as between income and principal in contravention of the intent of the settlor as indicated by the terms of the trust instrument .as a whole.” Annotation: 27 A.L.R., 2d, Income and Principal, p. 1325. Construing Articles VI and XIV together, it seems clear that the testator diesired his brother, Robert Grubb, to have the stock and credits in question, but, in balancing the dispositive provisions of the will, did not intend an outright gift, but made provision for payment therefor from the income gift in Article XIV. Had Robert Grubb renounced the bequest in Article VI, which he had the right to do, he would have been entitled to and would have received the total income bequeathed to him in Article XIV and the property referred to in Article VI would) have, without question, become a part of the corpus of the residuary trust estate. Robert Grubb, however, elected to take the bequest in Article VI and in so doing elected to pay for same from the income gift of Article XIV. To all intents and purposes, the income in question was distributed and paid out to Robert Grubb and applied by him (after his death, by his surviving issue) to discharge of the obligation imposed by electing to take the bequest in Article VI. The allocation by the trustees was logical, reasonable and in accordance with the intent and meaning of the will.

Trustee and Alma Lee Grubb except to the allowance of attorneys fees as part of the costs of the action to “be paid by (trustee) out of the corpus of the trust.” Substantial fees were allowed and it is true that the manner of payment places a large proportion of the burden upon the widow. G.S. 6-21 provides: “Costs in the following mat ters shall be taxed against either party, or apportioned among the parties, in the discretion of the court: ... 2. Caveats to wills and any action or proceeding which may require the construction of any will or trust agreement, or to fix the rights and duties of parties thereunder. . . . The word ‘costs’ as the same appears and is used in this section shall be construed to include reasonable attorneys’ fees in such amounts as the court shall in its discretion determine and allow.” In the case sub judice the taxing of costs, the inclusion therein of attorneys fees and the fixing of reasonable counsel fees are matters within the sound discretion of the trial court. The careful, discreet and learned trial judge who presided in this case was in position to make reasonable appraisal of services rendered by attorneys and the proper assessment of costs. There is nothing in the record to indicate that the fees allowed are unreasonable or that the judge in any way abused his discretion. The cause is fraught with unusual difficulties. The scholarly and exhaustive briefs furnished this Court by all participating counsel are indicative of splendid legal services rendered. We find no grounds upon which to disturb the orders of the court with respect to costs and attorneys fees.

The matters adjudicated below and not discussed here are not the subject of assignments of error, are not in controversy and are affirmed.

We do not undertake to deal with contingencies which have not and may not happen.

The cause is remanded and it is ordered that the judgment be modified in accordance with this opinion.

Modified, affirmed and remanded.

Case Details

Case Name: Little v. Wachovia Bank and Trust Company

Court Name: Supreme Court of North Carolina

Date Published: Apr 6, 1960

Citation: 113 S.E.2d 689

Docket Number: 380

Court Abbreviation: N.C.