39 N.C. App. 403 | N.C. Ct. App. | 1979
The appellant argues five assignments of error in his brief challenging in turn the priority of payment given each of the five classifications of claims against the settlor’s estate in the judgment appealed from. At the foundation of each of these arguments is the contention that the trial court erred in failing to distinguish between principal and income in establishing these priorities.
On the other hand, the appellee contends that the first judgment of January, 1976, which was not appealed constitutes the law of the case, and that the second judgment does not add thereto except in its inclusion of debts in the third order of priority. The appellee argues that by law as well as by the intent of the deceased, debts of the estate must be afforded preferred status along with taxes and costs which were clearly provided for in the first judgment. Accordingly, the category of debts which was omitted from the first judgment by oversight could be inserted by the trial judge by authority of Rule 60(a).
At the outset we think it necessary to examine the appellee’s contentions concerning the status of the first judgment and the procedural development of this case. The first judgment which was entered in January of 1976 purported to answer specific questions raised by the petitioner in its petition for declaratory judgment. As previously stated, none of the parties sought appellate review of this judgment. Without expressing any view as to the propriety of the trial judge’s conclusions therein, we think the January 1976 judgment established the law which is binding on the parties to this proceeding. Humphrey v. Faison, 247 N.C. 127, 100 S.E. 2d 524 (1957). See also, King v. Grindstaff, 284 N.C. 348, 200 S.E. 2d 799 (1973); Williams v. Herring, 20 N.C. App. 183, 201 S.E. 2d 209 (1973).
The case was re-opened upon the motion of the petitioner who sought further instructions supplementary to the January
Consideration of the substantive aspects of this case entails an examination of the two judgments individually and in conjunction with one another. The first judgment, which we have found to be the law of the case, granted to the trustee in Paragraph 4 general authority to pay on behalf of the settlor’s estate all “Federal estate taxes, North Carolina inheritance taxes, specific bequests under the Will of Reuben B. Robertson, deceased, and all costs of administration.” Paragraph 6 directs the trustee to reduce the appellant’s right of withdrawal from the principal of the trust of $275,000.00 pro rata u[s]ince the Trustee is directed to pay from the trust the Federal estate and North Carolina inheritance taxes, specific bequests, and costs of administration.” We think it is clear that the designation of “specific bequests” in this paragraph refers to Paragraph 4 which specifies “specific bequests under the Will” of the settlor. Moreover, the reference to taxes, specific bequests under the will, and costs of administration is implicit in Paragraph 5 in light of the trial judge’s finding addressed to the same matter. In sum, while the language in the foregoing provisions is less than precise, in our opinion they establish the priority of taxes, specific bequests under the will and costs of administration over the appellant’s right to invade the principal of the trust to the extent of $275,000 for any purpose and to the extent of $400,000 for investment purposes. The final provision with which we are concerned expressly grants priority to the annuity of $200 per month for life to May Holtzclaw over the appellant’s income interest under the trust agreement.
In its motion seeking to re-open the case the petitioner enumerated its obligations under the trust agreement as well as its obligation pursuant to the first judgment to pay the specific
Finally, as the appellant contends, we think it imperative that any judgment directing the application of assets comprising both principal and income interests of a trust to the payment of various claims against the estate designate that interest to be used in meeting any particular claim. See, North Carolina Principal and Income Act of 1973, G.S. §§ 37-16 to -40. From our reading of the two judgments it appears that since the trial court clearly relegated the appellant’s interest of the entire net income of the trust to the lowest order, it intended that the income be added to the corpus to pay all claims and that the appellant take any balance remaining after the payment thereof. However, if such was the intent of the trial judge we think he was bound to express it in more explicit terms, especially in view of Paragraph 8 of the trust agreement in which the settlor provides that taxes, debts, funeral expenses and costs of administration be paid from the principal of the trust.
In our opinion, the following principles set forth in 46 Am. Jur. 2d, Judgments, § 67 (1969), are applicable to the case before us:
It is a fundamental rule that a judgment should be complete and certain in itself, and that the form of the judgment should be such as to indicate with reasonable clearness the decision which the court has rendered, so that the parties may be able to ascertain the extent to which their rights and obligations are fixed, and so that the judgment is susceptible of enforcement in the manner provided by law. A failure to comply with this requirement may render a judgment void for uncertainty.
See also Gibson v. Insurance Co., 232 N.C. 712, 62 S.E. 2d 320 (1950); Tucker v. Bank, 204 N.C. 120, 167 S.E. 495 (1933); Smothers v. Schlosser, 2 N.C. App. 272, 163 S.E. 2d 127 (1968). As we have pointed out, the judgment appealed from which purports to establish the priority of payment of all claims against the estate omits claims of a substantial nature as well as leaving other matters unresolved. Thus, we do not think the parties to this action can with any certainty carry out its directives. Nor can we as an appellate court cure its infirmities. The judgment of 10 June 1977 is vacated and the cause remanded to the Superior Court for a new trial.
New trial.
