36 S.E.2d 667 | Ga. | 1946
1. Where a testatrix provided a life estate to her daughters, with remainder over to grandchildren, in designated improved realty, and also that a named corporation, as long as it "continues in business, . . is financially successful, and desires to occupy these properties, . . shall have the right to occupy them at their fair market value for rent," and set forth a plan for determining the fair amount of rent to be paid, such right of lease is not in violation of the rule against perpetuities.
(a) The conditions, above quoted under which the corporation should have a right to occupy the premises, are not vague, uncertain, or illegal.
(b) Where, in connection with the disposition of the premises referred to in headnote 1, the testatrix used the expression "they are not to be sold," such expression, when considered in connection with other items of the will and the will in its entirety, was not an attempt to violate the rule against perpetuities or the alienation of property.
2. So much of items S and 15 of the will as relates to the duties, or the tenure of office of the executrices, is not a requirement for them to serve in perpetuity, and does not violate or make illegal, void, or against public policy, the right of lease given to the named corporation.
3. As to the realty referred to in headnote 1, there is no restraint in the will on the sale by the life tenants or remaindermen of their respective interests. Each could sell her interest, or could join in conveying the entire fee, subject, in either event, to the right of lease by the named corporation.
To her daughter, Dorothy Peteet, she gave a life interest in property on Carnegie Way and Cone Street, and also a certain Broad Street building which was formerly part of the old store of J. M. High Company. To her daughter, Hattie May Williams, she gave a life interest in property known as 142 Peachtree Street. After the creation of the above life interests, provision was made for the fee to vest in the respective children of the daughters, with additional direction for the vesting of the fee in the event either or both daughters died without issue. As to each of these life interests, provision was made for the sale of the property by the life tenant, but subject to be reinvested and held on the same conditions and limitations and with the same powers. The residuary clause provided for an equal distribution to the two daughters on the same terms and limitations as those just stated in reference to the life estates in realty granted to each.
The daughters, Hattie May Williams and Dorothy Peteet, were *232 nominated as executrices, with a provision for a succession in the event of the death of either or both.
The portions of the will for which construction and direction were prayed were as follows: Item 8. "The properties on Whitehall and Hunter Streets (not including the real estate referred to in item three above), now occupied by J. M. High Company, shall be disposed of as follows: As long as the corporation continues in business and is financially successful and desires to occupy these properties, they are not to be sold, but said corporation shall have the right to occupy them at their fair market value for rent, and if the officers and directors of said corporation cannot agree with my executrices as to said rental, same shall be fixed by arbitration each year there is a failure to agree, my executrices to select one disinterested arbitrator, said directors another disinterested arbitrator, and these two to select a third, also disinterested, and the award to be final and no appeal to lie from it. Subject to the above right of lease, I give said property to my two daughters in equal shares for the terms of their lives. When one shall die, her interest shall go to her children, children of a deceased child of my daughter to take the parent's place. If one of my daughters should die without leaving children or grandchildren, her share shall go to my other daughter, or if she be then dead, to her children, children of a deceased child to take the parent's place. In the event my daughters shall both die without leaving children or grandchildren, said real estate to be sold and the proceeds to be divided, one-half (1/2) to the High Museum of Art, and one-fourth (1/4) each to the Old Ladies' Home in Atlanta, Georgia, and the Thornwell Orphanage of Clinton, South Carolina."
Item 15. (After making provision for the executrices) "Whenever a minor shall be vested with any interest in my estate, my executrices shall act as guardians without bond for such interest. The guardians shall have no power to mortgage or create a lien upon any part of the property belonging to the minors except for the purpose of improving that or some other property belonging to the same interest, but they have the power to mortgage the fee for this purpose. The executrices and guardians shall have full power to lease for any term, also power of sale of fee — simple interests, either publicly or privately and for cash or on such terms as they *233 may deem best, without order of court and without advertisement, but should they make sales the proceeds of such sales are to be used for improvement or reinvestment only, such reinvestment shall pass under the terms of this will, and no reinvestment shall be made except in such securities as executrices and guardians are allowed under the law to invest in, or in unencumbered rent-producing business property in the City of Atlanta. The same full power of mortgage for improvement also power of sale shall exist in the executrices and guardians as to the properties on Hunter and Whitehall Streets now occupied by J. M. High Company at any time said corporation no longer desires to occupy them, and in the event of sale the proceeds shall be separately invested and carried on the books of the executrices in a separate account, and such reinvestment shall be governed in all respects by the provisions hereinabove set out as to the disposition of said real estate itself. My executrices shall also have the power to fulfill any bond for title or other executory contracts of mine without order of court, and no such order shall be required to validate the exercise of any other power by executrices or guardians. My daughters are requested to serve as executrices without compensation."
The executrices, in their petition for construction, named as respondents the two daughters of the testatrix, individually, the four grandchildren, and J. M. High Company. Guardians ad litem were appointed to represent the unborn interested parties as a class. The company in its response claimed, under the terms of the will, an interest in the realty on Whitehall and Hunter Streets, as follows: "The nature of said estate is best described as a base or determinable fee, but, however described, it is a vested property interest of the kind and character described in the said eighth item of the will." The daughters and grandchildren in their response denied that J. M. High Company has an interest in the property described in item 8, for the reasons: (a) that it would be void and contrary to law, in that the conditions attempted to be expressed as attaching to any interest are too vague, uncertain, and indefinite; (b) that so to construe it to be an interest would violate the rule against perpetuities; and (c) it would be contrary to public policy to require an estate to be held open in perpetuity. The daughters and grandchildren by amendment prayed that a declaratory judgment, as provided for by the act approved February *234 12, 1945 (Ga. L. 1945, p. 137), be granted, and that the rights, duties, and liabilities of the parties be determined.
Following a hearing, the court issued the following decree: "1. That plaintiffs herein are entitled to the direction of the court with respect to the matters set out in their said petition. 2. . . That the eight item of the will of Mrs. J. M. High, deceased, gives to the J. M. High Company the right of occupancy of the properties described in the said eighth item of said will, subject to certain conditions, to wit: (a) as long as the corporation continues in business; (b) is financially successful; (c) desires to occupy said properties; and (d) [pays rent on the properties at their fair] market value for rental; the said fair market value for rental to be determined as provided in said will. This right of occupancy, upon the conditions indicated, is a valid legal property right. 3. . . That the said eighth item of the will does not give to the J. M. High Company any right except the right of occupancy of these properties upon the conditions named. No right of alienation or assignment or right of succession is given, but the right of occupancy is given as hereinbefore set out. 4. . . That under the terms of the will the said properties described in the eighth item of the will are not to be sold by the executrices (or anyone else) so long as the conditions of occupancy are met with as hereinbefore set out. 5. Subject to this right of the J. M. High Company, which the testatrix denominates a `right of lease,' the eighth item devises said property as in said item set out. 6. As requested by the petitioners, the court reserves jurisdiction of this cause for the purpose of giving such other direction respecting these matters as may be appropriate should occasion arise therefor."
The individuals interested and the guardians ad litem assign error on this judgment.
1. The granting of the privilege to J. M. High Company to renew the lease, as set forth in item 8 of the will under consideration, if otherwise valid, would subject the property therein described to the possibility of a renewal and re-renewal of a lease of the *235
premises in perpetuity, as in contemplation of law the life of a corporation may be so extended. There is authority in this State to the effect that a lease may be executed in perpetuity. It was so held in Atkinson v. Orr,
(a) The conditions set forth in this item of the will, to wit, "as long as the corporation continues in business, is financially successful, and desires to occupy these properties," are not vague, uncertain, or illegal. Such conditions could be construed to mean nothing more or less than that, if J. M. High Company continued in business, was financially able to pay the rent, and desired to retain the premises, it would have a right to elect to do so, and the amount of rent to be paid would then be fixed as provided by the will.
(b) Nor does the provision in this item that, as to "these properties, they are not to be sold," violate the rule against perpetuities or the alienation of property. Every other item of the will, which created a life estate in realty in either daughter, including the residuary clause, permitted a sale of the entire fee in the property by the life tenant, with a provision for reinvestment of the funds under the same terms and conditions as applied to the property sold. Construing the will in its entirety, the testatrix's intention in the use of this expression was, not to prevent the sale of this property at any time; but, following the general scheme of disposition as used in reference to other realty in which she gave her *237 daughters a life interest, it appears that the expression, "they are not to be sold," was used to prohibit the right by the life tenants to sell this realty for reinvestment, as distinguished from their right to sell other realty.
2. It is also insisted by the plaintiffs in error that a portion of item 15, when construed in connection with item 8, is illegal, void, and against public policy, in that it would require the estate to be held open with the executrices remaining in office forever. This item, after making provision for them, provided that they act as guardians when a minor becomes vested with any interest, and that they have the power of mortgage for improvements. It was then provided that the executrices and guardians have the power of lease and sale, the sale being confined to improvements on other property of the same interest or for certain specified reinvestments. The same item then continued: "The same full power of mortgage for improvement also power of sale shall exist in the executrices and guardians as to the properties on Hunter and Whitehall Streets now occupied by J. M. High Company at any time said corporation no longer desires to occupy them, and in the event of sale the proceeds shall be separately invested and carried on the books of the executrices in a separate account and such reinvestment shall be governed in all respects by the provisions hereinabove set out as to the disposition of said real estate itself." The powers of the executrices and guardians as to the mortgage and sale of the premises occupied by J. M. High Company were granted only when "said corporation no longer desires to occupy them." It will be observed that there was no effort to place a restraint upon a sale by a life tenant and a remainderman subject to the rights of J. M. High Company.
Item 8 of the will provided certain duties for the executrices to perform in determining the fair rental value of the building; and item 15, in providing for a sale when the corporation no longer desires to occupy the premises, also defined the duties of the executrices as to the proceeds of the sale. It is insisted that — inasmuch as the right of the corporation to lease the premises may extend its occupancy in perpetuity, and the requirements of the will impose upon the executrices duties in fixing the amount of rent and also in accounting for the proceeds of the sale after the corporation no longer occupies the premises — this would require the *238
executrices to remain as such in perpetuity. If it were absolutely essential for the executrices to perform these services, and no other means of having them performed were possible under the law, we might agree with this view. But in this State an executor, in a limited sense, is a trustee; and, where the duties imposed under the terms of the will also partake of the nature of a continuing trustee, this would raise an equitable trust. Willingham v. Bentley,
3. The life tenants and remaindermen, by amendment, set up that they had received an offer for the sale of the property occupied by J. M. High Company, and prayed for a declaratory judgment, as authorized by the act approved February 12, 1945 (Ga. L. 1945, p. 137), defining the "rights, duties, and liabilities" of the parties in respect to a sale of said premises. By the fourth paragraph of the decree it is provided that "said properties described in the eighth item of the will are not to be sold by the executrices (or anyone else) so long as the conditions of occupancy are met with as hereinbefore set out." *239
We think that the trial court erred in a portion of the decree. There are two limitations in the will on the sale of this realty. The life tenants cannot sell the entire fee for reinvestment, even subject to the rights of J. M. High Company. Neither can the executrices and guardians sell as long as the company desires to occupy the premises under the conditions named in the will. But there is no restraint upon the sale by the life tenants as to their life interests, or upon the remaindermen as to their remainder interests. Each could sell her interest, or could join in conveying the entire interest, subject, in either event, to the rights of J. M. High Company.
The judgment of the lower court being reversed as to a portion of the forth paragraph of the decree, and this being a substantial modification of the judgment, it would ordinarily follow that the costs of the writ of error would be taxed against the defendant in error. Anderson v. Beasley,
Judgment affirmed in part, and reversed in part. All theJustices concur.