Yancey v. Grafton

27 S.E.2d 857 | Ga. | 1943

1. "A bare contingency or possibility may not be the subject of sale, unless there shall exist a present right in the person selling to a future benefit." Accordingly, where by will the testator provided that his nominated executrix administer his estate, except as to two certain pieces of real property, and then convey to herself as trustee the two designated properties, to be held for a period of twenty years, unless sooner sold pursuant to directions stated in the will, the trustee being given broad powers and authority in the management and control of such properties with a view to discharging certain heavy encumbrances or debts of the testator against such realty, upon the completion of which "active and executory" trust the property was to be sold and the proceeds distributed to named legatees described as "ultimate," and as to whom it was expressly declared by the will that "None of the legatees, devisees or beneficiaries named shall have any interest or estate until or unless distribution is made under this will:" Held, that under the will only a bare contingency or possibility, and not a present right or interest, legal or equitable, devolved upon any "ultimate" legatee, upon the mere probate of the will, as to any portion of the estate, and such "ultimate" legatee would become possessed of an actual right or interest only when the estate, as determined by the trustee, should be freed from all encumbrances or debts against the estate and be ready for distribution.

2. A petition against one of the "ultimate" legatees, individually, the trustee and executors of an estate under the will described in the preceding headnote alleging that the petitioner was a judgment creditor of such legatee, that he is insolvent, and has no assets that can be reached in satisfaction of the judgment through the processes of law, and praying that the court of equity appoint a receiver to sell the interest of the legatee and apply the proceeds thereof to the satisfaction of the judgment, did not, under the principles of law ruled above, set forth a cause of action, and the court erred in overruling the general demurrers.

No. 14666. NOVEMBER 12, 1943. STATEMENT OF FACTS BY DUCKWORTH, JUSTICE. Mrs. Margaret Grafton filed an equitable petition against Hamilton Yancey Jr. individually, Mrs. Florence Yancey Newton as trustee under the will of Hamilton Yancey, deceased, and Mrs. Florence Yancey Newton and First National Bank of Rome as executors of said will. A copy of the will was attached to and made a part of the petition. It was alleged, that the will was executed on November 9, 1931, and duly probated in solemn form on May 5, 1932; that the petitioner is a judgment creditor of Hamilton Yancey Jr., a legatee under the will; that he is insolvent and has no assets which can be reached in satisfaction of her judgment, other than an interest which he has in the trust estate created by the will; that this trust estate is subject to sale, but can not be reached through the processes of law, the legal title being vested in either the executors or the nominated trustees. The plaintiff prayed that a receiver be appointed by the court to sell the interest of Hamilton Yancey Jr. in all property and interest in said estate, and to apply the proceeds thereof to the satisfaction of her judgment; and for such further relief as might seem proper.

The will provided for administration by the executrix of all of the testator's estate, except two valuable pieces of real estate which were to be held in trust for twenty years from the date of the death of the testator, except that if they could be sold sooner at stipulated prices the trustee was authorized to sell and terminate the trust, or they could be sold for less than the stipulated amounts with the concurrence of all of the testator's children "in life at the time" and thus the trust be terminated; and that one or both of these properties could be sold under such exceptions, the trust continuing as to the unsold property. One of these properties was located in Rome, Georgia, being business property, and the other consisted of a farm or plantation located in Cherokee County, Alabama; and the will provided that the nominated executor and the trustee serve as such both in Georgia and Alabama. Without quoting therefrom literally, it may be said that the trust was described as active and executory, that the trustee was given very broad powers and discretion in the management and control of the two special pieces of property, being vested with title and possession and relieved from all liability, and authorized to incorporate the trust property and to hold the stock in the corporation formed if necessary or desirable, the intention of the testator being that the executrix so handle the estate as to save in whole or in part these two properties in the hands of a trustee, and over a period of years, when heavy encumbrances or debts of the testator should have been discharged, to make such assets available for distribution among legatees as provided in the will, power being given to the executrix to convey to herself as trustee either of such properties when she had completed the administration of the estate otherwise, she to secure her discharge as executrix and hold the two special pieces of property, or either of them, as trustee for the purposes expressed. The will provided as follows: Item 25. "The ultimate legatees, devisees, and beneficiaries under this will shall be my four daughters, Sara, Mary Lou, Florence, and Claire, whose interest all equal, no loans or advancements having been made to them. My son, Hamilton Yancey Jr., shall be an ultimate legatee, devisee and beneficiary to the extent of an equal share with each of my daughters, less any loans and advancements made to or for him as determined in the preceding item of this will. Such loans and advancements shall be deducted from such share, and the balance, if any, shall be the interest or share of my said son Hamilton. My granddaughter, Phoebe Yancey Alexander, shall be an ultimate legatee, devisee, and beneficiary to the extent of an equal share with each of my daughters, less any loans or advancements made to or for her father, my son Robert, as determined in the preceding item of this will. Such loans and advancements shall be deducted from such share, and the balance, if any, shall be the interest or share of my said granddaughter."

Item 26, in part: "None of the legatees, devisees, or beneficiaries named shall have any interest or estate until or unless distribution is made under this will. Any such distribution under this will, if and when made, shall be made to such of the persons named in the preceding item of this will as are in life at the time of such distribution, whether such distribution be of income or principal or both, or whether it be preliminary or final distribution."

Item 28. "If at any time during said period of twenty years there shall be in the hands of my executrix or my trustee, as the case may be, any surplus money whether arising from income or from the sale of any of my property, and all debts of my estate have been paid, and all debts against any property then in the hands of the executrix and/or the trustee have been fully paid, then my trustee or executrix, as the case may be, is authorized to make distribution of said surplus fund, but, before doing so, shall be authorized to keep and hold as working capital or other reserve such part or parts thereof as may be necessary in her opinion. It is my desire and direction that there be no distribution of any part of my estate until [all] of my debts and all debts of my executrix and all debts of my trustee shall be paid in full, and complete reserve be set aside for the payment of same. In case a lease on my property may have been sold, my executrix or trustee is vested with absolute discretion to determine whether this is a debt or not, for the purpose of construing this item of my will."

Item 4. "I give, grant, will, and devise and bequeath all of my property, real, personal, and mixed, to my said executrix in trust, to carry out the terms and provisions of this will."

The defendants demurred on the grounds, among others, that the petition sets forth no cause of action; and that it shows that Hamilton Yancey Jr. has no interest in the estate or trust which can be reached or controlled by him or any creditor, and no ground for equitable relief is shown, the interest being only a bare contingency or possibility, and no present right to a future benefit. The court overruled the demurrer, and the defendants excepted. The plaintiffs in error contend that no present interest whatever is shown by the petition to be in Hamilton Yancey Jr., against whom equitable relief is sought; and that even if it could be said that he has a contingent-remainder interest under the will of his father, it is not such an interest as would authorize the aid of a court of equity, as prayed. The defendant in error contends that the contingency as to the interest of the legatee is only as to a future event or time of payment, no futurity being annexed to the gift; that, without reference to whether the interest be a vested or a contingent remainder, it is an interest which is an equitable asset of the legatee debtor; and that a court of equity has power to appoint a receiver as prayed. In support of the latter argument we are cited to the Code, § 37-408, which provides that "Equitable assets may be reached by a creditor in every case where he shows that there is danger of not being satisfied out of legal assets" and § 28-103, which provides that "Courts of equity shall assist creditors in reaching equitable assets in every case where to refuse interference would jeopardize the collection of their debts." The inquiry before this court is whether or not the legatee, Hamilton Yancey Jr., has any present equitable interest under the will. In construing wills the paramount and essential rule is to ascertain the intention of the testator and give complete effect thereto, provided it is not unlawful; and in order to arrive at the intention of the testator every portion of the will should be considered. Ivey v. Davis, 175 Ga. 607 (165 S.E. 605). "While cases involving the construction of wills may guide us in the general rules of construction, they should not be considered as binding authority unless the cited case is in every respect directly in point, and agreed in every respect with the will to be construed. Comer v.Citizens Southern National Bank, 182 Ga. 1, 5 (185 S.E. 77). `Precedents, or adjudged cases, are of but little authority, and of dangerous application, in deciding upon the intention of a testator; the construction depends so much on each case, upon the character of the testator, the terms he employs, and all the surrounding circumstances.' Cook v. Weaver, 12 Ga. 47 (3)."Refinance Corporation v. Wilson, 183 Ga. 336, 339 (188 S.E. 707).

We have no hesitancy in holding that the will under consideration shows that until the time of distribution title to all of the testator's property was placed in the executor or the trustee, it being his intention to clothe them with full title, power, and authority to manage and control his estate, free from all interference or importunities from any "ultimate" legatee, and postponing to the time of distribution, not only the acquisition of any part of the net proceeds, but the accrual of a right to any portion of such distribution. Any doubt as to this intention of the testator vanishes by a consideration of the express provision in item 26 of the will that "None of the legatees, devisees, or beneficiaries named shall have any interest or estate until or unless distribution is made under this will." The only present interest that the legatee, Hamilton Yancey Jr., could be said to have under the will is nothing more than a mere chance or possibility to succeed to an absolute and definite interest; and this could be resolved in his favor only in the event that, by reason of the obligations or debts of the testator being discharged by the trustee, the latter should become able to declare, under the directions of the will, an existing right or interest in the legatee at such time, and to then distribute to him his proper share of the trust fund.

Is such a bare contingency one in respect to which the aid of a court of equity might be invoked? A future interest may be conveyed by deed (Code, § 29-103), but "A bare contingency or possibility may not be the subject of sale, unless there shall exist a present right in the person selling to a future benefit." Code, § 96-102. In Trammell v. Inman, 115 Ga. 874 (42 S.E. 246), which involved a marriage settlement, a widow conveyed to a trustee, among other things, "her interest in and to the property of any other person by virtue of any gift, devise, or conveyance of any kind whatsoever made to her or to which she might at any time thereafter be entitled by law." With respect to her undertaking to convey such interest as is described above, this court ruled that it was ineffectual, for the reason that she lacked a present interest and was seeking to convey a mere naked possibility. InDailey v. Springfield, 144 Ga. 395 (87 S.E. 479, Ann. Cas. 1917D, 943), a vendor conveyed "all the present rights in or title to all interests that" he "may become possessed of, either by inheritance or by deed from" the mother of the vendor in certain city lots which she then owned, and any interest he "may in the future become possessed of in any other city property, . . either by deed or inheritance from" the mother. This court held that the deed was an attempt to convey a mere naked possibility without any present interest, and was void. The principle that a deed conveying a bare contingency does not pass title was recognized in Grant v. Sosebee, 169 Ga. 658, 663 (151 S.E. 336), and Shockley v. Storey 185 Ga. 790 (196 S.E. 702). It follows the common law, which discountenanced sales of mere expectancies. As was said in Hoyt v. Hoyt, 61 Vt. 413, 416 (18 A. 313): "At common law agreements for the sale of expectancies are generally held to be pernicious and void, for the reason that they offer temptations to heirs to anticipate the enjoyment of property by making disadvantageous bargains, which tend to their harm and to involve the name and character of the family." This rule prevents the defendant from alienating any property he may receive under the will; hence the petitioner's judgment if kept alive would automatically attach thereto the instant it becomes his.

A sale of the nature above mentioned being void, it follows as a logical corollary that a court of equity, which follows the law, will not lend its aid to a transfer of a mere expectancy such as would be involved in the appointment of a receiver with authority, as prayed, to sell "the interest of the said Hamilton Yancey Jr. in and to all property and interest in said estate of Hamilton Yancey, and to apply the proceeds thereof to the satisfaction of the aforesaid judgment of your petitioner." For the reasons above shown, the petition did not set forth a cause of action; and the court erred in overruling the general demurrers.

Judgment reversed. All the Justices concur.