Allen v. Currie
Citation | 119 S.E.2d 917,254 N.C. 636 |
Decision Date | 10 May 1961 |
Docket Number | No. 451,451 |
Parties | Emily Myers ALLEN, Co-Executor of the Estate of Samuel G. Allen, Deceased, v. James S. CURRIE, Commissioner of Revenue of The State of North Carolina. |
Court | United States State Supreme Court of North Carolina |
Thomas W. Bruton, Atty. Gen., and Peyton B. Abbott and Lucius Pullen, Asst. Attys. Gen., for defendant, appellant.
John D. McConnell, Pinehurst, for plaintiff, appellee.
G.S. § 105-212, in pertinent part, provides:
shall be deemed to have the same meaning that it has in the income tax article. Where the intangible personal property for which this exemption is claimed is held or controlled with other property as a unit, allocation of appropriate deductions from gross income shall be made to that part of the entire gross income which is derived from the intangible personal property by direct method to the extent practicable; and otherwise by such other method as the Commissioner of Revenue shall find to be reasonable: Provided, that each fiduciary claiming the exemption provided in this paragraph shall, upon the request of the Commissioner of Revenue, establish in writing its claim to such exemption. No provision of law shall be construed as exempting trust funds or trust property from the taxes levied by this article except in the specific cases covered by this section.'
The agreed case on appeal contains this stipulation:
'It is hereby stipulated by the parties to this action that all income received by the Executors of the Estate of Samuel G. Allen, during the administration of the same during the years 1956 and 1957 has been paid to the legatees in the ratio of one-fourth to Mrs. Emily Myers Allen of Pinehurst, North Carolina, and three-fourths to the residuary legatees under the Will of Samuel G. Allen, all of whom are non-residents of North Carolina.
'It is further stipulated that no income was distributed during the year 1956; and that $200,000.00 was distributed during the year 1957, $50,000.00 to Mrs. Emily Myers Allen, and $150,000.00 to the residuary non-resident legatees; and that the remaining income earned during the years 1956 and 1957 has been subsequently divided one-fourth to Mrs. Emily Myers Allen of Pinehurst, North Carolina, and three-fourths to the residuary non-resident legatees.'
The question is whether the executors, in respect of intangible personal property held and controlled by them on December 31, 1956, and on December 31, 1957, respectively, are entitled to the refunds demanded. On these dates, the estate was in process of administration. As of now, there has been no final settlement.
Unquestionably, as plaintiff contends, an executor acts in a fiduciary capacity. In re Will of Covington, 252 N.C. 551, 114 S.E.2d 261; McMichael v. Proctor, 243 N.C. 479, 91 S.E.2d 231. In G.S. § 36-9, they are classified with 'guardians, trustees, and other fiduciaries * * *' They are expressly included in statutory definitions of 'fiduciary.' G.S. § 32-2; G.S. § 105-163.1(8). An executor's fiduciary obligation is to pay the decedent's debts as provided by law and to administer the estate in compliance with the provisions of the decedent's will. McGehee v. McGehee, 190 N.C. 476, 130 S.E. 115; Scott v. Jordan, 235 N.C. 244, 250, 69 S.E.2d 557.
The status of an executor is well stated in 21 Am.Jur., Executors and Administrators § 8, as follows:
The personal property of the testator vests upon his death in his executor. Darden v. Boyette, 247 N.C. 26, 31, 100 S.E.2d 359, 68 A.L.R.2d 1098; Coastal Sales Co. v. Weston, 245 N.C. 621, 627, 97 S.E.2d 267. 21 Am.Jur., Executors and Administrators § 283.
G.S. § 28-162 provides that an executor, immediately after the expiration of two years from his qualification, shall divide, deliver and pay to the persons entitled thereto under the will all of the estate remaining after payment of legal debts, charges and disbursements.
In the light of these well-established legal principles, it is appropriate to consider the provisions of the will. Summarized, they are as follows:
The testator gives, devises and bequeaths to his wife, Emily Myers Allen, such portion of all his property and estate, real, personal and mixed, whatsoever and wheresoever, 'as will amount to one-fourth (1/4) of my adjusted gross estate as defined in Section 2056 of the Internal Revenue Code [26 U.S.C.A. § 2056]'; and, in addition thereto, he bequeaths and devises to his wife, in fee simple and absolutely, certain described real estate and tangible personal property. He then gives and bequeaths to various legatees specific monetary bequests aggregating $230,000. He directs his executors to pay out of the residue of his estate 'any and all Federal or State estate, inheritance or other tax that may be payable on or on account of any of my property and estate,' so that 'each devise and/or bequest * * * shall be received by the beneficiary free from the payment of, or any deduction for or on account of, any such tax.'
In respect of all the rest, residue and remainder of his property and estate, real, personal and mixed, whatsoever and wheresoever, after payment of all taxes as theretofore provided, the testator orders and directs that his executors divide such residue into ten equal portions. Thereupon, he gives and bequeaths a specified number...
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