Berry v. Union Nat. Bank

• Decision Date: 05 February 1980
• Docket Number: No. 14054,14054
• Citation: 164 W.Va. 258,262 S.E.2d 766
• Court: West Virginia Supreme Court
• Parties: Josephine H. BERRY, Exec., etc. v. The UNION NATIONAL BANK, etc. et al.

Page 766

262 S.E.2d 766

164 W.Va. 258

Josephine H. BERRY, Exec., etc. v. The UNION NATIONAL BANK, etc. et al.

No. 14054.

Supreme Court of Appeals of West Virginia.

Feb. 5, 1980.

Syllabus by the Court

1. An executor is a necessary party to, and may appeal from, a declaratory judgment on the construction of a will or the administration of an estate.

2. We adopt a doctrine of equitable modification which courts should apply to certain non-charitable devises and bequests that on their face appear to violate the rule against perpetuities but meet the conditions enumerated below. A devise or bequest which violates the rule against perpetuities will be modified to comply with the rule if:

(1) The testator's intent is expressed in the instrument or can be readily determined by a court;

(2) The testator's general intent does not violate the rule against perpetuities;

(3) The testator's particular intent, which does violate the rule, is not a critical aspect of the testamentary scheme; and

(4) The proposed modification will effectuate the testator's general intent, will avoid the consequences of intestacy, and will conform to the policy considerations underlying the rule.

3. Where a construction of a will potentially creates distinct classes of unborn beneficiaries, and the interests of each class are adverse to the others, guardians ad litem should be appointed for each class.

Berry, Waters, Spelsberg & Warner and Boyd L. Warner, Clarksburg, for appellant.

Steptoe & Johnson and Ernest C. Swiger, Clarksburg, for appellees, Union Nat. Bank.

McNeer, Highland & McMunn and C. David McMunn, Clarksburg, for Clayton, et al.

Francis L. Warder, Jr., Clarksburg, for Corsini, et al.

Jones, Williams, West & Jones and John S. Kaull, Clarksburg, for Morris, et al.

HARSHBARGER, Justice:

This case presents the issue whether a private testamentary trust which violates the rule against perpetuities should be modified to effectuate a testatrix' intent or should fail.

Clara Clayton Post died on June 20, 1975, in Harrison County. Her will and codicil were admitted to probate on June 23, 1975, at which time Josephine H. Berry, appellant, qualified as executrix. After a series of specific bequests to her heirs at law, appellees Ellen Clayton and Arthur Clayton, and to other parties, Ms. Post created a private educational trust for the descendants of her late husband's brothers and sisters, giving her trustee absolute discretion to provide educational expenses for class members meeting certain criteria. ¹ The trust was to endure for twenty-five years after testatrix' death or until the principal was reduced to less than $5,000.00, whichever should first occur. At the termination of the trust the principal and interest were to be distributed per stirpes to the then living descendants of her husband's brothers and sisters. The Union National Bank of Clarksburg, appellee, was named trustee.

Executrix Berry recognized that the trust potentially violated the rule against perpetuities and entered into a trust termination agreement with the trustee. The agreement amended the twenty-five year provision to twenty-one years and required the executrix to initiate a declaratory judgment action in the Circuit Court of Harrison County to determine Inter alia, whether the trust violated the rule against perpetuities and whether it was proper for the executrix and trustee to enter into a trust termination agreement. A guardian ad litem was appointed for the unborn beneficiaries on April 26, 1977. The trial court granted summary judgment for the heirs at law, finding that the trust provision violated the rule against perpetuities and was therefore void and without force. The court additionally ruled that the executrix and trustee were not authorized to enter into the trust termination agreement. ² Executrix Berry appealed.

I.

The heirs argue that she does not have standing to challenge the declaratory judgment because she is not a potential distributee of the residuary estate, and have moved for dismissal.

W.Va.Code, 55-13-4 ³ provides that an executrix may bring a declaratory judgment action to determine questions of construction or administration of wills or trusts. The opening phrase is "(a)ny person interested as or through an executor". Had she not initiated the action, Code, 55-13-11 ⁴ would require that she be made a party.

A party to a controversy in any circuit court may obtain from the supreme court of appeals, or a judge thereof in vacation, an appeal from . . . a judgment, decree or order of such circuit court in . . . civil cases where the matter in controversy, exclusive of costs, is of greater value or amount than one hundred dollars, wherein there is a final judgment, decree or order . . . . Code, 58-5-1.

Therefore, as a party to a civil action in circuit court where the amount in controversy exceeds one hundred dollars (which has constitutionally been amended to three hundred dollars, W.Va. Constitution, Article VIII, § 3 (1974)), the executrix also had a statutory right to appeal. In addition, the Uniform Declaratory Judgment Act, Code, 55-13-7, provides that "(a)ll orders, judgments and decrees under this article may be reviewed as other orders, judgments and decrees." The Article is to be liberally construed. Code, 55-13-12. ⁵ Appellees' motion to dismiss is denied.

II.

The analysis of any problem concerning a will must begin with the fundamental principle that a testator's intent shall be ascertained and followed to the extent possible. Wheeling Dollar Savings & Trust Co. v. Hanes, 237 S.E.2d 499 (W.Va.1977); Wheeling Dollar Savings & Trust Co. v. Stewart, 128 W.Va. 703, 37 S.E.2d 563 (1946); Bell's Administrator v. Humphrey, 8 W.Va. 1 (1874). ⁶ In addition, there is a strong presumption against intestacy, and if possible, a will should be interpreted to avoid total or partial intestacy. Rastle v. Gamsjager, 151 W.Va. 499, 153 S.E.2d 403 (1967); Cowherd v. Fleming, 84 W.Va. 227, 100 S.E. 84 (1919). The testator's intent will be implemented so long as it does not violate a positive rule of law or public policy. Emmert v. Old National Bank of Martinsburg, 246 S.E.2d 236 (W.Va.1978). If there appears to be a contradiction between the testator's general intent and a particular intent, the general intent is given preference. Hope Natural Gas Co. v. Shriver, 75 W.Va. 401, 83 S.E. 1011 (1915).

The rule against perpetuities is a common law rule which reflects the public policy that a testator or trustor cannot control the devolution of his property for an inordinate period of time. First Huntington National Bank v. Gideon-Broh Realty Co., 139 W.Va. 130, 79 S.E.2d 675 (1953); McCreery v. Johnston, 90 W.Va. 80, 110 S.E. 464 (1922). To prevent bars to property alienation the rule requires that:

'(E)very executory limitation, in order to be valid, shall be so limited that it must necessarily vest, if at all, within a life or lives in being, ten months and twenty-one years thereafter, the period of gestation being allowed only in those cases in which it is a factor.' Goetz v. Old National Bank of Martinsburg, 140 W.Va. 422, 84 S.E.2d 759, 772 (1954). ⁷

If a testator creates an estate which vests or has the possibility of vesting after a life in being plus twenty-one years and a period of gestation, the estate violates the rule against perpetuities and the testator's intent will be defeated. Greco v. Meadow River Coal & Land Co., 145 W.Va. 153, 113 S.E.2d 79 (1960); Prichard v. Prichard, 91 W.Va. 398, 113 S.E. 256 (1922).

It is here that principles of law collide: a testator may not indefinitely control the devolution of his property; but a testator's intent should be honored and intestacy avoided whenever feasible. To remedy this apparent conflict, we adopt a doctrine of equitable modification which courts should apply to certain devises that on their face appear to violate the rule against perpetuities but meet the conditions enumerated below. Our action accords with a developing trend to ameliorate the harsh consequences of "remorseless application" of the rule. ⁸ The theory which we endorse today is akin to the doctrine of Cy pres which was initially developed in the area of charitable trusts and was legislatively enacted in West Virginia in 1931 for that purpose. W.Va.Code, 35-2-2.

The purpose of equitable modification is to revise an instrument in a fashion that effectuates a testator's general intent within the limitations established by the rule.

We support the underlying policies of the rule against perpetuities and will deny validity to an interest which vests beyond the time limitations provided in the rule. However, before a testamentary scheme is totally obliterated by application of the rule, we will determine whether the testamentary disposition can be equitably modified to comport with the rule's underlying policy.

A non-charitable devise or bequest which violates the rule will be modified if the following conditions are met:

(1) The testator's intent is expressed in the instrument or can be readily determined by a court;

(2) The testator's general intent does not violate the rule against perpetuities;

(3) The testator's particular intent, which does violate the rule, is not a critical aspect of the testamentary scheme; and

(4) The proposed modification will effectuate the testator's general intent, will avoid the consequences of intestacy, and will conform to the policy considerations underlying the rule.

The testamentary trust her meets all these criteria for application of the equitable modification doctrine.

Testatrix clearly expressed her general intent in Section IX of her will when she stated:

I believe it was the desire of my husband that such funds as I might have at my death should be used to help such persons (who are later defined in this section) obtain educations. This is the only expression I ever heard him make relative to the disposition of such funds.

Her general...