Cabarrus Bank and Trust Company v. Finlayson

• Decision Date: 06 January 1961
• Docket Number: No. 8132.,8132.
• Citation: 286 F.2d 251
• Parties: CABARRUS BANK AND TRUST COMPANY, as Surviving Executor and Trustee under the Last Will and Testament of Emma F. Whitman, deceased, Defendant, and Arthur Lee Padgett, Jr., and First & Merchants National Bank of Richmond, Virginia, as Executors and Trustees under the Last Will and Testament of Norwood K. Whitman, deceased, Defendants-Interveners, Appelpellants, v. H. Lee FINLAYSON, Jr., Plaintiff, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

286 F.2d 251 (1961)

CABARRUS BANK AND TRUST COMPANY, as Surviving Executor and Trustee under the Last Will and Testament of Emma F. Whitman, deceased, Defendant, and Arthur Lee Padgett, Jr., and First & Merchants National Bank of Richmond, Virginia, as Executors and Trustees under the Last Will and Testament of Norwood K. Whitman, deceased, Defendants-Interveners, Appelpellants, v. H. Lee FINLAYSON, Jr., Plaintiff, Appellee.

No. 8132.

United States Court of Appeals Fourth Circuit.

Argued October 19, 1960.

Decided January 6, 1961.

William J. Adams, Jr., Greensboro, N. C. (Robert H. Patterson, Jr., Richmond, Va., Adams, Kleemeier & Hagan, Greensboro, N. C., and McGuire, Eggleston, Bocock & Woods, Richmond, Va., on the brief) for appellants Arthur Lee Padgett, Jr., and others.

E. T. Bost, Jr., (W. H. Beckerdite, Concord, N. C., on the brief) for appellant Cabarrus Bank and Trust Co.

Beverly C. Moore, Greensboro, N. C. (Richmond G. Bernhardt, Jr., Greensboro, N. C., Charles Lathrop Reed, John W. Edmonds, III, Richmond, Va., Smith, Moore, Smith, Schell & Hunter, Greensboro, N. C., and Tucker, Mays, Moore & Reed, Richmond, Va., on the brief), for appellee.

Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH, Circuit Judges.

SOPER, Circuit Judge.

This case calls for the interpretation of certain provisions of the will of Hattie Lee Finlayson of Goldsboro, Wayne County, North Carolina, who died in 1925, whereby the testatrix devised and bequeathed certain property to her daughter, Emma Finlayson (Cannon) Whitman, but specifically provided that if her daughter should die without children the property left to her would be divided amongst the children of the son of the testatrix, H. Lee Finlayson. The son died on September 8, 1937, leaving the plaintiff, H. Lee Finlayson, Jr., as his only surviving child. The daughter, who was born in 1890, was married to E. T. Cannon until January 19, 1938, and was thereafter married to Norwood K. Whitman until her death in August, 1957. No child was ever born to her of either marriage and hence upon her death the present suit was brought by H. Lee Finlayson, Jr. to establish his right to the property left by the testatrix to her daughter upon condition as aforesaid. The suit was resisted by the executors and trustees under the will of the daughter and by the executors and trustees under the will of her husband, Norwood K. Whitman.

The portions of the will pertinent in this dispute are as follows:

"3rd. My National Oil Stock Company sic is to be equally divided between my husband, H. L. Finlayson, daughter Emma Finlayson Cannon, and son H. Lee Finlayson.

"5th. All other stocks, bonds, and real estate to be divided equally between my daughter, Emma Finlayson Cannon, and my son H. Lee Finlayson.

"8th. I want my husband to wear my wedding ring on his watch chain.

My son H. Lee Finlayson to have my largest solitaire diamond ring. My daughter in law Rosalie Harwood Finlayson, my dinner ring. My daughter all other jewelry during her natural life. At her death my larvilier lavaliere, two stone diamond ring and diamond watch to my niece and namesake, Hattie Lee Bordon. The other jewelry to be sold, money received from same to be given my grandson, H. Lee Finlayson, Jr., unless he wants the jewelry to wear himself.

"10th. Should my daughter die without children what I have bequeathed to her is to be divided between children of my son H. Lee Finlayson. Should she leave children all jewelry is to be theirs, and bequests made above except Rosalie Harwood Finlayson ring, this is to be given her regardless."

The theory of the defendants is that the provision of paragraph 10 of the will, that the children of the son should take the property left to the daughter if the daughter should die without children, refers to the death of the daughter during the life of the testatrix; and since the daughter survived the testatrix her title to the property became absolute. The judge rejected this theory and held that the will referred to the death of the daughter at any time without children and hence the plaintiff was entitled to the property left to the daughter. See Finlayson v. Cabarrus Bank & Trust Co., D. C.M.D.N.C., 181 F.Supp. 838.

There is, of course, no question that the will should be construed in accordance with the law of North Carolina and that under the rule prevailing in that State and elsewhere the intention of the testator is the prime object of the inquiry and all clauses of the will should be reconciled if possible so as to give full effect to the testator's wishes. Woodward v. Clark, 234 N.C. 215, 66 S.E.2d 888; Roberts v. Sanders, 192 N.C. 191, 134 S.E. 451.

Plaintiff's contention that the interest taken by Emma F. Whitman under her mother's will passed to him, under the provisions of paragraph 10 when she died without children, finds strong support in the following section of the General Statutes of North Carolina:

"§ 41-4. Limitation on failure of issue. — Every contingent limitation in any deed or will, made to depend upon the dying of any person without heir or heirs of the body, or without issue or issues of the body, or without children, or offspring, or descendant, or other relative, shall be held and interpreted a limitation to take effect when such person dies not having such heir, or issue, or child, or offspring, or descendant, or other relative (as the case may be) living at the time of his death, or born to him within ten lunar months thereafter, unless the intention of such limitation be otherwise, and expressly and plainly declared in the face of the deed or will creating it: Provided, that the rule of construction contained in this section shall not extend to any deed or will made and executed before the fifteenth of January, one thousand eight hundred and twenty-eight."

This statute was enacted in 1827 to meet the rule then generally prevailing in this country that a gift over on "death without issue" in a deed or will meant an indefinite failure of issue and hence was void for remoteness. To remedy this situation statutes similar to that of North Carolina were passed in a number of states whereby the defect was cured by directing that such a phrase in a deed or will should be interpreted as a limitation to take effect when such person dies not having such heir, issue, or child living at the time of his death. See the discussion in Restatement of Property, § 266, Comment b, p. 1340. The primary purpose of the enactment was not to abrogate the rule which favors the early vesting of estates, but it has been given that effect under certain circumstances in the North Carolina decisions.

In Buchanan v. Buchanan, 99 N.C. 308, 5 S.E. 430, 431, the court referred to the statute in interpreting the following provision of a will:

"I give and bequeath to my son Richmond all the remaining part of my property * * * and, should Richmond die, without a bodily heir it is my will and desire that my son Andrew should have it all."

In answer to the contention that if Richmond outlived the testator he took the property absolutely, the court said (99 N.C. 308, 311, 5 S.E. 430, 432):

"* * * The devise is of an estate in fee to Richmond, terminable at his decease without issue, and, in such event, passing over and vesting in Andrew. No time is fixed for the executory devise over to take effect, except that it must be at the death of his brother, whenever this shall occur, under the specified condition of his being `without a bodily heir,\' or childless; and to this the act of 1827 adds, `living at the time of his death.\' Code, § 1327. Without the aid of the statute, the concurrent rulings of the courts are that such a limitation being upon an indefinite failure of issue, that is, whenever such issue ceases to exist, is void for remoteness, to prevent which the enactment, alike applicable to wills and deeds, was made, when no contrary intent is manifest. Thereby the limitation over is made effectual, or fails at the death of the first taker, and the result is then determined. * * *"

* * * * * *

"The testator in the will before us limits the property to one son upon the death of the other without issue, and with no other qualifying restrictions. How, then, by construction, can such a restriction as requires the death to occur before the death of the testator be introduced into the clause, if it be made to speak what the testator has not said? Does not the testator intend that Andrew shall have all if Richmond dies, and whenever he dies with no child to succeed him? * * Annex the explanatory words of the statute * * * so that it will read, `Should Richmond die without a bodily heir, not having such heir living at the time of his death\' can there be any serious doubt as to the meaning of the clause, and especially when the act declares that the ulterior limitation shall then take effect? If it ties up the contingency to the death, as an independent fact, so as to avoid too remote a limitation under former rulings, why should it not equally exclude an interpretation which refers to an earlier period for the vesting?" 99 N.C. 308, 318, 5 S.E. 430, 435.

The statute was also applied in Rees v. Williams, 165 N.C. 201, 81 S.E. 286, to support the view that the first taker did not take a fee simple absolute upon the death of testatrix. In the Rees case, the will left property to the daughter but another item provided that if she "shall die leaving issue surviving her, then to such issue and their heirs forever," but if she "die without issue surviving her, then the property to return to my eldest daughter * * * and to my son * * *." The daughter contended that, upon the death of the testatrix her estate was released from the contingency and made absolute. In rejecting this contention the court noted (165 N.C. 201, 207, 81 S.E. 286, 288-289):

"There are cases decided in this court which seem to sustain the plaintiffs\' view that the first taker will get a fee absolute at the death of

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