Campbell v. Jordan
| Decision Date | 23 August 1968 |
| Docket Number | No. 522,522 |
| Citation | 274 N.C. 233,162 S.E.2d 545 |
| Parties | Bess Woodard CAMPBELL v. John R. JORDAN, Jr., Trustee of the Estate of Moses W. Woodard, Deceased;Moses W. Woodard, III; Nancy Elizabeth Woodard and Mary White Woodard McDonald. |
| Court | North Carolina Supreme Court |
Boyce, Lake & Burns, Raleigh, for plaintiff appellee.
William R. Hoke, Raleigh, for John R. Jordan, Jr., trustee, defendant appellee.
Purrington, Joslin, Culbertson & Sedberry, Raleigh, for Moses Woodard, III, Nancy Elizabeth Woodard and Mary White Woodard, additional defendants appellants.
Appellants' assignments of error present these questions: (1) May plaintiff, over the objection of defendant appellants, require the trustee to convey to them their one-half undivided interest in the corpus of the trust created by the will of Moses W. Woodard, and to terminate the trust as to defendant appellants? (2) Does the trustee have absolute discretion under the will to terminate the trust during the lifetime of plaintiff by conveying to her a one-half interest in the corpus of the estate irrespective of whether such conveyance is 'necessary or best for the welfare of the cestui que trust (plaintiff), and consistent with the welfare of * * * (the) family and estate' of the testator? The answer to these questions requires an interpretation of the will.
In interpreting a will, the testator's intent is gathered from the entire instrument. Despite its circumlocution and apparently conflicting provisions--some of which seem to be the result of attempts at clarification--, when we consider the will of Moses W. Woodard from its four corners, his purpose emerges. The trustee was directed to provide for testator's wife during her widowhood and for his son and daughter during the lifetime of each. During the joint lives of the three, the trustees (or trustee) to whom his estate was committed, were directed to divide its income into three equal parts, and to distribute it semi-annually to each. Upon the death of either the son or daughter leaving lineal descendants, his or her share immediately vested in that child's lineal descendants. Upon the death of the other without lineal descendants, his share vested in the lineal descendants of the other, and the trust ended.
The first of the three beneficiaries to die was Woodard, Jr. Upon his death on 6 January 1959, a one-third interest in the corpus of the trust vested in his lineal descendants, appellants, and the Testamentary trust terminated as to that share. They then had the absolute right--had they desired to exercise it--to hold that share in severalty and to require a conveyance in fee simple from the trustee. In effect, they became tenants in common with the trustee and had the right to partition. However, so long as the trust continued as to either of the other beneficiaries, and no prejudice to them resulted, there was no legal impediment to an agreement between appellants and the trustee that he continue to administer their vested interest as if it were still a part of the entire trust corpus. After the death of Woodard, Jr., as to appellants' one-third part, the trustee acted as their appointed agent and not under the will. 'Even though a trust is to terminate, by the terms of the will, at a certain time, the beneficiaries may, by agreement, postpone its termination.' 96 C.J.S. Wills § 1047, p. 673 (1957); Bogert, Trusts & Trustees § 1010 (1962).
Appellants' election to have the trustee continue to handle the property for them appears to have been the exercise of good business judgment and to have inured to the benefit of all the beneficiaries of the estate. Plaintiff, who cannot compel the trustee to exercise his discretionary powers under the will to terminate the trust and convey to her a share in the trust estate, has no legal right to require a division of the estate. Woodard v. Mordecai, 234 N.C. 463, 67 S.E.2d 639. Thus--absent a showing of injury (which does not appear)--she has no standing to object to the arrangement between appellants and the trustee by which he continues to administer the property as a unit. The answer to the first question is NO.
Upon the death of wife on 7 November 1960 all her rights in the trust estate terminated. She, therefore, had no interest in the estate which she could transfer by will. Thus, no part of testator's estate passed to plaintiff under the will of her mother. Thereafter, however, plaintiff was entitled to the income from one--half the estate, and appellants were entitled to a conveyance of their one-half interest in fee had they desired it.
Plaintiff is now 83 years old; she has no lineal descendants. Upon her death 'without leaving any lineal descendants surviving her,' the will provides that her interest in the trust estate will 'cease and determine' and go as provided in the will 'for the holding and disposing of the original shares' of testator's wife and son. The effect of that provision was that, after the death of Woodard, Jr., leaving lineal descendants, during the lifetime of testator's wife and daughter there remained three interests in the trust estate, two of which the trustee was Required to administer. After the death of wife, the estate consisted of two shares. Upon the death of plaintiff, her share will also end and the entire trust estate will belong to appellants as the lineal descendants of Woodard, Jr. Testator decreed that the interest of each of the three original beneficiaries should terminate with his death and that the estate should ultimately vest in fee in the issue of son and/or daughter. It transpired that son had issue and daughter did not.
Plaintiff may not, as a matter of right, require the trustee to convey to her, free of the trust, any part of the trust estate. However, since the day on which she became 21 years of age, the trustee has had the authority, if he deemed it 'necessary or best for the welfare of the Cestui que trust (plaintiff), and consistent with the welfare of testator's family and estate' to convey to plaintiff in fee simple, free from the trust, any part or all of the share of the Corpus of the trust estate provided for her benefit. In 1951, she and her mother, who was then alive and unmarried, demanded that the trustees (W. G. Mordecai and First Citizens Bank and Trust Company) convey to each of them one-third of the trust corpus free from the trust. The corporate trustee was willing to make the conveyance; the individual trustee refused. Plaintiffs then instituted an action against the trustees to require them 'to exercise a discretionary power granted by the will.' They alleged that the conveyances which they had requested were 'best for their welfare,' and that the individual trustee, in refusing to exercise his discretionary...
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