Cannon v. Cannon
| Decision Date | 28 November 1945 |
| Docket Number | 379 |
| Citation | 36 S.E.2d 17,225 N.C. 611 |
| Parties | CANNON et al. v. CANNON et al. |
| Court | North Carolina Supreme Court |
Civil action by Trustees under the will of Mary Ella Cannon, deceased, for construction of will and for advice in the administration of testamentary trust.
The testatrix died 4 May, 1938. Her will consists of the original and two codicils. It has been duly probated in Cabarrus County. After a number of specific bequests, the residue of the estate is left in trust, with instructions for its management as contained in the second codicil. An alleged ambiguity in these instructions has given rise to the present proceeding.
The testatrix named her son, Charles A. Cannon, her son-in-law David H. Blair, and the Central Hanover Bank & Trust Company trustees of her residuary estate. On the advice of counsel, the corporate trustee decided not to qualify. The individual trustees duly qualified on 16 September, 1941, and received from themselves as executors the residuary trust estate.
The second codicil to the will was executed and published on 21 May, 1937. On this same day Mrs. Cannon amended a 'New York Trust Agreement,' under which certain properties were held by a trust company in New York, and so far as the dispositive provisions of the two instruments are concerned i.e., the New York Trust Agreement and the Will, they are exactly alike and the beneficiaries are the same.
On 14 March, 1939, the trustees under the 'New York Trust Agreement' instituted an action in New York to have certain matters judicially determined. It was thought that such determination might be binding here; hence, the plea of res judicata and the first appeal, reported in 223 N.C. 664 28 S.E.2d 240.
The pertinent provisions of the second codicil follow:
'Fifth: All the rest, residue and remainder of my property and estate of whatsoever kind and wheresoever situate, I give, devise and bequeath to my Trustees, hereinafter named, In Trust, Nevertheless, to hold, manage, control, invest and reinvest the same and to divide the principal thereof into five (5) equal shares and to dispose of each such equal share as follows:
'Upon the death of my said son, Eugene T. Cannon, or in case he shall die before me then upon my death, the said equal share shall be divided into four (4) equal parts and each such equal part shall be disposed of as follows:
Similar provisions are made in respect of the remaining four equal shares, to be held in trust, one each for the daughters of the testatrix: (B) Adelaide Cannon Blair; (C) Margaret Cannon Howell; (D) Mary Cannon Lucke; (E) Laura Cannon Mattes. The last named daughter has no children, except adopted children who are excluded by the will. Her interest, therefore, will cease at her death, and the share of which she is the first beneficiary will go to the issue of her brother and sisters.
In all, nineteen individuals are mentioned in this item: Five first beneficiaries, children of the testatrix, and fourteen second beneficiaries, grandchildren of the testatrix, who, if they all live, will be entitled to receive an annuity of 4 1/2% of the value of a share or part under the terms of the will.
Then comes paragraph (G) in this item which has resulted in varient contentions:
'(G) Whenever an annuity of four and one-half per centum (4 1/2%) of a share or part of the trust estate is granted under the terms and provisions of this my Will, the said percentage shall be that percentage (i.e. 4 1/2%) of the principal of the share or part set aside in trust, computed at the market value thereof at the date of the setting aside of said share or part.'
At the August Term, 1944, Bobbitt, J., Presiding, it was adjudged:
'1. That the annuities to the first annuitants (children of Mary Ella Cannon) provided for in the fifth item of the second codicil to Mary Ella Cannon's Will accrued, and are payable, as of the death of Mary Ella Cannon, to-wit: May 4, 1938.
For the purpose of ascertaining the market value of each of the first five shares 'as of September 16, 1941,' over objection of all parties, the matter was referred to Hon. S. J. Ervin, Jr., to find the facts and report the same, together with his conclusions of law, to the court.
The plaintiffs and the defendants, other than Laura Cannon Mattes, noted an exception to this judgment.
As the estate consists largely of corporate stocks, principally stock in the Cannon Mills Company, the Referee applied the 'Blockage Rule' in arriving at the market value of the Cannon Mills stock. Under this rule, the stock of the Cannon Mills Company was valued at $33 5/8 per share, whereas it was then actually selling on the market at $36 1/8. The reason given by the Referee and adopted by the court below was that the 'prices at which small blocks of stock in the Cannon Mills Company were sold on the New York Stock Exchange on or about September 16, 1941, did not accurately reflect the market values of the large blocks of such stock held by the trust and allocated to the five trust shares on September 16, 1941.'
With some slight modifications the referee's report was approved at the April Term, 1945, Gwyn, J., Presiding.
Exceptions to this judgment were noted by the plaintiffs and by the following defendants: E. T. Cannon, Adelaide Cannon Blair, Jay B. Douglass, Adelaide Douglass Whitley, David J. Blair, Jr., William C. Cannon, Mariam Cannon Hayes, Charles A. Cannon, Jr., Mary Ruth Cannon, Margaret Cannon Howell, Mary Cannon Hill, Charles G. Hill, Susan Hill Walker, Jane Hill Simpson, Ernest R. Alexander, guardian ad litem for the minor defendants, Norma Louise Cannon, et al. and J. Carlyle Rutledge, guardian ad litem for the unborn issue of Adelaide Cannon Blair, et al., and Laura Cannon Mattes.
Several appeals are here prosecuted from both judgments, the plaintiffs and the named defendants duly preserving their respective exceptions and assignments of error.
W. H. Beckerdite, of Kannapolis, for Charles A. Cannon, Trustee, and Adelaide Cannon Blair, Successor Trustee, appellants-appellees.
E. T. Bost, Jr., of Concord, for E. T. Cannon, William C. Cannon, Mariam Cannon Hayes, Charles A. Cannon, Jr., and Mary Ruth Cannon, appellants-appellees.
Ratcliff, Vaughn, Hudson & Ferrell, of Winston Salem, for Margaret Cannon Howell, Mary Cannon Hill, Charles G. Hill, Susan Hill Walker, and Jane Hill Simpson, appellants-appellees.
J. G. Korner, Jr., of Washington, D. C., for Adelaide Cannon Blair, Jay B. Douglass, Adelaide Douglass Whitley, and David H. Blair, Jr., appellants-appellees.
E. R. Alexander, of Kannapolis, guardian ad litem for the minor defendants, Norma Louise Cannon et al., appellants-appellees.
J. Carlyle Rutledge, of Kannapolis, guardian ad litem for the unborn issue of Adelaide Cannon Blair et al., appellants-appellees.
John M. Robinson and Hunter M. Jones, both of Charlotte, for Laura Cannon Mattes, appellant-appellee.
This is the same case that was before us at the Fall Term, 1943, on demurrers to pleas of estoppel or res judicata, reported in 223 N.C. 664, 28 S.E.2d 240, to which reference may be had for further statement of the facts.
The will is now presented for construction in a number of particulars.
Two questions were specifically decided at the August Term, 1944, Cabarrus Superior Court: First, that the annuities to the first annuitants vested or accrued at the date of the death of the testatrix, and became payable from and after that date; and, second, that the market value of the principal of each of the first trust shares is to be determined as of the date of its setting aside by the Trustees, to wit, September 16, 1941.
It is conceded on all sides that the trial court correctly decided the accrual date of the first annuities to be the date of the death of the testatrix,...
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