DuBose v. Box

• Decision Date: 14 November 1980
• Docket Number: 36365,36475,36366,Nos. 36364,36473,36367 and 36474,s. 36364
• Citation: DuBose v. Box, 246 Ga. 660, 273 S.E.2d 101 (Ga. 1980)
• Parties: DuBOSE et al. v. BOX et al. (two cases). CALHOUN v. DuBOSE et al. DuBOSE et al. v. DuBOSE et al. (two cases). WADDELL v. DuBOSE et al. CALHOUN et al. v. DuBOSE et al.
• Court: Georgia Supreme Court

Page 101

273 S.E.2d 101

246 Ga. 660

DuBOSE et al. v.BOX et al.(two cases).

CALHOUN v.DuBOSE et al.

DuBOSE et al. v.DuBOSE et al.(two cases).

WADDELL v.DuBOSE et al.

CALHOUN et al. v.DuBOSE et al.

Nos. 36364, 36473, 36365, 36366, 36475, 36367 and 36474.

Supreme Court of Georgia.

Argued July 7, 1980.

Decided Oct. 9. 1980.

Rehearings Denied Nov. 14, 1980.

William Linkous, Jr., John T. Marshall, Frank S. McGaughey, III, Robert L. Connelly, Jr., Atlanta, Ronald W. Self, Columbus, for appellants in Case Nos. 36364, 36473.

Max R. McGlamry, R. Lee Redmond, Jr., Charles H. Ford, Jr., Allen D. Altman, Timothy J. Sweeney, Forrest L. Champion, Jr., A. Kimbrough Davis, Atlanta, Aaron Cohn, Columbus, for appellees in Case Nos. 36364, 36473.

Charles H. Ford, Jr., William L. Tucker, Columbus, for appellants in Case Nos. 36365, 36367, 36474.

Robert L. Connelly, Jr., R. Lee Redmond, Jr., Allen D. Altman, Timothy J. Sweeney, Forrest L. Champion, Jr., A. Kimbrough Davis, Atlanta, Marcus B. Calhoun, Jr., Aaron Cohn, Max R. McGlamry, Columbus, for appellees in Case Nos. 36365, 36367.

Timothy J. Sweeney, Atlanta, for appellants in Case Nos. 36366, 36475.

J. Norman Pease, Frank S. McGaughey, III, Marcus B. Calhoun, Jr., Robert L. Connelly, Jr., Max R. McGlamry, R. Lee Redmond, Jr., Charles H. Ford, Jr., Forrest L. Champion, Jr., A. Kimbrough Davis, Atlanta, Aaron P. Cohn, Columbus, for appellees in Case Nos. 36366, 36475.

Max R. McGlamry, R. Lee Redmond, Jr., Frank S. McGaughey, III, Allen D. Altman, Timothy J. Sweeney, Forrest L. Champion, Jr., A. Kimbrough Davis, Atlanta, Aaron Cohn, Marcus B. Calhoun, Jr., Columbus, for appellees in Case No. 36474.

PER CURIAM.

This will case began by the executrices of the estate of Jefferson Denman Box filing a petition in the Muscogee Superior Court for construction of the testator's will.¹In the petition, the executrices seek direction from the court as to whether three bequests of municipal bonds in the respective amounts of $200,000, $500,000 and $600,000 are to be funded with municipal bonds valued at market value or face (par) value.The executrices also ask from what point in time interest allocable to the municipal bonds used to fund these bequests is distributable with the bequests.In addition, the petition states that there are insufficient assets in the residuary estate to pay the debts of the estate, expenses of administration, and estate and inheritance taxes.Direction is sought as to whether various bequests in the will are specific, general, or demonstrative, so as to determine their order of abatement.

This case can best be presented by reviewing the facts giving rise to it, the superior court's rulings, and our decision on appeal.

Facts of the Case.

The evidence shows that the testator was a nonpracticing attorney who had invested in the stock and bond markets for over 30 years.The will was executed by him on March 22, 1979.Insofar as is relevant to these appeals, the testator provided as follows in his will:

In Item I of the will, the testator directs that all estate, inheritance and other death taxes imposed on the estate be paid out of the residue of the estate, "except that my executrices shall recover from the recipients of any property includable in my estate for federal estate tax purposes because of a Power-of-Appointment held by me, the portion of such taxes legally recoverable."

The municipal bond bequests are found in Items II, IV, and V.In Item II, the testator gives to his wife, Kathryn S. Box, provided that she survive him, "the sum of Six Hundred Thousand Dollars ($600,000) in Tax Free Municipal Bonds of the State of Georgia or political subdivisions thereof to be hers absolutely in fee simple, said bequest to her to be in lieu of dower, year's support, and any and all other benefits provided for by law.I direct that this bequest be fulfilled within sixty (60) days of my death."

In Item IV, the testator gives to his secretary, Jeanne Ewing Cremer, provided that she survives him, "the principal sum of Five Hundred Thousand Dollars ($500,000) in Municipal Tax Free Bonds of the State of Georgia or political subdivisions thereof."This bequest is in trust, and the Columbus Bank and Trust Company, Columbus, Georgia, is named as trustee.It is provided in Item IV that the trustee shall pay over the income from these bonds to the secretary in monthly installments of $2,000 per month for the duration of her natural life, and that on her death the principal of the trust shall revert to and become a part of the testator's general estate.The testator directs that the Item IV trust be established within 30 days of his death.

In Item V, the testator gives to his "faithful household staff,"Henry Lyles, Lillie Mae Wheeler, and Maude Lyles, provided they or any of them shall survive him by at least 30 days, "the principal amount of Two Hundred Thousand Dollars ($200,000) in State of Georgia Municipal Bonds ..."This bequest is made in trust to the Columbus Bank and Trust Company, and the trustee is directed to pay over the sum of $200 per month to each beneficiary of the Item V trust for as long as they shall live.When all of the beneficiaries of this trust die, the trust terminates and the principal of the trust reverts to the testator's general estate.

In Item III, the testator gives "FOUR HUNDRED SEVENTY-TWO (472) shares of common stock of National Distillers and Chemical Company" to Jefferson Denman Box DuBose.In Item IX, the testator gives "FIVE THOUSAND EIGHT HUNDRED (5,800) shares of the Common Stock of The Coca-Cola Company" to his stepgranddaughter, Frances Waddell Calhoun.In Item X, he gives "FIVE THOUSAND EIGHT HUNDRED (5,800) shares of the Common Stock of The Coca-Cola Company" to his stepgrandson, Beverly M. Dubose, III.In Item XI, he gives "FIVE THOUSAND EIGHT HUNDRED (5,800) shares of the Common Stock of The Coca-Cola Company" to his stepgranddaughter, Dean DuBoseLewis Smith.

Items VI, VII, and VIII are devises of real property.In Item XII, the testator directs that the residue of the estate be divided into two shares, each share to be held in trust, the income to be paid to various lifetime beneficiaries and the remainder to be paid to the beneficiaries' children.

The testator died on May 16, 1979.As of the date of his death, his estate was valued at approximately $3,605,000, less approximately $174,000 in gifts made by the testator within three years prior to his death and, therefore, includable in his estate for estate-tax purposes.The assets of the estate included municipal bonds of the State of Georgia having an aggregate par value of approximately $1,695,000 and an aggregate fair market value of approximately $1,600,000 as of the date of the testator's death.In addition, the testator owned 472 shares of the common stock of National Distillers and Chemical Company and 17,450 shares of the common stock of the Coca-Cola Company.(The record shows that at the time the testator wrote his will he owned 17,400 shares of Coca-Cola stock; however, he purchased an additional 50 shares prior to his death.)

On May 18, 1979, the will was probated in solemn form in the Probate Court of Muscogee County, and letters testamentary were granted to the executrices named in the will, Frances Woodruff DuBose and Virginia Woodruff Waddell, who are the testator's stepdaughters.The executrices filed this petition for construction of the testator's will on October 11, 1979.On December 10, prior to being served in this suit, the widow filed a petition for accounting against the executrices in the probate court.²This petition for accounting was made the subject of a counterclaim in this suit.

Superior Court's Rulings.

The superior court ruled that the Item II, IV and V bequests are to be funded with municipal bonds valued at fair market value.The court further ruled that the beneficiaries of the Item II and IV bequests are entitled to the income earned on the bonds used to fund their bequests since the date of the testator's death, as well as interest on this income.It was held by the court that each beneficiary of the Item V bequest is entitled to $200 per month in income (plus interest) earned on the municipal bonds used to fund his bequest, beginning 60 days after the testator's death.

Although the superior court determined that the Item II, IV, and V bequests all constitute demonstrative legacies for the support of the beneficiaries, the court ruled that each bequest would abate differently.The court ruled that the Item II bequest to the widow is not subject to abatement, because the widow took this bequest in lieu of year's support and, therefore, as a quasi purchaser.The court ruled that all of the bequests except the Item II bequest to the widow will abate before the Item IV bequest to the secretary, because the Item IV bequest was made in fulfillment of a promise made by the testator to the secretary in 1973 that, if she would serve as his personal secretary until his death, he would provide for her in his will.As to the Item V bequest, the court ruled that this bequest is not subject to abatement, because it is for the support of the testator's household staff.

The superior court awarded attorney fees to the beneficiaries of the Item II, IV and V bequests, on the ground that the executrices abused their discretion by not funding these bequests within the time limits specified in the will, thereby putting the beneficiaries to unnecessary trouble and expense.The court awarded attorney fees to the trustee of the Item IV and V trust on the same ground.The court upheld the award of attorney fees to the Item II, IV, and V beneficiaries on the additional ground that the counterclaim filed by the widow, as well as the responsive pleadings filed by the secretary and household staff, led to the proper administration of the estate.

As to the Item III, IX, X, and XI bequests, the superior court ruled that these...