Federal Land Bank of Columbia v. Wood

• Decision Date: 18 February 1971
• Docket Number: Civ. A. No. 70-752.
• Citation: 334 F. Supp. 1124
• Parties: The FEDERAL LAND BANK OF COLUMBIA, a corporation, Plaintiff, v. Ida Walker WOOD, individually and as Executrix of the Last Will and Testament of Edward Charles Wood, Deceased, Defendants.
• Court: U.S. District Court — District of South Carolina

334 F. Supp. 1124

The FEDERAL LAND BANK OF COLUMBIA, a corporation, Plaintiff, v. Ida Walker WOOD, individually and as Executrix of the Last Will and Testament of Edward Charles Wood, Deceased, Defendants.

Civ. A. No. 70-752.

United States District Court, D. South Carolina, Rock Hill Division.

November 2, 1970.

On Motion for Relief from Order February 18, 1971.

Melvin L. Roberts, York, S. C., for appellants.

Carroll M. Pitts, Jr., Rock Hill, S. C., Melvin B. McKeown, Jr., York, S. C., for appellee, Federal Land Bank of Columbia, etc.

James D. McCoy, III, Asst. U. S. Atty., for appellees, United States of America and others.

ORDER

HEMPHILL, District Judge.

The above entitled cause was commenced in the Court of Common Pleas for York County on May 26, 1970, for the purposes of foreclosing a real estate mortgage. The defendant, United States of America, removed the cause to Federal Court as authorized by statute. It appears that all proper and necessary parties are properly before the court. The matter was submitted to the court on an agreed Stipulation of Facts and came on for hearing before the court on October 16, 1970. By agreement of counsel the following facts were stipulated:

Edward Charles Wood was the owner in fee during his lifetime as to all the twelve (12) tracts totaling 497.8 acres of land described in the Complaint and during his lifetime on November 24, 1965, gave a valid first mortgage to secure a principal indebtedness of Fifty-two Thousand and No/100 ($52,000.00) Dollars to the plaintiff, The Federal Land Bank of Columbia, a corporation. That there is now due and owing on said mortgage indebtedness the sum of Forty-one Thousand Eight Hundred Thirty-one and 92/100 ($41,831.92) Dollars principal as of February 26, 1970, with daily interest thereafter at the rate of $6.9592 per day, which principal and interest constitutes a first lien.

That Edward Charles Wood died testate April 2, 1966, and his widow, the defendant, Ida Walker Wood, was duly appointed April 5, 1966, and is now acting as Executrix. That there is now due and owing to the defendant, The United States of America (Internal Revenue Service) for inheritance taxes the sum of One Thousand Four Hundred Fifty-one and 48/100 ($1,451.48) Dollars with statutory interest after March 7, 1969, which constitutes a second lien on the after-described property.

That thereafter on September 15, 1967, the defendants, Ida Walker Wood, Charles Kenneth Wood, and Jewell Wood Hall, executed to the defendant, the United States of America (acting through the Farmers Home Administration, United States Department of Agriculture), a promissory note in the amount of Fifteen Thousand Five Hundred and No/100 ($15,500.00) Dollars, and gave as security for such loan a Crop and Chattel Mortgage, and real estate mortgage, copies of said note and the security agreements were attached to the Stipulation of Facts and to the pleadings. That there is now due and owing to the defendant, the United States of America (acting through the Farmers Home Administration, United States Department of Agriculture), the sum of Thirteen Thousand Three Hundred Ninety-four and 08/100 ($13,394.08) Dollars principal and Nineteen and 82/100 ($19.82) Dollars interest with daily interest accruing after August 14, 1970, at the rate of $1.1009 per day and said principal and interest constitutes a third lien on said property.

That a foreclosure action was commenced against Ida W. Wood, Charles K. Wood and Jewell W. Hall April 17, 1970, by United States of America, Civil Action No. 70-297. That action has been consolidated with the instant case by Order dated September 9, 1970. The instant action was instituted to foreclose the real estate mortgage of the plaintiff, The Federal Land Bank of Columbia, and, to determine all issues, it is necessary to determine the interest, if any, of any unknown or unborn persons who have or could claim an interest in said land. Accordingly, John Doe was joined as a party defendant and Carroll M. Pitts, Jr., was appointed Guardian ad Litem and is acting in such capacity to protect any interest the unknown and/or unborn persons may have in said property.

The Stipulation of Facts in this matter leaves no doubt that the mortgage given by the Testator to the plaintiff and the tax lien of the United States are valid and that the plaintiff and the United States are entitled to a decree of this court requiring that the mortgaged property be sold. Because the mortgage to Farmers Home Administration was granted by the individual defendants and because it appears that the mortgaged property is worth very substantially more than the indebtedness, it is necessary that the interests taken by the individual defendants be determined in order that the proceeds can be properly dispersed.

Edward Charles Wood owned the real estate covered by the mortgages in fee simple. By the terms of his Last Will and Testament he left that property using the following language:

"ITEM II. I will and devise all the real estate of which I may die seized and possessed unto my beloved wife, Ida Walker Wood, to be hers for and during the term of her natural life; and upon the death of my said wife I will and devise said real estate unto my two children, Charles Kenneth Wood and Jewell Wood Hall, share and share alike, PROVIDED, HOWEVER, that if either of my said two children should predecease my said wife, without leaving a child or children, of which such child is the natural parent, then and in such event, I will and direct that the share of my said real estate which would have gone to such predeceased child shall go directly to my surviving child, absolutely and in fee; PROVIDED, FURTHER, HOWEVER, That if either of my said children should predecease my wife leaving a child or children of which such child was the natural parent, then and in such event, the share that such child or children would have taken, had such child or children survived my wife, shall go in fee to such natural child or children of either of my children who might predecease my wife. It is my specific intention by the devise of my real estate, as hereinabove set forth and the language used, to express such devise to specifically and absolutely eliminate any adopted child or adopted children or step-child or step-children of either of my children from taking any interest in my said real estate, in the event of the happening of the contingencies hereinabove set forth."

There is agreement among the parties that Ida Walker Wood took a life estate in the property. At that point, however, the agreement ends. The plaintiff and the United States argue that the remainder to the two children is vested subject to divestment with alternative gifts over which constitute executory interests. The Guardian ad Litem for unknown and unborn persons urges that the remainder given Charles Kenneth Wood and Jewell Wood Hall is contingent upon their surviving their mother Ida Walker Wood. The contention of the named beneficiaries is that the remainder is vested and in fee simple, the later clauses being of doubtful import intended only to insure that adopted and step-grandchildren took no interest in the property and cannot have the effect of cutting down the remainder in fee granted Charles Kenneth Wood and Jewell Wood Hall.

It is clear that the rights of the unborn children of the defendant Charles Kenneth Wood and Jewell Wood Hall, if those children indeed take any interest under Item II of the Will of Edward Charles Wood, will be effected by this litigation. By order of this court a respected member of the York County bar was appointed Guardian ad Litem to represent all unknown and unborn persons having claim to the property. The question arises as to whether or not the court has jurisdiction to adjudicate the rights, of unborn, who are not represented by one of the class to which they belong. In the case at issue, representation by one of the class is not possible.

In the case of Caine v. Griffin, 232 S.C. 562, 103 S.E.2d 37 (1958), the court quoting from the decision of Bofil v. Fisher, 3 Rich.Eq. 1, 24 S.C. Equity 1 (1860) stated:

But the question is whether the Court has the power, by its decrees, to alienate the contingent titles of unborn remaindermen, who, from the nature of things, cannot be made parties or be represented in the proceedings before the Court . . . To say that the Court could not under circumstances like these convey away the fee, would be to assert a doctrine that would render conditional limitations and contingent remainders an intolerable evil to a growing and prosperous community. Thus to shackle estates without the power of relief, unless every person having a contingent and possible interest could be brought before the Court, as a party complainant or defendant, according to the usual forms and ordinary practice of the Court, would be to sacrifice the rights and interests of the present generation to those of posterity, and of citizens to aliens. If the whole property of the country were thus situated, it is obvious that all improvement and advance would be completely checked. And this check upon progress and improvements would be in direct proportion to the extent to which this state of things exists. . . . Is there no power in the State, by which the titles of estates may be unfettered from the contingent claims of unborn remainder-men and their rights not extinguished but transferred from the property itself to a fund arising from the sale of the property? I think there should be; I think there is.

This language convinces the court that it has power to determine the rights of the unborn children. It should be further pointed out that the appointed Guardian ad Litem has fully stated and urged the claim of the unborn children.

In construing the provisions of a Will every effort must be made to determine the intention of the Testator and to carry out such intention. Citizens and Southern National...