First Nat. Exchange Bank of Roanoke v. Hughson

• Decision Date: 09 March 1953
• Docket Number: No. 4039,COLONIAL-AMERICAN,4039
• Citation: 194 Va. 736,74 S.E.2d 797
• Court: Virginia Supreme Court
• Parties: THE FIRST NATIONAL EXCHANGE BANK OF ROANOKE, GUARDIAN OF THE ESTATE OF NELLIE WHORLEY STONE v. A. L. HUGHSON, ANDNATIONAL BANK, EXECUTORS OF THE ESTATE OF EUSTACE B. STONE, ET AL. Record

Page 797

74 S.E.2d 797

194 Va. 736

THE FIRST NATIONAL EXCHANGE BANK OF ROANOKE, GUARDIAN OF THE ESTATE OF NELLIE WHORLEY STONE v. A. L. HUGHSON, AND COLONIAL-AMERICAN NATIONAL BANK, EXECUTORS OF THE ESTATE OF EUSTACE B. STONE, ET AL.

Record No. 4039.

Supreme Court of Appeals of Virginia

March 9, 1953.

Hazlegrove, Shackelford and Carr, Joseph Wysor Smith, for appellant.

Woods, Rogers, Muse and Walker, Tom S. Fox, Copenhaver, Edwards and Barrett, A. L. Hughson, Kossen Gregory, for appellees.

JUDGE: MILLER

MILLER, J., delivered the opinion of the court.

On February 4, 1952, The First National Exchange Bank of Roanake, guardian of Nellie W. Stone, incompetent widow of Dr. Eustace B. Stone, deceased, filed its bill in equity against A. L. Hughson and Colonial-American National Bank, executors of decedent's estate, and against the Baptist Orphanage of Virginia, Eugenia W. Stone, and others, legatees under his will.

The primary purpose sought to be accomplished was to have the court renounce, or authorize the guardian to renounce, the provisions made in Dr. Stone's will for his widow, and direct his executors to deliver to complainant as guardian of Nellie W. Stone, all property to which she would have been entitled upon her renunciation had she been competent. Certain interested parties and beneficiaries opposed renunciation. In their answers they proposed, and four legatees offered, alternative plans (Plan 1 and Plan 2) to set up a special trust for the widow in the property bequeathed to them. From this trust the guardian would receive the income for support of its ward during her life. If necessary, the trustees named in the trust would also be allowed to invade the corpus and pay to the guardian for the support of the widow such part thereof as might be needed. The part not thus used would, upon the widow's death, pass to the four legatees as nearly in accordance with the terms of the will as possible.

By decree of April 21, 1952, the court declined to renounce and accepted, with slight modification, Plan 2. From that decree the guardian sought and obtained an appeal.

An intelligent understanding of the problems presented requires that the terms of an inter vivos trust established by Dr. Stone before his death for the benefit of his wife during her life, pertinent provisions of his will, the terms of the plans to establish the special trust for the widow as proposed by the legatees, and other relevant facts, be stated in detail.

By written instrument of April 1, 1947, Dr. Stone transferred certain personal property to Colonial-American National Bank and G. C. Holcomb, trustees, and thereby set up a trust under the provisions of section 5157, Code of 1942, (section 55-19, Code of 1950) for the benefit of his wife. When the instrument was executed, the property included in the trust was worth about $52,000. Under its terms, the trustees could use the income for the support and maintenance of Nellie W. Stone during her life, but income that accrued and was unused was to be added to the principal. In event the income was insufficient to provide for Nellie W. Stone, then after, but only after, she had used all of her individual estate, could the trustees invade the principal to provide for her maintenance. Any of the corpus not so used for the widow was to pass at her death to named parties who were settlor's brothers and nieces.

At the time of Dr. Stone's death on April 17, 1951, his wife was seventy-five years old (said by defendants to be seventy-seven), and she had become physically helpless and hopelessly insane. She was a patient at Lewis-Gale Hospital, Roanoke, Va., where she is still confined, and constant nursing attention is required for her. Income from the inter vivos trust had not been used as it accrued, and the principal, thus augmented, had by March 20, 1952, increased to $63,077.

Dr. Stone's will, dated September 8, 1950, was admitted to probate April 21, 1951. Testator left surviving neither father nor mother, and no direct descendants by blood or adoption, but he was survived by brothers, nieces, nephews, and other kin.

Excepting certain provisions of the will which have no bearing upon this controversy, it is, in part, as follows:

'(3) I give and bequeath unto my dear wife, Nellie W. Stone, the sum of Twenty Thousand Dollars ($20,000.00), which sum is to be delivered by my executors to The Colonial-American National Bank, Trustee, and said sum is to become a part of the trust fund heretofore created by me for the benefit of my wife. This is in addition to the proceeds of insurance policies on my life, which I have made payable to my wife, and the income from the trust fund above mentioned, which I have previously established for her benefit. I direct that the bequest of $20,000.00 be the first charge on my estate and be paid to The Colonial-American National Bank, Trustee, by my executors before any bequest hereinafter provided for are paid out of my estate.'

Here follow paragraphs 4 to 8, inclusive, and by the bequests contained therein totaling $98,000, monetary gifts are made in varying amounts to fifteen different people, i.e., testator's brothers, nieces, nephews, a great-niece, and two parties bearing no blood relation to him. The last bequest mentioned in paragraph 8 is to a niece, Eugenia W. Stone, for $15,000, thus leaving $83,000 as the sum bequeathed to the other fourteen legatees mentioned ahead of her.

The will then continues:

'(9) I give and bequeath to the Goodwill Industry and Gospel Mission of Roanoke, Virginia, Incorporated, the sum of $2,000.00.

'I give and bequeath to the Grandin Court Baptist Church of Roanoke, Virginia, $500.00.

'All of the above bequests are to be paid by my executors in the order of their priority, in the event that my estate is not sufficient to pay all of them.

'(10) All the rest and residue of my estate, both real and personal, of every kind, and description, wherever situated, I give, devise and bequeath to the Baptist Orphanage of Virginia at Salem, Virginia.'

Paragraph 11 is unimportant; Paragraph 12 nominates the executors, and among other things, provides as follows:

'* * * I further direct that my executors distribute all United States, State and Municipal bonds and all notes, bonds, and corporate stocks left after all Federal taxes are paid, to the legatees above designated, but in order to make an equal and unquestionable distribution, it may be necessary to have some of the stocks reissued in smaller blocks. I do not want the bequests of my relatives to be paid in cash, but in stocks, bonds or notes, as near as possible.

'The bequests to the Goodwill Industry and Gospel Mission of Roanoke, Virginia, Incorporated, and the Grandin Court Baptist Church of Roanoke, Virginia, are to be paid in cash. ' Emphasis added.

The two insurance policies on testator's life (mentioned in Paragraph 3 of the will, but which do not pass thereunder) in which his widow is beneficiary provide for payments to her beginning as of insured's death of $49.20 and $50.00 per month for the term of 120 months and 240 months respectively.

It was shown by the testimony of Dr. W. R. Whitman, who was thoroughly familiar with Mrs. Stone's condition (but whose records showed her to be about seventy-eight years old when he testified on March 31, 1952), that her life expectancy was about four years. The yearly cost of supporting and caring for her, which includes keeping graduate nurses to serve her twenty-four hours a day, amounts to about $16,440. That sum could be reduced to about $13,700 if practical nurses were employed for her at the hospital.

On May 11, 1951, when the guardian qualified, Nellie W. Stone was possessed of an estate worth $29,696, but as of the time of entry of the decree appealed from $9,321 thereof had been used for her support, and her estate thus reduced to $20,375.

After testator's death his real estate was valued at $13,500, and his personal estate was appraised at $244,194, i.e., a total of $257,694.

It appears from a stipulation of counsel that the funeral expenses, debts, and cost of administration that have been paid amount to $14,700, and further amounts that will have to be expended will not exceed $10,000, i.e., a total of $24,700. Thus testator's net personal estate, before charged with taxes, is $219,494, and his real estate is worth $13,500, making a total net estate of $232,994. If his widow had been sane and had elected to renounce the will, or if the court had renounced for her, she would have received one-half of the personal property, i.e., $109,747, and dower with a commuted value (as of age seventy-six when the bill was filed) of about $1,155. This makes a total estate of $110,902, in which she would thus obtain full ownership as contrasted with the bequest of the income from $20,000, with the right to use the principal thereof upon exhaustion of her individual estate if no renunciation be had.

The answers filed by defendant executors and by Eugenia W. Stone, Goodwill Industry and Gospel Mission of Roanoke, Inc., Grandin Court Baptist Church, and the Baptist Orphanage of Virginia and others, are in the nature of cross-bills. They admit the purely factual allegations of the bill, oppose renunciation, and the four above-named defendant legatees submit to the court two plans (Plan 1 and Plan 2) to establish with their bequests and devise a special trust, which, they say, would be to the interest of the widow to accept. By these plans it is proposed that the bequest of $20,000 to the widow be added to the inter vivos trust of $63,077, thus increasing it to $83,077, and that all other bequests in the will down to and including a gift of $10,000 to Sam W. Stone in Paragraph 8 thereof, totaling $83,000 be paid. Thus $103,000 of the bequests will be paid in accordance with the precise terms of the will. When that sum and $24,700 used and to be used for payment of debts, costs of administration, etc., are...