Fish v. Hanson

• Decision Date: 05 May 1943
• Docket Number: 527.
• Parties: FISH v. HANSON et al.
• Court: North Carolina Supreme Court

25 S.E.2d 461

223 N.C. 143

FISH v. HANSON et al.

No. 527.

Supreme Court of North Carolina

May 5, 1943

Civil action by legatee of life interest in residuary estate to recover income from estate received by executrices.

George Fish, late of Mecklenburg County, died testate May 12, 1933. Plaintiff, his widow, and defendants Jane Alice Fish Hanson and Lucy Moore, his daughters, were named as executrices. He made certain specific bequests including $10,000 each to Lucy Moore and Jane Alice Fish Hanson. The residue of his estate, after the payment of debts and the costs of administration, he devised to plaintiff for life or until her remarriage, with remainder to his two daughters and Dorothy Ligon, his stepdaughter.

When he died his estate was valued at $45,000 and he owed approximately $20,000. So that upon an immediate settlement of the estate the debts, expenses of administration and individual legacies would consume the estate, leaving a residuary bequest only nominal in value.

The interested parties held a meeting, discussed the situation considered the inadvisability of a sale of the assets of the estate at the then prevailing low prices due to the existing economic depression, and agreed that the executrices should delay settlement of the estate, collect the income, sell assets from time to time as might be advisable, and use the income and proceeds of sales to pay the debts and specific legacies. To accomplish the purpose of the agreement the daughters agreed not to demand payment of their legacies before the estate was worked out on a satisfactory basis. All agreed that income from the estate property might be used to pay debts and specific legacies. This was done in order to try to salvage the property and to create a residue of substantial value.

The executrices administered the estate in accord with the agreement. They collected income up to January 1, 1940, in the sum of $13,956.43 net. This sum, plus sales of assets was sufficient to pay all debts and specific legacies and approximately $500 to plaintiff and still leave an estate consisting principally of income-producing real estate, valued at approximately $19,000 (tax value). Since January 1, 1940, net income of $4,456.05 has been received and paid to plaintiff.

Plaintiff instituted this suit to recover the income collected by the executrices, alleging that her contract constituted nothing more than an agreement to advance the income for the benefit of the estate and that she is entitled now to reimbursement for the funds so advanced.

When the cause came on for hearing in the court below the parties waived trial by jury and agreed that the court should hear the evidence, find the facts and enter judgment thereon. The court, after hearing the evidence, found the facts substantially as herein set forth and entered judgment dismissing the action. Plaintiff excepted and appealed.

Whitlock & Dockery, of Charlotte, for appellant.

Frank W. Orr and Frank H. Kennedy, both of Charlotte, for appellee Mrs. Lucy Moore.

BARNHILL, Justice.

Family agreements looking to the advantageous settlement of estates or to the adjustment of family differences, disputes or controversies, when approved by the court, are valid and binding. They are bottomed on a sound public policy which seeks to preserve estates and to promote and encourage family accord. Spencer v. McCleneghan, 202 N.C. 662, 163 S.E. 753; In re Wright's Estate, 204 N.C. 465 168 S.E. 664; Reynolds v. Reynolds, 208 N.C. 578 182 S.E. 341; Bohannon v. Trotman, 214 N.C. 706, 200 S.E. 852; Schouler, Wills, Executors and...