Joyner v. Duncan

• Decision Date: 01 April 1980
• Docket Number: No. 33,33
• Citation: 264 S.E.2d 76,299 N.C. 565
• Parties: Reginald T. JOYNER and Jane Duncan Miller, as Trustees of the Trust under the Will of David Crockett Duncan v. Bessie Lee DUNCAN, Edwin Duncan, Jr., Jane Duncan Miller, Edwin Duncan, III, Katherine Duncan Woodruff, Jane Lee King, Reginald T. Joyner and Jane Duncan Miller, as Administrators, C.T.A. of the Will of Edwin Duncan, Sr., Kathryn K. Hatfield, Guardian ad Litem for Joseph Duncan King, a minor, Bessie Duncan Miller, a minor, and the unborn children of Edwin Duncan, Jr. and Jane Duncan Miller, and Samuel C. Evans, Jr., Guardian ad Litem for the unascertained heirs of Edwin Duncan, III, Katherine Duncan Woodruff, Jane Lee King, Joseph Duncan King, Bessie Duncan Miller, and of any unborn children of Jane Duncan Miller and Edwin Duncan, Jr., and any other persons, born or unborn, having or claiming an interest which would be affected by the declaration in this action.
• Court: North Carolina Supreme Court

Page 76

264 S.E.2d 76

299 N.C. 565

Reginald T. JOYNER and Jane Duncan Miller, as Trustees of

the Trust under the Will of David Crockett Duncan v. Bessie Lee DUNCAN, Edwin Duncan, Jr., Jane Duncan Miller, Edwin Duncan, III, Katherine Duncan Woodruff, Jane Lee King, Reginald T. Joyner and Jane Duncan Miller, as

Administrators, C.T.A. of the Will of Edwin Duncan, Sr.,

Kathryn K. Hatfield, Guardian ad Litem for Joseph Duncan

King, a minor, Bessie Duncan Miller, a minor, and the unborn

children of Edwin Duncan, Jr. and Jane Duncan Miller, and

Samuel C. Evans, Jr., Guardian ad Litem for the

unascertained heirs of Edwin Duncan, III, Katherine Duncan

Woodruff, Jane Lee King, Joseph Duncan King, Bessie Duncan

Miller, and of any unborn children of Jane Duncan Miller and

Edwin Duncan, Jr., and any other persons, born or unborn,

having or claiming an interest which would be affected by

the declaration in this action.

No. 33.

Supreme Court of North Carolina.

April 1, 1980.

W. G. Mitchell, North Wilkesboro, for defendant-appellants Bessie Lee Duncan, Edwin Duncan, Jr., Jane Duncan Miller and Reginald T. Joyner and Jane Duncan Miller as administrators C.T.A. of the will of Edwin Duncan, Sr.

Hayes, Hayes & Evans, by Samuel C. Evans, Jr., North Wilkesboro, acting as guardian ad litem.

Sam J. Ervin, Jr. and Womble, Carlyle, Sandridge & Rice by Leon L. Rice, Jr. and Elizabeth L. Quick, Winston-Salem, for plaintiff-appellees Reginald T. Joyner and Jane Duncan Miller as trustees of the testamentary trust of David Crockett Duncan.

Sam J. Ervin, Jr., Morganton, and Katherine D. Woodruff, Wilkesboro, for defendant-appellees Edwin Duncan, III, Katherine Duncan Woodruff and Jane Lee King.

COPELAND, Justice.

No devise or grant of a future interest in property is valid unless the title thereto must vest in interest, if at all, not later than twenty-one years, plus the period of gestation, after some life or lives in being at the creation of the interest. Parker v. Parker, 252 N.C. 399, 113 S.E.2d 899 (1960); McPherson v. First & Citizens National Bank of Elizabeth City, 240 N.C. 1, 81 S.E.2d 386 (1954); McQueen v. Branch Banking & Trust Co., 234 N.C. 737, 68 S.E.2d 831 (1952). For testamentary devises, the period of time prescribed by the rule begins to run at testator's death. Simes & Smith, The Law of Future Interests, § 1226 (2d ed. 1956).

Although the language in some of our cases may be unclear as to the following portion of the rule, Link, The Rule Against Perpetuities in North Carolina, 57 N.C.L.Rev. 727, 762, 767 (1979) and cases cited therein, the rule requires that contingent future interests must vest, if at all, within the period of the rule. In other words, it is not required that the interest must vest within the perpetuities period. What is required is that the interest must be certain to either vest or fail within that period. Thus, if the interest should happen to vest, that vesting must occur within the period of the rule, and if there is any possibility, when the interest is created, that it may vest in interest at a remote time, then under the rule, that interest is void. Simes & Smith, supra, § 1228; Bergin and Haskell, Preface to Estates in Land and Future Interests, pp. 185-86 (1966).

The rule does not apply to limit the duration of a trust. It simply applies to the time when legal title must vest in the trustee and the time when all beneficial or equitable interests created in the trust vest in the beneficiaries even though the duration of those vested interests may extend beyond the period of the rule. McQueen v. Branch Banking & Trust Co., supra.

The rule applies to contingent future interests. A future interest is contingent when it is subject to a condition precedent (other than the natural expiration of the preceding estate) or when the interest is owned by unascertained persons. Wachovia Bank & Trust Co. v. Schneider, 235 N.C. 446, 70 S.E.2d 578 (1952). An estate is vested when there is either an immediate right of present enjoyment or a present fixed right of future enjoyment. Wachovia Bank & Trust Co. v. Taylor, 255 N.C. 122, 120 S.E.2d 588 (1961); Parker v. Parker, supra. A vested remainder is a present fixed right in the remainderman to take possession upon the natural termination of the preceding estate with no conditions precedent imposed on the time for the remainder to vest in interest. Priddy & Co. v. Sanderford, 221 N.C. 422, 20 S.E.2d 341 (1942). The rule is concerned solely with the time for vesting in interest of estates and not with the time the estates will vest in possession and enjoyment. Parker v. Parker, supra.

The essence of the rule in a will case is the search for an answer to the following question: Must the contingent future interest in question vest (if it ever does vest) within the lifetime of some one or more people who were alive at testator's death (plus the 21 year period and any period of gestation)? These lives in being at testator's death are referred to as the measuring life or lives for the interest in question. Frequently the measuring life or lives will be the beneficiary or beneficiaries of an interest in the trust or will that precedes the interest in question. If there is any possibility that the gift will vest in interest in the lifetime of someone who was not a life in being at testator's death and more than 21 years after the death of all possible measuring lives plus any period of gestation, then the interest vests too remotely and is void because it is in violation of the rule against perpetuities.

The testamentary trust that is the subject matter of this action is set forth in Article III of testator's will. The first provision of Article III is as follows:

"It is my will and desire that all of my property of every kind and nature remaining after the payment of taxes, funeral expenses, just debts, and cost of administration shall be and constitute a TRUST ESTATE, and that Edwin Duncan shall be trustee of my trust estate as long as he shall live or is able to act, and upon his death or inability to act, that The Northwestern Bank, Inc. shall be the trustee of my trust estate and shall succeed to all the powers and duties granted unto Edwin Duncan, Trustee; therefore, I give, devise, and bequeath all of my property remaining in my estate or in the hands of my Executor unto Edwin Duncan, Trustee, and upon his death to The Northwestern Bank, Inc., as Trustee, to be administered by him or it in the following way and manner:

1. I direct that my Trustee shall pay the net income so derived from my trust estate annually unto Edwin Duncan; however, the said Edwin Duncan shall have the right and privilege of refusing to accept the annual net income of my estate and his decision in that respect shall be final and controlling. In the event he does not elect to accept the net income or any part of it derived from my trust estate annually, then the net income or the part he does not care to accept shall be added to the corpus and principal of this trust estate."

There is no problem with this interest since it was a gift of a present life income interest which expired on the death of Edwin Duncan, Sr. on 7 October 1973.

The second section of the trust provides that:

"2. Upon the death of Edwin Duncan, I direct that my Trustee shall pay out of the net income derived from my trust estate unto Bessie Lee Duncan, the widow of Edwin Duncan, for the remainder of her life or until she remarries, if necessary, the sum of $150.00 per month provided she does not have sufficient income from other sources to maintain and support her. That the remainder of the net income of my trust estate shall be paid equally unto Edwin Duncan, Jr. and Jane Cannon Duncan, and upon the death of Bessie Lee Duncan, that the net income derived from my trust estate shall be paid unto Edwin Duncan, Jr. and Jane Cannon Duncan equally; however, should Edwin Duncan, Jr. or Jane Cannon Duncan elect not to accept the net income or a part of the income, that the same shall be added to the corpus or principal of this trust estate each year such election is made. Provided, further, in the event of the death of Edwin Duncan, Jr. or Jane Cannon Duncan during the life of this trust, that the net income derived from this trust estate going to such deceased grandchild shall be paid per stirpes to the child or children of said grandchild."

The interest of Bessie Lee Duncan is a vested remainder income interest for life. It is subject to no condition precedent save the natural termination of the preceding interest. Parker v. Parker, supra ; Wachovia Bank & Trust Co. v. Taylor, supra ; Priddy & Co. v. Sanderford, supra. Since the remainder was vested at testator's death, there is no problem with the rule against perpetuities. If she remarries, her income interest will terminate. This condition subsequent will serve merely to divest a vested interest and raises no perpetuities problem in this case. See, Elmore v. Austin, 232 N.C. 13, 59 S.E.2d 205 (1950).

Edwin Duncan, Jr. and Jane Cannon Duncan (now Jane Duncan Miller) also have vested remainder income interests for life. These income interests were not given to testator's grandchildren as a class. They were given to each of the two named grandchildren who were alive at testator's death; thus, there is no perpetuities violation. Fuller v. Hedgpeth, 239 N.C. 370, 80 S.E.2d 18 (1954). The gift over of the income interest to "be paid per stirpes to the child or children of said grandchild" does not violate the rule against perpetuities. That gift over cannot possibly occur at a remote time within the meaning of the rule against perpetuities, since it will occur, if at all, for the children of each of the two named grandchildren, upon the death of each grandchild. The two named grandchildren were lives in being at testator's death and therefore, they are the measuring lives for the respective gifts over to their children. There is no possibility that...