King v. Richardson
Decision Date | 19 June 1943 |
Docket Number | No. 5042.,5042. |
Parties | KING et al. v. RICHARDSON et al. |
Court | U.S. Court of Appeals — Fourth Circuit |
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L. P. McLendon, of Greensboro, N. C. (A. L. Brooks, of Greensboro, N. C., Charles G. Rose, of Fayetteville, N. C., and Thornton H. Brooks, of Greensboro, N. C., on the brief), for appellants and cross-appellees.
B. S. Womble, of Winston-Salem, N. C., and Clifford Frazier, of Greensboro, N. C. (Russell M. Robinson, of Greensboro, N. C., and Lee McCanliss, of New York City, on the brief), for appellees and cross-appellants.
Before PARKER, SOPER, and DOBIE, Circuit Judges.
These are cross appeals in a suit to enforce a trust with respect to a remainder interest in certain stock of the Vick Chemical Company, devised by the will of the late Lunsford Richardson to Trustees of the First Presbyterian Church of Greensboro, N. C. with direction to use the "profits or dividends" arising therefrom for the benefit of "Home and Foreign Missions and the benevolent causes of the church, in such proportion as the trustees deem best". Plaintiffs are the Trustees of the church and certain corporations engaged in carrying on benevolent causes of the church, who sue in behalf of themselves and other beneficiaries under the will similarly situated. The defendants are the surviving executors and trustees under the will of Mr. Richardson and the Vick Chemical Company, a Delaware corporation, which has succeeded to the rights and liabilities of the original corporation which issued the stock.
Plaintiffs complained, as to a portion of the stock, of a sale to create assets to pay debts and, as to the remainder, of a transfer to the children of Mr. Richardson under a sale by the trustees in breach of trust for the purpose of raising funds, not for the purposes of the trust, but for the erection of a church building. The District Court held that a trust had been created by the will of Mr. Richardson, that plaintiffs were bound by the action of the state court with respect to the portion of stock sold to create assets to pay debts, that the remainder of the stock had been transferred in derogation of the trust, that the rights of plaintiffs with respect thereto were not barred by the statute of limitations, by laches or by estoppel, and that plaintiffs were entitled to recover of defendants on the basis of the value which the stock had attained as the result of various business expansions and reorganizations, subject, however, to a set off of the amount received by the trustees from the sale made in breach of trust with interest on such amount from the date of sale.
Plaintiffs contend on appeal that a trust should be declared with respect to the stock sold to create assets to pay debts, as well as to that sold by the trustees and transferred to the children of Mr. Richardson, and that no set off should be allowed on account of the amount received from the sale in breach of trust of the remainder of the stock, since the trust received no benefit from the transaction. Defendants contend that no trust was created by the will but that an outright gift was made to the First Presbyterian Church, that the sale by the trustees of the church was valid and binding upon plaintiffs, that plaintiffs are barred of recovery by the statute of limitations, by laches and by estoppel, and that, at all events, recovery should not include accretions to the stock or amounts paid on stock retirements, where these represent earnings accrued during the estate of the life tenant.
The will in question was executed in the year 1917. At that time, Lunsford Richardson, the testator, was the owner of a 51/100 interest in the Vick Chemical Company, a partnership, in which the remaining 49/100 interest was owned by his two sons J. H. Smith Richardson and Lunsford Richardson, Jr., defendants herein. By the terms of the will, testator gave a 3/100 interest in the company to J. H. Smith Richardson, a 10/100 interest to Lunsford Richardson, Jr., and a 10/100 interest to each of his three daughters for life with remainder to their children and with provision that the share of each daughter was to be held in trust for her for a period of ten years. The remaining 8/100 interest he gave to his wife for life, with remainder as to 3/100 to the Trustees of the First Presbyterian Church with direction that "the profits or dividends arising therefrom be used by the said Trustees for the benefit of Home and Foreign Missions and the benevolent causes of the church, in such proportion as the trustees deem best". The remainder in the remaining 5/100 interest was given to the children in equal shares after the death of the wife. The real estate and all the personal property other than the interest in the Vick Chemical Company was given in trust to Mrs. Richardson for life with remainder to the children. Mrs. Richardson, J. H. S. Richardson, and Lunsford Richardson, Jr., were appointed executors under the will and trustees of the trusts created for Mrs. Richardson and for the daughters. The paragraph of the will creating the trust here in controversy is the fifth paragraph and is as follows:
As bearing upon the intention of the testator with respect to the duties imposed upon the trustees of the church by this paragraph of the will, the thirteenth paragraph which gives a bequest of $2,000 to the trustees upon a similar trust should be considered. That paragraph is as follows: "Thirteenth: I hereby direct that my executors shall out of the estate of which I may die seized and possessed pay all my just debts and funeral expenses, and thereafter pay to the Trustees of the First Presbyterian Church of Greensboro the sum of Two Thousand Dollars, to be held by them absolutely and invested, and the proceeds arising from such investment I desire that they shall devote annually to the benevolent causes of the church in such proportion as to the said Trustees may seem best."
After the provisions disposing of testator's interest in the Vick Chemical Company, the will contains the following provision as to sale by devisees of their interests: . * * *"
With respect to "Home and Foreign Missions and the benevolent causes of the church", the court below made the following finding, viz.:
Testator had long been a devout member of the...
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...act or refuse to act in analogy to[ ] the statute of limitations relating to actions at law of like character." See King v. Richardson , 136 F.2d 849, 862 (4th Cir. 1943) (cleaned up). And here, Steves filed suit less than four years after the merger closed.14 The district court's award of ......
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