King v. Richardson

• Decision Date: 20 July 1942
• Docket Number: No. 128 G-Civil.,128 G-Civil.
• Citation: 46 F. Supp. 510
• Court: U.S. District Court — Middle District of North Carolina
• Parties: KING et al. v. RICHARDSON et al.

46 F. Supp. 510

KING et al. v. RICHARDSON et al.

No. 128 G-Civil.

District Court, M. D. North Carolina, Greensboro Division.

July 20, 1942.

COPYRIGHT MATERIAL OMITTED

Brooks, McLendon & Holderness and R. R. King, Sr., all of Greensboro, N. C., and Charles G. Rose, of Fayetteville, N. C., for plaintiffs.

Clifford Frazier, R. M. Robinson, Huger S. King, and R. R. King, Jr., all of Greensboro, N. C., for defendants.

HAYES, District Judge.

This unfortunate litigation finds its origin in the divergent interpretations by eminent lawyers of North Carolina of Item V of the last will and testament of the late Lunsford Richardson. He was the founder of Vick Chemical Company. When his will was written in 1917, he and his sons Smith and Lunsford, Jr., were conducting the business as a partnership in which he owned 51%. Before his death in 1919, the business was incorporated but the stock had not been issued. He was not only a successful business man but an outstanding lay leader and active worker in the Presbyterian denomination. Besides taking active part in Sunday School and church work of the local church at Greensboro and acting as one of its officers, he represented the church as delegate at various meetings of the denomination both in the state and the Southern Assembly. He was thoroughly familiar with the church's activities and functions, the causes sponsored by the denomination and the methods employed to accomplish its numerous undertakings.

He employed Mr. A. L. Brooks, also an active member and officer of that church, to write his will. After his death in 1919, the will was probated and his sons Smith and Lunsford, the designated executors and his wife, as executrix, qualified and acted as his personal representatives until Mrs. Richardson died in 1940.

Mr. Richardson recognized that the business which he had founded had a bright future. It had earned vast sums during his life and with proper management he foresaw continued success. There were two objects of his bounty — his family and the benevolent causes of the Presbyterian Church. He specified that his sons should have unhampered control and management of the business. He gave all of his 51/100 of the company to his two sons and three daughters except 8/100, but he appointed his sons and widow trustees to hold the shares of his daughters for twenty years, later changing it to 10 years.

Item V of the will is as follows: "Fifth: I give and bequeath to my beloved wife, Mary Lyn Richardson, eight one-hundredths interest in the Vick Chemical Company. At the death of my said wife it is my desire that of the said eight one-hundredths so devised to her, three one-hundredths thereof shall be and become absolutely the property of the Trustees of the First Presbyterian Church, and the profits or dividends arising therefrom shall be used by the 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 remaining five one-hundredths interest I desire to be distributed equally among my five children, herein named, each receiving one share thereof in fee simple."

In Item VIII, after providing for the payment of debts, etc., he directs his executors to "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 said trustees may seem best." The latter gift was immediate, while that under Item V was deferred until the death of Mrs. Richardson.

It is contended by the plaintiffs that a trust was created in the trustees to hold the corpus for the designated causes and to distribute income therefrom annually among the causes as the trustees deem best, while the defendants contend that the gift is free from trust to the First Presbyterian Church of Greensboro. In 1923, before the termination of the life estate, the interest was sold under the order of the church acting by its board of deacons and elders who directed the trustees to convey it to Mrs. Richardson for $45,000. It is necessary to decide the nature of the interest held by the trustees and their power under the will to sell it.

We must decide the question under the law of North Carolina. Neither party has cited any North Carolina case exactly like the one here involved. There are general principles often announced by the Supreme Court which point the way for our decision.

The controlling principle in the interpretation of wills is that the intention of the testator as expressed in the language of the will shall prevail. Where that intention substantially appears in the language of the will, courts shall not apply technical rules to defeat it. Williamson v. Cox, 218 N.C. 177, 10 S.E.2d 662. Applying this principle to the will here, the language of the will, in so far as it deals with gifts to the trustees, in Items V and XIII, plainly provides that the gifts are to the trustees of the First Presbyterian Church who are directed to use the income only for the benevolent causes of the church in such proportion as the trustees deem best. Ordinarily trustees of a church hold church property for it and subject to its will, and generally property conveyed to such trustees will be deemed the property of the church of which they are trustees. It does not follow, however, that they could not hold property in another manner. The testator, by signing the will made it his language, but the language was placed there by a lawyer of this state. Both lawyer and the testator knew the church of which they were members; they knew the trustees and the manner of selecting their successors. If the testator had intended to give the property to the First Presbyterian Church of Greensboro in absolute ownership, free to do as it pleased with it, surely a layman without the aid of a lawyer could have found simple language to express such an intention. It is to be noted that there is an absence of a power of sale of the corpus in each item but there is a command what is to be done with the income from the corpus. It is to be distributed annually not by the deacons or elders or the congregation, but by the trustees.

That church had three trustees. They were three of the leading men of Greensboro and of that church. At the time of the making of the will, one of them was R. R. King, an outstanding lawyer; R. G. Vaughn, a distinguished business man and banker; the other an executive of a life insurance company — all three of the highest character. There were many deacons and elders and an enormous congregation. When the testator directed that the trustees, as distinguished from the deacons and elders and the congregation, should distribute the income among the benevolent causes of the church his language negatived an intention to place the corpus or income under the control of the church. As a business man he preferred to vest the management in the hands of three men rather than entrust it to a larger number. It seems clear that the gift was to the trustees in the manner stated, and not to the church.

The defendants contend that no trust was created because (1) No sufficient words were used to raise a trust; (2) no certain charitable objects are named; (3) no cause is named capable of enforcing a lawful claim; (4) no method is provided whereby the objects of the testator's bounty may be definitely ascertained and the ultimate purpose of his bounty effectuated; (5) the funds would be left to the uncontrollable discretion of the trustees' donee or donees with no administrative supervision and rely on St. James Parish v. Bagley, 138 N.C. 379, 50 S.E. 762, 107 Am.St. Rep. 548, and Williams v. Thompson, 216 N.C. 292, 4 S.E.2d 609, 610.

The law of this state is well stated in the case last cited. "In order that a trust may arise from the use of precatory words, the court must be satisfied from the words themselves, taken in connection with all of the other terms in the disposition that the testator's intention to create an express trust was as full, complete, settled and sure as though he had given the property to hold upon a trust declared in express terms in the ordinary manner." It is not necessary, however, that any particular form of words be employed to create a trust. If the intention of the donor to create a trust appears from the language of the will itself, the law requires nothing more. Justice Matthews in Colton v. Colton, 127 U.S. 300, 8 S.Ct. 1164, 1168, 32 L. Ed. 138 said: "If it appear to be the intention of the parties from the whole instrument creating it, that the property conveyed is to be held or dealt with for the benefit of another, a court of equity will affix to it the character of a trust, and impose corresponding duties upon the party receiving the title." Thomas v. Clay, 187 N.C. 778, 122 S.E. 852; Laws v. Christmas, 178 N.C. 359, 100 S.E. 587; Scott on the Law of Trust, Vol. 3, sec. 351.

In Item one of the will the testator, among other things, said: "In whatsoever form the business may continue, either as a partnership or corporation, it is my wish that my two sons, J. H. Smith Richardson and Lunsford Richardson, Jr., shall continue in the exclusive and undisturbed management of the same, and that all my capital and interest in the concern be continued therein. And should the business continue as a partnership, then my interest therein shall be chargeable for its debts and liabilities."

Item II gives 3/100 interest to J. H. Smith Richardson; Item III gives 10/100 interest to Lunsford Richardson, Jr.; Item IV gives each of his three daughters 10/100 interest; Item VI makes disposition of shares to daughters upon death of either; Item VII establishes a formula for ascertaining the value in the event he or she desires to sell with the requirement that the other donees be given the option to...