May v. Hunt, 52215

• Decision Date: 14 October 1981
• Docket Number: No. 52215,52215
• Citation: 404 So.2d 1373
• Parties: Anthony Ray MAY, Executor of the Estate of Carl C. May, Deceased v. David R. HUNT, Guardian Ad Litem for Anthony Barrett May, et al., Minors.
• Court: Mississippi Supreme Court

Page 1373

404 So.2d 1373

Anthony Ray MAY, Executor of the Estate of Carl C. May Deceased v. David R. HUNT, Guardian Ad Litem for Anthony Barrett May, et al., Minors.

No. 52215.

Supreme Court of Mississippi.

Oct. 14, 1981.

Dulaney & Dulaney, William P. Dulaney, Tunica, for appellant.

Sullivan, Hunt, Spell, Shackelford & Henson, David R. Hunt, Clarksdale, for appellee.

En Banc.

WALKER, Justice, for the Court:

Anthony Ray May, the executor of the Estate of Carl C. May, filed a petition for the construction of his father's will in the Chancery Court of Coahoma County, Mississippi. He sought to have declared invalid a trust created by the will, contending said trust was in violation of the rule against perpetuities. The chancellor held that the trust created by the will did not violate the rule against perpetuities and ordered that the trust be given full effect in the administration of the estate. The executor has appealed.

Carl C. May died testate on March 23, 1973, survived by seven children who are the beneficiaries of the trust in question: Anthony Ray May (executor), Tony C. May, Rickey L. May, Pamela Joy May, Sheila Ann May, Dianne May, and Carl May, Jr. The testator left all his property, real and personal, to his seven children to share equally per stirpes, "to be held in trust ... until the year 2022, for their use and benefit to sell and dispose of and do any and all other acts that they may desire so long as they shall live."

The decedent's widow, Louise J. Wilson May, renounced the will and claimed a widow's share. She subsequently was paid the sum to which she was entitled and it is stipulated that she has no further interest in the administration of the estate. Other interested parties include five grandchildren of the decedent. The chancellor appointed David Hunt as guardian ad litem for these grandchildren and any unborn grandchildren or descendants of May's seven children.

The pertinent provisions of the last will and testament of Carl C. May are as follows:

ITEM III.

I hereby give, devise and bequeath unto my children, TONY C. MAY, ANTHONY RAY MAY, RICKEY L. MAY, PAMELA JAY MAY, ALIELIA ANN MAY, DIANNE MAY, AND CARL MAY, JR. to share equally, per stirpes, all of my property, both real, personal, and mixed, of whatsoever kind and nature and wheresoever situated including lapsed legacies and bequests of which I

shall die seized or possessed or to which I shall be entitled at the time of my death or over which I shall have any power of appointment, to be held in trust in accordance with Item # IV. until the year 2022, for their use and benefit to sell and dispose of and do any and all other acts that they may desire as long as they shall live. (NOTE: Alielia Ann May referred to above is Sheila Ann May; Pamela Jay May referred to above is Pamela Joy May).

ITEM IV.

CARL C. MAY TESTAMENTARY TRUST

ITEM IV.: I, CARL C. MAY hereby give, devise and bequeath to CHARLES C. FINCH AND OR D. BRIGGS SMITH, all my estate of whatsoever kind and nature and wheresoever situated; IN TRUST for the use and benefit of my children, TONY C. MAY, ANTHONY RAY MAY, RICKEY L. MAY, PAMELA JAY MAY, ALIELIA ANN MAY, DIANNE MAY and CARL MAY, JR. per stirpes, subject to the following provisions:

(a) Said trustee, shall take possession of all my estate, hold, manage, invest and reinvest and keep the same invested, and collect and receive the interest and income thereof for and during the period of the existence of the trust hereby created, and after paying all costs and expenses incident to the execution of this trust, shall until the year 2022 use the income from my estate, for the support, maintenance, care and education of my said children, per stirpes, paying such amounts as may be necessary for said purpose, in the discretion of said trustee either direct to my children, per stirpes, as may be deemed best by such trustee.

(b) After the year 2021 my executor and trustee shall transfer, convey and pay over the corpus of said trust with all gain, increases and accumalations (sic), if any, to my said children per stirpes, absolute and forever.

(c) My Testamentary Trustee with regard to the administration of my property placed in trust under this will, shall have full and complete power and authority to do any and all things deemed by him necessary and for the best interest of my estate and the beneficiaries of this will and trust as fully as I might do if living. Said powers shall include but not be limited to the power to sell property of all kinds and description; to buy property of all kinds and description; to borrow money and give liens on any property in my estate or any trust, and to enter into any and all kinds of contracts and agreements. It is my intention that the testamentary trustee shall have the fullest possible powers and shall exercise them without necessity of court authorization.

In his petition for the construction of the will, the executor requested the court to hold the testamentary trust created by Item IV of the will to be void and to declare the children owners in fee simple absolute, free and clear of the trust. The guardian ad litem filed an answer asking that the will's trust provision be upheld because the interests created by the trust were vested interests, not contingent interests, and thus not in violation of the rule against perpetuities.

The lower court, relying on Carter v. Berry, 243 Miss. 321, 136 So.2d 871, sugg. of error overruled, 140 So.2d 843 (1962), upheld the validity of the trust. Citing the elementary principle that the rule against perpetuities does not apply to vested interests, the Court found that the legal and beneficial interests in the trust vested immediately on the death of the testator.

The sole issue presented by this appeal is whether or not the provisions of this will violate the rule against perpetuities. A classic formulation of the rule is: "No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being after the creation of the interest." Gray, The Rule Against Perpetuities, § 201 (4th ed. 1942). Another definition is that stated in Magee v. Magee, 236 Miss. 572, 111 So.2d 394 (1959) as follows:

"The rule against perpetuities prohibits the creation of future interests or estates which by possibility may not become vested "No limitation of a present life estate, or a present term of not more than twenty-one years, can be bad for remoteness." Gray, The Rule Against Perpetuities, Fourth Edition, p. 228, sec. 225. (236 Miss. at 591-592, 111 So.2d 394).

within a life or lives in being at the time of the testator's death or the effective date of the instrument creating the future interest, and twenty-one years thereafter, together with a period of gestation when the inclusion of the latter is necessary to cover cases of posthumous birth." 41 Am.Jur., 50, Perpetuities and Restraints on Alienation, par. 3A.

The rule is not concerned with the postponement of the full enjoyment of a vested estate. It deals with remoteness of vesting and not with the duration of vested interests. Phelps v. Shropshire, 254 Miss. 777, 183 So.2d 158 (1966). In that case the Court also noted that "(a) trust is not invalid either in whole or in part merely because the duration of the trust may exceed the period of the rule against perpetuities, provided that the interests of all the beneficiaries must vest within the period. 1 Restatement (Second), Trusts § 62 at 168 (1959); 2 Restatement (Second) Trusts § 365 (1959)." See also, 1 Scott on Trusts § 62.10 (2d ed. 1956).

It has also been stated: "A strict and technical application of the rule against perpetuities does not involve any limitation on the permissible duration of a validly created trust, as long as the interests of the cestuis will necessarily vest, if ever, within the period prescribed by the rule...." 70 C.J.S. Perpetuities § 27 (1951).

The above stated principles are firmly embedded in our jurisprudence and are not questioned by the appellant. However, the appellant strenuously argues that the repeated use by the testator of the phrase "per stirpes" indicates the testator's intent to provide for contingent beneficiaries in the year 2022, these beneficiaries being the descendants of his children, per stirpes, living on January 1, 2022. He argues that the final beneficiaries of the trust do not have a vested interest because if one of the children should die before distribution of the estate, then the interest of that child would be defeated. If we understand this argument correctly it is that the use of the phrase "per stirpes" creates an implied condition that the children must survive the termination of the trust. This is not so.

At the outset, two cardinal rules of construction should be noted. In construing a will, the intention of the testator is controlling, unless the intention is invalid under the law. Also, the law favors the vesting of estates at the earliest time possible, and whenever there is doubt as to whether an interest is vested or contingent, the court will construe it as vested. With these rules of construction in mind and for the reasons which follow, we hold that the rule against perpetuities does not apply in this case.

The most comprehensive discussion of the law in Mississippi on the rule against perpetuities is that contained in Carter v. Berry, supra. The will in that case, in essence, left eighty percent of the testator's estate to trustees. The trust was to continue as an active trust, and to terminate "when my youngest grandchild (whether now living or hereafter born) shall become twenty-five years of age; provided, however, that in no event shall said trust continue for a longer period than twenty-five years from the date of this (will)." Upon termination of the trust, the trust estate remaining was to be "transferred, delivered over, divided and distributed by my trustees to my said grandchildren per capita." The will stated...