Rollins v. May

• Decision Date: 03 April 1978
• Docket Number: Civ. A. No. 77-44.
• Citation: 473 F. Supp. 358
• Court: U.S. District Court — District of South Carolina
• Parties: Virginia Eve ROLLINS and Robert Lee Rollins, Jr., Plaintiffs, v. Annie Pearl S. MAY, Defendant.

473 F. Supp. 358

Virginia Eve ROLLINS and Robert Lee Rollins, Jr., Plaintiffs, v. Annie Pearl S. MAY, Defendant.

Civ. A. No. 77-44.

United States District Court, D. South Carolina, Greenwood Division.

April 3, 1978.

COPYRIGHT MATERIAL OMITTED

Thomas H. Pope, Thomas H. Pope III, of Pope & Schumpert, Newberry, S. C., for plaintiffs.

Judson F. Ayers, Jr., of Watson & Ayers, Greenwood, S. C., for defendant.

ORDER

HEMPHILL, District Judge.

This matter came before this Court for jury trial in Greenville, South Carolina, on March 20, 1978 and March 21, 1978. All of the testimony and evidence have been considered, and the plaintiffs' motion for directed verdict in the amount of Three Hundred Sixty-three Thousand Nine Hundred and no/100 ($363,900.00) Dollars is hereby granted.

There is no dispute as to the facts constituting liability on the part of this defendant to the plaintiffs or as to the amount of damages under the measure of damages which this Court finds to be appropriate. The parties prior to trial entered into extensive stipulations of the uncontested facts, which stipulations were five pages in length and which were admitted into evidence as plaintiffs' Exhibit 34.

To summarize from these stipulations, the defendant Annie Pearl S. May, has been Trustee under the Will of A. C. Stockman at all times from her appointment on February 18, 1938, to the present time. She is sued by the plaintiffs, who are brother and sister and the children of Henrietta Rollins, now deceased, who was the granddaughter of A. C. Stockman. A. C. Stockman, who died on September 13, 1924, left a Will, item eight of which provided:

"All of my real estate of whatsoever kind and wheresoever situate, I will, devise and bequeath unto B. A. Hunter, H. J. Stockman, I. B. Stockman and J. P. Stockman, to have and to hold the same in trust for the following purposes and uses, to wit: . . .

(b) One-fourth of the said real estate shall be set off in kind for the use of H. J. Stockman for and during the term of his natural life, and he shall be allowed to handle, manage, and control the same during his lifetime, collecting the rents and profits therefrom, and paying the taxes and assessments against the same from the rents and profits.

After his death, the said Trustees, or their successors, shall divide the property set off to H. J. Stockman in kind among his children, and the said children shall have the use of the part so set off to each of them for and during the terms of their respective lives, and after the death of such children, or either of them, the parts set off to such child or children shall vest in fee simple in his or her child or children."

Item 12 of the Will of A. C. Stockman provides that the Trustees may, if they deem it advisable, convey any of A. C. Stockman's real estate, in fee simple, "for the purposes only of reinvesting the proceeds of such sale in other real estate" under the terms of the Will.

Item 14 of the Stockman Will provides that on the death of any Trustee, or failure or refusal of any Trustee to act, the child or children of such Trustee may appoint a successor for him. This item further provides that upon failure to exercise the right to appoint said successor Trustee, the Probate Court may make such appointment on the petition of any interested party.

On April 23, 1926, the then Trustees under the Will of A. C. Stockman set off and conveyed to H. J. Stockman one-fourth of the real estate of which A. C. Stockman died seized and possessed.

H. J. Stockman is the grandfather of the plaintiffs herein. He died on April 1, 1927, and was survived by five children: Mary Sue S. Williams, Ernest W. Stockman, Ruth S. Walker, Annie Pearl S. May (the defendant herein), and Henrietta S. Rollins. Ernest W. Stockman was appointed by the children of H. J. Stockman to succeed his father as Trustee, and Ernest Stockman served as Trustee from August 21, 1937, until his death on February 1, 1938.

The defendant Annie Pearl S. May was appointed by her sisters as the successor Trustee to Ernest W. Stockman, her brother, on February 18, 1938. The defendant Annie Pearl S. May has served as Trustee from February 18, 1938, to the present time.

Following the death of H. J. Stockman, the then Trustees divided the property set off to H. J. Stockman under the Will of A. C. Stockman among his above-named five children, but made no deed or instrument in writing showing such division, although each of the children of H. J. Stockman went into possession of the lands set off to them and collected the rents and profits therefrom.

Following the death of Ernest W. Stockman, the then Trustees under the Will of A. C. Stockman—namely, I. B. Stockman, J. P. Stockman, Mary E. Hunter, and the defendant Annie Pearl S. May—instituted an action in the Court of Common Pleas for Greenwood County against the four surviving daughters of H. J. Stockman, who were Mary Sue S. Williams, Ruth S. Walker, the defendant Annie Pearl S. May, and Henrietta S. Rollins, and against the minor children of Ernest W. Stockman, who were Evelyn Stockman, Charles Stockman and Henry Stockman. This suit brought by these Trustees sought confirmation of the division in kind of the property set off to H. J. Stockman among his five children.

The Honorable C. C. Featherstone, Resident Circuit Judge, took testimony and passed a Decree dated April 4, 1938, confirming the division of the Trustees, and setting off to Henrietta Rollins, as second life tenant under the Will of A. C. Stockman, five tracts of lands, referred to as (a) the Boazman tract (333.41 acres), (b) the Gage Street tract, (c) the Plowden Street tract, (d) the Greene Street tract, and (e) the Andrews Lane tract.

In his Order, Judge Featherstone confirmed the appointment of the defendant Annie Pearl S. May as successor Trustee to Ernest W. Stockman and H. J. Stockman, both deceased, under the Will of A. C. Stockman. Judge Featherstone authorized and directed the Trustees under the Will of A. C. Stockman to execute such deeds or instruments in writing to the defendants in that action, as would carry out the terms of the Will of A. C. Stockman.

The defendant Annie Pearl S. May (along with the other then Trustees Mary E. Hunter, I. B. Stockman, and J. P. Stockman) did execute and deliver to the minor children of Ernest W. Stockman, deceased, who were Evelyn Stockman, Charles Stockman, and Henry Stockman, two deeds of conveyance to the lands set aside to them in fee simple under the Will of A. C. Stockman, deceased. Such deeds were dated October 22, 1938 (Exhibit 11) and November 29, 1938.

No deed of conveyance to the land set aside to Henrietta S. Rollins, for herself and her children, under the Will of A. C. Stockman, was ever executed by the then Trustees, including the defendant Annie Pearl S. May. Nor was any deed of conveyance made to the other children of H. J. Stockman for many years.

Pursuant to the terms of the A. C. Stockman Will, the lands set aside to Henrietta S. Rollins were to vest in fee simple in the plaintiffs, her children, as of the time of her death.

From 1938 to 1942, the then Trustees, including the defendant May, executed three deeds of property which was supposed to be set aside to Henrietta Rollins for her life, and then to the plaintiffs, under the Decree of Judge Featherstone. The properties sold were the East Plowden Street tract (1938), the Boazman tract (1939), and the Greene Street lots (1942). In 1938, the plaintiff Eve Rollins was only eight years old, and the plaintiff Robert L. Rollins, Jr., had just been born.

These three conveyances were made by the defendant and the other then Trustees for cash considerations, and on none of these conveyances were the proceeds reinvested for the benefit of Henrietta Rollins or the plaintiffs.

After the present lawsuit was filed, the defendant and the other present Trustees voluntarily conveyed to the plaintiffs the final tract of real property which was supposed to be set aside for Henrietta Rollins. The deed of this Gage Street property was executed on April 19, 1977.

Henrietta Rollins died on January 26, 1975, survived by the two plaintiffs as her only children. At her death all of the property had been sold except the Gage Street property.

All of the other children and grandchildren of H. J. Stockman were treated in strict accordance with the terms of the Will of A. C. Stockman and with the terms of the 1938 Decree. The defendant and the other then Trustees reinvested the proceeds from the sale of properties set aside for every one of the heirs of H. J. Stockman except Henrietta Rollins. The defendant has disregarded and breached her fiduciary duty to the plaintiffs, and she has admitted this. When she sold the aforementioned properties which were supposed to have been set aside for Henrietta Rollins, she never reinvested the proceeds in other real estate, in violation of the express provisions of the Will. She admitted that she knew that the Will required her to so reinvest for the benefit of Henrietta and her children. She further admitted that she was aware that the plaintiffs would have a vested interest in the trust property after their mother's death. Her conduct is legally inexcusable.

It is the law in South Carolina that a trustee, in the management of a trust, must exercise reasonable care, prudence and diligence, and if he departs from the express provisions of the trust instrument, he does so at his peril, and not even good faith nor the exercise of his best judgment will absolve him from liability. Rodgers v. Herron, 226 S.C. 317, 85 S.E.2d 104 (1955). A trustee who violates an express provision of a trust, as the defendant Mrs. May did in the instant case, is absolutely liable for any resulting loss. There is no inquiry into good faith. Klugh v. Seminole Securities Company, 103 S.C. 120, 87 S.E. 644 (1916); Crayton v. Fowler, 140 S.C. 517, 139 S.E. 161 (1927); Rodgers v. Herron supra. It has been stated that...