Spencer v. McCleneghan

• Court: North Carolina Supreme Court
• Writing for the Court: CLARKSON, J.
• Citation: Spencer v. McCleneghan, 202 N.C. 662, 163 S.E. 753 (N.C. 1932)
• Decision Date: 27 April 1932
• Docket Number: 464.
• Parties: SPENCER et al. v. McCLENEGHAN et al.

163 S.E. 753

202 N.C. 662

SPENCER et al. v. McCLENEGHAN et al.

No. 464.

Supreme Court of North Carolina

April 27, 1932

Appeal from Superior Court, Mecklenburg County; Cowper, Special Judge.

Action by J. Leak Spencer, Jr., Laura Spencer McCleneghan and husband, and Olive Shull Spencer, against Laura Dwelle McCleneghan and the Commercial National Bank of Charlotte, N C., executor and trustee under the will of J. Leak Spencer deceased, brought to have the court approve a contract entered into by petitioners in reference to the distribution of the estate of said decedent, in which action H. Eugene Kiser was appointed guardian ad litem for respondent McCleneghan, a minor, and for the unborn children of first two named petitioners. From a judgment confirming and approving such contract, the bank appeals.

Affirmed.

Equity held to have jurisdiction of action to have contract between life tenant and remaindermen, settling dispute respecting distribution under testamentary trust approved.

Equity favors amicable adjustments of family disputes respecting will.

The judgment of the court below is as follows:

"This cause coming on to be heard at the December, 1931, Special Term of Mecklenburg Superior Court, before his Honor, G. V Cowper, Judge, and being heard upon the petition and the answer of the guardian ad litem of the infant respondent Laura Dwelle McCleneghan, and the unborn children of Laura Spencer McCleneghan and J. Leak Spencer, Junior, and the answer of the Commercial National Bank of Charlotte, N. C., Executor and Trustee under the will of J. Leak Spencer, and upon the evidence introduced before the Court in the cause, the following facts are found by the Court:

"(1) That J. Leak Spencer, late of the County of Mecklenburg, State of North Carolina, died on the 4th day of July, 1930, leaving a last will and testament which has been duly admitted to probate in the Superior Court of Mecklenburg County, which last will and testament names the Commercial National Bank of Charlotte, N. C., as executor and trustee, and the said Commercial National Bank of Charlotte, N. C., has duly qualified and is now acting executor and trustee under said will.

"(2) That Olive Shull Spencer is the widow of J. Leak Spencer, deceased, and J. Leak Spencer, Jr., and Laura Spencer McCleneghan are the only children of said J. Leak Spencer, deceased.

"(3) That the respondent Laura Dwelle McCleneghan is the only child now living of the petitioner, Laura Spencer McCleneghan, she being a minor of the age of five years, and that J. Leak Spencer, Jr., has no children at this time.

"(4) That under the will of J. Leak Spencer, deceased, the entire estate of said J. Leak Spencer, deceased, was left to the said Commercial National Bank of Charlotte, N. C., Executor and Trustee, in trust, with the direction to said executor and trustee to pay over to Olive Shull Spencer, wife of J. Leak Spencer, deceased, during her life time, all of the income of said estate as received, with the proviso that in case said income, in any year be less than $500.00 per month the executor and trustee should sell such of the principal of the estate as might be necessary in order to pay said Olive Shull Spencer, in quarterly payments, sufficient amounts to bring her total receipts to $500.00 per month, with further direction to said executor and trustee, upon the death of said Olive Shull Spencer, to pay over to the children of said J. Leak Spencer, deceased, share and share alike, the income from said estate, as the same should be received, until the youngest of said children shall have reached the age of forty years, at which time said executor and trustee is directed to turn over to them, share and share alike, the corpus of said estate, with an additional proviso that should any of said children die leaving issue before the time specified under the will for a division of said estate, such issue shall represent the deceased child, both in receipt of the income and in the division of the corpus of the estate, as provided for in said will.

"(5) That the said Laura Spencer McCleneghan may have other child or children hereafter born to her, and also the said J. Leak Spencer, Jr., may also hereafter have a child or children born to him who might be entitled to participate in the income or final division of the corpus of said estate.

"(6) That the estate of J. Leak Spencer, deceased, consists principally of real estate in the City of Charlotte, and in stocks in industrial enterprises and corporations located in the City of Charlotte and in the County of Mecklenburg.

"(7) That the value of said estate is approximately one hundred thirty thousand dollars.

"(8) That the net income from said estate, since the death of said J. Leak Spencer, Jr., less the costs and expenses of collection, administration, taxes, etc., has been at the rate of $4,556.94 per year, which sum is insufficient to pay to the said Olive Shull Spencer the sum of $500.00 per month, as provided in said last will and testament, and it is not probable that the net income from said estate will at any time in the near future, if ever, be as much as six thousand dollars per year, or an amount sufficient to pay the said Olive Shull Spencer the sum of $500.00 per month, as provided in said will, and if the said sum of $500.00 per month should be paid to said Olive Shull Spencer, as provided in said will, it will be necessary from time to time to invade and sell a portion of the capital or corpus of said estate in order to make up for the deficiency in said income.

"(9) That due to the nature of the assets belonging to said estate and to the financial conditions existing, a sale of any of the capital assets or corpus of said estate could not be made at a fair and reasonable value and if such sale should be required or made it would have to be at great sacrifice and loss to the estate.

"(10) That the said Olive Shull Spencer, widow, is forty-five years of age, and under the mortuary tables set forth in Section 1790 of the Consolidated Statutes of North Carolina, she has a reasonable expectancy of 24.5 years; that the said Olive Shull Spencer is in apparent good health and from her appearance, and from the evidence as to her physical condition, it is reasonable to suppose that she will live out said expectancy; that if she should live out said expectancy it would be necessary, in order for the executor and trustee to pay her the sum sufficient to make her income amount to $500.00 per month, as provided by said last will and testament, that the capital assets and corpus of said estate be invaded and sold to a large extent and that the capital assets and corpus of said estate would be thereby reduced in an amount not less than thirty thousand dollars.

"(11) That the income from said estate, since the death of J. Leak Spencer, has been $7,956.95, of which sum $2,564.64 has been paid to Olive Shull Spencer and $5,392.30 is still held and retained by the said executor and trustee, all of which sum, less expenses and taxes in the approximate sum of one thousand two hundred ($1,200) dollars, would be payable under the terms of said will to Olive Shull Spencer, and that the payment of said sum would leave a deficiency at the present time in the amount due her under the terms of said will, which would have to be realized from the corpus of said estate in the sum of $2,243.05.

"(12) That the said Olive Shull Spencer has proposed and agreed that if she be paid the sum of fifteen thousand ($15,000.00) dollars in cash at this time out of the accrued income and capital assets of said estate, and if the petitioner J. Leak Spencer, Jr., shall also be paid at this time the sum of two thousand ($2,000.00) dollars, and if the said Laura Spencer McCleneghan shall have canceled and delivered to her at this time a certain deed of trust and note secured thereby in the sum of $4,500.00 with all accrued interest executed by said Laura Spencer McCleneghan and her husband, F. A. McCleneghan and now held by said executor and trustee as a part of said estate, and if certain personal jewelry, consisting of a watch, a diamond stick pin, and a set of diamond cuff links, now held by said executor and trustee, be divided and delivered as follows, namely: The said watch to Olive Shull Spencer, the diamond stick pin to Laura Spencer McCleneghan, and the diamond cuff links to J. Leak Spencer, Jr., she will thereupon waive her right to have the corpus of said estate further invaded or sold in order to supplement any income which may be derived from said estate, and that she further agrees that she will thereafter, of the net income to be derived from said estate, less costs of collection, administration charges and taxes, accept three-fifths thereof, and the other two-fifths of said net income to be paid to Laura Spencer McCleneghan and J. Leak Spencer, Jr., or their legal representatives, or in case of their death, to the ultimate beneficiaries under said will, provided, however, if said three-fifths of the net income shall be insufficient to pay to the said Olive Shull Spencer $325.00 per month, the said Olive Shull Spencer shall nevertheless receive, as a minimum income, the said sum of $325 per month, the deficiency to be made up out of the other two-fifths of said income, which said two-fifths thereof shall be reduced accordingly, but if thereafter the income from said estate shall be sufficient that three-fifths thereof shall amount to more than $325.00 per month, the said Olive Shull Spencer shall nevertheless receive only $325.00 per month until such time as the amount theretofore deducted from the two-fifths in order to make up the deficiency of her minimum income of $325.00 per month has been repaid to said Laura Spencer...