Stephens v. Stephens

• Decision Date: 11 February 1963
• Docket Number: No. 21937,21937
• Citation: 218 Ga. 671,130 S.E.2d 208
• Parties: Rob Roy STEPHENS, by Guardian, et al. v. Grace Moore STEPHENS et al., Trustees.
• Court: Georgia Supreme Court

Page 208

130 S.E.2d 208

218 Ga. 671

Rob Roy STEPHENS, by Guardian, et al. v. Grace Moore STEPHENS et al., Trustees.

No. 21937.

Supreme Court of Georgia.

Feb. 11, 1963.

Rehearing Denied Feb. 25, 1963.

Syllabus by the Court

1. (a) It is the duty of this court to effectuate the intent of the testator insofar as his intent is consistent with established rules of law.

(b) The testator intended to create a trust for the benefit of his window for her life.

(c) A resulting trust of the remaining portion of the trust estate after the termination of the trust will be implied for the benefit of the testator's estate where, as here, the testator in one provision of his will creates a trust for the benefit of a person for her life and makes no express disposition of that remaining portion but by the residuary clause of his will disposes of all the residue of his estate. The reason for the rule is that intestacies in construing wills are not favored and it will be presumed that the testator intended by his will to dispose of his entire estate.

2. (a) Whether or not the testator's intent to create a trust for the benefit of his widow for her life may be effectuated depends upon the law in force at the time of the testator's death.

(b) Under the law of Georgia in force at the date of the testator's death, a trust estate could not be created in property for the sole benefit of an adult who was sui juris and who was not a spendthrift.

(c) The trust will not remain executory pursuant to Code § 108-111 on the theory that 'something remains to be done by the trustee * * * the doing of which requires him to retain the legal estate,' to wit: the trustees are directed to exercise a discretion to encroach upon the corpus of the trust fund 'to meet any emergency which might beset * * * [the widow], or to maintain her in the manner in which she is accustomed to living,' for the reason that it is not necessary that the trustees retain the legal estate in order to exercise the discretionary power to encroach.

3. (a) The trust being executed, the intended life income beneficiary takes a legal estate equivalent to the equitable estate she was intended to have, to wit: a legal life estate. The reversionary interest in fee in the trust property passed by an implied resulting trust to the testator's estate and thence by the residuary clause of his will to his residuary legatees.

(b) The fact that the trustees were given a power to encroach upon the corpus of the trust for the benefit of the life beneficiary does not have the effect of increasing her legal life estate (the trust having executed) into a fee.

(c) The reversion in fee taken by the residuary legatees is subject to being partially or totally divested upon the exercise by the surviving trustee of the simply collateral power to encroach upon the fund for the benefit of the life tenant.

(d) Protection of the liquid assets in the hands of the life tenant by requiring bond or otherwise is a matter for the trial court in the first instance and not for this court except on review.

W. P. Stephens died testate in 1946 and his will was admitted to probate during that year. Paragraph 6 of his will provides as follows: 'I further direct that a fund of Thirty Thousand Dollars made up of either cash or securities be held in trust by the Citizens and Southern Bank of Atlanta, and my brothers, Rob and Roy Stephens, as trustees, the income of which is to be paid to my wife, Mrs. Grace Moore Stephens, so long as she may live. I give the trustees in their discretion the right to encroach upon the principal amount in this fund to meet any emergency that may beset my wife or to maintain her in the manner in which she is accustomed to living. As I have made provision for her with the amount of Twenty Thousand Dollars insurance, this should be ample to provide her with the comforts and necessities of life during the remaining years of her existence on earth.' The will makes no express disposition of the remainder interest in the trust res, but paragraph 12 of the will provides: 'I give the balance or residue of my estate, wherever and whatever it may consist of, to my brothers, Rob and Roy Stephens, share and share alike.' The testator's brothers Rob and Roy survived the testator but died thereafter.

Mrs. Grace Moore Stephens made a written demand upon the Citizens & Southern National Bank of Atlanta as surviving trustee to deliver over to her in fee the corpus of the trust because the trust had become executed by operation of the Statute of Uses as codified in Georgia. The bank as trustee brought this petition for construction of the will and for direction as to the rights and interests of the various parties defendant, who are Mrs. Grace Moore Stephens and the various successors in interest of the residuary legatees Rob and Roy Stephens.

Mrs. Grace Moore Stephens and the successors in interest of Rob and Roy Stephens filed their answers to the petition. The case was submitted to the court without a jury upon the verified pleadings and certain stipulations of fact. The court held that the trust created by paragraph 6 of the will was executed by operation of law immediately upon the death of W. P. Stephens, that Mrs. Grace Moore Stephens was entitled to the corpus of the trust in fee, and directed the trustee to deliver the same to her after deducting costs and expenses.

The various successors in interest of Rob and Roy Stephens except to that judgment.

Henry M. Quillian, Jr., Roland P. Smith, Bryan, Carter, Ansley & Smith, Atlanta, for plaintiff in error.

Eugene Black, Albany, J. Winston Huff, Powell, Goldstein, Frazer & Murphy, Atlanta, for defendant in error.

MOBLEY, Justice.

1. It is the duty of this court to effectuate the intent of the testator insofar as his intent is consistent with established rules of law. Code § 113-806; Edmondson v. Dyson, 2 Ga. 307, 312(2); Stringfellow v. Harman, 207 Ga. 62, 64, 60 S.E.2d 139.

The language used by the testator in paragraph 6 of his will clearly manifests his intent to create a trust which would continue only during the life of his widow. He directed that the income of the trust be paid to her 'so long as she may live.' This is a clear expression of intent to create a testamentary trust for the benefit of the widow for her life. In several paragraphs of his will the testator gave specific legacies to his widow. This shows that he knew how to make outright gifts to her when he so desired and intended.

The testator failed to make an express disposition of the remainder interest in the fund upon the termination of the trust. 'Where a trust is expressly created, but no uses are declared, or are ineffectually declared, or extend only to a part of the estate, or fail from any cause, a resulting trust is implied for the benefit of the grantor, or testator, or his heirs.' Code § 108-106(4). 'An implied trust is sometimes for the benefit of the grantor, or his heirs, or heirs or next of kin of a testator, and is then a resulting trust.' Code § 108-110. The former section of the Code states that a resulting trust may be implied for the benefit of the testator or his heirs, while the latter section states that an implied trust is sometimes for the benefit of certain enumerated persons, including the heirs or next of kin of a testator, and is then a resulting trust, but makes no reference to such a trust for the benefit of a testator. However, the latter section does not appear to be a complete enumeration of those persons for whom a resulting trust may be implied because by stating that such a trust is sometimes for the benefit of the thereinafter enumerated persons it implies that sometimes such a trust may be for the benefit of others. Code § 108-106(4) expressly states that a resulting trust may be implied for the benefit of a testator, and Code § 108-110 cannot be construed as forbidding such a trust for such a person.

A resulting trust will be implied for the benefit of the testator, which of course means the testator's estate, rather than for the benefit of his heirs or next of kin when his will contains a residuary clause which disposes of all the rest or residue of his estate, a trust having been created in another provision of his will but no express disposition of the remainder thereafter having been made. Contrast the residuary clause in W. P. Stephens' will with the residuary clause construed in First National Bank of Brunswick v. Stewart, 215 Ga. 141, 109 S.E.2d 606. Intestacies are not favored in construing wills. Gilmore v. Gilmore, 197 Ga. 303, 314, 29 S.E.2d 74. The law raises a strong presumption against intestacy. Lane v. Citizens & Southern National Bank, 195 Ga. 828, 838, 25 S.E.2d 800. The presumption is that the testator intends by his will to dispose of his entire estate. McDonald v. Suarez, 212 Ga. 360, 361, 93 S.E.2d 16. Since W. P. Stephens failed to dispose of the remainder interest in the trust property after the termination of the trust upon the death of his widow, a resulting trust of that interest will be implied for the benefit of the testator's estate. This reversionary interest being a part of the balance or residue of the testator's estate, it passed by paragraph 12 of his will to his brothers Rob and Roy Stephens, share and share alike. These, then, are the estates which the testator intended to create: a trust for his widow for her life with the unconsumed corpus passing to his brothers in fee upon her death.

2. Can W. P. Stephens' intent to create a trust for the benefit of his widow be given effect? Counsel agree that the decision of this case is to be controlled by the Georgia law as it existed at the time of the testator's death in 1946. Sutton v. Chenault, 18 Ga. 1; Hertz v. Abrahams, 110 Ga. 707(2), 36 S.E. 409, 50 L.R.A. 361; Bussey v. Bussey, 208 Ga. 760, 763, 69 S.E.2d 569; Blanchard v. Gilmore, 208 Ga. 846, 848, 69 S.E.2d 753. Because the decision is controlled by the law as of 1946, we...