Tierce v. Macedonia United Methodist Church of Northport

Citation519 So.2d 451
PartiesDon TIERCE and Festus Tierce v. MACEDONIA UNITED METHODIST CHURCH OF NORTHPORT, et al. 86-1003.
Decision Date11 December 1987
CourtSupreme Court of Alabama

J. Paul Whitehurst of Whitehurst & Whitehurst, Tuscaloosa, for appellants.

Gordon Rosen of Rosen, Harwood, Cook & Sledge, Tuscaloosa, for appellees.

HOUSTON, Justice.

This declaratory judgment action was commenced by several plaintiffs, among them the Macedonia United Methodist Church of Northport (the "Church"), who sought the construction of the will of Octavia Hagler and of certain mortgages that she had accepted prior to her death, which occurred on April 6, 1983. The Church contended in its complaint that the will and the mortgages in question established a trust or trusts of the mortgage proceeds in its favor and the plaintiffs named as defendants Hagler's heirs and the executrix of her estate. The Church also contended that the funds making up the trust corpus were being improperly withheld from it by the executrix for the benefit of Hagler's heirs, and it asked the trial court to order that these funds be released to the Church according to the terms of the alleged trust or trusts.

After a hearing at which only documentary evidence was introduced, the trial court ruled in favor of the Church and the Church's fellow plaintiffs, entering a judgment establishing a trust in favor of the Church. Two of the defendants, Don Tierce and Festus Tierce, now appeal from that judgment, asserting that the trial court erred in establishing the trust in favor of the Church. We affirm in part, reverse in part, and remand.

Many of the operative facts in this case concern certain sales of real property by the decedent, Octavia Hagler. A few years prior to her death, she sold four parcels of this property to various purchasers, receiving in exchange four promissory notes providing for annual payments of portions of the purchase price. Each note was secured by a separate mortgage issued to the decedent as a consequence of each transaction. The first such sale was to Bobby C. Hagler, and this sale took place on December 11, 1980. The mortgage securing the debt resulting from this sale provided as follows:

"This mortgage is executed by the Mortgagor and accepted by the Mortgagee with the distinct understanding and agreement that the payments will be paid to the Mortgagee as long as she lives. After the death of the Mortgagee, the balance of the mortgage indebtedness will belong to Macedonia Methodist Church of Northport, Alabama, R.F.D. and the money will be invested by the Church in accounts guaranteed by the Federal Deposit Insurance Corporation and the income will be used for maintaining the Church. The amount paid to Macedonia Methodist Church will be deposited and become a part of the Trust fund administered by the Church and the income from said amount in said Trust Fund will be used for the upkeep of the Church."

Virtually identical language was also placed in the note given as a consequence of this sale.

The second sale took place one week later, on December 18, 1980. This sale was to Joe Hillary Shirley and Jean R. Shirley, and it was also consummated by the giving of a note and mortgage. Each of these documents contained language concerning the mortgage proceeds virtually identical to that contained in the documents issued in the previous sale to Bobby C. Hagler, and the mortgage, like the mortgage from Hagler, was recorded. Henceforth, we will refer to these two sales collectively as the "Hagler-Shirley Transfers."

The third transfer took place on January 29, 1981. In this sale, another parcel of land was conveyed to Ralph Harden and Louise T. Harden. This conveyance, henceforth referred to as the "Harden Transfer," was also consummated by the giving of a mortgage, and, presumably a note, although the note is not part of the record on this appeal. However, none of the language of the Hagler-Shirley Transfers concerning the Church's trust fund was contained in the mortgage relating to the Harden Transfer, nor was there any other indication of a transfer of the right to the mortgage proceeds arising from this sale. 1

The fourth sale was to Rogene S. Tierce and Sybil C. Tierce, and it took place on August 25, 1981. As with the previous sales, the decedent accepted a note and mortgage from the buyers. The mortgage given as a consequence of this sale contained the following language concerning a possible transfer in trust, language which differed significantly from that of the Hagler-Shirley Transfers:

"In the event of the death of Octavia T. Hagler, the balance of the payments are to be made to the Trustee of a Trust which will be set up for the benefit of Macedonia Methodist Church. However, the Mortgagee has the right to cancel this."

The note evidencing the debt resulting from this sale, however, contains no such language. We will subsequently refer to this conveyance as the "Tierce Transfer," bearing in mind that the Tierces who purchased this property are not the parties prosecuting this appeal.

In addition to a consideration of these notes and mortgages, our resolution of this case also depends upon a consideration of the will of the decedent. This will was executed March 24, 1981, subsequent to the Hagler-Shirley and Harden Transfers, but prior to the Tierce Transfer. The pertinent provision of this will provides as follows:


"I now own three mortgages and one or more of them may not be paid in full before my death. Regardless of the statements contained in the said mortgages concerning the payment of balances to the Macedonia United Methodist Church located near Northport, Alabama, on Alabama State Highway 69, I now will to The First National Bank of Tuskaloosa, N.A., as Trustee acting under a certain Trust Agreement entered into and with The First National Bank of Tuskaloosa, N.A., for the purposes stated in said Trust Agreement.

"[The will then identified the three referenced mortgages as being the Hagler-Shirley and Harden Transfers noted above.]

"The Trust Agreement to be made and entered into by me with The First National Bank of Tuskaloosa, N.A., will be in memory of my beloved husband, John M. Hagler." 2

A codicil revoking another section of the will was executed on October 20, 1981.

In addition to the above documents, we will also refer to a trust instrument that appears in the record, although the parties disagree as to whether this document was properly admitted into evidence. This document purports to establish an inter vivos trust with the Church as the beneficiary and the First National Bank of Tuskaloosa as trustee. Importantly, this trust instrument was never executed by the parties, and it is uncontradicted that the inter vivos trust described therein was never actually established by the decedent. We also note that the date of this instrument's drafting can only be narrowed to sometime within the year 1981, which is recited on several occasions in the language of the unexecuted trust instrument.

Construing the unexecuted trust instrument and the will together, the trial court concluded that a valid trust had been created in favor of the Church. The trial court apparently regarded the two documents as together creating a trust that conveyed all the disputed parcels to a trustee for the benefit of the Church. As the following analysis will show, the trial court was in error in reaching this conclusion.

Before proceeding to that analysis, however, we note initially that our standard of review in this case establishes no presumption of correctness in regard to the trial court's judgment. This case involved no oral testimony before the trial court. With the exception of the disputed trust instrument, the evidence was stipulated by the parties. Therefore, we review the case "without any presumption in favor of the trial court's findings." Gibson v. Jones, 293 Ala. 616, 619, 308 So.2d 692, 694 (1975).

I. The Will and Trust Instrument

We begin our analysis with the materials primarily relied upon by the trial court--the will and the trust instrument. We note that the defendants vigorously argue that the trust instrument should not have been considered by the trial court, on the ground that it was not part of the evidence stipulated to by the parties. Because we hold that the trial court incorrectly determined that either of these documents established a trust, we need not consider the defendants' particular argument for excluding the trust instrument, and, for the purposes of this appeal, we will assume that the trust instrument was properly before the trial court.

As has been noted many times by this Court, "[t]he intention of the testator is always the polestar in the construction of wills, and the cardinal rule is to ascertain the intention of the testator and give it effect if not prohibited by law." Mastin v. First Nat. Bank of Mobile, 278 Ala. 251, 257, 177 So.2d 808, 813 (1965); see Ala.Code (1975), § 43-8-222. In ascertaining the testator's intentions, we consider the will as whole, and we may consider the language of the will in light of the facts and circumstances attending its drafting. See, e.g., Mastin v. First Nat. Bank of Mobile, 278 Ala. at 257, 177 So.2d at 813.

Applying these principles to the case at bar, we think it beyond doubt that the testatrix tentatively intended by this will to devise 3 the disputed mortgage proceeds to an inter vivos trust established by the testatrix. The will is unambiguously a "pourover" will, and we may assume that the unexecuted trust instrument represents the contemplated inter vivos trust into which the proceeds noted in "Item Two" of the will were to be devised.

The trust instrument, however, was never executed, nor was the trust referenced therein ever otherwise established by the testatrix. Consequently, we think it clear that this attempted devise fails and that the devise in "Item Two" of the will therefore lapses.

The attempted devise fails...

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