Wachovia Bank & Trust Co. v. Taylor, 667

• Decision Date: 16 June 1961
• Docket Number: No. 667,667
• Court: North Carolina Supreme Court
• Parties: WACHOVIA BANK & TRUST COMPANY, Administrator c.t.a. of the Estate of Haywood M. Taylor, Deceased, v. Alice B. TAYLOR (Widow) et al.

Page 588

120 S.E.2d 588

255 N.C. 122

WACHOVIA BANK & TRUST COMPANY, Administrator c.t.a. of the Estate of Haywood M. Taylor, Deceased, v. Alice B. TAYLOR (Widow) et al.

No. 667.

Supreme Court of North Carolina.

June 16, 1961.

S. C. Brawley, Jr., Durham, for appellants.

Albert W. Kennon, Durham, for defendants-appellees.

MOORE, Justice.

The appellants contend that the court erred 'in concluding and adjudging that the devise of the remainder interest in the real property to the children of Alice Lee Taylor McLeod and Martha Anne Taylor Swayze was in violation of the rule against perpetuities and therefore void.'

There is no appeal from the court's interpretation of the will with respect to the disposition of personal property. The judgment below as to the personal estate is binding on all parties and this phase of the case is not considered and discussed here. Rule 28, Rules of Practice in the Supreme Court, 221 N.C. 562. Furthermore, the rulings as to the personal estate do not affect the rights or interests of the infant defendants or of the unborn children of testator's daughters.

We are here concerned only with the following provision: 'The balance of my estate (real property) I leave in trust to my wife * * * for her lifetime--then in trust to my two daughters * * * for their lifetime, and upon their death their share is to be divided equally between their children when they reach the age of twenty-five years.'

'The paramount aim in the interpretation of a will is to ascertain if possible the intent of the testator.' Entwistle v. Covington, 250 N.C. 315, 318, 108 S.E.2d 603, 606. And the intent of the testator is ordinarily to be ascertained from an examination of the will from its four corners. Bullock v. Bullock, 251 N.C. 559, 563, 111 S.E.2d 837. In construing a will every word and clause will be given effect if possible. Andrews v. Andrews, 253 N.C. 139, 147, 116 S.E.2d 436.

Testator in the devises to his wife and daughters uses the words 'in trust.' Yet an examination of the residuary clause as a whole indicates that no trust was created or intended. Certainly there is no manifest or implied purpose that an active trust be established and a trustee be appointed to manage the real estate for the benefit of widow, daughters, and grandchildren. Ordinarily when property is devised to one 'in trust,' the devisee is the trustee. But when we consider the language of the will in this light we find nothing to indicate an intent on the part of testator that the widow and daughters hold the land in trust during their respective lives for use and benefit of the grandchildren with obligation to account for rents and profits. The will provides that upon the death of the daughters their share is to be equally divided between their children. If testator intended that the daughters have a share which was to pass to the grandchildren after their death, he undoubtedly meant that share to be something more than the bare legal title of a passive trust. The interest of a trustee in a passive trust is a mere formality without substance, for in a passive trust the legal and equitable titles are merged in the beneficiary by virtue of the statute of uses. Phillips v. Gilbert, 248 N.C. 183, 187, 102 S.E.2d 771. 'The Statute of Uses, 27 Henry VIII, preserved in this State by G.S. § 41-7, merges the legal and equitable titles in the beneficiary of a passive trust * * *.' Finch v. Honeycutt, 246 N.C. 91, 99, 97 S.E.2d 478, 484.

The essentials for creation of a trust are: (1) sufficiency of words to raise it, (2) a definite subject, and (3) an ascertained object. Finch v. Honeycutt, supra; Thomas v. Clay, 187 N.C. 778, 122 S.E. 852. In the instant case no trust object is stated even if we concede that the first two essentials appears. No duties are imposed and no beneficiaries are designated, expressly or by implication.

It is clear that testator intended that the widow and, in turn, the daughters, have and enjoy life estates in the land, with the benefits ordinarily accruing therefrom. If the words 'in trust' created any legal estate as distinguished from the use or equitable estate, the two merged so as to vest in the widow and daughters life estates in the usual and ordinary sense. The words 'in trust' as used in this will mean nothing more than that the life tenants pay taxes, not commit waste, and maintain and preserve the property as befits, and is required of, one having a life estate.

We have this situation: A devise to the widow for life, and at her death to the daughters for life, and at their death 'their share is to be divided equally among their children.' The devise of the remainder, subject to the life estates, is to a class (grandchildren). Some of the members of the class were living at the death of the testator.

'A legacy given to a class subject to a life estate vests in the persons composing that class at the death of the testator; but not absolutely; for it is subject to open, so as to make room for all persons composing the class, not only at the death of the testator, but also at the falling in of the intervening estate. This is put on the ground that the testator's bounty should be made to include as many persons who fall under the general description or class as is consistent with public policy; and the existence of the intervening estate makes it unnecessary to settle absolutely the ownership of the property until that estate falls in.' Mason v. White, 53 N.C. 421, 422. The rule thus clearly enunciated has been consistently adhered to in this jurisdiction. Privett v. Jones, 251 N.C. 386, 393, 111 S.E.2d 533; Sawyer v. Toxey, 194 N.C. 341, 343, 139 S.E. 692; Walker v. Johnston, 70 N.C. 576, 579.

We next inquire as to the effect of the language--'upon their (daughters) death their share is to be divided equally between their children when they reach the age of twenty-five years.' It is our opinion and we hold that this language does not exclude the devise of the remainder in the case at bar from the rule above quoted from the Mason case. "The remainder is vested in the children of the life tenant who are in esse, and their interest in subject only to a contingency affecting the quantum of their interest, but not the quality of the estate taken by them.' * * * Nor was the vested character of the remainder affected by the direction that the property be equally divided * * * after the death of their monther(s).' Beam v. Gilkey, 225 N.C. 520, 524, 35 S.E.2d 641, 643. The rule against perpetuities does not relate to and is not concerned with the part postponement of the full enjoyment of a vested estate. The time of vesting of title is its sole subject matter. McQueen v. Branch Banking & Trust Co., 234 N.C. 737, 741, 68 S.E.2d 831. '* * * (I)f there is, in terms, a devise, and the time of enjoyment, merely, is postponed, the interest is a vested one, but if the time be annexed to the substance of the gift or devise, as a condition precedent, it is contingent * * *.' Bowen v. Hackney, 136 N.C. 187, 190, 48 S.E. 633, 634, 67 L.R.A. 440. '* * * (A) remainder is vested if, so long as it lasts, the only obstacle to the right...