Williams v. J. M. High Co.

• Decision Date: 10 January 1946
• Docket Number: 15361.
• Citation: 36 S.E.2d 667,200 Ga. 230
• Parties: WILLIAMS et al. v. J. M. HIGH CO. et al.
• Court: Georgia Supreme Court

36 S.E.2d 667

200 Ga. 230

WILLIAMS et al. v. J. M. HIGH CO. et al.

No. 15361.

Supreme Court of Georgia

January 10, 1946

Syllabus by the Court.

1. Where a testatrix provided a life estate to her daughters with remainder over to grandchildren, in designated improved realty, and also that a named corporation, as long as it 'continues in business, * * * is financially successful and desires to occupy these properties, * * * shall have the right to occupy them at their fair market value for rent,' and set forth a plan for determining the fair amount of rent to be paid, such right of lease is not in violation of the rule against perpetuities.

(a) The conditions, above quoted, under which the corporation should have a right to occupy the premises, are not vague uncertain, or illegal.

(b) Where, in connection with the disposition of the premises referred to in headnote 1, the testatrix used the expression 'they are not to be sold,' such expression, when considered in connection with other items of the will and the will in its entirety, was not an attempt to violate the rule against perpetuities or the alienation of property.

2. So much of items 8 and 15 of the will as relates to the duties, or the tenure of office of the executrices, is not a requirement for them to serve in perpetuity, and does not violate or make illegal, void, or against public policy, the right of lease given to the named corporation.

3. As to the realty referred to in headnote 1, there is no restraint in the will on the sale by the life tenants or remaindermen of their respective interests. Each could sell her interest, or could join in conveying the entire fee, subject, in either event, to the right of lease by the named corporation.

This case involves the construction of the will, duly probated, of Hattie Wilson High, who died in 1932. The instrument provided for the payment of debts; for ten special legacies to be paid in cash; for the immediate sale of designated realty on East Hunter Street in the City of Atlanta, the proceeds to be added to such cash as she might leave and to a portion of her life insurance, and to be used to pay debts, taxes, specific bequests, expenses of administration; and for any balance left from this fund to go to her two daughters. The will directed that her real estate be equalized between her two daughters, Hattie May Williams and Dorothy Peteet, taking into consideration what she might have previously deeded to them, and, where less than a fee was bequeathed, in computing the value for equalization purposes the value of the entire fee was to be charged. To her daughter, Dorothy Peteet, the testatrix gave her home at 58 Fifteenth Street, N.E. in the City of Atlanta, and certain other described realty on the same street. She gave certain described realty to one of her granddaughters. Provision was also made for the disposition of a reversionary interest in realty previously deeded to the Atlanta Art Association. A trust fund of $100,000 was established for four designated grandchildren.

To her daughter, Dorothy Peteet, she gave a life interest in property on Carnegie Way and Cone Street, and also a certain Broad Street building which was formerly part of the old store of J. M. High Company. To her daughter, Hattie May Williams, she gave a life interest in property known as 142 Peachtree Street. After the creation of the above life interests, provision was made for the fee to vest in the respective children of the daughters, with additional direction for the vesting of the fee in the event either or both daughters died without issue. As to each of these life interests, provision was made for the sale of the property by the life tenant, but subject to be reinvested and held on the same conditions and limitations and with the same powers. The residuary clause provided for an equal distribution to the two daughters, on the same terms and limitation as those just stated in reference to the life estates in realty granted to each.

The daughters, Hattie May Williams and Dorothy Peteet, were nominated as executrices, with a provision for a succession in the event of the death of either or both.

The portions of the will for which construction and direction were prayed were as follows: Item 8. 'The properties on Whitehall and Hunter Streets (not including the real estate referred to in item three above), now occupied by J. M. High Company, shall be disposed of as follows: As long as the corporation continues in business and is financially successful and desires to occupy these properties, they are not to be sold, but said corporation shall have the right to occupy them at their fair market value for rent, and if the officers and directors of said corporation cannot agree with my executrices as to said rental, same shall be fixed by arbitration each year there is a failure to agree, my executrices to select one disinterested arbitrator, said directors another disinterested arbitrator, and these two to select a third, also disinterested, and the award to be final and no appeal to lie from it. Subject to the above right of lease, I give said property to my two daughters in equal shares for the terms of their lives. When one shall die, her interest shall go to her children, children of a deceased child of my daughter to take the parent's place. If one of my daughters should die without leaving children or grandchildren, her share shall go to my other daughter, or if she be then dead, to her children, children of a deceased child to take the parent's place. In the event my daughters shall both die without leaving children or grandchildren, said real estate to be sold and the proceeds to be divided, one half (1/2) to the High Museum of Art, and one fourth (1/4) each to the Old Ladies Home in Atlanta, Georgia, and the Thornwell Orphanage of Clinton, South Carolina.'

Item 15. (After making provision for the executrices): 'Whenever a minor shall be vested with any interest in my estate, my executrices shall act as guardians without bond for such interest. The guardians shall have no power to mortgage or create a lien upon any part of the property belonging to the minors except for the purpose of improving that or some other property belonging to the same interest, but they have the power to mortgage the fee for this purpose. The executrices and guardians shall have full power to lease for any term, also power of sale of fee-simple interests, either publicly or privately and for cash or on such terms as they may deem best, without order of court and without advertisement, but should they make sales the proceeds of such sales are to be used for improvement or reinvestment only, such reinvestment shall pass under the terms of this will, and no reinvestment shall be made except in such securities as executrices and guardians are allowed under the law to invest in, or in unencumbered rent-producing business property in the City of Atlanta. The same full power of mortgage for improvement also power of sale shall exist in the executrices and guardians as to the properties on Hunter and Whitehall Streets now occupied by J. M. High Company at any time said corporation no longer desires to occupy them, and in the event of sale the proceeds shall be separately invested and carried on the books of the executrices in a separate account, and such reinvestment shall be governed in all respects by the provisions hereinabove set out as to the disposition of said real estate itself. My executrices shall also have the power to fulfill any bond for title or other executory contracts of mine without order of court, and no such order shall be required to validate the exercise of any other power by executrices or guardians. My daughters are requested to serve as executrices without compensation.'

The executrices, in their petition for construction, named as respondents the two daughters of the testatrix, individually, the four grandchildren, and J. M. High Company. Guardians ad litem were appointed to represent the unborn interested parties as a class. The company in its response claimed, under the terms of the will, an interest in the realty on Whitehall and Hunter Streets, as follows: 'The nature of said estate is best described as a base or determinable fee, but, however described, it is a vested property interest of the kind and character described in the said eighth item of the will.' The daughters and grandchildren in their response denied that J. M. High Company has an interest in the property described in item 8, for the reasons: (a) that it would be void and contrary to law, in that the conditions attempted to be expressed as attaching to any interest are too vague, uncertain, and indefinite; (b) that so to construe it to be an interest would violate the rule against perpetuities; and (c) it would be contrary to public policy to require an estate to be held open in perpetuity. The daughters and grandchildren by amendment prayed that a declaratory judgment, as provided for by the act approved February 12, 1945, Ga.L.1945, p. 137, be granted, and that the rights, duties, and liabilities of the parties be determined.

Following a hearing, the court issued the following decree: '1. That plaintiffs herein are entitled to the direction of the court with respect to the matters set out in their said petition. 2. * * * That the eighth item of the will of Mrs J. M. High, deceased, gives to the J. M. High Company the right of...