Wing v. Wachovia Bank & Trust Co., N. A.
| Decision Date | 02 December 1980 |
| Docket Number | No. 37,37 |
| Citation | 301 N.C. 456,272 S.E.2d 90 |
| Court | North Carolina Supreme Court |
| Parties | Martha Andrews Johnson WING and Jane Virginia Andrews Power Philbrick v. WACHOVIA BANK & TRUST COMPANY, N. A., Successor Trustee, and Augusta Andrews Young et al. |
Maupin, Taylor & Ellis, P.A., by W. W. Taylor, Jr., and Jane Fox Brown, Raleigh, for defendant-petitioners Augusta Andrews Young, Alexander A. Marks, Laurence H. Marks, Graham H. Andrews, Jr., F. M. Simmons Andrews, William M. Marks III, Ralph Stanley Marks, Frances Marks Bruton, Julia Marks Young, Elizabeth Marks Green, Jane A. Marks (formerly designated as Jane Marks Cline), Hal V. Worth III, Julia A. Worth Ray, Simmons Holladay Worth, John W. Andrews, Sara Simmons Andrews Johnston and Mary Graham Andrews.
John A. McAllister, Raleigh, for defendant-petitioners minor and unborn parties as Guardian ad Litem.
Vaughan S. Winborne, Raleigh, for original plaintiff-appellees.
Emanuel & Thompson by W. Hugh Thompson, Raleigh, for defendant-appellee, Alex B. Andrews III.
Manning, Fulton & Skinner by Howard E. Manning, Jr., Raleigh, for defendant-appellees Howard E. Manning, Trustee, and William H. Clarkson, Jr.
Smith, Debnam, Hibbert & Pahl by J. Larkin Pahl, Raleigh, for defendant-appellee, James Rose Andrews, minor, as Guardian ad Litem.
Hunton & Williams by Henry S. Manning, Jr., Raleigh, for defendant-appellee, Wachovia Bank & Trust Co., N.A., Successor Trustee.
Alexander B. Andrews II, a Wake County lawyer, died on 21 October 1946 leaving a will dated 21 November 1945. The will was duly probated and recorded in the office of Clerk of Superior Court of Wake County. He was survived by a sister, two brothers, eleven nieces and nephews, and twelve great nieces and great nephews. One brother and a nephew predeceased testator; both were survived by children.
The will provided for payment of testator's debts and burial expenses and directed the executors to turn over to the University of North Carolina and the Church Historical Society the sets of books testator had already committed to each. The will directed that the remainder of the estate be placed in trust for the benefit of his family. Testator's brothers, John and Graham, were designated as trustees. Wachovia Bank & Trust Company, N.A., is the successor trustee. After payment of the expenses of handling the trust, the income was to be divided into twenty equal shares and distributed to various members of testator's family. Each of his siblings, one sister and two brothers, was to receive one share of the annual income "for and during (his or her) natural life." One share of the annual income was to be divided equally and paid to testator's eleven nieces and nephews for and during their lifetime. The remaining sixteen shares of the annual income were to be divided equally among testator's great nieces and great nephews alive at his death or born within twenty-one years thereafter. The income interests of this class of beneficiaries was not limited to their lifetime.
Upon the death of testator's sister or brothers, his or her share was to be added to the share of income allotted testator's nieces and nephews. Thus, the ultimate number of shares of income going to the nieces and nephews was four. Upon the death of a niece or nephew, his or her interest in the income ceased, and the portion formerly going to that niece or nephew was to be divided among the surviving members of the class, until the number of survivors reached four. After that time the share of any niece or nephew who died was to be added to the sixteen shares going to the great nieces and great nephews. Under the testator's plan of distribution, his great nieces and great nephews would ultimately receive 100 percent of the trust income.
The duration of the income interest of the great nieces and great nephews was not expressly limited to life as were the income interests of testator's sister, brothers, nieces and nephews. However, a later portion of the will provided that the trust should extend:
for and during the joint and several lives of any other nieces or nephews or great nieces or great nephews born prior to, and alive at the time of my death, and until the death of the last survivor of my nieces and nephews and the last survivor of my great nieces and nephews (sic) (alive at my death), ..., and no longer.
Thus, the trust terminates at the death of the last survivor of testator's brothers, sister, nieces, nephews, great nieces and great nephews alive at his death. The paragraph of the will which provides for termination of the trust is silent on the question of entitlement to or distribution of the corpus.
The courts of this State have examined this will on two prior occasions. In Trust Co. v. Andrews, 264 N.C. 531, 142 S.E.2d 182 (1965), this Court construed the portion in the will providing for distribution of income to "those ... (great nieces and great nephews) hereafter ... born within twenty-one (21) years after (testator's) death" to limit the class to natural born members and to exclude adopted great nieces and great nephews. Some thirteen years later, the validity of the entire trust was challenged in Wing v. Trust Co., 35 N.C.App. 346, 241 S.E.2d 397, cert. denied, 295 N.C. 95, 244 S.E.2d 263 (1978), as violating the rule against perpetuities. The Court of Appeals examined the will and held that all interests created under the trust vest within the perpetuities period and, thus, that the trust did not violate the rule. At the time the latter suit was brought, all necessary parties were joined. The successor trustee, Wachovia Bank & Trust Company, asserted a claim for affirmative declaratory relief in the form of instructions on how to distribute the income after the death of a great niece or great nephew and on how to distribute the corpus at the termination of the trust. A hearing on this claim was delayed pending final determination of the plaintiffs' claim that the trust violated the rule against perpetuities. The successor trustee's claim for declaratory judgment in the form of instructions is the subject of the present appeal.
As of 20 October 1978 the corpus of the trust was valued in excess of two million dollars. In 1977 the income distribution to nieces and nephews was $2,174.57 to North Carolina residents and $2,251.72 to nonresidents. Great nieces and great nephews who reside in North Carolina received $4,604.97, while those who are nonresidents receive $4,768.73. A great nephew testified that knowing what vested interest he had in the trust corpus would greatly influence his estate planning and his decision on life insurance. A vice-president of the successor trustee testified that the trustee would be forced to seek instructions from the courts on how to distribute the income upon the death of the first great niece or great nephew who received income from the testamentary trust. The members of that class range in age from the mid-twenties to about fifty years of age.
Judge Braswell made findings of fact and concluded as a matter of law that the claim was a proper one for declaratory relief under our Uniform Declaratory Judgment Act, G.S. 1-253 to 267 (1969). He also concluded that the adopted children of testator's nieces and nephews have no interest in either the income or the corpus of the trust and that the seventeen natural great nieces and great nephews alive at testator's death or born within twenty-one years thereafter own the entire equitable interest in the trust subject to the life interests of the nieces and nephews in four of the shares of the trust income. Judge Braswell further concluded that the interest of a great niece or great nephew in the income or corpus does not terminate at his or her death. Accordingly, he ordered that the portion of income which the natural great niece or great nephew, if alive, would have received be paid to the estate, testamentary beneficiaries or intestate heirs of that person until termination of the trust. With respect to the corpus of the trust, Judge Braswell ordered that upon the termination of the trust at the death of the last survivor of testator's nieces, nephews, great nieces and great nephews alive at testator's death, the trust corpus be divided into seventeen equal shares and distributed equally among the estates, intestate heirs, or testamentary beneficiaries of each deceased great niece or great nephew and those great nieces and great nephews alive at the termination of the trust.
Several of defendants appealed from Judge Braswell's findings, conclusions of law and orders. The Court of Appeals affirmed the conclusion and order concerning the payment of income to the estate of a deceased great niece or great nephew, reasoning that a condition of survivorship will not be inferred, but reversed the trial court's determination that the testator intended that his natural born great nieces and great nephews have the entire interest in the corpus of the trust. Instead, the Court of Appeals held that the testator did not intend to dispose of the trust corpus in the will because of the will's silence on that matter and because testator was a lawyer.
Certain of the appellees in the Court of Appeals petitioned this Court's discretionary review of that portion of the Court of Appeals' decision dealing with the disposition of the trust corpus. We allowed their petition on 3 June 1980. The propriety of this cause for declaratory judgment is not before us.
The trust provision of the will before us lends itself to two possible constructions. The silence of the will on the distribution of the corpus might be construed to mean that testator did not intend to dispose of the corpus by his will; the result of such construction would be to cause the corpus to pass by intestate succession to his heirs at law at the time of testator's death. Alternatively, the will as a whole might be construed to support a gift by implication of...
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