Clarke v. Clarke

116 S.E.2d 449 (1960) 253 N.C. 156

Linward A. CLARKE, Executor of the Estate of Maggle M. Clarke, Petitioner,
v.
Rudolph B. CLARKE et al.

No. 166.

Supreme Court of North Carolina.

October 12, 1960.

Nicholas Long, Roanoke Rapids, guardian ad litem for unborn children of Rudolph B. Clarke and Norman M. Clarke, appellant.

J. S. Livermon, Scotland Neck, guardian ad litem for living minor children of Rudolph B. Clarke and living minor children of Norman M. Clarke appellant.

George A. Hux, Enfield, guardian ad litem for Patsy McKay, Rosanne McKay, Charles McKay, Jr., and Freddie McKay, Minors, and Ancillary Admr. of Estate of Cornelius Clarke, appellees.

MOORE, Justice.

"A limitation by * * * will * * * to the heirs of a living person, shall be construed to be to the children of such person, unless a contrary intention appear by the * * * will." G.S. § 41-6. (Emphasis added). In paragraphs 4 and 5 of the will of Maggie M. Clarke provision is made for the college education of the "heirs" of testatrix's sons, Norman and Rudolph. These sons were living at the time of the execution of the will and survived the testatrix. There is nothing in the will which indicates that testatrix intended to use the word "heirs" in its technical sense. Indeed a contrary intent is shown. It is provided in paragraph 7 that Norman and Rudolph are to share in the residue of the bonds after termination of the trust. Therefore testatrix contemplated that they might outlive the trust. Obviously she did not intend by the word "heirs" to designate beneficiaries of the trust as of the date of the deaths of Norman and Rudolph. Our construction is that the word "Heirs," as used in paragraphs 4 and 5, means "children." Lide v. Mears, 231 N.C. 111, 56 S.E.2d 404.

As corrected, paragraph 4 reads: "I give 50% of my war bonds and their accumulation to the children of my son, Norman M. Clarke, to be used for college education only." This item must be construed to mean that testatrix gave the bonds, to be used for college education, to the children of Norman who were living at the death of the testatrix. "* * (a) legacy given to a class immediately, vests absolutely in the persons composing that class at the death of the testator: for instance, a legacy to the children of A: the children in esse at the death of the testator take estates vested absolutely, and there is no ground upon which children who may be born afterwards can be let in." Mason v. White, 53 N.C. 421, 422. But where the gift is not immediate and there is an intervening life estate, the rule is otherwise. Ibid., 422. See also 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. The rule quoted above has been consistently adhered to in this jurisdiction. Cole v. Cole, 229 N.C. 757, 760, 51 S.E.2d 491, 6 A.L.R. 2d 1335; Sawyer v. Toxey, supra; Wise v. Leonhardt, 128 N.C. 289, 38 S.E. 892; Walker v. Johnston, 70 N.C. 576, 579.

What is ordinarily denominated "the rule against perpetuities" is as follows: No devise or grant of a future interest in property is valid unless the title thereto must vest, if at all, not later than twenty-one years, plus the period of gestation, after some life or lives in being at the time of the creation of the interest. If there is a possibility such future interest may not vest within the time prescribed, the gift or grant is void. Parker v. Parker, 252 N.C. 399, 402-403, 113 S.E.2d 899; McPherson v. First & Citizens Nat. Bank, 240 N.C. 1, 15, 81 S.E.2d 386.

The beneficiaries under the provisions of paragraph 4 were designated and in being at the death of the testatrix. Since the benefits were for their personal enjoyment, their rights thereto must vest, if at all, during their lives. Therefore, the rule against perpetuities has no application here and paragraph 4 is a valid testamentary disposition. What is said here with respect to paragraph 4 is equally applicable to paragraph 5, and it is likewise valid. The beneficiaries in paragraph 5 are the children of Rudolph who were living at the death of testatrix. There is nothing in the will which shows an intention on the part of the testatrix to avoid the quoted rule in the Mason case. "In our opinion, the testatrix did not intend a disposition of her property which would violate the rule against perpetuities." Elledge v. Parrish, 224 N.C. 397, 400, 30 S.E.2d 314, 316. The presumption is that the testatrix intended to make a legal and valid disposition of her property. Wachovia Bank & Trust Co. v. Waddell, 234 N.C. 454, 460, 67 S.E.2d 651.

The factual situation in Parker v. Parker, supra, though somewhat similar to that in the instant case, is distinguishable. In item 6 of the Parker will there was a devise of land to Cheshire J. Parker for life with remainder over at his death to his children. This was a gift to a class, subject to a life estate. The gift vested in those children of Cheshire J. Parker who were living at the death of the testator, subject to open up and make room for his after-born children. In item 7 of the Parker will land was devised to Cheshire J. Parker in trust, the income to be used for college education of children. In item 7, the only designation of beneficiaries is the words "the children." Without reference to item 6 there is no way to determine what children or whose children are intended. Therefore, the only permissible inference is that "the children" are those children referred to in the preceding paragraph. "The children" in the preceding paragraph included after-born children. This then is one of the differentiating features of the Parker case. It is true that there are also important considerations in Parker as to remoteness of vesting of title which do not arise here. The two cases are significantly different.

In the case at bar the will sets no time or age limitations on the use of the funds by the beneficiaries for college education. "The court cannot make a will for the testator nor add to the valid portions of his will provisions which are not therein expressed." Hodges v. Stewart, 218 N.C. 290, 292, 10 S.E.2d 723, 724. The time of termination of the trust, for college education, may depend on many varying circumstances which cannot now be foreseen. In apt time it may be determined by the beneficiaries themselves or by the court in an appropriate proceeding. The provision of the will that trust funds may "in case of emergency or dire necessity * * * be used * * * by the parties" is a subordinate feature of the trust and the time within which such use may be made of them will not extend beyond the termination of their use for college education.

It seems to us clear that it is the intention of the testatrix, as gathered from paragraph 6, that the executor retain the bonds and administer the trust. Direction is given that the fund is to be issued to the father whenever the children "qualify to receive it." This means that when a particular child enters college and pursues his or her studies there, the executor is to provide the father with funds to meet the expense. This is a matter of convenience in administration. It relieves the executor of much detail, to a large extent frees him of the responsibility for seeing that the individual expenditures are proper, and makes the fund more readily available to the child. The conclusion that the executor is charged with the duties as trustee of the fund is further borne out by the provision that, at the termination of the trust, the residue is to be divided among the five children of testatrix. This can be best achieved if the fund is retained and administered by one person.

Equity requires that resort, for the payment of decedent's debts, funeral expenses and the costs of administration, first be had to the assets of the estate which have not been impressed with the trust—the savings accounts. If these prove insufficient, recourse must be had to the bonds as far as necessary. But, if after payment of these items, any sum remains from the savings accounts, it shall be distributed according to the law of intestacy in effect 9 November 1958.

The gift of the residue of the trust fund in equal shares to testatrix's five children, as set out in paragraph 7, vested in these legatees upon the death of testatrix, and the share of each then became descendible and bequeathable through and by them respectively. Little v. Wachovia Bank & Trust Co., 252 N.C. 229, 249-250, 113 S.E.2d 689. After naming Rudolph as one of the residuary legatees and giving him one of the five shares, the will states: "Rudolph B. Clarke's amount is to be used for, business investment, home improvement, or illness or hospitalization." It is our opinion that this provision does not render the gift to him of less quality than absolute; it is descendible and bequeathable through and by him. "Directions regulating mode of enjoyment of an absolute gift will not cut it down." 96 C.J. S. Wills § 841, p. 269. Louderbough v. Weart, 25 N.J.Eq. 399; Simmons v. Simmons, 1923, 99 Conn. 562, 121 A. 819, 821. The directions regulating the mode of enjoyment of the gift are intended to apply to Rudolph personally. If the residue of the trust fund is distributed during his lifetime, it is the duty of the executor-trustee to supervise the expenditure of Rudolph's share in accordance with the directions above quoted.

No specific directions for distribution of the shares of the residue of the trust fund are presently possible. What is said in the preceding paragraph will guide the ultimate distribution. No one can now know who will finally be entitled to answer roll call.

The judgment below is reversed in so far as it is in conflict herewith and the cause is remanded to the end that judgment be entered in conformity with this opinion.

Reversed and remanded.