Johnson v. Salsbury

61 S.E.2d 327 (1950) 232 N.C. 432

JOHNSON et al.
v.
SALSBURY.

No. 161.

Supreme Court of North Carolina.

October 11, 1950.

A. J. Fletcher and F. T. Dupree, Jr., Raleigh, for plaintiffs, appellants.

Leggett & Fountain, Tarboro, for defendant, appellee.

ERVIN, Justice.

The demurrer admits the facts alleged in the complaint to be true, and asserts as a legal proposition that the admitted facts do not reveal the commission of an actionable wrong by defendant against plaintiffs. It is self-evident that the defendant has done the plaintiffs no actionable injury by buying the stock if E. V. Johnson had authority to sell it to him. For this reason, the appeal presents this single query: When the factual averments of the complaint are accepted as true, do they show that E. V. Johnson had no lawful power to sell the stock to the defendant?

The plaintiffs contend that this question must be answered in the affirmative. They assert that the will of the testatrix did not vest any power of sale in E. V. Johnson for alternative reasons. They say primarily that this is so because items ten and thirteen were at most an unlawful attempt by a grandparent to appoint a testamentary guardian for grandchildren. They assert secondarily that item ten was the expression of a mere hope or request of the testatrix that E. V. Johnson would qualify as guardian for his children before a proper court in the event she died before such children arrived at the age of twenty one years, and that such court would permit him to exercise the broad powers enumerated in item thirteen in his capacity as such guardian. They conclude that E. V. Johnson had no authority whatever to handle the stock of the plaintiffs, Ernest Victor Johnson, Jr., and Pattie Ruth Johnson Faulkner, except that derived from his appointment as guardian of their estate by the county court of Brown County, Texas; that in consequence he had no power to sell the shares of stock in controversy unless he was authorized so to do by a court of competent jurisdiction; and that the decree of the District Court of Brown County, Texas, purporting to sanction a sale of such stock, was void because the District Court had no power under Texas law to make such decree.

It appears, therefore, that the first task confronting us on the appeal is that of interpreting the will of the testatrix. In construing a will, courts do not search for a meaning which will nullify the instrument or any part of it. The converse is true. They adopt a construction which will uphold the will in all its parts, if such course is consistent with established rules of law and the intention of the testator. Tillett v. Nixon, 180 N.C. 195, 104 S.E. 352.

The statute codified as G.S. § 33-2 does not empower a grandparent to appoint a testamentary guardian for a grandchild. Williamson v. Jordan, 45 N.C. 46. For this reason, items ten and thirteen of the will of Pattie T. Johnson are not to be interpreted as an ineffectual attempt by the testatrix to appoint a testamentary guardian for her grandchildren if her words are reasonably susceptible of a construction which will give effect to the provisions of the items. Moreover, item ten is not to be interpreted to express a mere hope or request on the part of the testatrix that her son, E. V. Johnson, should qualify as guardian of her grandchildren before an appropriate court, unless her language will admit of no other reasonable construction. This is true because such interpretation would render item thirteen wholly meaningless.

A technical draftsman would undoubtedly have used apter words to express the purpose of the testatrix. Nevertheless, we think that the language employed in items seven, ten and thirteen can be reasonably interpreted to express an intention on the part of the testatrix to invest her son, E. V. Johnson, with the legal title to one-third of her residuary estate in trust for the use and benefit of his children. Manifestly, this construction must be adopted, for its gives effect to every word and phrase of the testatrix without offending any rule of law. Besides, it is sanctioned by a pertinent precedent. Camp v. Pittman, 90 N. C. 615.

The validity of a testamentary trust of personalty is governed by the law of the state of the testator's domicile at the time of his death. Cross v. United States Trust Co., 131 N.Y. 330, 30 N.E. 125, 15 L.R.A. 606, 27 Am.St.Rep. 597; 15 C.J.S., Conflict of Laws, § 18. Furthermore, a trust of personal property created by will is administered by the trustee according to the law of the state of the testator's domicile at the time of his death unless the will affirmatively shows an intention that the trust should be administered elsewhere. Am.Law Inst.Restatement, Conflict of Laws, section 298. See, also, in this connection: Hoglan v. Moore, 219 Ala. 497, 122 So. 824; Fernald v. First Church of Christ, 77 N.H. 108, 88 A. 705; Rosenbaum v. Garrett, 57 N.J.Eq. 186, 41 A. 252; Beale: The Conflict of Laws, section 102.2. This is so even though the trustee, Smith v. Central Trust Co., 154 N.Y. 333, 48 N.E. 533; Lozier v. Lozier, 99 Ohio St. 254, 124 N.E. 167, or the beneficiary is a resident of another state. Merritt v. Corties, 71 Hun. 612, 24 N.Y.S. 561.

The will of Pattie T. Johnson does not manifest any intention that the trust created thereby should be administered outside of North Carolina, where the testatrix was domiciled at the time of her death. When this will of a resident of North Carolina was admitted to probate in North Carolina, it became a North Carolina instrument, creating a North Carolina trust to be administered according to North Carolina law.

It cannot be gainsaid that the language of item thirteen was sufficient in form to vest in E. V. Johnson as testamentary trustee an unrestricted power to sell the trust property. This being true, he had lawful authority under the will to sell the shares of stock in suit to the defendant, for it is established in this jurisdiction that a trustee can properly sell trust property if a power of sale is conferred upon him by the instrument creating the trust. Ripley v. Armstrong, 159 N.C. 158, 74 S.E. 961.

Since the sale was authorized by the will creating the trust, its validity was not impaired in any degree by the fact that the trustee professed to make it under the authority of the decree of the District Court of Brown County, Texas, even if it be taken for granted that such decree was void because the District Court had no jurisdiction under Texas law to render it. The rule governing this aspect of the case was rightly applied by the Maryland Court of Appeals in Preston v. Safe Deposit and Trust Company, 116 Md. 211, 81 A. 523, Ann.Cas. 1913C, 975, and is accurately stated in this headnote to that decision: "Where one having various capacities executes a delegated authority in one of them, the law will attribute the act to the proper authority, though he does not profess to exercise that authority in doing the particular act, so that the fact that the testamentary trustee sold the trust property under a decree of court based upon statutory authority, which was erroneous because the statute did not authorize sales made in the future as it appeared advantageous, did not prevent the trustee from making good title, where he in fact had an implied power of sale under the will, but did not purport to act thereunder."

These conclusions necessitate an affirmance of the judgment. Nevertheless, we deem it not amiss to make certain observations concerning the contention of the plaintiffs that the decree of the District Court was void.

The plaintiffs advance these arguments to support their position in this respect: (1) That E. V. Johnson was merely the guardian of the estates of the plaintiffs, Ernest Victor Johnson, Jr., and Pattie Ruth Johnson Faulkner, under appointment of the County Court of Brown County, Texas; (2) that the decree of the District Court of Brown County, Texas, was entered in a suit instituted in such court by E. V. Johnson as guardian to sell the property of his wards; and (3) that the District Court had no power to render its decree because Texas law confers exclusive original jurisdiction of suits by guardians to sell the property of their wards upon county courts.

It has been pointed out that E. V. Johnson took title to the shares of stock of the Carolina Telephone and Telegraph Company as trustee under the will of Pattie T. Johnson. The facts that the Administrator with the will annexed deposited the certificates representing such stock with the Clerk of the Superior Court of Halifax County instead of mailing them to E. V. Johnson, and that such Clerk required E. V. Johnson to qualify as guardian of the estates of his two minor children in Texas as a condition precedent to obtaining such certificates did not alter the expressed intention of the testatrix, or deprive E. V. Johnson of his character and powers as trustee under the will. Subsequent to the removal of the stock certificates to Texas, E. V. Johnson professed to manage the stock as trustee under the will, and the District Court of Brown County, Texas, adjudged that he held it in that capacity. In the light of these circumstances, the assertion of the plaintiffs that E. V. Johnson handled the stock as a mere guardian is clearly insupportable.

The second and third arguments of the plaintiffs on this aspect of the litigation are equally as untenable. The decree under consideration was rendered by the District Court sitting as a court of equity in a suit to terminate the trust and divide the trust property among the beneficiaries. It was well devised to effect those purposes. See in this connection: 54 Am.Jur., Trusts, section 78.

The statute codified as G.S. § 84 prescribes that "When any question shall arise as to the law of the United States, or of any other state or territory of the United States, or of the District of Columbia, or of any foreign country, the court shall take notice of such law in the same manner as if the question arose under the law of this State." In consequence of this enactment, we judicially know that the District Court of Brown County, Texas, is a court of general jurisdiction and that it has power under Article V, Section 8, of the Constitution of Texas, Vernon's Ann. St., and the statutes embodied in Chapter 3 of Title 40 of Vernon's Texas Civil Statutes to entertain and determine a suit to terminate a trust and divide the trust property among the beneficiaries of the trust.

The trustee and the beneficiaries of the trust created by the will of Pattie T. Johnson resided in Texas, and were parties to the suit in the District Court of Brown County. Since equity acts in personam, the decree terminating the trust and directing E. V. Johnson to partition the trust property among the beneficiaries in kind or by sale was binding upon all parties in interest. 15 C.J., Courts, §§ 129, 130; 30 C.J.S., Equity, § 81; 65 C.J., Trusts, §§ 790, 939. Hence, the sale of the stock was authorized by the decree as well as by the will.

The judgment sustaining the demurrer must be

Affirmed.