Porth v. Porth

165 S.E.2d 508 (1969) 3 N.C. App. 485

William R. PORTH, Individually and as Administrator, C.T.A. of Jerry Hilda Porth
v.
Robert Edward PORTH et al.

No. 68SC157.

Court of Appeals of North Carolina.

February 5, 1969.

Womble, Carlyle, Sandridge & Rice, by Charles F. Vance, Jr., and John L. W. Garrou, Winston-Salem, for plaintiff appellee.

McKeithen & Graves, by J. H. McKeithen, Winston-Salem, for defendant appellees, Samuel M. Whitt and wife, Blanche Collins Whitt and William V. Doss.

W. Dunlop White, Jr., Winston-Salem, for defendant appellee, Lawyers Title of North Carolina, Inc.

James J. Booker, Winston-Salem, pro se.

Jenkins & Lucas, by R. Kenneth Babb, Winston-Salem, for defendant appellant Philip E. Lucas, Guardian Ad Litem.

FRANK M. PARKER, Judge.

APPEAL OF THE GUARDIAN AD LITEM: The appeal of the guardian ad litem brings forward three assignments of error: (1) That the trial court erred in holding valid the conveyance of the Briarcliff Road property by the surviving husband and son of the decedent and in directing distribution of the net proceeds of such sale in the manner set forth in the judgment; (2) that the court erred in determining that title to the Shallowford Hills property vested in the heirs of the decedent as of the date of her death and in directing distribution of any surplus proceeds from a sale of such property in accordance with that determination; and (3) that the court erred in the manner in which it directed distribution of the balance in the joint checking account in the name of decedent and her husband. Determination of the questions presented requires an interpretation of the provisions of Chapter 31A of the General Statutes, which is entitled "Acts Barring Property Rights," and which was enacted by Chapter 210 of the Session Laws of 1961 and became effective 1 October 1961.

The North Carolina Supreme Court has long recognized as a basic principle of law and equity that no man shall be permitted to take advantage of his own wrong or to acquire property as the result of his crime. In Re Estate of Perry, 256 N.C. 65, 123 S.E.2d 99; Garner v. Phillips, 229 N.C. 160, 47 S.E.2d 845; Parker v. Potter, 200 N.C. 348, 157 S.E. 68; Bryant v. Bryant, 193 N.C. 372, 137 S.E. 188, 51 A.L.R. 1100. The statute we are now called on to interpret must be construed in the light of this long established public policy. G.S. § 31A-15 expressly provides that "(t)his chapter (G.S., Chap. 31A) shall not be considered penal in nature, but shall be construed broadly in order to effect the policy of this State that no person shall be allowed to profit by his own wrong." The particular section of the statute with which we are first concerned and which is controlling on the questions presented by the guardian ad litem's first two assignments of error, is G.S. § 31A-5, which provides as follows:

"Where the slayer and decedent hold property as tenants by the entirety:

"(1) If the wife is the slayer, one half of the property shall pass upon the death of the husband to his estate, and the other one half shall be held by the wife during her life, subject to pass upon her death to the estate of the husband; and

"(2) If the husband is the slayer, he shall hold all of the property during his life subject to pass upon his death to the estate of the wife."

It is firmly established in North Carolina that where husband and wife own real property as tenants by the entirety, the husband is solely entitled, to the exclusion of the wife, to the possession, income, and usufruct of such property during their joint lives. Nesbitt v. Fairview Farms, Inc., 239 N.C. 481, 80 S.E.2d 472; Davis v. Bass, 188 N.C. 200, 124 S.E. 566; West v. Aberdeen & R. F. Railroad Co., 140 N.C. 620, 53 S.E. 477. G.S. § 31A-5 recognizes this distinction in the rights held by the husband as compared with the rights held by the wife in entirety property by providing that the slayer-husband shall hold all of the property during his life subject to pass upon his death to the estate of the wife, whereas the slayer-wife is to hold only one-half of the property during her lifetime subject to pass upon her death to the estate of the husband, while the other one-half of the property in such case shall pass upon the death of the husband to his estate. In preserving the slayer-husband's right to hold all of the property during his life, G.S. § 31A-5(2) recognizes his right to the lifetime possession, income, and usufruct, of the property, and thereby avoids the possibility that the statute might be considered unconstitutional as working a forfeiture of a vested property right for crime. See, Bolich, Acts Barring Property Rights, 40 N.C.L.Rev. 175, at 201-205.

In the case presently before us, appellant guardian ad litem contends in connection with his first assignment of error that the language of the statute providing that if the husband be the slayer, "he shall hold all of the property during his life," is mandatory, and therefore that the slayer-husband in this case had no lawful right or power to join in a conveyance of the Briarcliff Road property. We do not so interpret the statute. The quoted language was employed by the Legislature, not for the purpose of barring any alienation of the property until after the slayer-husband's death, but in order to recognize and preserve the husband's lifetime rights in the property and thereby avoid the constitutional problem referred to above. The Legislature clearly intended that even the slayer-husband should not forfeit what was always recognized as his—the right to possession and income from the property for his lifetime.

We do not believe that the statute, correctly interpreted, bars the alienation of the entire title to the property by joint conveyance of the slayer-husband and the heirs of the decedent. To so interpret the statute would run contrary to the established policy of our law, which is to prevent undue restraint upon or suspension of the right of alienation. See, Mercer v. Mercer, 230 N.C. 101, 52 S.E.2d 229. We do not presume that the Legislature intended to do something that is against the long established public policy of this State, and the language of the statute does not require such a construction. The words "shall hold," as used in the statute, were not intended to effect a complete restraint on alienation during the husband's lifetime. On the contrary, the word "hold", as used in the statute, is used in the same sense as when used in the habendum clause of a deed. Certainly the word "hold" as used in the habendum clause of a deed is never construed to place a restraint on alienation, and the very words used in this statute, "hold all of the property during his life subject to pass upon his death to the estate of the wife," if used in a deed, would not prevent the husband from selling his life interest in the property. Our law has long recognized that the slayer-husband cannot convey more than his own interest in the entirety property and that certainly no conveyance of his can work a detriment to the rights of the estate of his deceased wife. For that reason it was held in Bryant v. Bryant, supra, that the slayer-husband "holds the interest of his deceased wife in the property as a trustee for her heirs at law; that he be perpetually enjoined from conveying the property in fee; that the plaintiffs should be adjudged the sole owners, upon the appellant's death, of the entire property as the heirs of their deceased mother. * * *" That case arose when the slayer-husband attempted to sell the fee title to lands previously held by him and his wife by the entireties. This the court prevented him from doing, but made no suggestion that the husband could not join with his wife's heirs in order to convey good title to the property.

We must next determine the meaning of the word "estate" as it is used in G.S. § 31A-5. The legal significance of this word must be ascertained from the context in which it appears. Reid v. Neal, 182 N.C. 192, 108 S.E. 769. From examination of the entire statute and giving consideration to the purposes for which it was enacted, we believe it is clear and we so hold that the word "estate" as used in G.S. § 31A-5 means those persons, other than the slayer, who succeed to the rights of the decedent either by testate or intestate succession, as the case may be. To accomplish the purpose of G.S. § 31A-5 and consistent with the clear language of G.S. § 31A-4, the slayer cannot be included in this class. In cases in which the decedent has made testamentary disposition of the real property involved, this interpretation gives effect to the decedent's will. If there is no will, or if, as in the case before us, the decedent left a will but made no disposition therein of the real property involved, the decedent's "estate" consists of those persons who become entitled to succeed to the decedent's property under our intestate succession laws. In either event under G.S. § 31A-4 the slayer is not included.

Finally we must determine as of what date the roll must be called in order to ascertain the persons entitled as constituting the "estate" of the deceased wife under G.S. § 31A-5(2). The guardian ad litem contends that the language of the statute that the slayer-husband hold the property during his life "subject to pass upon his death to the estate of the wife," postpones the roll call until the death of the husband. We do not agree.

Our decisions have long recognized the legal distinction between vesting in interest and vesting in possession and enjoyment. For example, in Rives v. Frizzle, 43 N.C. 237, Ruffin, C. J., construing a bequest to testator's wife for life and after her death to his lawful heirs, said:

"`(A)fter,' or `upon,' the death of the wife, or the like expressions, do not make a contingency, but merely denote the commencement of the remainder, in point of enjoyment. * * * The limitation here is not to such persons `as may be my heirs at the death of my wife;' but it is to `my lawful heirs,' simpliciter, and imports, therefore, those who were the heirs at the testator's death, who took in right then, though they were not to take in possession, until the previous benefit, intended for their mother, should terminate by her death."

We hold that the words "pass upon his death" refer exclusively to possession and enjoyment of the property and not to vesting in interest. In effect, the slayer-husband holds a life estate in the property with a vested remainder in the estate of his deceased wife, and the persons entitled to succeed to her estate are to be determined as of the actual date of her death, not as of the subsequent date when the husband's life estate terminates upon his death. This interpretation is further supported by the express language of G.S., Chap. 31A, as well as by reference to the purposes to be achieved by the statute. G.S. § 31A-4 provides in part that, for purposes of distributing the estate of the decedent, "(t)he slayer shall be deemed to have died immediately prior to the death of the decedent * * *." In view of this express statutory presumption, it is clear that the words "the estate of the wife" as the same are used in G.S. § 31A-5(2) mean the estate of the murdered wife as the same comes into existence at the instant of her death, and the title to the entireties property at that moment passes to those persons who would be entitled to succeed to her interest in such property as of the moment of her death if she had in fact survived her husband, subject only to his recognized right to "hold" the property during his lifetime. In the case before us, the murdered wife died on 13 August 1965. According to G.S. § 31A-4, for purposes of distributing her estate, her slayer-husband is deemed to have died immediately prior to that date. The statute makes no attempt artificially to alter the date of the death of the decedent, but provides instead that the actual date of death of the slayer is to be disregarded. Therefore, if the language of the statute is followed, the estate of the decedent is determined at the date of her actual death, and the law calls the roll of the class immediately as of that time; those who can then answer, take.

The correctness of the interpretation of the words "estate of the wife" in G.S. § 31A-5(2) as meaning the estate as it came into existence at the moment of her actual death, is further strengthened by an examination of subparagraph (1) of G.S. § 31A-5, which deals with the situation when the wife is the slayer. In such case the statute provides that "one half of the property shall pass upon the death of the husband to his estate, and the other one half shall be held by the wife during her life, subject to pass upon her death to the estate of the husband." It is not reasonable to suppose that the Legislature in G.S. § 31A-5(1) intended the word "estate" to have one meaning as to one-half of the property and another meaning as to the other one-half. Rather, it is more reasonable to suppose that the word "estate" as twice used in the same sentence was intended to have the same meaning, and that it refers to the estate of the deceased as such estate comes into existence at the moment of actual death.

The interpretation which we have here given to G.S. § 31A-5(1) and (2) is consistent with the rules of construction applied by our Supreme Court when considering instruments creating future instruments. Rives v. Frizzle, supra. As pointed out by Chief Justice Stacy in Wachovia Bank & Trust Co. v. Lindsay, 210 N.C. 652, 654, 188 S.E. 94, 95, quoting from Lord Campbell: "Generally speaking, where there is a bequest to one for life, and after his decease to the testator's next of kin, the next of kin who are to take are the persons who answer that description at the death of the testator, and not those who answer that description at the death of the first taker." (Emphasis added.)

What we have said above disposes of appellant guardian ad litem's first two assignments of error, as to both of which we find the trial court's judgment to be correct.

The question presented by appellant guardian ad litem's third assignment of error, directed to that portion of the judgment dealing with the joint bank account as to which decedent and her husband had entered into a survivorship contract, is governed by G.S. § 31A-6(a), which provides as follows:

"Where the slayer and the decedent hold property with right of survivorship as joint tenants, joint owners, joint obligees or otherwise, the decedent's share thereof shall pass immediately upon the death of the decedent to his estate, and the slayer's share shall be held by the slayer during his lifetime and at his death shall pass to the estate of the decedent. During his lifetime, the slayer shall have the right to the income from his share of the property subject to the rights of creditors of the slayer."

The trial court's judgment was in error insofar as it directed payment of one-half of the checking account to the slayer-husband. The judgment should have directed that the slayer-husband have only the income during his lifetime from his one-half share of the account, subject to the rights of his creditors, and that at his death the principal should pass to the estate of his deceased wife. Plaintiff appellee's brief concedes this is so, and the judgment should be modified accordingly.

APPEAL OF JAMES J. BOOKER: The appeal by defendant, James J. Booker, presents three assignments of error: (1) That the trial court erred in directing that the $3,000.00 held in the escrow account be paid to the estate of the decedent; (2) that the court erred in overruling appellant's motion to remove the plaintiff as administrator c.t.a. of his mother's estate; and (3) that the court erred in overruling appellant's motion to remove plaintiff's counsel from the case. There is no merit in any of these assignments of error.

The $3,000.00 escrow account was set aside from a portion of the proceeds of sale of the Briarcliff Road property solely to protect the title insurance company against creditors and tax claims against decedent's estate; the title insurance company has filed answer disclaiming any interest in the escrow account and appellant James J. Booker has no interest therein except as trustee. There was no error in directing that this fund be paid to the decedent's estate to be distributed in the same manner as the remaining proceeds from the sale of the Briarcliff Road property.

Appellant Booker's motion to remove plaintiff as administrator of his mother's estate on the grounds that plaintiff is no longer a resident of this State is a collateral attack which cannot be made in this action. Such a question must be presented by direct proceedings before the Clerk of Superior Court, who, as probate judge, has exclusive original jurisdiction to hear and decide a motion to remove an administrator for cause. G.S. § 28-32; McMichael v. Proctor, 243 N.C. 479, 91 S.E.2d 231. Appellant's motion made before the judge in this declaratory judgment action was properly denied.

There was also no error in overruling appellant Booker's motion that counsel for plaintiff be removed on grounds of a conflict in interest. Appellant contends there is a conflict in that counsel representing plaintiff in this case is also representing plaintiff, as an individual, and his father in a separate suit brought against them by the appellant Booker for the purpose of collecting additional attorney's fees allegedly due by reason of Booker's representation of the father in the murder case. We find no relationship between the issues which might arise in that case and those in the present declaratory judgment action, and appellant's motion was properly overruled.

On the appeal of the guardian ad litem, the judgment of the trial court is modified so as to direct that the husband be entitled only to the income during his lifetime from one-half of the joint bank account, subject to the rights of his creditors. With that change the judgment is

Modified and affirmed.

On the appeal of the defendant, James J. Booker, we find

No error.

MALLARD, C. J., and BROCK, J., concur.