Latta v. Trustees of the General Assembly of the Presbyterian Church in the United States

Barnhill, J. Mrs. Eargason excepts to so much, of the judgment as prohibits the distribution to her of any further portion of the estate until the payment of $81,450 made to her out of the share of Mrs. Porcher is restored upon the theory that the court was without jurisdiction to make such order for the reason that the payment of said sum to her was a personal transaction between her and Mrs. Porcher. This exception cannot be sustained. The record discloses that check for said sum was issued to Mrs. Porcher, endorsed by her, and delivered to Mrs. Eargason by the trustee as an advancement upon Mrs. Eargason’s share under the agreement, to save the payment of interest, and that Mrs. Eargason gave her receipt to the trustee in acknowledgment of the payment of said sum “on account of my interest in the estate of Edward I). Latta.” The order of the judge is fully sustained by the facts appearing of record and found by him. The court had full jurisdiction, both by reason of the fact that this proceeding relates to the administration of a trust estate and it involves the interest of infants, over each of which the court has full equity jurisdiction. The agreement entered into by certain of the devisees under the will of plaintiff’s testator merely affects the method of the distribution of the corpus of the estate. Under the terms of the will and the provision of the contract it remains a trust estate, to be administered by the plaintiff, executor and trustee. Mrs. Eargason’s exceptive assignments of error based upon the contention that the distribution is to be made under the terms of the contract and not under the terms and provisions of the will, and that the contract is binding and cannot be modified or in anywise disturbed by the court, are without merit. "While the agreement does not specifically state that payments under the agreement are to be made to the parties thereto ratably in proportion to the interest of each of such parties under the agreement, it clearly appears from the agreement as a whole that this was the intent of the parties. Distributions were made on three separate occasions on that basis without exception on the part of either person interested. It was not error for the court below to base its order upon the theory that in the distribution to the parties to said agreement there was to be equality *469 in the amounts to be received by such parties in the ratio of their respective interests in the estate. As to the interest of Mrs. Fargason, there is no error in the decree. The failure of the court below in any of its decrees to make adequate provision for the protection of the annuitants under the will other than the Porcher children, and the questions presented by the appeal of the guardians ad litem, give us more concern. Prom our earliest history infants have been regarded as entitled to the especial protection of the State and as wards of the court. In a sense courts of chancery are the supreme guardians of all infants and are charged with the protection alike of their personal and property rights. The State is parens pairice of the infants within its borders and the jurisdiction of its courts to protect the interest of infants is broad, comprehensive and plenary. In all suits or legal proceedings of whatever nature, in which the personal or property rights of a minor are involved, the protective powers of a court of chancery may be invoked whenever it becomes necessary to fully protect such rights. When necessary the courts will go so far as to take notice ex mero motu that the rights of infants are endangered and will take such action as will properly protect them. Speaking to the subject in Bank v. Alexander, 188 N. C., 667, Adams, J., says: “It is unquestionable that courts of equity have general jurisdiction over the property of infants and that infancy alone is sufficient to sustain the right of supervision. The jurisdiction in all cases is complete and may be exercised in order to afford relief wherever it may be necessary to preserve and protect the estates and interests of those who are under age.” And in 10 R. C. L., 340, see. 89, it is stated: “Equity has full and complete jurisdiction over the persons and property of infants and all other persons laboring under legal disabilities. . . . The jurisdiction in all these cases is plenary and potent to reach and afford relief in every case where it may be necessary to preserve their estates and protect their interests.” While under the will of the testator practically all of his estate was to be held in trust, under the agreement entered into by certain of the devisees and the decree of the court, only $125,000, out of an estate valued at more than two million dollars, is to be reserved in trust to protect the infant parties to this proceeding. At the time this order was made it may have then appeared that said sum was fully sufficient for that purpose. It is now a matter of common knowledge, however, that under present conditions the securities in which a trustee is authorized to invest trust money will not produce a net return sufficient to guarantee the payment of the annuities accruing to these infants and the other annuitants. They take under the will and not under the agreement. Those who are sui juris having elected to substitute, by agreement, a different mode of payment to them of their interest in the estate, the rights of these infants and the other annuitants in effect constitute a *470 charge upon the whole estate. It is the duty of the court to require the segregation in the hands of the trustee assets unquestionably adequate to protect their interests. Although it appears that practically all of the liquid assets of this estate have been disbursed and that practically nothing now remains except unproductive real estate, only the sum of $6,358.24 has been retained in the trust fund created by order of the court. It was error for the court to decline to consider the petition of the guardians ad litem in this respect. The judgment below should be modified so as to provide that the trustee shall retain out of the corpus of the estate as a whole an amount which the court shall find to be amply sufficient to be set apart in trust to guarantee to these infants their legacies under the will before any further disbursement of the corpus is made to any other person. The record discloses that there are four annuitants, other than the Porcher children, who were not parties to the agreement. These annuitants have not been made parties to this proceeding. It appears that the only provision made for their protection is contained in the agreement, which provides that the trustee shall pay these annuities out of the portion of the estate to be paid to Mrs. Acton Latta Porcher. At the same time the agreement and the decree of the court provide that Mrs. Porcher shall receive all of her share except the $125,000 to be set apart for the benefit of the Porcher children. We do not consider that adequate trust provisions have been attached to the portion of said estate payable to Mrs. Acton Latta Porcher to protect these annuitants. These parties likewise take under the will and not under the agreement and their right is against the whole estate. Adequate provision should be made for their protection. The court below, after adequate investigation, will enter judgment modifying the decree entered in accordance with this opinion. Modified and affirmed. Seawell, J., took no part in the consideration or decision of this case.