First-Citizens Bank & Trust Co. v. Rasberry

Barnhill, J. The appellant concedes that the trust estate, due to its heavy debt load, is in a precarious financial condition and that it would be to the advantage of the cestuis que trustent to sell a part of the trust estate to raise funds with which to reduce the indebtedness and thus make the profitable operation of the farm land possible. He admits that the contingent remaindermen are interested in all other lands held in trust in the same way and to the same extent as they are interested in the land proposed to be sold; hence, the application of the proceeds of the property sale to the payment of debts would tend to preserve and protect the bulk of the estate and thus inure to the benefit of the contingent remaindermen as well as the other beneficial owners. Even so, he contends the authority of the court to order the sale of land so as to convey the interest of contingent remaindermen and bar any future claim on their part is limited to sales for reinvestment and improvement. In support of his position he cites and relies on G. S., 41-11. Were sale sought by 'those who have a vested interest in land with contingent remainders over to persons who are not in being, this position would be sound. But such is not the case here. While the adult cestuis que trustent join as plaintiffs the corporate plaintiff, trustee, is the real petitioner. It is seeking a sale to raise funds for the preservation and protection of the trust estate. G. S., 41-11, is an enabling statute authorizing those who have a vested interest in land with contingent remainders over to persons not in being to petition for and procure the sale thereof for reinvestment. It does not limit the power of the court to supervise the administration of trust estates and to enter such orders and decrees in respect thereto as circumstances may require. Hence, on this record, it is not controlling. Courts of equity have general, inherent, exclusive, supervisory jurisdiction over trusts and the administration thereof. In the exercise of that power they may authorize whatever is necessary to be done to preserve a trust from destruction. The prime consideration is the necessity for the preservation of the estate. Cutter v. Trust Co., 213 N. C., 686, 197 S. E., 542; Johnson v. Wagner, 219 N. C., 235, 13 S. E. (2d), 419; *590 Duffy v. Duffy, 221 N. C., 521, 20 S. E. (2d), 835; Bond v. Tarboro, 217 N. C., 289, 7 S. E. (2d), 617; Penick v. Bank, 218 N. C., 686, 12 S. E. (2d), 253; 21 C. J., 116; 19 Am. Jur., 152, et seq.; 54 Am. Jur., 224; Re Stack, 97 A. L. R., 316; Anno. 97 A. L. R., 325. Equity may and will give relief against tbe provisions of tbe trust instrument to save tbe beneficiaries from want or to prevent tbe loss of tbe estate, arising from exigencies not contemplated by tbe party creating tbe trust, wbicb, bad tbey been anticipated would undoubtedly bave been provided for. Tbe court may in cases of emergency, for tbe preservation of tbe trust estate and tbe protection of tbe cesiuis, authorize and direct tbe trustee to do acts wbicb under tbe terms of tbe trust agreement and under ordinary circumstances tbey would bave no power to do. 54 Am. Jur., 227. “To protect tbe rights of tbe beneficiaries or cestui que trust tbe court of equity will administer whatever relief may be appropriate.” 19 Am. Jur., 154. This inherent authority vested in a court of equity, in our opinion, unquestionably includes tbe power to direct tbe sale of a part of tbe estate whenever it is made to appear that it is necessary to do so in order to preserve and safeguard tbe remainder for tbe benefit of tbe cestuis. Tbe court below, after a full bearing, concluded that tbe proposed sale should be bad; that tbe funds to be raised thereby are needed to preserve tbe estate from destruction; and that tbe sale would serve tbe best interests of all parties concerned. His conclusion is fully supported by tbe record. Hence tbe judgment below is Affirmed.