Woody v. . Christian

OlaeksoN, J. The questions involved: (1) Did the court have authority as a matter of law under the findings of fact in the case to direct the trustee: (a) To make payments out of the principal of the estate for the temporary support of the beneficiaries? We think not under the facts and circumstances of this case, (b) To pay for extensive repairs to certain of the property out of the income remaining? We think not under the facts and circumstances of this case. (2) Does the petitioner, Edith Christian Woody, have a contingent interest in *616 the estate? We think under the will she has her father’s share in the “net income remaining” and a contingent interest. Item 5 of the will of W. J. Christian, Sr., in part, is as follows: “All the rest and residue of my estate, both real, personal and mixed, wherever and howsoever situate, I give, devise and bequeath to the First National Trust Company, Durham, N. 0. To have and to hold the same to it and its successors upon the following uses, purposes and trusts, that is to say: (1) To collect the rents from my real estate, the dividends from my stocks and bonds and the interest on my notes and bonds, and after paying the taxes, insurance, repairs, municipal assessments, and all necessary expenses, said trustee will pay the net income remaining, once a month, equally to my four sons, Charles E. Christian, John A. Christian, Thomas R. Christian and 'William J. Christian, Jr., share and share alike for and during the term hereinafter specified. (2) If either of my sons shall die before the expiration of twenty (20 years) after my death, leaving a child or children, then such child or children shall receive their father’s share of said, net income; and if at the time of such son’s death any of his children be dead leaving children, such children will receive the portion of net income which their parent would have received if alive at my son’s death.” In Carter v. Young, 193 N. C., 678 (681-2), it is written: “Courts exercising equitable jurisdiction have been slow to interfere with a trustee who holds property in trust for another, and who is vested with discretion as to the manner in which his duties with respect to such property shall be performed. When it appears that a trustee has exercised, or proposes to exercise, such discretion in good faith, and with an honest purpose to effectuate the trust, the courts will not undertake to supervise or control his actions. They will not undertake to set aside or override his judgment in matters clearly committed to his discretion, and to substitute therefor the judgment of others, or their own judgment, upon the sole allegation that the action of the trustee is not wise or just. See Troutt v. Pratt (Va.), 56 S. E., 165, 8 L. R. A. (N. S.), 398, and case-notes. The courts, however, have not hesitated to assume jurisdiction and to grant relief to a cestui que trust, when it appears that the trustee has acted in bad faith, or with a fraudulent purpose, to the injury of the cestui que trust. See Collister v. Fassett (Ct. of App. N. Y.), 57 N. E., 490.” It is contended by plaintiffs, appellants, that from examining the will that the intent and primary purpose of the testator in providing the trust estate was to see that his four sons were comfortably provided for duxing their lives. This contention is true, but the clear language of the will of the testator limits and shackles the trustee. Under the language of the will, we think the court below had no authority to make payments out of the principal of the estate for the *617 temporary support of the beneficiaries. But part of finding of fact 15 is as follows: “That the trustee has recently made extensive repairs in certain real estate belonging to the estate, involving an expenditure of $1,200.00, for the purpose of putting it in condition to produce rental income; that this money was borrowed from the bank and is being-repaid.” In Carter v. Young, supra, at p. 683, it is said: “No higher obligation rests upon the courts of this State than that which requires them to effectuate the purpose and intent of a testator, clearly expressed in his last will and testament, with respect to the maintenance and support of a dependent child, who was during the lifetime of the testator the object of his affection and solicitude. The courts have ample power to discharge this obligation.” To be sure, the will gives the trustee authority to make repairs, before paying the “net income remaining.” The finding of fact is that the trustee made extensive repairs. We do not question the good faith of the trustee, but think that if it was necessary to make extensive repairs that under the facts and circumstances of this case the corpus could be used for this purpose and the “net income remaining” would include the rents paid out for extensive repairs, and should be divided as set forth in Item 5, supra, of the will. In Middleton v. Rigsbee, 179 N. C., 437 (440), we find: “As appertaining to the facts of this record, the decided cases on the subject hold that courts in the exercise of general equitable jurisdiction may decree a sale of property for reinvestment, where it is shown that such a course is required for the preservation of the estate and the protection of its owners. And the position may in proper instances be extended to a sale of a portion of the property for the protection and preservation of the remainder. The principle adverted to has been not infrequently applied in the proper administration of charitable and other trusts, and the exercise of the power has been justified and upheld, notwithstanding limitations in the lease or deed creating the estate which apparently imposed restrictions on the powers of the trustees in this respect when it is properly established that a sale is required by the necessities of the case, and the successful carrying out of the dominant purposes of the trust. Trust Co. v. Nicholson, 162 N. C., 257; Grace Church v. Ange, 161 N. C., 315; Jones v. Haversham, 107 U. S., 175; Stanly v. Colt, 72 U. S., 119-169; Weld v. Weld, 23 Rd. Island, 311.” In Shannonhouse v. Wolfe, 191 N. C., 769 (773), it is said: “Sales may be made: . . . (4) If the power of sale is prohibited in the trust instrument, but, if at the same time a sale of the trust property is indispensable to the preservation of the interests of the parties in the subject-matter of the trust. ‘We think it is well settled that a court of *618 equity, if it has jurisdiction in a given cause, cannot be deemed lacking in power to order the sale of real estate which is the subject of a trust, on the grounds, alone, that the limitations of the instrument creating the trust expressly deny the power of alienation. It is true, the exercise of that power can only be justified by some exigency which makes the action of the court, in a sense, indispensable to the preservation of the interests of the parties in the subject-matter of the trust, or, possibly, in Case'of some other necessity of the most urgent character.’ Trust Co. v. Nicholson, 162 N. C., 257; St. James v. Baglay, 138 N. C., 384; Church v. Bragaw, 144 N. C., 126; Church v. Ange, 161 N. C., 314; College v. Riddle, 165 N. C., 211; Middleton v. Rigsbee, 179 N. C., 440.” Stepp v. Stepp, 200 N. C., 237. The appellants contend that the court erred in holding that the petitioner’^ Edith Christian Woody, had only a contingent interest in the estate. Section 2 of Item 5 of the will reads: “If either of my said sons shall die before the expiration of twenty years after my death, leaving a child or children, then such child or children shall receive their father’s share of said net income,” etc. Construing the entire Item 5 of the will, we think the language “Receive their father’s share of said net income” means that Edith Christian Woody would step in the shoes of her deceased father, and receive his share of the “net income remaining.” The authorities cited by appellants do not apply to the facts in this case. We think the meaning of the language is clear. The able briefs of the appellants have been helpful. For the reasons given, the judgment in the court below is Modified and affirmed. Beogden, J., not sitting.