Opinion
13208
July 21, 1931.
Before SEASE, J., Spartanburg September, 1928, November, 1929. Will and codicil declared invalid and cause remanded.
Action by Lena C. Davenport against Robert E.L. Collins and others to construe will of J.D. Collins, deceased. From a decree construing the will, plaintiff and answering defendants appeal, and from a supplemental decree all the acting competent parties appeal.
The will, codicils, and decrees, directed to be reported, were as follows:
"LAST WILL AND TESTAMENT OF JNO. D. COLLINS OF SPARTANBURG"In the name of God. Amen:
"I, John D. Collins, of the City of Spartanburg, State of South Carolina, being now of sound and disposing mind, and memory, do hereby make and declare this to be my will and testament, as follows:
"Item 1. I will and direct that my executor hereinafter provided shall pay all my just debts and funeral expenses out of the first moneys that come into his hands from my estate.
"Item 2. I devise and bequeath unto my trusted friend, Jas. H. Lee, of Monroe, North Carolina, who is my executor hereinafter provided, all of my personal property, consisting of all my mercantile stocks, cash, and every other description of personal property wherever the same may be situated, except as hereinafter provided, to be held by him in trust for the following uses and purposes and none other, that is to say:
"(A) I direct that my said executor shall with all reasonable diligence and dispatch, after my death, proceed to sell and dispose of all my personal property, collect all the debts and choses in action due to me, and convert the same into money; which is hereby directed to lend on first mortgage of first class improved real estate, or other securities equally so sound, at such rate of interest as he may be able lawfully to lend or invest the same; and after having exercised such business judgment and discretion said executor shall only be liable to account to the beneficiaries mentioned in the will for the actual amount of interest or income derived therefrom, which accrued interest or income he shall keep invested according to his best judgment until the times hereinafter mentioned for the division or distribution of the corpus of my estate.
"(B) The said executor is hereby directed to invest one-tenth of all the moneys coming into his hands from my personal estate, as provided in Subdivision `A' above separate and distinct from the other nine-tenths for the benefit of my wife, Lillian, so long as she may live a widow. He is directed to pay over to her for her own personal use, at her direction all the interest and income arising from the said one-tenth. In case she shall not marry again, then she shall have the right to dispose of the corpus of said one-tenth by will to such of my children as she may see fit, and in such proportions as to her may seem proper; provided that in case she shall re-marry, or shall die intestate, her right to the corpus of said fund and the income arising therefrom shall immediately cease and determine, and the same shall be held by my executor for the equal benefit of my female child or children then living; or in case of their death, then to be equally divided among my other children who may then be living, to be paid to her or to them at the times and in the manner hereinafter provided.
"(C) I further direct that my executor shall apply, so far as may be necessary, the remainder of said net annual income from the funds above-mentioned to the support, education and maintenance of my children now living or which my said wife may hereafter bear me, until each of my said children shall have arrived at the age of twenty-one years; and in case of the second marriage of my said wife, that share of my income heretofore provided for her support shall be likewise applied to the support, education and maintenance of my said children or so much thereof as may be necessary for that purpose. Any amount of said income not so needed shall be added to the corpus of the estate, and handled accordingly.
"(D) My executor is directed to permit my said wife, so long as she may remain a widow, and my children so long as they may live with her, to have and enjoy the use of all my household and kitchen furniture and other household articles that may be used in connection with my home, and said articles shall not be sold or disposed of, nor shall my said wife or the family, so long as they remain together or any portion of them remain together, be held accountable for the use and wear and tear of same.
"(E) Subject to the provisions above named, I direct that the remaining nine-tenths of my personal estate shall be equally divided among all of my children, each child to receive one-half of his or her share when such child shall arrive at the age of twenty-one years, and the balance upon arriving at the age of twenty-five years. But in the meantime each child shall receive the actual income from the unpaid portion of his or her legacy, that is, between the ages of twenty-one and twenty-five years. In case my daughter or daughters shall become entitled to the share of my estate heretofore directed to be set apart for the benefit of my wife, by reason of her second marriage or death, then I direct that my executor shall hold the same and pay it out to my daughter or daughters as above provided; or in the case of their death, then to be divided equally among my other children who may then be living, upon such conditions as is hereinbefore provided for the division and distribution of the other portion of my personal estate.
"AS TO MY REAL ESTATE"Item 4. I hereby will, devise and bequeath to my son, John Duren Collins, and my daughters, Kathleen and Ethel Collins, in equal shares, my dwelling house and lot on Marion Ave. in the City of Spartanburg, in addition to the other interests that they take under the provisions of this will, and on condition that their mother is to live with them and have a home at said place, if she so desires, so long as she may live a widow. If said Kathleen, J. Duren Collins or Ethel Collins or my executors should see fit at any time to rent this property, said Kathleen, Duren and Ethel are to have all the rent moneys that may accrue from same, provided their mother during her life or widowhood is willing for the same to be rented; in other words, I wish the property to be absolutely theirs.
"Item 5. I direct that all my other real estate of every kind and description, consisting of houses, lots, lands, store buildings and other buildings shall not be sold until my youngest child shall have reached the age of forty years. It is my desire that my said real estate, and any other that I may die possessed of shall be rented by my executor, or by someone lawfully handling it as his agent, and all rents which shall accrue from such property, after paying insurance and taxes and a small sum for necessary or reasonable repairs or improvements, shall be divided among my children as follows: Said income to be divided into seventy-eight parts and to be paid out to my children as follows: My oldest child one-seventy-eighth parts thereof; my third child, three-seventy-eighths parts thereof; my fourth child, four-seventy-eighths parts thereof; my fifth child, five-seventy-eighths parts thereof; my sixth child, six-seventy-eighths parts thereof; my seventh child, seven-seventy-eighths parts thereof; my eighth child, eight-seventy-eighths parts thereof; my ninth child, nine-seventy-eighths parts thereof; my tenth child, ten-seventy-eighths parts thereof, and my eleventh child, eleven-seventy-eighths parts thereof, and my twelfth child, twelve-seventy-eighths parts thereof. I also direct my executor, if in his judgment it shall be to the best interest of the estate in case my wife and children shall remove to the State of North Carolina, to remove and transfer all of my personal estate from South Carolina to North Carolina; or so much of it as he may think it wise to remove; and I hereby authorize him to take such steps as the laws of South Carolina require to enable him to carry on this provision.
"Item 6. I hereby appoint my trusted friend, James H. Lee, of Monroe, North Carolina, executor of this my last will and testament and guardian of my children and direct that he shall give bond for the faithful discharge of all duties, and in other respects to be governed by and be subject to the laws governing administrators and guardians, and not inconsistent with the foregoing provisions of this will. But in case the above-mentioned executor shall refuse to accept the trust hereby created and shall not qualify as executor within ten days from the date of his notification of my death, or shall at that time be dead, or shall die at any time after having so qualified, then in either of said events, I hereby appoint George S. Lee of Monroe, North Carolina, executor of this will and guardian of my children, with all the estate, right, powers and privileges, and subject to all the burdens and responsibilities, hereinbefore conferred and imposed upon the first named executor and guardian. Or, in case of his death or refusal to qualify, I appoint my cousin, Thomas Lee, Jr., of near Monroe, North Carolina, executor and guardian with all the estate, rights, powers and privileges, and subject to all the duties and burdens and responsibilities before imposed upon the first named executor of this will in like manner as if he had been in this will first appointed executor and guardian.
"Item 7. I positively direct that all taxes accruing upon said property belonging to my estate shall be paid by my executor as soon as the books are open for the receipt of taxes, even should it require the total income from my estate to do so, in order that there may be no danger of any penalty for non-payment added.
"Item 8. If any of my real estate should be damaged or destroyed by fire and not sufficiently covered by insurance to repair the damage or rebuild, my executor is hereby directed to appropriate a sufficient sum from the income of my real estate to rebuild or repair, as in his judgment may be deemed sufficient, so that my real estate may be kept in an income-producing condition.
"Item 9. After paying all taxes, insurance, repairs or rebuilding, as before directed, from the income of my estate, my executor is directed to distribute the balance of the income from the said real estate as specified in Item 5 of this will for the support, education and maintenance of my children.
"Item 10. If for any reason after my death the income from the portion of my personal estate set apart for the support of my wife should not be sufficient to support her comfortably, in the judgment of my executor, then and in that event he is directed to supplement said income provided for her as in his judgment he sees wise; such portion, however, being limited to the amount not to exceed that which each child shall receive and said supplementary sum to come from the income of my personal estate.
"Item 11. By way of suggestion, if my executor should approve, I make the following suggestion as to the method of his converting any stock or stocks of goods I may have into cash: —
"That he continue to sell at retail for a time sufficient to raise enough cash to pay any and all my debts; when this is done, he shall within twelve months after date of my death, take or have taken a complete and accurate inventory of all of said stock or stocks and after said inventory shall have been taken, he shall close the store or stores and advertise for thirty or sixty days all of said stock or stocks, including a lease or rental of the store in which the same may be situated, if the party so desires, said advertisement to be placed in several leading daily papers, both North and South Carolina, and if the party purchasing it be a desirable rental and not of German or Jewish descent, my executor shall give him the preference of renting the building in which the same may be situated.
"Item 12. While I wish it distinctly understood that none of my real estate is to be sold as provided in Item 5, still my executor may exchange any dwelling situated on less than one acre of land for other property, provided my estate is in a position to pay a cash difference; I also wish it understood that none of my real estate is to be exchanged for inferior property, even though my executor should be able to get what he considered more than the cash difference.
"Item 13. It is my will and desire that my grandchildren receive no part of my estate, and should any child or children be born after this, the division provided for in Item 5, shall be so changed as to allow this child or children to receive its or their share of the income under the same method so that the youngest child shall receive the largest amount.
"In Witness Whereof I have hereunto set my hand and seal this 13th day of August, 1915, in the presence of the subscribing witnesses hereto, who at my request and in my presence and in the presence of each other, have subscribed their names as witnesses to this will.
"JOHN D. COLLINS. [Seal.] "In the presence of:
"T.J. PATTON, "O.C. CRANE, "H.B. CARLISLE." "Jan 2d 1924.
"This Codicil witnesseth that, on this day, January 2d 1924, I, J.D. Collins will that at my death all the merchandise and contents of my Department store located at 109 East Main Street in the City of Spartanburg is to be disposed of as follows:
"After sufficient merchandise has been sold to pay all my indebtedness the balance of the stock of merchandise is to be invoiced at original cost and sold to William A. Collins, provided the following stipulations are conformed to in every sense of the word:
"The stock shall be discounted for depreciation reckoning from original first cost, not more than one-fourth, or 25 per cent off of the original cost. I will that this stock is to be sold to William A. Collins providing that at no time until he has fully paid for the stock, he shall borrow money, or buy merchandise on credit to exceed an amount equal to more than one-fourth of the value of this stock, at the time at which it was transferred to him. In other words, his total indebtedness shall not exceed more than one-fourth of merchandise for which he is to pay net after discounting. That is, the indebtedness for borrowed money, and merchandise bought on credit must not combined aggregate an amount equal to more than one-fourth inventory shows after a deduction of one-fourth for depreciation.
"I will that William A. Collins is to be charged no rent for twelve months, and the stock shall be turned over to him without any cash payment. I will that he is to look after maintenance and education of the children under twenty-one years of age. I will that after the first year, he is to pay a rental of not over five hundred dollars per month, and in addition to this he is to pay three hundred ($300) dollars per month until the debt for the stock of merchandise is fully paid. I will that if he should become dissipated, or drink whiskey to excess, or live extravagently, spending an amount exceeding three hundred ($300) dollars each month for his personal use, that after one year his interest and rights to the stock shall be cancelled and that my administrator have the stock inventoried and transferred to J. Duren Collins, Jr., providing it meets the approval of my executor, and providing that he, J. Duren Collins, Jr., agrees to all the provisions previously stipulated in this Codicil.
"I will that the said William A. Collins is to sell no merchandise, either wholesale or retail, without the cash until the debt for the stock of merchandise has been fully paid.
"I will that J. Duren Collins, Jr., is to occupy my store room, corner North Church and Commerce Streets, which he now occupies free of rent for a period of at least twelve months after my death. I will that all my wares and merchandise which I now, or hereinafter own at Branch stores, shall be disposed of as per terms mentioned for the disposal of merchandise and wares in Spartanburg, viz., Branch stores shall be kept open, and merchandise sold therefrom till sufficient cash has been received to pay any and all debts such stores may owe, and that as soon as such debts are paid all the merchandise is to be removed, and placed with stock at my Spartanburg store and sold to W.A. Collins, on the same terms as those stipulated in Codicil for disposing of Spartanburg merchandise.
"I will that should the terms of this codicil, in the opinion of my executor, J.H. Lee, be too stringent, he, the said executor, is to modify said codicil in such a manner as to make it justifiably acceptable. I will that should said William A. Collins die, or become physically, mentally or financially unable to conform to the requirements stipulated in this codicil, then J. Duren Collins, Jr., is to take his place providing he conforms to all requirements as stipulated in this codicil.
"Should my son, William A. Collins, and my son, J. Duren Collins, Jr., die or fail for any reason to comply with the terms of this codicil, then, my will is, that my son, Robert Lee Collins, take their place in the purchase of merchandise upon his complying with all the terms and conditions thereof.
"In witness whereof, I have hereunto set my hand and seal this 3rd day of January, in the year Nineteen hundred twenty-four (1924), in the presence of the subscribing witnesses hereto, who at my request and in presence, and in the presence of each other have subscribed their name as witnesses to this Codicil.
"JOHN D. COLLINS. [Seal.] "In the presence of:
"G.E. TAYLOR, "O.C. CRANE, "H.B. CARLISLE.""STATE OF SOUTH CAROLINA, COUNTY OF SPARTANBURG
"I, John D. Collins, of the City of Spartanburg, State and county aforesaid, do hereby declare and ordain this to be a codicil to my last will and testament, dated August 15th, 1915.
"For the purpose of making proper and more suitable provision for the safety and welfare of my daughters, I do hereby authorize and direct the executor of my will, heretofore named, to pay to whichever one of my sons who will agree to abide by the requirements hereinafter set forth, the sum of twenty-five and No-100 ($25) a week and his board. This amount of money, together with his board, is to be paid to the son who will agree to spend his nights at my home where his sisters are living, to take care of his sisters and to see that they are properly chaperoned on all occasions when they leave home to take a trip, or to attend any social gatherings, or any meeting of any kind, whatsoever; that he will see that his younger sisters are taken to school and are furnished with means of transportation necessary to take them to such places as they may care to go from time to time. My purpose for making these requirements is to throw the proper safeguards and protection around my daughters so that they might feel at ease at all times in making their arrangements to go out and will always have a protector in the home in which they live.
"It is my request that my executor offer this proposition first to each of my single sons in the following order, that is to say: Robert L. Collins, first; William L. Collins, second; Edwin Collins, third; Francis Collins, fourth; and Harold Collins, fifth. Should all of my sons be married at the time of my death, or should those of my sons who are single refuse to accept this proposition, I direct that my executor make the same proposition to each of my married sons except my oldest, J. Duren Collins, until one of them has accepted. Should the one who accepts fail or refuse to abide by the terms hereof, then my executor is authorized and directed to make this proposition to one of my other boys.
"It is my intention and I so direct that my executor shall be the sole judge as to whether or not the conditions and requirements herein set forth are being complied with, and his decision in the matter shall be final.
"In witness whereof, I have hereunto set my hand and seal, this the 26th day of January, A.D., 1924.
"JOHN D. COLLINS. [Seal.]
"Signed, sealed and published and declared by the within John D. Collins as and for a Codicil to his last will and testament, in the presence of us, who at his request and in his presence, and in the presence of each other, have hereunto subscribed our names as witnesses, the year and day last above written. "J.D. ERVIN, "LORENA GARRETT, "C.W. PERRIN."
"STATE OF SOUTH CAROLINA, COUNTY OF SPARTANBURG"I, John D. Collin, of the City of Spartanburg, State and county aforesaid, do hereby declare and ordain this to be a Codicil to my last will and testament dated August 15th, 1915, hereby revoking the codicil heretofore made by me on January 2d 1924, and substituting in lieu thereof the following:
"I will and direct that at my death all the merchandise and contents of my Department store located at No. 109 East Main Street, in the City of Spartanburg, is to be disposed of as follows:
"After sufficient merchandise has been sold to pay all my indebtedness, the balance of the stock of merchandise is to be inventoried at the original cost and sold to J. Duren Collins, Jr., and R. Lee Collins, providing the following stipulations are conformed to in every sense of the word:
"The stock shall be discounted for depreciation reckoning from original first cost, not more than one-fourth (1/4) or 25 per cent off of the original cost. I will and direct that this stock is to be sold to J. Duren Collins, Jr., and R. Lee Collins, providing that at no time until they have fully paid for the stock shall they borrow money, or buy merchandise on credit to exceed an amount equal to more than one-fourth (1/4) of the value of this stock, at the time it may be transferred to them. In other words, their total indebtedness shall not exceed more than one-fourth (1/4) of the stock of merchandise for which they are to pay net after discounting. That is the indebtedness for borrowed money and merchandise bought on credit combined must not aggregate an amount equal to more than one-fourth of what the inventory shows after a deduction of one-fourth for depreciation.
"I will and direct that J. Duren Collins, Jr., and R. Lee Collins are to be charged no rent for twelve months, and the stock shall be turned over to them without any cash payment. I will and direct that they look after the maintenance and education of my children under twenty-one years of age.
"I will and direct that after the first year they are to pay a rental of not over five hundred ($500) dollars per month and in addition they are to pay on the purchase price of the stock of goods transferred to them the sum of three hundred ($300) dollars per month until the debt for the stock of merchandise is fully paid. I will and direct that if either of my two sons, J. Duren Collins, Jr., and R. Lee Collins, shall become dissipated, or drink whiskey to excess, or live extravagantly, spending an amount exceeding three hundred ($300) dollars each month for his personal use, that after one year his interest and rights to the stock shall be cancelled and my administrator shall have the stock inventoried and transferred to Edwin Collins, providing it meets the approval of the executor and providing that he, Edwin Collins, agrees to all the provisions previously stipulated in this codicil.
"I will and direct that the said J. Duren Collins, Jr., and R. Lee Collins are to sell no merchandise, wholesale or retail, without the cash until the debt for the stock of merchandise has been fully paid.
"I further will and direct that all of my wares and merchandise which I now, or hereafter may own at Branch stores, shall be disposed of as per terms mentioned for the disposal of merchandise and wares in Spartanburg, viz. branch stores shall be kept open and merchandise sold therefrom until sufficient cash shall have been received to pay any debt or debts such stores may owe, and that as soon as such debts are paid all the merchandise is to be removed and placed with the stock at the Spartanburg store and sold to J. Duren Collins, Jr., and R. Lee Collins on the same terms as those stipulated in codicil for disposing of Spartanburg merchandise.
"I will and direct that should the terms of this codicil in the opinion of my executor, J.H. Lee, be too stringent, he, the said executor, is to modify said codicil in such manner as to make it justifiably acceptable. I direct that should the said J. Duren Collins, Jr., or R. Lee Collins, die or become physically, mentally or financially unable to conform to the requirements stipulated in this codicil, then Edwin Collins is to take his place providing he conforms to all the requirements as stipulated in this codicil. Should either of my sons, J. Duren Collins, Jr., or R. Lee Collins die, or fail for any reason to comply with the terms of this codicil, then my will is, that my son, Edwin Collins take his place in the purchase of merchandise upon his complying with all the terms and conditions thereof.
"In witness whereof, I have hereunto set my hand and seal this the 24th day of June, in the year Nineteen hundred and twenty-five (1925) in the presence of the subscribing witnesses hereto, who, at my request and in my presence, and in the presence of each other, have subscribed their names as witnesses to this codicil.
"JOHN D. COLLINS. [Seal.] "In the presence of:
"MARY L. RUDISAIL, "T.S. PERRIN, "C.W. PERRIN."DECREE
This is an action brought for the purpose of having the will and codicils of John D. Collins, deceased, construed and to obtain instructions to the executor by the Court, as to his duties and powers under said will.
All parties interested in the estate have been made parties and have been duly served with summons and complaint and are properly before the Court.
An order of reference was passed, referring it to the master to take testimony and references were duly held and the testimony taken, and the same is before me.
The following matters appear from the evidence: John D. Collins, the testator whose will is involved, died in this city on or about November 19, 1925, leaving of force his last will and testament, including attached codicils, hereinafter referred to in greater detail, Mr. Collins, had, for many years, been engaged in the mercantile business here, his principal business being known as the Bee Hive, in which he kept a large stock of merchandise, both dry goods and groceries. The Bee Hive fronted both on East Main Street and Broad Street, the main building being some three stories high, with a basement floor, also. He also maintained three other branch stores located at Union, Landrum, and Greer, which were operated in conjunction with his Bee Hive in Spartanburg.
Testator left surviving him, his second wife, Mrs. Pearl Walker Collins, and his twelve children named as plaintiff and as defendants. His estate consisted mainly of the stocks of merchandise aforesaid, with some $50,000.00 in life insurance payable to his estate, some household and kitchen furniture, and a number of parcels of real estate of quite considerable value; all of his estate appraising some $500,000.00 in value. The will was duly probated in the office of Probate Judge of this county shortly after testator's death. The executor at once took charge of the estate, including the stocks of merchandise, and on December 31, 1925, caused to be taken a complete inventory of all merchandise adjusted so as to show the amount of merchandise on hand as of the date of the death of testator, the same being shown as $118,806.42. All of the children are now of age except four of the girls; the ages ranging from about thirty-six years down to about fifteen.
The executor has been in charge of and operating the stores, as going concerns, ever since the death of testator. He explains that he has operated them successfully and has made some money for the estate by the operations, and that the reason he has continued to so operate them was because of the uncertainty and confusion in regard to the meaning and interpretation of the will, and the question as to his exact powers and duties thereunder.
For the same reasons he has refrained from offering to turn over the merchandise to the defendants, Robert E.L. and J. Duren Collins, under the terms of the third codicil.
The contention made on behalf of the plaintiff, which is also concurred in by Mr. McDow, representing all the adult defendant children, and also concurred in by the infant defendants personally, is that the will and codicils are so contradictory, conflicting, and confusing, and the meaning of some of the provisions so obscure, that it is self-destructive, and, as a result, the testator died intestate as to both real and personal property, and that his entire estate should be adjudged to belong to his children as intestate property. In making these contentions, they likewise press in argument the contention that the terms of the will are unreasonable to the point of being ridiculous, and unfair and unjust to some of the children.
I have given the most careful and thoughtful consideration to the arguments and contentions of counsel, and while I must admit that there is some confusion and difficulty involved in the interpretation of the will, nevertheless it is the duty of the Court to interpret, rather than attempt to destroy wills, and if possible to so interpret the will as to ascertain the real meaning and intent of the testator, if the same can be done consistent with rules of law.
THE WILLA large number of questions have been raised by the parties to the action (principally by the plaintiff and by the executor), as to the proper construction of the will, and the interpretation and effect to be given various provisions thereof. The will itself is rather lengthy and somewhat complicated, and there are attached to it three separate codicils, the last of which expressly revokes the first codicil. I have given the questions presented, and the oral and written arguments of counsel in relation thereto, very careful consideration, and I shall now undertake to give my views upon each of the questions presented, with my reasons for such views, where it is deemed important to set them forth.
1. I find no difficulty in concluding and holding that the will makes definite disposition of all testator's personal estate and that he did not die intestate as to the same, as is contended.
2. I think testator died without disposing of the fee in the real estate, and therefore he died intestate as to the fee. But I hold that his will empowers the executor to take charge of the real estate, make repairs thereon, rent or lease it, pay taxes and collect the income and hold and distribute the same amongst the children in the manner set forth in the will, until the youngest child shall reach the age of forty years. He does not, in words, state that these acts on the part of the executor shall continue for that exact period, but the language of the will in its various parts is such as to leave no doubt in my mind that such was his intention. During that period also, under Item 12, the executor is given the power to exchange any of his real estate for other property in the manner and subject to the conditions therein stated. I conclude that the various provisions relating to the real estate amount to the creation of a trust in relation thereto, which is to continue until the youngest child reaches forty years of age, unless such child shall die sooner, in which case it terminates. Such a trust is lawful and valid and is binding upon all the heirs and legatees. Upon the death of testator, therefore, the fee descended, under the statute of distributions, to the children of testator, share and share alike, subject, however, to the limitations which his will places upon the use and enjoyment thereof, and subject to the authority and powers given the executor in reference thereto. The testator could not, of course, lawfully deprive his children of the power to alienate his or her interest in the fee, subject of course, to the limitations set forth in the will as to the use and enjoyment thereof for the period stated, and subject to the rights and powers of the executor aforesaid. I do not interpret the provisions of the will in which the testator states that none of his real estate is to be sold until his youngest child is forty years old, as affecting the validity of the other provisions of the will as to the disposition of the real estate, the rents and income and the division thereof, and for the period fixed.
3. All parties concede and I so hold that the provisions of Item 13 cannot deprive any of testator's grandchildren from inheriting any part of the estate through the death of his or their parents.
4. Several questions have arisen as to the proper interpretation of the provisions of Item 2, Subdivision A, C, and E; Items 5 and 9 and the codicils, and the rights and interests of the parties thereunder, etc. I shall therefore set forth, as briefly as possible, my conclusions with reference to the various questions that have arisen in connection with these provisions:
Item 2 gives all personal property, including merchandise, etc., to his executor, in trust for the uses and purposes thereafter named. Subdivision A provides for the executor to immediately sell all personal property and collect all amounts due the estate, and to then lend the proceeds upon good security and collect and hold the interest and income as therein provided, until the times thereafter mentioned, etc. Subdivision B provides for the separate investment of one-tenth of his personal estate for the benefit of his wife. Subdivision C directs that his executor shall apply, as far as may be necessary, the remainder of said net annual income from the funds above mentioned, to the support, education and maintenance of my children, until each of my said children shall have arrived at the age of twenty-one years. Any amount of said income not so needed shall be added to the corpus of the estate, and handled accordingly.
Subdivision E provides: "Subject to the provisions above named, I direct that the remaining nine-tenths of my personal estate shall be equally divided among all of my children, each child to receive one-half of his or her share when such child shall arrive at the age of twenty-one years, and the balance upon arriving at the age of twenty-five years. But in the meantime, each child shall receive the actual income from the unpaid portion of his or her legacy, that is between the ages of twenty-one and twenty-five years. In case my daughter or daughters shall become entitled to the share of my estate heretofore directed to be set apart for the benefit of my wife, by reason of her second marriage or death, then I direct that my executor shall hold the same and pay it out to my daughter or daughters as above provided, or in case of their death, then to be equally divided among my other children who may then be living, upon such conditions as is hereinbefore provided for the division and distribution of the other portion of my personal estate."
Item 5 provides, amongst other things, for the executor to take charge of and rent all real estate and divide the net proceeds amongst his children on the basis of one-seventy-eighth (1/78) thereof to the oldest child, and gradually increasing the amount to each succeeding child until the last, which is to receive twelve-seventy-eighths (12/78) thereof.
Item 9, however, provides that, "after paying all taxes, insurance, repairs, etc., as before directed, from the income of my estate, my executor is directed to distribute the balance of the income of the said real estate as specified in Item 5 of this will for the support, education and maintenance of my children."
The third codicil provides that the executor is to offer the merchandise stocks to Robert E.L. and J. Duren, upon the terms and conditions therein named.
My conclusions as to the various questions presented, arising out of the aforesaid provisions, may be stated as follows:
(a) Later provisions, in case of conflict, must prevail as against earlier provisions, nevertheless, all provisions must be considered together and apparent conflicts reconciled as far as possible. By such method of construction, the earlier items of the will must be considered along with and as modified by the later provisions and the codicils.
(b) Therefore Subdivision A, as modified by the third codicil, directs the executor to sell at once and reduce to cash all the personal property, except the merchandise, which is to be sold, and the proceeds collected as is provided in said codicil. Under the first paragraph of Item 2, all of the personal property, including the merchandise, is given to the executor in trust for the purposes thereafter named. The codicil does not change the nature of the trust created, but merely substitutes the testator's own directions as to the method of sale, the persons to whom sale is to be made, and the terms of sale. It does not undertake to change the beneficiaries of the proceeds of such sale. Under the provisions of the codicil, construed in connection with the provisions of Subdivisions C and E, the purchase price of the merchandise, when and as paid in by the boys, goes into the hands of the executor, in trust, to be handled and disposed of just as he is required to handle and dispose of the proceeds of all other personal property. The interest on the purchase price, which I told the boys must pay as hereafter stated, should be handled and disposed of by the executor just as he is required to handle and dispose of the other income on the personal property. The codicil does not revoke, but merely modifies, Subdivision A.
(c) Subdivision C, as set forth above, as I construe it, requires that "as far as may be necessary," the income from the remaining nine-tenths of his personal estate, shall be applied to the maintenance, education, and support of his minor children during their minority only.
The terms of the will do not justify the conclusions that any of the children are to be supported or maintained out of the estate after they respectively reach twenty-one years of age. I think that Items 5 and 9 must be construed along with Subdivision C, and, when so construed, Item 9 requires that the net income from the real estate must be applied, as far as necessary, towards the education, support, and maintenance of the minor children during minority. In other words, the minor children are entitled to have the net income from nine-tenths of the personal property, as well as the net income from the real estate, applied, as far as is necessary, to their maintenance, support, and education during minority.
(d) It will be noted that Subdivision E provides that "Subject to the provisions above named (that is, subject to the provisions of Subdivision C for the maintenance, education, etc., of the minors), I direct that the remaining nine-tenths of my personal estate shall be equally divided among all my children, each child to receive one-half his or her share when reaching the age of twenty-one, etc."
My construction of this provision, in connection with the other provisions, is, that it is the intention of testator that his twelve children shall share equally in the final division of the remaining nine-tenths of his personal estate, but subject to the provisions made for the support, maintenance, and education of his minor children out of the income thereof, during their minority. As each child reaches the age of twenty-one years, his or her right to the income for support, maintenance, and education ceases, and when the youngest child reaches twenty-one, no further claims of that sort will exist. The provisions of the codicil must be read in connection with these provisions, and it must be remembered that the third codicil merely provides that the executor offer the merchandise to these boys on the conditions named. Until they accept the offer, there is no contract of sale to them. In case they should refuse to accept the terms, and in case, in that event, their younger brother should also refuse, then the codicil goes by the board, and the merchandise would be subject to the original provisions of Item 2, Subdivision A, etc., and the executor would proceed to sell the same and reduce it to cash and handle and dispose of the proceeds just as he is required to do with the proceeds of all other personal property.
Assuming, however, that the two sons will accept the terms of the codicil, and in as much as they are only required to pay $300.00 per month on the purchase price, it is quite obvious that it would be impossible to carry out strictly the terms of Subdivision E, which provides for each child to receive one-half of his or her share of nine-tenths of the personal estate when reaching twenty-one, and his full share on reaching twenty-five. In fact, that would have been impossible of literal fulfillment even if there had been no such codicil, as will be seen when the varying ages of the children, ranging from thirty-six down to fifteen, is taken into consideration. My view is that the provisions of Subdivision E, as to the time when the division shall be made amongst the children, is merely directory and is not to be allowed to override the other and controlling provisions; and that the testator's primary object in this connection was and is to provide that his children are to share equally in the ultimate distribution of nine-tenths of his personal property and in the income therefrom, subject, as already indicated, to the rights of the minors in the income thereof for their maintenance, education, and support during their respective minority. I conclude, therefore, that the executor, after making due provision for the maintenance, education, and support of the minors during minority, from the net income of the nine-tenths of the personal estate and the net income of the real estate, should, as early as practicable, divide any surplus of such nine-tenths of the personal estate amongst the adult children, reserving the shares of the present minors until they reach twenty-one years, respectively. Further, that as any additional proceeds of personal property and income therefrom shall be collected hereafter, that the executor, after reserving such part thereof as may be necessary (if any) for the protection and benefit of said minors (if that shall be necessary), should pay out nine-tenths thereof in the same way as just above provided.
(e) In this connection, there logically comes up for consideration the question as to the one-tenth of the personal estate that Item 2, Subdivision B, provides should be invested separately for the benefit of his first wife, who predeceased testator. Construing that subdivision along with the latter part of Subdivision E, I conclude that it was the intention of testator that, in the event of the death of his said wife, the said one-tenth and the income therefrom should be equally divided amongst his female children. That one-tenth and the income therefrom is not subject to the charge for the support, maintenance, and education of the minors under Subdivision C, and, therefore, I hold that it should be divided amongst the female children as early as is practicable, the shares of the adults to be paid them and the shares of the minors to be paid them as they respectively reach twenty-one years; the amounts which hereafter may be collected, to be distributed at reasonable intervals as and when collected. I further hold that the said female children took vested interests in such one-tenth.
(f) The next question raised is as to what disposition the executor should make of the household and kitchen furniture. The will provides that the wife and children might use said property so long as they lived together in his home, during which time it should not be sold. However, since the wife predeceased him and the children are all living elsewhere, I hold that all such property should be disposed of as early as practicable to the best advantage of the estate, and the proceeds be handled and disposed of as is provided for the proceeds of other personal property of the estate.
(g) As to the income from the real estate and the division thereof, I have already held that under Items 5 and 9, construed together, the net income from the real estate is applicable along with the net income of the nine-tenths of the personal property, under subdivision of C, to the maintenance, education, and support of the minors during their minority. Subject to that, the remaining net income from the real estate, if any, is divisible, under Item 5, amongst the children according to their ages as therein stated. The will does not state when this shall be divided, but I think it is implied that it should be divided at reasonable intervals, and at least annually while the executor is to remain in charge of the real estate; but this is of course subject to the provisions of Item 8, which provides in certain contingencies for the rebuilding or repair of buildings, and the same is likewise true of the provisions of Item 9, already discussed, as to the application of the net income of real estate to the education, support, and maintenance of the minor children; this is likewise subject to the right and duty of the executor under Item 8, to repair and rebuild houses, etc.
5. There are a number of other questions that have arisen in connection with the provisions of the third codicil, which I shall dispose of, as follows:
(a) The third codicil has been attacked as being so unreasonable, impractical, and impossible of fulfillment, that it should be held ineffectual and be ignored as part of the will. While its terms in all respects may be difficult to carry out, in connection with other parts of the will, I nevertheless see no legal impediment to its validity, and I must therefore hold that it is valid and is to be enforced in accordance with its terms.
(b) Under its terms, very broad powers and discretion are vested in the executor. I think it would be unwise at this time to undertake to define their limits, other than to say that his powers and discretion in the matters set forth in the codicil, so long as they are exercised in good faith, must be left just as the testator left them.
(c) I hold that, if the boys should accept the provisions of the said codicil, they will be entitled to occupy the Bee Hive store building, as occupied by the business of the deceased, for one year from the date they take over the business, without paying any rent, and thereafter, they are entitled to continue to occupy said property at a monthly rental of not over $500.00 per month during the period during which they are engaged in completing the purchase of the merchandise at the rate of payment fixed in the codicil, and when the full purchase price has been paid and the purchase completed, as contemplated in the codicil, then the said real estate will immediately be subject to the control of the executor, just as the will provides as to the other real estate. I further hold that the said boys, in event of accepting said terms of sale, would never have the right to rent out the said property or any part thereof to third parties and collect and enjoy the rent, and that they would not be entitled to collect and enjoy the rents of that part of said property that is used as a barber shop; but that such part as is rented as a barber shop would be subject to the control of the executor, just as all other real estate.
(d) I do not construe the provisions of the codicil as placing the financial burden upon the said sons, to support, maintain, and educate the minor children. I do not think that testator meant to impose any such burden upon them by the language which he did use, and I think that such construction is refuted by the other provisions of the will when construed in connection with the codicil, and furthermore, if he had intended to create such an obligation upon them as a condition to their accepting the terms of the codicil, he would have said so in unmistakable terms, which he did not do.
(e) I do think, though, that if the sons accept the terms of the codicil, they should pay interest upon the purchase price for the merchandise, and I think that the testator so intended. Furthermore, I think that, in the absence of a specific provision in the will to the contrary, the law implies that the obligation which these boys assume to pay this purchase price money for the goods, will bear interest until it is paid. I therefore hold that they should pay interest annually of 7 per cent. upon the balance that may be due on the purchase price, subject to deductions for the monthly installments as paid. The interest should be paid at the end of each year, counting from the date of taking over the merchandise.
(f) The third codicil clearly and expressly revokes the first one, which provided that J. Duren Collins should have the storeroom occupied by him rent-free for one year. I therefore conclude and hold that he is liable for reasonable rental for said store from the date of the death of his father. This can be determined by agreement between him and the executor, or by legal proceedings, as may be deemed best.
(g) I think the terms of the codicil are such as of necessity to require the close attention of the executor to the business and its conduct, and to the boys and their habits, during the entire period of the completion of the purchase, in event they accept the terms imposed, with the view of enabling the executor to see to it that all terms and conditions of the codicil are at all times complied with.
(h) The codicil requires the executor to "discount for depreciation reckoning from original first cost" not more than 25 per cent. off of the original first cost, but it does not prevent him from fixing the discount at a less percentage than 25 per cent. At the same time he has liberty of action here, as elsewhere in the performance of his duties, "to modify said codicil in such manner as to make it justifiably acceptable." Under this provision, therefore, if he deemed it justifiable to do so, he could allow a greater discount than 25 per cent. from the original first cost. He can also modify any other provision of the codicil in the same way and subject to the same conditions, and could waive a violation of the strict terms and provisions of the codicil, if, in his judgment, they were too stringent, etc.
(i) It is conceivable that various questions, now unforeseen, might arise hereafter in the administration of this estate, and therefore I think it wise to provide, as I now do, that any party to this action, or their heirs or successors, shall have the right at any time hereafter by petition in this cause, or by other appropriate method, to present to this Court for consideration and determination any question, not specifically decided herein, that may hereafter arise in connection with the further construction of this will, or relating to the powers or duties of the executor or the rights of any of the legatees or devisees herein.
(j) I hold that the executor, under the terms of the codicil, was directed to offer to the said two sons, the privilege of purchasing the merchandise, as soon as sufficient merchandise had been sold to pay all testator's indebtedness. The evidence does not show definitely just on what date that point was reached. It does show that an inventory was taken on December 31, 1925, but it is not very definite whether at that time enough money had been obtained from the sale of merchandise to pay all of the indebtedness. The language of the codicil indicates that testator wanted sufficient money "to pay all his indebtedness" to be produced by the sale of merchandise. As soon as that was done, these boys were entitled to then have the privilege of accepting the terms of the codicil. I think and so hold that such additional testimony should be taken by the master to clear this point up. It may be, but I am not definitely deciding the point at this time, that these boys would be entitled to the merchandise and the store as of the date when they were entitled to accept the terms of the codicil, and that they might be entitled to have the subsequent operation of the store treated as being upon their account and entitled to the profits, if any, which may have been made since then. These questions are not now decided, but are left open for future consideration. What I hold now is, that just as soon as is reasonably practicable, the executor must offer to turn over to the said sons, the entire remaining stocks of merchandise and the place of business in question, and allow them to purchase the same upon the terms and conditions mentioned in the codicil, modified in such manner as the executor may see fit, if at all, to modify the same under the terms of said codicil.
6. The first wife having predeceased her husband, it follows that the provisions of Item 10 are now inapplicable.
7. Item 11 contains mere suggestions as to the method of sale of the merchandise, which suggestions are inapplicable in view of the third codicil, in the event the two sons or Edwin Collins should accept under its terms. If they should not, then the executor would have to proceed to sell the said merchandise under the provisions of Item 2 of the will, and in that case the suggestions contained in Item 11 might be pertinent and applicable.
8. As it appears that other and satisfactory arrangements have been made for the protection and chaperonage of the girls and the minors, none of whom live in the old home, which was contemplated by the testator, I hold that it is not necessary for the executor (unless conditions should very materially change, making it advisable in his opinion to do so), to attempt to carry out the provisions of the second codicil of date January 26, 1924, relating to employing one of the sons to live with and take care of the girls.
9. I have endeavored to state my conclusions upon each of the issues that counsel has presented for determination. If any matter has been omitted by oversight and counsel will call attention to it, it can be taken up and determined in a supplemental decree.
September 29, 1928. THOS. S. SEASE, Presiding Judge.ORDER
The plaintiff asked the Court, in the above-entitled action, to determine the following questions:
1. The will directs that the personal property be distributed, and directly provides that all debts be paid by selling off goods at the stores. The testimony, the returns, and pleadings of the executor show that proceeds of life insurance, to the extent of . . . . . thousand dollars in round numbers, were used in paying taxes, costs, and debts. Must "personal property" be reimbursed to the extent of those payments on taxes, debts, and expenses from "sales of goods," so as to leave presently distributable as personal property all the personal property which the testator owned at the time of his death? Must the stores pay all debts and expenses?
2. The operation of the stores by the executor has produced a profit. The Court is asked to ascertain the amount of the profits and to definitely determine whether it goes to the takers of the store under the third codicil.
3. The testimony and the return of the executor show that the stock in the stores has been materially increased in value and amount under the administration of the executor, since the death of J.D. Collins. The Court is asked to ascertain the increase in value, and to determine whether or not this increase is to be awarded to the store takers under the third codicil at the testamentary discount, and on the testamentary credit, or shall be disposed of and be distributable as personal property.
4. The $37,500.00 dower settlement has come out of insurance money which the clients, represented by the attorneys making this application, contend is distributable "personal property." Must "personal property" be reimbursed from realty or from continued selling of store goods so that this sum may be distributed?
5. The Court is asked to determine what is a reasonable annual allowance for the maintenance and education of the minor children, either from the testimony before it, or from additional testimony ordered to be taken.
6. The Court is asked to definitely determine and instruct the executor that the amount of the stock in the stores shall be sold down to and kept at the level of value as of the date of the death of J.D. Collins.
Before these questions were decided, the store building known as the Bee Hive, including almost the entire stock of goods therein, was destroyed by fire. The plaintiff thereafter filed a supplemental complaint contending that the issues arising out of the codicil to the will have, by such destruction of the store building and stock of goods, become academic, inasmuch as the building to be rented to Robert E. L. Collins and John Duren Collins for $500.00 per month no longer exists; that the stock of goods, which the third codicil provides should be turned over to them on the terms and conditions named in the will, no longer exists; that the testamentary object as found by the former decree, to wit, the conduct of the business of the testator, is no longer possible under any of the terms and conditions of the will, and that the whole means for the effectuating of testator's testamentary purpose, as declared by the said decree, has gone out of existence; that the takers under the third codicil of the will have never signified their acceptance of the terms nor their willingness to accept such terms, and now, by reason of the facts alleged in the supplemental complaint, they no longer have the right to accept such terms, and asked that the executor be authorized and directed to make such distribution of the moneys received from the insurance on the building and the stock of goods destroyed by fire and operation of the Bee Hive profits, and to distribute the proceeds of the sale of the stock in branch stores as same are disposed of.
The whole matter was referred to the master of Spartanburg County to take and report the testimony, who at two references took the testimony and has filed the same.
The first question involves the construction of the third codicil, wherein the testator provides: "After sufficient merchandise has been sold to pay all my indebtedness, the balance of the stock of merchandise is to be inventoried at the original cost and sold to J. Duren Collins, Jr., and R.E.L. Collins," under certain conditions.
It was evident from the terms of this codicil that the testator intended that enough goods should be sold to pay all his debts. It appears that before testator's death, and before his marriage to his second wife, he made an alleged antenuptial contract with her, wherein it was alleged that she agreed to accept $10,000.00 as her portion from his entire estate, including dower.
After testator's death, the widow refused to accept the $10,000.00 and an action was brought by the executor against her to require her to accept said amount and relinquish all claims against the estate. By her answer, she set up her claim of dower in all the real estate left by the testator. This cause was settled by compromise between the parties for $37,500.00. The question arises whether or not the $37,500.00 should be paid from the sale of goods under the terms of the codicil. When the testator provided that all his debts should be paid from the sale of merchandise before transferring the same to J. Duren Collins and Robert E.L. Collins, he meant to include all his obligations, whether known or unknown. While it is true that dower is not such an obligation, or debt and that the claim set up by the widow and compromised was set up and allowed partly as dower and that dower is a vested property right which becomes fixed in the widow upon the death of the testator, yet testator in making his codicil did not take into consideration the fact that his widow would claim dower, but relied upon his antenuptial contract with her, which appears to have been dated prior to the date of the codicil.
I am of the opinion that it was the intention of the testator that all claims against the estate should be paid from the sale of the goods, including the inheritance taxes, but not the costs of tombstone, and I so hold. However, the testimony of C.B. Boatwright, auditor, shows that the Bee Hive had earned profits up to January 1, 1929, in the amount of $95,740.37, and these profits should be used to pay the debts and obligations under the above provision of the codicil and should not inure to the benefit of the beneficiaries under the third codicil of the will, even though the evidence does clearly show that Robert E.L. Collins and John D. Collins were all along ready and willing to comply with the terms of the codicil and were prevented from doing so by the executor on account of litigation and the appeal from the prior decree. This, however, would not entitle them to the profits from the store, because, even though they were willing, they had never actually taken the same over. If there be anything left from the profits or from the money realized from the sale of the goods, the same should be distributed as other personal property under the will, and it is so ordered.
The third question which the Court was asked to determine before the destruction of the Bee Hive by fire has become somewhat complicated by reason of the destruction of the stock of goods by fire. The amount of insurance on the stock of goods collected, or to be collected, is approximately $58,000.00. It is doubtful whether, under the disposal by me of the matters raised by the supplemental complaint, there will be any excess, but if there should be, the same should be disposed of and distributed as personal property under the terms of the will.
The fourth question has already been disposed of.
Under the fifth question, I am asked to determine what is a reasonable annual allowance for the maintenance and education of the minor children. The testator provided in Paragraph (c), Item two, of his will that the income from nine-tenths of all his personal property should be expended for the education, maintenance and support of his minor children. By Item nine of his will he provided that the net income from all his real estate should be applied to the same purpose. It is quite evident that he intended for his minor children to be amply provided for. It appears that since the testator's death the executor and testamentary guardian has attended to the education and support of the minor children, expending for this purpose such amount as he deemed wise to expend. The amounts so expended appear from the testimony to show that Mildred Collins, Dorothy Collins, and Miriam Collins, who are now minors, and Ethel Collins, non compos mentis, were furnished by the executor from their father's death until January 1, 1929, total sums varying from $1,600.00 for Ethel Collins, to $5,100.00 for Mildred Collins, and $5,400.00 for Kathleen, who is now of age.
It is my opinion, and I so hold, that the amounts to be expended for the support of the minor children should be left largely to the discretion of the executor, and that he be allowed to expend such sums as he may deem necessary for the support and education of these minor children, which shall in no event exceed the sum of $2,400.00 a year for any one minor child.
I am asked to definitely determine under the sixth question, what amount of the stock in the stores should be sold down to and kept at the level of value as of the date of the death of J.D. Collins. In accordance with my findings hereinafter on the last question to be disposed of, I am of the opinion that this question has been practically disposed of by the fire.
As to the questions raised by the supplemental complaint, the testimony shows that since the death of the testator, the executor, up to the time of the fire, had no doubt sold the most of the stock of goods left by the testator at the time of his death, and had replaced the same with other goods. It appears from the testimony that J.D. Collins and R.E. L. Collins, after the death of their father and before the destruction of the building by fire, had, on quite a number of occasions, inquired of the executor when he was going to turn over to them the stock of goods under the terms of their father's will, and that they showed a readiness and willingness to take the stock of goods if he would turn it over to them under the terms of the will. They did all the law required them to do; that is, they agreed to accept the stock of goods under the terms of the will. The estate has been in litigation almost constantly since the death of the testator, and the executor refused to turn the stock of goods over to J. Duren Collins and Robert E.L. Collins until directed so to do by this Court. Before the destruction of the stock by fire, the Court had ordered the executor to turn the stock over to these boys under the terms of the codicil, but he failed to do so because notices of appeal to the Supreme Court from this judgment had been served.
Item eight of the will provides: "If any of my real estate should be damaged or destroyed by fire and not sufficiently covered by insurance to repair the damage or rebuild, my executor is hereby directed to appropriate sufficient sum from the income of my real estate to build or repair, as in his judgment may be deemed sufficient so that my real estate may be kept in an income producing condition."
The testimony shows that the insurance on the building was $47,500.00 and that B.C. Fiske, a reputable contractor, estimates that the cost of replacing the Collins Bee Hive building on East Main Street, which was destroyed by fire, as near like the old building as the present building ordinances of the City of Spartanburg will permit, to be $47,325.00, and states that he will be willing to make a contract for a turnkey job at that figure. It appears, therefore, that there was ample insurance on the building destroyed by fire with which to repair the building in as good or better condition than it was before the fire. It is my opinion that, under the terms of the testator's will, the executor should proceed at once to rebuild the building and rent it to J. Duren Collins and Robert E.L. Collins, under the terms of the third codicil of the will, and it is so ordered.
The plaintiff contends that the stock of goods which the codicil provided should be turned over to J. Duren Collins and Robert E.L. Collins, under certain terms and conditions, no longer exists by reason of its destruction by fire. It was evidently not the intention of the testator that, after his death, goods sold during the year, before it was to be turned over to these boys, should not be replaced from time to time by new goods. This is necessary to carry on any business. His intention was naturally that the Bee Hive should, during the year before it was to be turned over to these boys under the will, be continued as a going concern, and, if the goods were not replaced from time to time, the business would have been greatly reduced during that time by reason of the failure to replace the goods sold in the conduct of the business. It was not contended before the fire that the executor did not have the right to operate the Bee Hive as a going concern until all questions arising out of the construction of the will were settled by the Court. If the executor had the right to sell the original stock of goods, or any part thereof, and replace such goods with new goods, then it would appear that he would now have the right to use the $58,100.00 insurance collected on the goods destroyed by fire to purchase other goods to replace them.
It appears also that there was between ten and fifteen thousand dollars' worth of goods in one of the stores at Landrum, S.C. that were not destroyed by fire and which came within the terms of the third codicil, and which J. Duren Collins and Robert E.L. Collins had a right to buy under the provisions of the same.
The Bee Hive appears to have made for John D. Collins his fortune. It seems, under his will, that it was his greatest desire that it should be continued as a business after his death for an extended period of time. There is no provision in the will that provides that the insurance on the stock of goods, in case they were destroyed by fire, should be used for any other purpose than to repurchase a stock of goods and sell it to these boys under the terms of the third codicil.
It is my opinion that the stock of goods that the testator ordered in the third codicil to be sold to these boys is still in existence, but in the form of money realized from insurance thereon, capable of repurchasing a stock of goods, and that the stock of goods instead of being sold and converted into money has been destroyed by fire and converted into money by reason of the insurance on the stock of goods at the time of the fire.
It is, therefore, ordered, adjudged and decreed that the executor of the will of John D. Collins, deceased, use the $47,500.00 to replace the Collins Bee Hive building on the lot on East Main Street, which was destroyed by fire, as near like the old building as the present building ordinances of the City of Spartanburg will permit, and if the insurance be not sufficient to replace said building, as aforesaid, then the executor is authorized and directed to appropriate a sufficient sum from the income of the real estate to replace said building; that the executor of the will of John D. Collins, deceased, is hereby authorized, ordered, and directed to sell to J. Duren Collins and Robert E.L. Collins the stock of goods at the store at Landrum, S.C. under the terms and provisions of the will; that the executor be authorized, ordered, and directed to use the $58,100.00 insurance collected from insurance companies on insurance policies on the stock of goods in the Bee Hive building that was destroyed by fire, for the repurchase and replacement of a similar stock of goods in the Bee Hive building after the same has been reconstructed as heretofore authorized, ordered, and directed, and to sell the said repurchased stock of goods to J. Duren Collins and Robert E.L. Collins under the terms and conditions of the third codicil of the will.
T.S. SEASE, Circuit Judge, Seventh Judicial Circuit, at Chambers.
November . . . . ., 1929.
Messrs. Lyles Daniel, for plaintiff-appellant, and Thomas F. McDow, for defendants-appellants, Frances, Harold and Kathleen Collins, cite: Rules of construction: 21 R.C.L., 217-234; 40 Cyc., 1396-1417. Court will not uphold will where main purpose is illegal: 77 Atlantic, 25. Courts cannot by interpretation write provisions into will: 28 R.C.L., 221; 118 S.C. 526; 13 Rich. Eq., 104; 48 Am. Rep., 364.
Messrs. Bomar Osborne, Nichols, Wyche Byrnes and I.C. Blackwood, for defendants, J. Duren Collins and R.E. L. Collins, cite: Will did not violate rule against perpetuities: 142 S.E., 50; 149 Mass. 18; 100 N.Y. Supp., 1048.
Mr. Harvey W. Johnson, guardian ad litem for defendant, Ethel Collins, non compos mentis, cites: Construction of "all": 2 C.J., 113; 69 Va., 508; 82 S.C. 460; 100 Pa., 151.
July 21, 1931. The opinion of the Court was delivered by
It is with great regret I find myself unable to agree with the proposed opinion of Mr. Justice Cothran; likewise, I am disappointed that I cannot approve the two decrees of Hon. T.S. Sease, Circuit Judge, appealed from herein. I submit the following as my idea of what the opinion of the Court should be in this case.
John D. Collins was long a wealthy and successful merchant at Spartanburg. His chief enterprise was a department store located on east Main Street, known as the Bee Hive. He had several branch stores, at Union, Greer, and Landrum.
He had 12 children by his first wife, who predeceased him. Five of these were over 25 at his death, two were between 21 and 25, and five were under 21. His fourth child, a daughter, had long been hopelessly insane, and was and is confined in the State Hospital for the Insane. Mr. Collins, in his will, made no provision whatever for her.
His second wife survived him. He had undertaken a prenuptial settlement with her, whereby she was to relinquish all right in his estate in consideration of $10,000.00 to be paid her after his death.
He died in November, 1925, leaving the will and codicils involved here. His estate was valued at $500,000.00.
His widow repudiated the prenuptial settlement, and, in an action brought by the executor to compel her acceptance, was paid $37,500.00.
The Bee Hive storehouse and lot on east Main Street is by far the most valuable piece of real estate. It was a four-story and basement brick building, fronting 53 feet on Main, and running back with that width about half way to Broad, and continuing to Broad with a width of 25 feet. The building on the narrow Broad Street portion was brick, one story and basement.
In March, 1929, this building and all fixtures and stocks contained in it (and the stocks of all the branch stores except one had been brought into it) were totally destroyed by fire. There was $47,500.00 insurance on the building and $58,000.00 on the goods. During the pendency of this litigation, several banks in North Carolina, in which the executor had deposited the greater portion, if not all, of the insurance money, closed their doors. It is probable that there has been a great loss on this account to the estate of Mr. Collins.
There had long been a barber shop in the Main Street basement, which testator had rented, and which was not connected with the business.
After the fire, responsible parties offered to rent the ground, erect a modern, fully equipped building to cost not less than $90,000.00, at their own cost, pay taxes and insurance, and rent it for 30 years at an annual rental commencing at $10,000.00 per year, and advancing to $12,000.00 in five years, and to $15,000.00 in ten years, the building to belong to the owners when the lease terminates. It is next to the Kress store, whose lease is on the same terms, and whose building had been erected.
By reason of the death of his first wife after the will was made, and by reason of the testator's having sold, in his lifetime, the only real estate attempted to be disposed of by the will, there are no specific bequests or devises to be considered, and the questions presented are merely different forms of asking what the testator did with his personal and real property.
The plaintiff commenced this action in the Court of Common Pleas of Spartanburg County against her brothers and sisters, her stepmother and Mr. Lee, the executor named in the will, for a construction of the will. The complaint, one of much length, really sought to allege, if it did not clearly do so, that it was impossible to determine the intention of the testator from the language of the instrument, and contended that, for that reason, it was not a valid will. This statement is made because the complaint points out many, many instances of irreconcilable conflict in the provisions of the will.
It appears that the widow, Mrs. Pearl W. Collins and two of the children, William A. Collins and Edward McAlpine Collins, did not answer. Several separate answers were filed in behalf of the other defendants, they being represented in all by at least eleven attorneys. The defendants, who urge the validity of the will and claim that its terms are plain, in almost every instance disagree as to a construction of the language of the instrument. J. Duren Collins and R.E.L. Collins, who, if the will is sustained, appear to have been the greatest recipients of their father's bounty, are in much doubt as to what his intention was, but ask that the instrument be held to be valid. The executor begs the Court to instruct him.
Two of the defendants, Francis E. and Harold Collins, in their answer, boldly attacked the validity of the instrument and said, "that the will and codicils disclose a continuity of testamentary intention, failing of comprehensiveness to reconcile the mutually destructive force of various parts of the provisions and directions, and that the rejection of those which must be rejected will result in the defeat of the testator's whole intent, and therefore, by reason of the impossibility of execution of some of the provisions, the irreconcilable conflict between others, the unlawfulness of others, the will cannot be executed and except for the appointment of the executor and testamentary guardian, is without force and effect, and should be so declared."
The testimony in the case was taken by the Master, but he did not pass upon the legal questions involved. The cause was heard by his Honor, Circuit Judge Sease, who passed a decree construing the will, and provided therein that, if any matter had been omitted by oversight, the parties might apply to have the same determined in a supplemental decree. From that decree, the plaintiff and all the answering defendants appealed. Later, the plaintiff in a supplemental complaint asked for a more definite determination of certain questions alleged to have been overlooked, and by agreement the appeal was suspended until those questions could be determined. The attention of the Court was called to the burning of the store building. From the supplemental decree of Judge Sease, all the active parties, except the minor defendants, Kathleen Collins, Mildred Collins, Miriam Collins, Dorothy Collins, and Ethel Collins, non compos mentis, appeal to this Court.
The case has been in this Court many months, and has been well and carefully considered. We have had two arguments before the Court, granting additional time therein to the attorneys that their views could be clearly presented.
We realize that our Courts should hesitate a long, long time before declaring that a testator's will should be set aside because of confusion and ambiguity in its terms. When a Court, after long-continued study and careful examination, cannot ascertain a testator's intention from the instruments he has left as his will, there is nothing left for the Court to do but to declare the instrument invalid. Some of the language in the argument of C.E. Daniel, Esq., attorney for the plaintiff, is so apropos of what we have in mind that we take the liberty to quote it.
"From the terms of the will and codicil, it is impossible to deduce a sustained intent which can be effectuated.
"The application of the rules of construction (which come into play only when the intent is not apparent) produces results equally confusing and impossible.
"The rules, in substance, are: The intent must govern; it must be gathered from the will; every word and clause must, if possible, be given effect; the construction must be by the entirety, and not per parcella; the deduced intent must be so strong as to leave no doubt in the mind of the Court, and may not rest on conjecture; the presumption is that testator intended to dispose of his entire estate; the law favors the construction most nearly in conformity with the statute of distributions; double portions are disfavored; Courts are not permitted, under the guise of interpretation, to incorporate provisions; of two inconsistent provisions, the latter prevails; but only when it is as plain and decisive as the first; the just, natural and reasonable disposition is favored. See 21 R.C.L., 217-234, and 40 Cyc., 1396 to 1417.
"From the language of the will and codicils, we can discern no completed intent, no main and sustained purpose, but only fragmentary designs, each a closed system in itself, and each disrupted by the forgotten provisions that slipped the testator's mind when he attempted to formulate his subsequent incomplete schemes. We do not think the Court can believe that when he wrote his last codicil, the testator had in mind fitting it into a testamentary scheme carrying through the will to which it was a codicil. His intent, if any, is broken, unrelated, intermittent. He had not `thought through it.'"
Hardly two of the lawyers engaged in this cause, who had studied for many months the will and codicils in question, have agreed as to the meaning of any single provision therein. The learned Circuit Judge, who evidently gave much thought and study to the instruments, at last, as shown by a careful reading of his decrees, had to resort to conjecture and supposition upon which to base his conclusions. In his decrees, as we see it, he made a will for the testator. It is impossible for us to say, however, if the testator intended to make such a will. Our learned brother, Mr. Justice Cothran, who never tires in his efforts to see that a cause is justly decided, after an extended study of the instruments, seeking all the time to sustain their validity, has, in our opinion, made a will for the testator, perhaps, one the testator might have made for himself if he had understood the laws relating to wills. But who can say that the testator would have made the will Mr. Justice Cothran thinks he intended to make?
The will and codicils speak for themselves. They say to us only one thing which we may plainly understand, this: The testator, controlled by the motive which moves many mortals, the desire to have something made by him last forever, wished to see his handiwork, the Collins' Bee Hive, continue just as long as it might continue in the same manner he had built it. Already, fire and closed banks have shown the impossibility of carrying out the testator's plans, even if they could be ascertained. "Man proposes and God disposes." Testator's desire that mortal things should become immortal caused him to write a will, which, in our opinion, is so confusing and ambiguous that it is impossible for its terms to be carried out, even if the terms could be understood. Let the will and codicils and the decrees of the Circuit Judge be reported.
We have endeavored to apply every recognized rule for the construction of wills, in an effort to discover the intentions of the testator. When, following any given rule, we have thought his intention had been ascertained, then we found we had run counter to some other rule or to some positive declaration of the law forbidding the application of the rule. Everywhere there was only ambiguity, conflict, confusion, guess, conjecture, supposition, and mystery.
Every time we have read the will and codicils of the testator, we have reached a different conclusion as to what he intended to do. No two members of the Court are able to agree as to his intention regarding any one important matter involved in the will. In only one thing is there certainty, that is, as to the appointment of the executor, and that provision alone may stand.
"The Courts will hold a will void in its entirety for uncertainty when, after consideration of all its provisions and all the matters which shed light on it and make it certain, it remains so obscure, indefinite, and ambiguous that no definite idea of the testator's intention can be formed. It is only in such an extreme case, however, that the Courts declare a whole will void for uncertainty, regardless of how they may hold on the certainty or uncertainty of particular devises or bequests." 40 Cyc., 1092.
"Where the words of a will, aided by evidence of material facts, are insufficient to determine testator's meaning, no evidence will be admissible to prove what he intended, and the instrument is void for uncertainty." Steele v. Crute, 208 Ala., 2, 93 So., 694, 695.
"Uncertainty of expression and doubtful meaning does not absolve the Court from the duty of interpreting a will, unless it is so vague and so indefinite as to render the purpose and meaning incomprehensible." In Re: Allen's Will, 111 Misc. Rep., 93, 181 N.Y.S., 398.
"In the construction of a will, Courts are not permitted to supply what the testator has failed to indicate, and if after every endeavor the judicial expositor finds himself unable in regard to any material fact to penetrate through the obscurity in which the testator has involved his intention, the intended disposition fails." Wise v. Rupp, 269 Pa., 505, 112 A., 548.
It was exceedingly unfortunate that the testator, who was such an excellent business man, did not, in drawing his will and the codicils thereto, go about the very important matter of disposing of his large estate in a more careful manner, and that he did not obtain, in the preparation of all these instruments, expert legal assistance. This Court would be glad, indeed, to give full force and effect to what he attempted to do, if we were able to ascertain his intentions, and if those intentions were not contrary to positive rules of the law. Fortunately, in instances of this kind, which we are pleased to say are very rare, our laws relating to the disposition of intestate estates have made very fair and just provisions, and these may be easily carried into effect.
The judgment of this Court should be that the will and codicils involved in this proceeding are too uncertain, confusing, vague, and ambiguous to be declared valid testamentary instruments, except as to the appointment of the executor; and, with the exception stated, that they be declared invalid, and the cause should be remanded to the lower Court for such proceedings as are consistent herewith.
A majority of the Court concurring in this opinion, it becomes the judgment of the Court.
MR. JUSTICE STABLER and MR. ACTING ASSOCIATE JUSTICE COSGROVE concur.
MR. JUSTICE CARTER concurs in result.
This is an action, commenced January 12, 1927, by the plaintiff a daughter of John D. Collins, who died testate November 19, 1925, against the executor of his will, his widow, and eleven brothers and sisters of the plaintiff, for the purpose of having a construction of the will adjudicated, and proper instructions given to the executor in the administration of the estate.
John D. Collins, the testator, had been engaged in business for many years in the city of Spartanburg; his principal mercantile business was known as the Bee Hive, fronting on Main Street, in the center of the retail trade; it was located in a building which was filled with a large stock of merchandise, dry goods, and groceries; he maintained also branch stores at Union, Landrum, and Greer; he owned the store building in Spartanburg and other real estate, and carried life insurance of $50,000.00; his entire estate was appraised at about half a million dollars.
The defendant, James H. Lee, who was named executor in the will, duly qualified and took charge of the estate including the real estate, the stocks of merchandise, and other personal property. The appraisement of the merchandise in the four places of business amounted to nearly $120,000.00. The executor brought into the Bee Hive the stocks of goods from the Union and Greer stores, but not from the Landrum store, and operated the business at both places from the time of his qualification until the Spartanburg store, with much of its contents, was destroyed by fire on March 18, 1929, as will be later referred to.
The will, dated August 13, 1915, was followed by three codicils: (1) January 2, 1924; (2) January 26, 1924; and (3) June 24, 1925.
It is conceded on all sides that there has been no testamentary disposition in the will and codicils of the fee to any of the real estate, except that to a house and lot referred to in Item 4 of the original will, which appears to have been disposed of by the testator in his lifetime by deed; it of course cuts no figure in this discussion.
By the original will, the testator bequeathed all of his personal property, which included the stock of goods in the Bee Hive and in the three branch stores, to his executor, James H. Lee, in trust, for the following uses and purposes:
In Item 2, subdivision A, the trustee was directed to convert all of the personal property into cash and to invest the same in such securities as his good judgment indicated until the times prescribed for the distribution of the "corpus of my estate."
In the same item, subdivision B, the trustee was directed to invest one-tenth of the moneys coming from his personal estate as provided in subdivision A, for the benefit of his wife, Lillian, upon certain conditions and limitations, which, by reason of her death and the testator's remarriage, are not of interest in this controversy, except the provision that, in the event of her death intestate, the fund should be held in trust for the daughters, of whom there were five, of the testator.
There remained, after the disposition of the one-tenth to his wife, Lillian, nine-tenths of the proceeds of the conversion provided for in subdivision A, which in the same item, subdivision C, he directed to be held in trust for the support, education, and maintenance of his children then living (at that time there were several under age), "until each of my said children shall have arrived at the age of twenty-one years."
In the same item, subdivision E, it was provided: "Subject to the provisions above named, I direct that the remaining nine-tenths of my personal estate shall be equally divided among all of my children, each child to receive one-half of his or her share when such child shall arrive at the age of twenty-one years, and the balance upon arriving at the age of twenty-five years. But in the meantime each child shall receive the actual income from the unpaid portion of his or her legacy, that is between the ages of twenty-one and twenty-five years. In case my daughter or daughters shall become entitled to the share of my estate heretofore directed to be set apart for the benefit of my wife, by reason of her second marriage or death, then I direct that my executor shall hold the same and pay it out to my daughter or daughters as above provided; or in the case of their death, then to be divided equally among my other children who may then be living, upon such conditions as is hereinbefore provided for the division and distribution of the other portion of my personal estate."
There does not appear to be an Item 3.
In Item 4 a disposition is made of the real estate hereinbefore referred to as having been disposed of in the testator's lifetime.
In Item 5, it is provided: "I direct that all my other real estate of every kind and description consisting of houses, lots, lands, store building and other buildings shall not be sold until my youngest child shall have reached the age of forty years. It is my desire that my said real estate, and any other that I may die possessed of shall be rented by my executor, or by someone lawfully handling it as his agent, and all rents which shall accrue from property, after paying insurance and taxes and a small sum for necessary or reasonable repairs or improvements, shall be divided among my children as follows:" (here follows a scheme of division which is not of interest).
Items 6 and 7 may be passed over.
Item 8 provides: "If any of my real estate should be damaged or destroyed by fire and not sufficiently covered by insurance to repair the damage or rebuild, my executor is hereby directed to appropriate a sufficient sum from the income of my real estate to rebuild or repair, as in his judgment may be deemed sufficient, so that my real estate may be kept in an income-producing condition."
Item 9 provides: "After paying all taxes, insurance, repairs or rebuilding, as before directed, from the income of my estate, my executor is directed to distribute the balance of the income from the said real estate as specified in Item 5 of this will for the support, education and maintenance of my children."
The remaining items may be passed over.
Codicil No. 1, having been revoked by codicil No. 3, may be disregarded. Codicil No. 2 is not pertinent to the controversy.
Codicil No. 3 makes an important change in Item 2, subdivision A of the original will. That item directs the conversion of the entire personal estate; codicil No. 3 provides for the disposition of the stock of goods in the Bee Hive and in the branch stores, thus:
"After sufficient merchandise has been sold to pay all my indebtedness, the balance of the stock of merchandise is to be inventoried at the original cost and sold to J. Duren Collins, Jr., and R. Lee Collins, providing the following stipulations are conformed to in every sense of the word:
"The stock shall be discounted for depreciation reckoning from original first cost, not more than one-fourth (1/4) or 25 per cent off of the original cost. I will and direct that this stock is to be sold to J. Duren Collins, Jr., and R. Lee Collins, providing that at no time until they have fully paid for the stock shall they borrow money, or buy merchandise on credit to exceed an amount equal to more than one-fourth (1/4) of the value of this stock, at the time it may be transferred to them. In other words, their total indebtedness shall not exceed more than one-fourth (1/4) of the stock of merchandise for which they are to pay net after discounting. That is the indebtedness for borrowed money and merchandise bought on credit combined must not aggregate an amount equal to more than one-fourth of what the inventory shows after a deduction of one-fourth for depreciation.
"I will and direct that J. Duren Collins, Jr., and R. Lee Collins are to be charged no rent for twelve months, and the stock shall be turned over to them without any cash payment. I will and direct that they look after the maintenance and education of my children under twenty-one years of age.
"I will and direct that after the first year they are to pay a rental of not over Five Hundred ($500.00) Dollars per month and in addition they are to pay on the purchase price of the stocks of goods transferred to them the sum of Three Hundred ($300.00) Dollars per month until the debt for the stock of merchandise is fully paid."
After the death of the testator in November, 1925, and the taking possession of the estate by the executor, he continued the operation of the Bee Hive and the three branch stores, as stated above. There arose litigation concerning the claims of the widow, the testator's second wife. The testator had made a prenuptial agreement with her by which at his death she was to receive $10,000.00 in full settlement of all interest in his estate. After his death she repudiated the agreement and sought to recover her dower interest. A settlement, in compromise, was made with her by which she received $37,500.00 in cash from the executor in full of all demands. She thus passed out of the present litigation, and will not be further considered. It is assumed that that settlement was made with the legal approval of the executor and the heirs-at-law, and that she was paid out of the general assets of the estate, including the $50,000.00 life insurance.
It appears that the two sons, Robert and Duren, the beneficiaries of the third codicil, in reference to the several stocks of goods, offered to accept the terms of the codicil and take them over upon the conditions named. On account of the then pending litigation and the uncertainty in the mind of the executor as to the proper construction of the will, the executor declined to immediately comply with their offer until all matters of the construction of the will had been determined and the litigation ended. He continued to carry on the business as theretofore.
The present proceeding was then instituted in January, 1927. The contentions of the several parties will appear with sufficient clearness in the decrees of his Honor, Judge Sease, and in the discussion of the appeal hereinafter.
The case was referred to the master to take the testimony offered and report it, which was done at a time not stated in the record. The matter then came on to be heard by his Honor, Judge Sease, at a time not stated upon the testimony reported by the master. He filed an elaborate decree dated September 29, 1928, which will be reported, from which all of the parties have appealed except the executor.
Pending the appeal and before anything was done under the decree of September 29, 1928, to wit, on March 18, 1929, the building occupied by the Bee Hive branch of the business was destroyed by fire, and the stock of goods which included the stocks brought in from the Union and Greer stores, but not from the Landrum store, damaged or destroyed. The estate had at the time insurance upon the building and upon the stock, all of which appears to have been collected by the executor and deposited by him in various banks, amount to $105,700.00 ($58,700.00 of the insurance on the stock of goods, and $47,000.00 on the building), all of which it is supposed will be paid.
I. The plaintiff contends, which is also in the interest of the other children who insist upon the same construction of the will, that, there being no testamentary disposition of the fee in the real estate, the title thereto vested in them as heirs of an intestate estate, and that the direction that it be held in trust for a period of many years, until the youngest child shall have attained the age of forty years, contravenes the rule against perpetuities, and robs the inherited fee-simple estate of the heirs of an essential incident of title.
The property belonged to the testator, and we see no reason why he should not be allowed to dispose of it as he pleased. The limitation was clearly within the rule of perpetuities which permits a limitation within a life or lives in being. The fact that he made no disposition of the fee does not prevent the taking effect of a valid disposition of an estate less than a fee. It would be as tenable a position that a life estate would be void for the reason that the fee had not been disposed of. The conclusions of his Honor, Judge Sease, in his decree of September 29, 1928, upon the point are approved.
II. It seems clear, from the provisions of Item 8 of the original will, that the testator intended and provided that the executor should use the insurance money, realized from the policy or policies on the store building, supplemented by a sufficient sum from the income of real estate, in rebuilding upon the Bee Hive lot a structure substantially similar to the destroyed building, and adequate to such business as was formerly conducted there. This scheme appears practicable as to all buildings owned by the testator, except the Bee Hive building. As to it the testator's scheme has been completely disrupted by the destruction by fire of the building and practically its entire contents, a contingency which he could not anticipate and did not provide for. His scheme manifestly was that the sons should take over the stocks of goods and continue the operation of the Bee Hive establishment supplemented by the stocks in the branch stores, as he himself had been doing. If as we shall endeavor to show, the sons are not entitled to be made whole out of the assets of the estate for the stock destroyed by fire (they of course giving their obligations therefor), and are unable to stock the building as it had been stocked, it would appear unreasonable to apply such procrustean rule to the executor, requiring him, regardless of changed conditions, to follow the letter of the will. If the sons may satisfy the Court that they are able, from their own resources, to establish such a business as has been destroyed the Circuit Court may, in its discretion, by order direct the executor to reconstruct a suitable building for that purpose. If they may not, the Court may by order direct the executor, upon his application, to make such use of the vacant lot as under the circumstances will comply as near as may be with the intention of the testator "so that my real estate may be kept in an income producing condition."
III. In his decree of November . . . ., 1929, his Honor, Judge Sease, declared: "It is my opinion that the stock of goods that the testator ordered in the 3d codicil to be sold to these boys, is still in existence but in the form of money realized from insurance thereon, capable of repurchasing a stock of goods, and that the stock of goods instead of being sold and converted into money has been destroyed by fire and converted into money by reason of the insurance on the stock of goods at the time of the fire." He accordingly ordered that the executor use the $58,100.00 ($58,700.00?) insurance money collected on policies upon the stock of goods destroyed by fire for the repurchase and replacement of similar stock of goods after the new building had been reconstructed and that he sell such goods to J. Duren Collins and Robert E.L. Collins under the terms and conditions of the third codicil of the will.
The situation is abnormal and not free from difficulty. The boys were not legatees of the stocks of goods, but at their option, and subject to the conditions named in the will, they were to become purchasers from the executor, at a price based upon the inventoried cost, less 25 per cent. for depreciation, with the privilege of occupying the building at a low rental. They evidently were expected to give their obligation to the executor for such purchase price, and it was provided that they should "pay on the purchase price of the stock of goods transferred to them, the sum of $300.00 per month until the debt for the stock of merchandise is fully paid."
It appears that they notified the executor, soon after he took possession, that they would accept the proposition contained in the will. It does not appear that they made a formal demand upon the executor for the stock of goods, and to be let into possession of the building. He put them off with the statement that he could not comply with their request on account of pending litigation and doubts as to a proper construction of the will and a resolution of many questions which were arising as to the administration of the estate. The testator died in November, 1925; the executor qualified practically immediately; the fire occurred in March, 1929, three years and four months thereafter; during that period the executor remained in possession of the building and stock of goods, bringing in the stocks from two of the three branch stores and conducting the business as Collins had done; no disatisfaction on the part of the boys appears to have been indicated; things were allowed to "rock on," until the calamity of fire overtook them.
What rights did the boys acquire under the will? Not a legacy of the stock of goods, but an option to purchase it.
In Watson v. Riley, 101 Neb. 511, 164 N.W., 81, 82, it was held: "An option to buy real or personal property at a given price is everywhere recognized as a property right."
In 40 Cyc., 2000, it is said: "An option to purchase property of the estate whether it be at an appraised value or at a price named or agreed upon, may be created by will." To same effect see Daly v. Daly, 299 Ill., 268, 132 N.E., 495.
It is regarded as an essential incident to the exercise of such an option that the optionee shall accept the proposition within a reasonable time.
In Dunne v. Dunne, 66 Cal., 157, 4 P., 441, 1152, it was held that one entitled to an option under a will, to take property at a certain valuation, must exercise his option within a reasonable time.
In 40 Cyc., 2000, it is said: "This option must be exercised within the time set in the will or within a reasonable time if no time is fixed by the will."
It is possible that under the condition of the estate at that time, the pendency of litigation and the doubt which the executor entertained, as to various matters connected with the administration of the estate, the laches of the boys extending over three years, may be to some extent excusable, but during all of that time the Courts were open to them to force an acceptance by the executor of the exercise of their option, which for some reason they neglected to take advantage of.
Another matter to be considered is the validity of the acceptance which the boys contend that they made to the executor; it is true that they expressed their willingness to accept the terms of the will and made a request of the executor to close the transaction, but the matter was not pressed, and consummation of it was not had. They had the right to insist upon such consummation, but they did not do so and waited for more than three years until a situation developed which made it impossible for such consummation, the subject of the contemplated sale having been destroyed.
To constitute a valid acceptance of the proposition contained in the will, it was essential that they should do all that was required of them by the terms and conditions of the will; the will evidently contemplated the execution by them of an obligation to pay the purchase price of the stock of goods; they should have presented to the executor such an obligation, and, being for a liquidated sum, it naturally would have borne interest from date. In the case of Holly Hill Lumber Company v. Bank, 160 S.C. 431, 158 S.E., 830, heard at the March term of this Court and now in process of decision the authorities in the opinion of Mr. Justice Townsend are very strict as to the necessity of the party claiming an acceptance of tendering what he was under obligation to do.
Assuming that the boys did all that was required of them to consummate the matter, it then became an ordinary executory contract between them and the executor for the sale of the stock to them under the terms and conditions prescribed in the will. Pending a completion of the executory contract, the stock of goods, the subject of the contract, was destroyed by fire, and the question arises upon whom must the loss fail.
In the case of Good v. Jarrard, 93 S.C. 229, 76 S.E., 698, 43 L.R.A. (N.S.), 383, a similar question arose in reference to an executory contract for the sale of a house and lot. Before the day set for the completion of the contract arrived, the building was destroyed by fire. In an action by the vendor against the vendee for specific performance of the executory contract, the question arose upon whom should the loss, caused by the destruction of the building, fall. The case was tried on Circuit by his Honor, Judge Gage, later Associate Justice, who held that the loss should fall upon the vendee. Upon appeal, his decree was reversed, this Court being divided upon the question. The prevailing opinion, holding that the loss must fall upon the vendee, was written by Chief Justice Gary and concurred in by Justices Hydrick and Fraser, Justice Woods writing a dissenting opinion which was concurred in by Justice Watts, later Chief Justice. In view of the divergence of opinion upon the question, the very able dissenting opinion of Justice Woods, and the elaborate array of authorities sustaining the dissent, appearing in a note to McGinley v. Forrest, 107 Neb. 309, 186 N.W., 74, 22 A.L.R., 567, the principle announced in Good v. Jarrard cannot be said to be firmly established in this State.
Accepting, however, for the time being, the conclusion arrived at in Good v. Jarrard case, and particularly in view of the delay caused by the executor in not complying with the request of the boys (see cases cited in note 22 A.L.R. at page 583), the loss must fall upon the estate, which appears to have been protected against by the insurance upon the stock. The legal title to the stock of goods never passed from the executor, and of course he had the right to procure insurance upon it for the benefit of the estate; at the same time the boys had an equitable right to have the contract provided for in the will carried out. It has frequently been held that, under an executory contract of sale, the vendor holds the legal title as trustee for the vendee upon his compliance. The executor therefore received the proceeds of the insurance upon the stock as trustee to protect the vendees from loss by reason of his inability to carry out the contract, unless the delay was caused by the negligence of the vendees. We cannot say that the vendees under the circumstances were guilty of such negligence as would bar their rights; and the question would arise, assuming as has been said, that their acceptance was valid, as to the measure of their damages in losing the opportunity, presented to them by the will, of purchasing the stocks of goods. The property was not bequeathed to them; they had simply an option to buy it at an ascertainable price, on time; the damage sustained was the difference between the actual value of the property and the price at which they could have acquired it; what they may have in conducting the business would be too speculative for a basis.
We do not think that the evidence is sufficiently adequate to decide the issues whether the vendees have accepted the option tendered in the will; whether the executor is chargeable with the delay in consummating the transaction; whether the vendees have been negligent in not acting within a reasonable time to enforce compliance by the executor; and the amount of damages to which the vendees would be entitled, if entitled thereto; and that the case should be referred to a special referee to take the testimony and report his conclusions of law and fact upon these issues.
IV. As above recited, the widow repudiated the antenuptial agreement by which she was to receive, at the death of the testator, $10,000.00 in full satisfaction of all claims against the estate; she refused to accept the money, and set up a claim of dower in all the real estate of the testator. Her claim was compromised for $37,500.00 in cash; it represented her claim to dower. The amount in compromise was paid by the executor out of the $50,000.00 life insurance, it appears with the approval of all parties concerned, whether under an order of Court or not does not appear.
It is contended that the $37,500.00 paid to Mrs. Collins should not have been paid out of the life insurance money, for two reasons: That the insurance money was personal property, and came within the provisions of Item 2, Subdivision A, of the original will; and that so much of it as represented her dower interest should be charged to the real estate.
The subdivision referred to provides: "I direct that my said executor shall with all reasonable diligence and dispatch, after my death, proceed to sell and dispose of all my personal property, collect all the debts and choses in action due to me and convert the same into money" which he was directed to invest and dispose of under Subdivision B. There appears no doubt but that the life insurance money was not only personal property, but that it was the proceeds of a collection of a debt or chose in action which was due to the estate of the testator at his death, and should have become a part of the fund referred to in Subdivision A and disposed of under Subdivision B.
It is suggested that at least $10,000.00 of the $37,500.00 paid to the widow in compromise was a debt of the testator and payable out of the life insurance money. This cannot be, for the reason that the widow repudiated the antenuptial agreement which provided for the payment of $10,000.00 in full of her interest in the estate, and the parties practically confirmed that repudiation by paying her more than three times that amount upon her claim of dower; the $37,500.00 therefore did not include the unrecognized debt of $10,000.00; it could not have covered any interest in the estate real or personal as an heir-at-law, for the reason that the claim of dower excluded any claim as heir-at-law; it was a settlement of the dower claim alone, and necessarily became a charge upon the real estate, practically an assignment of it. The parties interested having approved the compromise, however, are bound to reimburse the executor for the amount. It being impossible under the terms of the will to reimburse the executor out of the real estate which is not to be sold until the youngest child comes of age, the only fund out of which the executor may be reimbursed is the profits from the operation of the business by the executor up to the time of the fire, which amounted to the rise of $90,000.00. It does not distinctly appear that the executor has this fund actually on hand. At any rate, he should be allowed credit in his acounting for the $37,500.00.
V. The amount paid by the executor on account of the Federal and State inheritance tax was a debt of the estate, and was properly paid out of the life insurance money, under Item 1 of the will, directing the payment of debts "out of the first moneys coming into his hands from my estate." The same may be said of the funeral expenses, including cost of monument.
VI. The executor is authorized to use the proceeds of the insurance upon the building in carrying out the directions contained in Subdivision II of this opinion. Any surplus thereof remaining should be considered as income from real estate, and fall within the provisions of Item 5 of the original will.
VII. The surplus which may remain of the proceeds of the insurance upon the stock of goods, after complying with the directions contained in Subdivision III of this opinion shall be considered as personal property, and fall within the provisions of Item 2, Subdivisions A and B.
VIII. The conclusions of his Honor, Judge Sease, in his decrees of September 29, 1928, and November ...., 1929, not affected by the conclusions herein announced and consistent therewith are affirmed.
The judgment of this Court should be that the decrees appealed from be modified as herein indicated, and that the case be remanded to the Circuit Court for further proceedings consistent herewith.