Kirkman v. Hodgin, 151 N.C. 588 (1909)

Dec. 23, 1909 · Supreme Court of North Carolina

151 N.C. 588

ADA KIRKMAN v. JAMES A. HODGIN, MATTIE K. STONE, Administratrix of S. O. Kirkman, Intervenor.

(Filed 23 December, 1909.)

Wills — Devisees — Contract for Division — Independent Property— Consideration — Chattels — Reservation of Life Estate — Covenants — Interpretation of Contracts — Intention.

In dividing the estate of the testator between his widow and two sons, A. and S., the widow having the life estate and the sons the remainder in certain portions, the widow and sons entered into and effectuated a written agreement among themselves, agreeing, among other things, that S. was to convey to A. certain property, and that the widow would hold until her death the proceeds of a certain note, which was her own property, and after her death the balance of the proceeds of the note’s to go to S., or his heirs. Held, (1) the contract to be a personal one between the parties; (2) that it should be construed to effectuate the intention of the parties; (3) the agreement will be construed as a distinct covenant that the widow shall have the use of the proceeds of the note during her life, and not as a conveyance of chattels, reserving a life estate to the grantor, and that the division of the estate under the contract was a sufficient consideration.

Appeal from Long, J., June Term, 1909, of G-uilfobd.

Civil action, to determine tbe ownership of a fund of $1,000 in tbe possession of J ames A. Hodgin, trustee, beard upon .exceptions to report of referee, wbicb report is as follows;

“In obedience to tbe order of reference made in tbis action, I proceeded on 6 May, 1909, to execute tbe same. Tbe testimony taken is herewith submitted, and from tbe testimony and admission in tbe pleadings I find:

“That W. L. Kirkman died testate, leaving bis surviving widow, Lydia E. Kirkman, and two sons, A. L. Kirkman and S. O. Kirkman; that be devised and bequeathed bis whole estate to bis widow for life, with remainder as to part of bis realty to bis son A. L. Kirkman for life, remainder to A. L. Kirkman’s wife and children, and tbe balance of bis estate to S. O. Kirk-man.

“That shortly after tbe death of W. L. Kirkman, his said widow, Lydia E., and bis sons, A. L. Kirkman and S. O. Kirk-man, entered into a contract to divide tbe estate of the said testator, without waiting for the termination of tbe life estate. By tbis agreement A. L. Kirkman was to bold a part of tbe real estate devised to S. O. Kirkman, and S. O. Kirkman was to bold a part of tbe real estate devised to A. L. Kirkman, and in accordance with tbe terms of tbe agreement and contract S. 0. Kirk-man conveyed a paid of bis property to A. L. Kirkman. By said agreement tbe personal estate was also divided.

“In tbis agreement and contract, Lydia E. Kirkman, tbe widow, agreed to bold until ber death tbe note of Webb Hunt, or tbe proceeds thereof, and after ber death tbe balance of tbe proceeds to go to S. 0.- Kirkman. Some time after tbis agreement and contract was entered into, the said widow married Jobn G. Davis, who bad knowledge of tbis agreement and contract.

“This Webb Hunt note was for $1,000 and was tbe separate property of Lydia E. before tbe death of ber husband — was no part of bis estate. She collected tbe note and deposited tbe proceeds in tbe Peoples Five Cent Savings Bank in December, 1905. Soon thereafter tbe widow, Lydia E., married John G. Davis^ Tbe Five Gent Savings Bank was afterwards consolidated with tbe Greensboro Loan and Trust Company, and tbe account of Lydia E. was transferred to” tbe Greensboro Loan and Trust Company, in tbe name of Lydia E. Davis. By order of Mrs. Lydia E. Davis, ber account was transferred to ber husband, John G. Davis, in February, 1896. Davis kept two accounts with tbe bank, keeping account transferred to him by bis wife separate from bis other account. Tbe principal of said deposit was kept intact.

“Lydia E., A. L. and S. O. Kirkman have all since died. During their lives they held tbe property of W. L. Kirkman according to tbe terms of tbe contract, and it has since so been held.

“A. L. and S. O. Kirkman administered, with tbe will annexed, upon W. L. Kirkman’s estate,' and since their deaths James A. Hodgin administered de bonis non, and has administered tbe same according to tbe terms of tbe agreement and contract.

“Mrs. Lydia Kirkman died 20 February, 1905, and, some time after that, ber surviving husband, John G. Davis, transferred and assigned to J ames A. Hodgin, trustee, $1,000 and tbe interest accrued since tbe death of. my wife, in trust, to bold for Mrs. Ada Kirkman, plaintiff; tbis $1,000 being the proceeds of tbe Webb Hunt note, an account of which was kept separate, in tbe name of John G. Davis, as above stated,“Unless it shall be determined that said money belongs to tbe heirs of S. O. Kirkman/ that question to be settled by tbe lawyers named, if they could agree; if not, to be settled by litigation. There is now in tbe bands of. Hodgin, trustee, tbe sum of $1,174.64, principal and accrued interest, of amount deposited by Lydia E. Kirkman.

“Upon tbe facts your referee concludes, as matter of law, that tbe agreement (Exhibit B)'was a personal contract between the parties thereto; and to effectuate the intentions of the parties, the proper construction's that at the death of Mrs. Lydia Kirk-man-Davis the balance of the proceeds of the "Webb Hunt note, i. e., the amount of the deposit held by James A. Hodgin, trustee, should be paid to the representatives of S. O. Kirkman.

James T. Morehead, Referee!’

The court overruled the exceptions and confirmed the report, and rendered judgment in favor of the defendant Mattie K. Stone, administratrix of S. 0. Kirkman. The plaintiff excepted and appealed.

Justice & Broadhurst for plaintiff.

Scott & McLean for defendants.

BrowN, J.

The basis of this action is the following paper writing, referred to in the report as Exhibit B :

"Agreement. — L. E. Kirkman, S. 0. Kirkman and A. L. Kirk-man. "We, L. E. Kirkman, S. O. Kirkman and A. L. Kirkman, do this day agree to the following form, in shape of division of the property of W. L. Kirkman, deceased, as follows:

“L. E. Kirkman to hold until her death the note of Webb Hunt, or the proceeds thereof; also to hold the $500 to be collected from the estate of W. M. Kirkman, and after her death the balance of the proceeds to go to S. 0. Kirkman or his heirs.

“A. L. Kirkman’s heirs áre to hold the lot on South Elm Street, on the west side, known as the Kirkman building; also vacant lot on east side, and half the balance of the notes, accounts, mills, stocks, safe, etc.

• “S. O. Kirkman to hold the home place and the place what is known as the Dillon place; to hold all the personal property, stock, grain, hay, etc., now he is in possession of; and it is further agreed that each, A. L. Kirkman and S. O. Kirkman, shall, from this day on, have and derive such benefits as may arise from above-mentioned property allotted to each of us.

Lydia E. KikkmaN,

A. L. KiRkmaN,

S. 0. KiRkmaN.”

We agree with the conclusion reached by the learned lawyer who acted as referee in this case, that the agreement is a personal contract between the parties thereto; and to effectuate the intentions of the parties the proper construction is that at the death of Mrs. Lydia Kirkman-Davis the balance of the proceeds of tbe Webb Hunt note, i. e., tbe amount of tbe deposit beld by James A. Hodgin, trustee, should be paid to tbe representatives of S. 0. Kirkman.

Tbis paper writing is not an attempt by tbe absolute owner of chattels, by deed, to reserve a life estate for bis own life and then to create a remainder interest in them by a limitation over to some one else. It is well settled that such limitation over is void and tbe grantor takes tbe whole estate under tbe reservation. Dail v. Jones, 85 N. C., 222.

Tbe instrument signed by tbe then Mrs. Kirkman and tbe two sons does not purport to be a deed of conveyance of property, but an executory agreement, founded upon a mutual and valuable consideration, for tbe settlement of tbe estate of their testator, W. L. Kirkman.

Such an agreement may be enforced. 3 Pom. Eq., 1235. There is ample consideration to support it. To make a consideration, it is not necessary that tbe person contracting should receive any benefit; it is sufficient if the other party be subjected to loss or inconvenience. Brown v. Ray, 32 N. C., pp. 73 and 74; Sherrill v. Hogan, 92 N. C., 345. Tbe findings of tbe referee show that tbe parties to this agreement, being desirous of making a division of tbe estate of W. L. Kirkman before tbe falling-in of tbe life estate of Lydia E. Kirkman, entered into tbe aforesaid agreement. It was an obligation on tbe part of Lydia E. Kirkman-Davis to S. C. Kirkman and bis heirs or next of kin; tbe consideration on tbe part of S. 0. Kirkman being tbe conveyance by him of valuable real property in tbe city of Greensboro to bis brother, A. L. Kirkman.

S. 0. Kirkman parted with bis property, both real and personal, in accordance with tbe terms of tbis contract, and tbis was a sufficient consideration to support tbe contract as against Lydia E. Kirkman and her assignee.

In order to give effect to tbe plain intention of tbe parties to tbis agreement, which is tbe true principle for tbe construction of all instruments, tbe Court will not construe it into a conveyance of chattels, reserving a life estate to tbe grantor, but rather as a distinct covenant that Mrs. Kirkman shall have tbe use of tbe property in controversy during her life, to which she assented. Howell v. Howell, 29 N. C., 491.

As said by Mr. Justice Battle, “Where, from tbe peculiar phraseology of tbe instrument, tbe benefit of an estate for life can be given to the grantor, or donor, by construing tbe apparent reservation into a covenant on tbe part of tbe grantee or donee that tbe other party shall enjoy tbe profits of tbe chattels granted or given, then, Ut res magis valeat, quam pereai, tbe grantee or donee shall take tbe property, subject to tbe covenant.” Lance v. Lance, 50 N. C., p. 414.

Tbe judgment of tbe Superior- Court confirming tbe report of tbe referee is

Affirmed.