Winchester-Simmons Co. v. Cutler, 194 N.C. 698 (1927)

Dec. 14, 1927 · Supreme Court of North Carolina

194 N.C. 698

WINCHESTER-SIMMONS COMPANY v. L. H. CUTLER et al.

(Filed 14 December, 1927.)

Estates — Entirety—Husband and Wife — Personal Property — Wills—Interpretation — Intent.

Under a bequest of personal property to husband and wife by entire-ties, the beneficiaries acquire the property as tenants in common, the law not applying to doctrine of survivorship except upon a devise of realty, and a clause in connection therewith “to have and to hold” the bequest to their survivors in fee simple, is but a statement of the incidents of an estate by entireties to husband and wife, the controlling intent of the testator, and does not vary its result.

Connor, J., and Stacy, C. J., dissenting.

Civil action, before Hams, J., at August Term, 1927, of Chaven.

Tbe judgment of tbe court contains all tbe essential facts and is as follows:

“Tbis cause coming on to be beard before bis Honor, W. C. Harris, judge of tbe Superior Court, riding tbe Fifth Judicial District, at Greenville, N. C., on 22 August, 1927, and being beard on tbe appeal from tbe judgment of L. E. Lancaster, clerk of tbe Superior Court, and on tbe notice to show cause, issued by bis Honor, Judge Nunn, as to wby a receiver should not be appointed, and being beard on tbe evidence, record and arguments of counsel for plaintiff and of counsel for defendant, tbe court finds tbe following facts:

1. That Sarah L. Wadsworth died domiciled in Craven County in October, 1926, leaving a last will and testament, appointing tbe defendant, L. H. Cutler, Sr., and defendant, E. W. Wadsworth, executors, who qualified on 4 November, 1926, and gave tbe notice to creditors, required by law, which will expire (one year) from date of qualification.

2. That by arrangement between tbe defendant, L. H. Cutler, Sr., and tbe defendant, E. W. Wadsworth, L. H. Cutler, Sr., has been in active charge of tbe administration of said estate, which seems to be solvent. .

3. That item nine of tbe will of said Sarah E. Wadsworth is as follows:

Item 9. To my husband’s friend, L. H. Cutler, who since tbe death of my beloved husband, and at tbis time for a period of about eleven years, has not only been a most true and faithful friend to me, but has as my business agent attended to every detail of my estate and all of my affairs saving me every care and responsibility in all tbe affairs of my life, and tbis be has done not only in most strictly correct and faithful manner, but without charge or compensation of any kind; and, therefore, not so much in compensation but in recognition of bis long valued and faithful service and friendship, I do devise and bequeath unto him, tbe said L. H. Cutler and wife, Laura D. Cutler, as husband and wife by entireties, all that certain bouse and lot in tbe city of New Bern, number sixty-eight (No. 68) Metcalf Street, and ten thousand dollars of my North Carolina four per cent bonds of par value, to have and to bold tbe same real estate and bonds to them as husband and wife by entireties and to tbe survivor of them in fee simple.

4. Tbat tbe defendant, L. H. Cutler, Sr., bypotbecated one $1,000 North Carolina four per cent bond to tbe National Bank of New Bern, and one like bond to tbe Citizens Bank and Trust Company, of New Bern, for tbe approximate value of tbe respective bonds, and said bonds are now so beld as collateral for said debts, wbicb are unpaid; tbat tbe proceeds of said loans was used by said Cutler for repairs to tbe said Laura D. Cutler’s property upon wbicb said defendant and wife live. Said bonds were taken without tbe knowledge of tbe court.

5. That in addition to said bonds said L. H. Cutler, as executor, by direction of tbe court, bypotbecated two $1,000 bonds to tbe National Bank of New Bern and borrowed thereon about $1,800 to pay tbe inheritance or succession taxes on tbe said estate, $980 of said amount borrowed being tbe inheritance tax on tbe devise and bequeaths aforesaid to L. H. Cutler and wife, Laura D. Cutler.

6. Tbat said L. H. Cutler contends be has no other property than bis interest under said devise, but this court does not find tbe fact whether be has other property or not.

7. Tbat said L. H. Cutler was at tbe time of tbe qualification, and now is, indebted to tbe estate of said Sarah E. Wadsworth in tbe sum of $2,000 secured by mortgage on real estate.

8. Tbe defendant, L. H. Cutler, Sr., is 79 years of age and in good health, and tbe defendant, Laura D. Cutler is 75 years of age and in good health.

Tbe court being of tbe opinion tbat under said item of said will tbe said Laura D. Cutler took, subject to tbe debts of tbe estate, $5,000 in North Carolina four per cent bonds absolutely, and said L. H. Cutler took a like $5,000 absolutely, with no remainder over after tbe death of either of said defendants:

It is thereupon considered by tbe court, and ordered tbat tbe receivership be continued as to $5,000 of tbe North Carolina four per cent bonds, left by said Sarah E. Wadsworth, deceased, to tbe said L. H. Cutler; and Laura D. Cutler be, and she is hereby discharged and her interest in tbe estate is hereby discharged from said receivership; tbat said receiver have and bold said bonds and any other property of L. H. Cutler, if any, subject to tbe rights of tbe creditors and the debts of tbe estate and bold them for tbe benefit of tbe plaintiff, as a creditor, excepting, however, tbe personal property exemption to be assigned to said L. H. Cutler out of said bond. Said $5,000 to be delivered to tbe receiver immediately upon tbe filing of this judgment with tbe court.”

To tbe foregoing judgment both plaintiff and defendant excepted.

Ernest M. Green for plaintiff.

Whitehurst & Bwden and Ward & Ward for defendants.

Bbogden, J.

Tbe primary question in tbe case is whether or not an estate by entirety can be created, in personal property.

Tbe question is raised by Item 9 of tbe last will and testament of Sarab E. Wadsworth and involves a legacy of $10,000 of North Carolina four per cent bonds. There is 'no controversy with respect to tbe devise of real estate contained in Item 9.

In Turlington v. Lucas, 186 N. C., 283, this Court held that an estate by entirety in personal property was not recognized in North Carolina. This decision was banded down subsequent to tbe execution of tbe will in controversy. The divergence of judicial opinion upon the question is referred to by Clarkson, J., in Turlington v. Lucas. There is also an instructive note upon tbe question in tbe North Carolina Law Review of April, 1924, p. 195. It would serve no useful purpose to reopen tbe debate or to reexamine tbe authorities as tbe question is no longer an open one after tbe decision in Turlington v. Lucas. Many of tbe decisions upon tbe point are classified in a note to tbe case of George v. Dutton, 108 Atlantic, 515, and annotated in 8 A. L. R., 1017. Tbe annotater in that case says: “As stated in tbe next preceding subdivision of this annotation, tbe decided weight of authority is to tbe effect that estates by the entirety may exist in personalty as well as in realty.” North Carolina is classified under this statement as bolding that estates by entirety in personal property are valid. Two cases from this State are cited in support of tbe proposition, to wit, West v. R. R., 140 N. C., 620, and Jones v. Smith, 149 N. C., 318. There are declarations in tbe cases which would perhaps warrant tbe inference that our Court has applied tbe doctrine of entirety to personal property. For instance, in tbe West case, supra, Clark, C. J., after discussing tbe incidents of an estate by entirety in land, said: “As to personalty the same rule applies, and, where shares of stock stand in tbe joint names of husband and wife be is entitled to tbe dividends during their joint lives.” However, Chief Justice Clark wrote tbe case of Kilpatrick v. Kilpatrick, 176 N. C., 182, using tbe following language: “Tbe briefs of counsel on both sides admit that there is no decision in this State upon tbe question whether there is an estate by entireties in personalty. Tbe decisions in other states on tbe point are conflicting. In England the estate by entireties obtained only in realty and has been abolished even as to that.” It is apparent, therefore, that tbe Chief Justice never construed West v. R. R., supra, as deciding tbe question. Tbe other case of Jones v. Smith involved tbe right of tbe partition of lumber manufactured from trees growing on land held by tbe entirety. Justice Walker, writing for tbe Court, said: “As tbe plaintiffs were thus seized of tbe timber, its severance from tbe land by cutting it did not convert the estate in tbe trees, when severed, or in the lumber cut from tbe logs, into a tenancy in common, nor is tbe feme plaintiff, by reason of the severance, entitled to maintain this action for partition.” It is clear, we think, by reason of the reference in the Kilpatrick case, supra, that this Court has not construed either the West case or the Jones case as deciding the question, and that it was an open question in this State until the decision in Turlington v. Lucas, supra.

The defendants contend that the language in Item 9 “to have and to hold the said real estate and bonds to them as husband and wife by entireties and to the survivor of them in fee simple,” by reason of the words, “survivor-of them in fee simple,” creates a contingent remainder in personal property. Our judgment, however, is that these words simply state the incident of an estate by entirety and that the estate by entirety is the governing thought in said item.

There are other questions as to the hypothecation of some of these bonds, but these involve accounting to be determined at the time of the final settlement of the estate.

Holding, as we do, that there is no estate by entireties in personal property, it necessarily follows that L. H. Cutler and his wife, Laura D. Cutler, took said bonds as tenants in common, and the judgment rendered by the trial court is approved.

Affirmed.

Connor, J.,

dissenting: I do not agree with the Court that the question stated in its opinion is necessarily involved in this appeal. It is now settled by our decisions that an estate by entireties in personal property is not recognized in this State, Turlington v. Lucas, 186 N. C., 283, although such estate, with all its incidents as at common law, is recognized, with respect to real property. Crocker v. Vann, 192 N. C., 422. It is needless to discuss now whether the distinction is based upon sound principles or is supported by authorities. The distinction is not, in my opinion, determinative of this appeal.

By her will Mrs. Wadsworth bequeathed ten thousand dollars of her North Carolina bonds to L. H. Cutler and his wife, Laura D. Cutler. If no further language had been used by her with respect to the interest which the legatees took under the will, in the bonds, the same would have been held by them, not as owners by entireties, with the incident of survivorship, but as owners or tenants in common. She expressly provides, however, that Mr. and Mrs. Cutler shall have and hold the bonds, not only as husband and wife, but also by entireties, and to the survivor in fee simple, or absolutely. Her intention with respect to the estate or interest in the bonds which they should take under her will, is manifest. Such intention ought not, in my opinion, to be defeated by a construction of her language, used in her will, which results in holding as a matter of law that Mr. and Mrs. Cutler take tbe bonds as tenants in common, and deprives tbem of tbeir joint estate or interest in tbe bonds, during tbeir lives, and further deprives tbe survivor of bis or ber absolute estate in tbe bonds. Tbe estate or interest wbicb Mr. and Mrs. Cutler take in tbe bonds, is determined not by tbe law, but by tbé language of tbe testator, wbicb shows ber intention as to such estate or interest.

I am authorized to say that Stacy, C. J., concurs in this dissent.