Opinion
No. 41398.
March 7, 1960.
1. Joint tenancy — right of survivorship a distinguishing characteristic of.
The distinguishing characteristic of a joint tenancy is right of survivorship and a provision for survivorship is strong evidence that a joint tenancy is created.
2. Husband and wife — joint tenancies — note and deed of trust using words which created a joint tenancy with right of survivorship.
Where note was executed to order of husband and wife or to survivor of them and deed of trust named as beneficiary husband and wife or survivor of them, note and deed of trust used words which created a joint tenancy with right of survivorship.
3. Bills and notes — payable to order of two or more payees jointly, and their survivor.
An instrument may be payable to order of two or more payees jointly, and their survivor, and right to enforce payment vests in surviving joint tenant by virtue of survivorship.
4. Bills and notes — delivery of note to one of two or more payees will operate as delivery to all.
5. Bills and notes — deeds of trust — delivery of note and deed of trust to husband, one of joint payees, constituted constructive delivery to other payee, the wife.
Delivery of note and deed of trust to husband, one of joint payees, constituted a constructive delivery of instruments to other payee, the wife, and upon husband's death, wife, as surviving joint tenant, became vested with full title to them.
6. Wills — construction — residuary clause as vesting in widow life estate with limited power of disposition for her support and maintenance and vesting a remainder in children.
Residuary clause devising and bequeathing to widow entire residue and providing that any of same not consumed in her lifetime was to go to testator's three children vested in widow a life estate with limited or restricted power of disposition for her support and maintenance and vested a remainder in the three children.
7. Executors and administrators — life tenancies with power to consume — remainders — power of equity court to appoint trustee or direct executor to retain property for preservation, management and control, for protection of remaindermen.
Court of equity has power to appoint a trustee to preserve, manage and control personal property of a nontrust life estate or to direct the executor to retain such property substantially as the trustee and that may be done where there is danger of loss or destruction of property, particularly money or personalty, or of waste or injury to the interests of remaindermen.
8. Equity — life estates with limited power to consume — requiring security from life tenant for protection of remaindermen.
Where power of disposal or consumption by life tenant is limited or restricted, as for support of maintenance, Court may in its sound discretion, require security by the life tenant.
9. Executors and administrators — life tenancies with limited power to consume — requiring estate to be kept open for protection of remaindermen — evidence reflected existence of a complete estrangement between life tenant and remaindermen.
In proceeding involving question whether estate should be kept open to protect interests of remaindermen named in will devising residue to widow and providing that any not consumed by her in her lifetime was to go to testator's three children, evidence reflecting existence of complete estrangement between widow and testator's children was properly admitted although some of it was of dubious probative value.
10. Executors and administrators — requiring estate to be kept open for protection of remaindermen — evidence sustained finding that there was danger of dissipation or waste of life estate to injury of remaindermen.
In such case, evidence sustained finding that there was danger of a dissipation or waste of life estate to injury of remaindermen.
11. Executors and administrators — life tenancies with limited power to consume — Chancellor properly required estate to be kept open under Court's supervision for protection of remaindermen.
Where widow was devised entire residue of property and will provided that any of same that was not consumed in her lifetime was to go to testator's three children, and there was danger of dissipation or waste of life estate to injury of remaindermen, Chancellor properly kept estate open for executrix-widow to retain such property substantially as a trustee, under supervision of courts, and fixed allowance of $3,000 per year for widow.
Headnotes as approved by Ethridge, J.
APPEAL from the Chancery Court of Lauderdale County; WILLIAM NEVILLE, Chancellor.
Gipson, Gipson Wiley, Meridian, for appellants.
I. The Court erred in overruling a motion to strike.
II. The Court erred in overruling appellants' objections to incompetent evidence.
III. The Court erred in charging back to executrix $59 she paid for insurance premium for automobile insurance on the estate's automobile.
IV. The Court erred holding that Mrs. Inez Pickett Vaughn did not own a one-half interest in note secured by deed of trust made jointly to her and her deceased husband, E.J. Vaughn.
V. The Court erred in limiting the support of Mrs. Inez Pickett Vanghn, widow of E.J. Vaughn, deceased, to $3,000 per year.
VI. The Court erred in refusing to order distribution of the net estate to the widow of said deceased, Mrs. Inez Pickett Vaughn, under the will of said deceased.
VII. The Court erred by rendering decree dated May 29, 1959, keeping estate in executrix's hands after final account was approved and prohibiting distribution except as authorized in said decree or in future decrees.
Collation of authorities: Abegg v. Hirst, 144 Iowa 196, 122 N.W. 838, 138 Am. St. Rep. 285; Cross v. O' Cavanagh, 21 So.2d 472; Ferguson v. Morgan, 70 So.2d 866; Mitchell v. Frederick, 92 A.L.R. 1412; Palmer v. Crews, 35 So.2d 430; Re McKelway, 221 N.Y. 15, 116 N.E. 348, L.R.A. 1917E 1143; Shackelford v. Dobbs, 61 So.2d 669; Wilburn v. Williams, 11 So.2d 306; Yeates v. Box, 22 So.2d 411; Amend. V, U.S. Constitution; Art. III, Sec. 14, Constitution 1890; 14 Am. Jur., Sec. 13 p. 85; 24 Am. Jur., Sec. 90.
Wilbourn, Wilbourn Lord, Gilbert Cameron, Meridian, for appellee.
I. The Chancellor was correct in holding that the indebtedness evidenced by the Highland Baptist Church note and deed of trust was an asset of the estate. Abegg v. Hirst, 144 Iowa 196, 122 N.W. 838, 138 Am. St. Rep. 285; Cross v. O'Cavanagh, 198 Miss. 137, 21 So.2d 473; Duling v. Duling's Estate, 211 Miss. 465, 52 So.2d 39; Fanning v. Russell, 94 Ill. 386; In re Lewis's Estate, 194 Miss. 480, 13 So.2d 20; Jones v. Jones, 162 Miss. 501, 139 So. 873; Martin v. DeJarnette, 185 Miss. 76, 187 So. 202; Mitchell v. Frederick (Md.), 170 A. 733, 92 A.L.R. 1412; Nicholson v. Dent, Robinson Ward, 189 Miss. 658, 198 So. 552; North v. Lowe, 63 Miss. 31; Reasner v. Bohne (Ind.), 129 N.E. 490; Reedy v. Alexander, 202 Miss. 80, 30 So.2d 599; Re McKelway, 221 N.Y. 15, 116 N.E. 348, L.R.A. 1917E 1143; Riddle v. Henderson (Wash.), 213 P. 480; Stephens v. Stephens, 193 Miss. 98, 8 So.2d 462; Stewart v. Barksdale, 216 Miss. 760, 63 So.2d 108; Stewart v. First Nat. Bank Trust Co., 192 Miss. 355, 5 So.2d 683; Tobin v. Tobin, 139 Wis. 494, 121 N.W. 144; Wilder v. Currie, 231 Miss. 461, 95 So.2d 563, 97 So.2d 384; Wooley v. Wooley, 194 Miss. 751, 12 So.2d 539; Secs. 834, 1281, Code 1942; 14 Am. Jur., Secs. 7, 13 pp. 81, 85; 24 Am. Jur., Sec. 90 p. 776.
II. The Chancellor was correct in his construction of the will. Barmore v. Gilbert, 151 Ga. 260, 106 S.E. 269, 14 A.L.R. 1060; Byrd v. Henderson, 139 Miss. 140, 104 So. 100; Colburn v. Burlingame (Cal.), 214 P. 226, 27 A.L.R. 1374; Cooper v. Simmons, 237 Miss. 630, 116 So.2d 215; Cross v. O'Cavanagh, supra; Ferguson v. Morgan, 220 Miss. 266, 70 So.2d 866; Gilliam v. Chancellor, 43 Miss. 437, 5 Am. Rep. 498; Hill v. Godwin, 114 Miss. 324, 75 So. 122; Howell v. Howell, 157 Miss. 15, 127 So. 566; Hutton v. Hutton, 233 Miss. 458, 102 So.2d 424; McKay v. Lemly, 206 Miss. 456, 40 So.2d 281; Martin v. Martin, 69 Miss. 315, 13 So. 267; Murdoch v. Murdoch, 97 Miss. 690, 53 So. 684; National Bank of Greece v. Savarika, 167 Miss. 571, 148 So. 652; Old Ladies' Home Assn. v. Miller, 217 Miss. 187, 63 So.2d 786; Palmer v. Crews, 203 Miss. 806, 35 So.2d 430, 4 A.L.R. 2d 483; Presbyterian Church v. Mize, 181 Ky. 567, 205 S.W. 674, 2 A.L.R. 1237; Quarton v. Shundoony, 249 Mich. 474, 229 N.W. 465, 69 A.L.R. 820; Re Miller's Estate, 160 Ohio St. 529, 117 N.E.2d 598, 46 A.L.R. 2d 493; Rice v. McMullen, 207 Miss. 706, 43 So.2d 195; Rife v. Rife, 154 Miss. 529, 122 So. 739; Rives v. Burrage, 110 Miss. 789, 70 So. 893; Schlottman v. Hoffman, 73 Miss. 188, 18 So. 893, 55 Am. St. Rep. 527; Selig v. Trost, 110 Miss. 584, 70 So. 699; Shackleford v. Dobbs, 216 Miss. 75, 61 So.2d 669; Sims v. Frith, 225 Miss. 311, 83 So.2d 93; Slaughter v. Gaines, 220 Miss. 755, 71 So.2d 760, 49 A.L.R. 2d 1355; Spiva v. Coleman, 122 Miss. 142, 84 So. 144; Strickland v. Delta Inv. Co., 163 Miss. 772, 137 So. 734; Wilburn v. Williams, 193 Miss. 831, 11 So.2d 306; Williams v. Coldwell (Tenn.), 111 S.W.2d 367, 114 A.L.R. 941; Yeates v. Box, 198 Miss. 602, 22 So.2d 411; Sec. 1697, Code 1942; 57 Am. Jur., Secs. 1049, 1093 pp. 681, 701; Annos. 2 A.L.R. 1243, 27 A.L.R. 1381, 69 A.L.R. 825, 94 A.L.R. 26, 114 A.L.R. 946, 46 A.L.R. 2d 502.
III. The Chancellor was correct in charging the automobile insurance premium back to the executrix. Howell v. Howell, supra; 29 Am. Jur., Sec. 336 p. 301.
This appeal from a decree of the Chancery Court of Lauderdale County involves the construction of a will, a joint tenancy in personalty, and certain restrictions placed by the chancellor upon the life tenant.
E.J. Vaughn died on January 13, 1958. He left surviving him his widow and second wife, the appellant, Mrs. Inez Pickett Vaughn, and three adult children by his first wife, the appellees. His will was duly probated and administered by the executrix named in it, his widow. He first bequeathed to his adult children $1,000 each. He devised to his wife a life estate in their residence, certain lands and personal property, with remainder in equal parts to his children. The will then stated: "I will, devise and bequeath unto my said wife the entire residue of my property of every kind, and any of same that is not consumed by her in her lifetime at her death to go to my said three children, share and share alike, or to the survivor, or survivors of them as the case may be . . ."
After administration, the executrix filed her final account. Appellees, testator's children by his first marriage, filed a petition for construction of the will, and objections to closing and disposition of estate and discharge of executrix. After a lengthy hearing, the chancery court held that a note and deed of trust executed by the Highland Baptist Church to Vaughn and wife, or the survivor of them, was the property of the estate rather than the widow. It held the residuary clause of the will vested in the widow a life estate in money and personalty, with remainder to the children, but, since testator intended her to use the residue for support, the trial court awarded her out of it the sum of $3,000 per year. For protection of the remaindermen, the court declined to close administration of the estate and to discharge the executrix, but kept it open under its supervision, although it approved the final account as amended. Mrs. Inez Pickett Vaughn appealed as executrix and individually. Two main issues are presented.
I.
E.J. Vaughn was a building contractor. On May 2, 1954 the Highland Baptist Church approved a resolution which recited that Vaughn had offered to construct a residence for the church and to loan it sufficient funds to complete the same, the loan to be payable in semi-annual installments of $500, over a period of five years, at four per cent interest; that the church accepted the offer, and its property trustees were authorized to enter into a written contract with Vaughn for such construction. When completed, the trustees were authorized to execute and deliver to Vaughn a promissory note in the amount of the loan made by him, and to deliver to him a deed of trust securing the note. Thereafter Vaughn advanced the money and completed the residence. Pursuant to this resolution, the church trustees on September 1, 1954 executed "to the order of E.J. Vaughn and (Mrs.) Inez Pickett Vaughn, or to the survivor of them", a note in the sum of $15,000, and a deed of trust on the property, naming as beneficiary "E.J. Vaughn and Mrs. Inez Pickett Vaughn, or the survivor of them."
In her inventory and final account the executrix included this note and deed of trust as an asset of the estate. However, the executrix later filed a "second amended final account" in which she asserted that she, individually, was the owner of the note and deed of trust as the surviving joint tenant, and asked the court to so adjudicate. At the hearing no evidence was offered concerning these instruments. The chancery court held that the testator had not made a gift of the note and deed of trust to his wife, although it recognized that this was a "very narrow question".
Appellant asserts that she, individually, is the owner of the note and deed of trust as the surviving joint tenant. This involves two questions, first, whether the words used are sufficient to create a joint tenancy with the right of survivorship and not a tenancy in common. We think they are.
Miss. Code 1942, Sec. 834 does not apply to mortgages or to choses in action. Code Sec. 5205 is not applicable to the present facts. It protects banks in paying out funds in joint accounts. Stewart v. Barksdale, 216 Miss. 760, 63 So.2d 108 (1953). It creates a presumption that the deposits were of joint ownership with right of survivorship. Shearin v. Coleman, 201 Miss. 193, 28 So.2d 841 (1949). The cases dealing with United States savings bonds are not pertinent, since they are controlled largely by Federal statutes and regulations. See Myers v. Laird, 230 Miss. 675, 93 So.2d 828, 831 (1957).
(Hn 1) The distinguishing characteristic of a joint tenancy is the right of survivorship. A provision for survivorship is strong evidence that a joint tenancy is created. 48 C.J.S., Joint Tenancy, Sec. 3(d), page 919.
(Hn 2) In Wolfe v. Wolfe, 207 Miss. 480, 42 So.2d 438 (1949), the deed conveyed a lot "unto Willis Wolfe and Della Wolfe and the survivor of them." The court held this was an estate in joint tenancy; it was impossible to have the right of survivorship in an estate in common; and the parties expressly intended to create that right. The words used in Wolfe are substantially similar to those in the instant note and deed of trust. We think the reasons expressed in that case are sound and apply here. In brief, the note and deed of trust used words which create a joint tenancy with right of survivorship.
The remaining question is whether the delivery of these instruments by the church trustees to E.J. Vaughn, in whose possession they were at the time of his death, was sufficient to vest a right of joint tenancy in the appellant widow.
(Hn 3) Although there was no testimony to that effect, the fact that the note and deed of trust were made to Vaughn and his wife or the survivor of them renders it manifest that Vaughn must have requested the church trustees to execute the instruments in that way. He must have intended this type of joint tenancy with survivorship. Appellees argue there was no completed gift by delivery of these instruments from Vaughn to his wife. The promissory note, for which the deed of trust was security, was a negotiable instrument. An instrument may be payable to the order of two or more payees jointly, and their survivor. 10 C.J.S., Bills and Notes, Sec. 128; 8 Am. Jur., Bills and Notes, Secs. 310, 311. The title and right to enforce payment vests in the surviving joint tenant by virtue of her survivorship. Ibid., Sec. 311; Ehrlich v. Mulligan, 104 N.J.L. 375, 140 A. 463, 57 A.L.R. 596 (1928); Anno. 57 A.L.R. 600 (1928).
(Hn 4) Moreover, the delivery of a note to one of two or more payees will operate as a delivery to all. 10 C.J.S., Bills and Notes, Sec. 78(e), p. 514; Spaulding v. First National Bank, 210 App. Div. 216, 205 N.Y.S. 492, affirmed, 239 N.Y. 586, 147 N.E. 206 (1924). Cf. Allen v. Tate, 58 Miss. 585 (1881); Anno., 64 A.L.R. 2d 8 (1959).
(Hn 5) In brief, we conclude that the delivery of the note and deed of trust to one of the joint payees, E.J. Vaughn, constituted also a constructive delivery of these instruments to the other payee, the wife. Vaughn held these instruments both for himself and for the joint payee, his wife. Upon his death, she, as the surviving joint tenant, became vested with full title to them. That part of the lower court's decree holding to the contrary is reversed, and title to the note and deed of trust are adjudged to be in Mrs. Vaughn.
II.
(Hn 6) The quoted residuary clause in the will was correctly held by the chancery court to vest in Mrs. Vaughn a life estate with a limited or restricted power of disposition for her support and maintenance, and to vest a remainder in the three children, appellees.
The governing principles are summarized in 33 Am. Jur., Life Estates, Etc., Sec. 39: "Limitation Over of What Remains After Indefinite Gift Coupled with Limited or Qualified Power of Disposal. — It is a general rule, followed by the courts with practical unanimity, that where there is a devise or bequest to one in general terms only, expressing neither fee nor life estate, and a subsequent limitation over of what remains at the taker's death, if there is also given to the taker an express or implied power of disposition which is not absolute, or is limited or restricted as to its exercise, the devise is construed to pass a life estate only. Thus, where A gives an estate to B, with the right to dispose of so much of it in his lifetime as he may need for his support, the balance if anything remains unexpended at B's death, to go to C, a life estate is created, although not by express words. The reasoning and theory underlying this rule are, in essence, that where a power of disposal is not an absolute power, but a qualified one, conditioned on some event or purpose, and there is a remainder or devise over, the words last used restrict and limit the words first used and have the force and efficacy to reduce a general or indefinite gift which was apparently a fee, to an estate for life only."
This rule has been applied generally in cases involving wills of substantially the same purport where the power of disposal is for maintenance, comfort, benefit or support, or where the unconsumed portion is left to second takers. Ibid., Sec. 40; 1 A.L.I., Restatement of Property, Sec. 108; 96 C.J.S., Wills, Secs. 898, 897, 891, 885, 886; Anno., 17 A.L.R. 2d 7 (1951); 3 Page, Wills, (3d Ed. 1941) pp. 354-356.
In brief, Mrs. Vaughn has a life estate with a limited power to invade the corpus for her necessary support and maintenance, and appellees, the children, have a remainder estate. Somewhat analogous is Howell v. Howell, 157 Miss. 15, 127 So. 566 (1930), where a similar construction was adopted. Ordinarily a bequest of money for life with remainder over to another is a bequest of the interest derived from the money. However, in both Howell and the instant case the manifest intention of the testator was that the widow who is the life tenant should receive a resonable amount for her support and maintenance where the interest from the life estate is not sufficient for that purpose. Howell v. Howell, 157 Miss. at 25 also cites in support of that holding Hill v. Godwin, 114 Miss. 324, 75 So. 122 (1917), and Martin v. Martin, 69 Miss. 315, 13 So. 267 (1891). Cf., Old Ladies' Home Association v. Miller, 217 Miss. 187, 63 So.2d 786 (1953); Cross v. O'Cavanagh, 198 Miss. 137, 21 So.2d 473 (1945); Anno. 17 A.L.R. 2d 7 (1951).
Since Mrs. Vaughn received under the residue clause a life estate with limited power of disposition, and remainder went to testator's children, the chancery court was warranted, with the evidence before it, in keeping open administration of the estate for the protection of the remaindermen, and fixing an allowance out of the estate for the support of the widow at $3,000 per year. The trial court concluded this was essential in order to protect the interest of the remaindermen. It directed the executrix to keep the funds of the estate separate from her individual property and money. It found no necessity at the time for the execution by the life tenant of a bond.
(Hn 7) It is well established that a court of equity has power to appoint a trustee to preserve, manage and control personal property of a nontrust life estate or to direct the executor to retain such property substantially as the trustee. Anno., 46 A.L.R. 2d 502 (1956). This may be done where there is danger of loss or destruction of the property, particularly money or personalty, or of waste or injury to the interests of the remaindermen. 33 Am. Jur., Life Estates, Secs. 225-230. (Hn 8) Where the power of disposal or consumption by the life tenant is limited or restricted, as for support or maintenance, the court may, in its sound discretion, require security by the life tenant. Ibid., Sec. 229; Sims v. Frith, 225 Miss. 311, 83 So.2d 93 (1955); Howell v. Howell, 157 Miss. 15, 25, 127 So. 566 (1930). (Hn 9) The evidence reflected the existence of a complete estrangement between Mrs. Vaughn and her stepchildrn, the appellees. It was properly admitted, although some of it was of dubious probative value. (Hn 10) Without reviewing the facts which the chancellor was warranted in finding under the circumstances, he was justified in concluding that there was danger of a dissipation or waste of the life estate to the injury of the remaindermen, (Hn 11) and in keeping the estate open for the executrix-widow to retain such property substantially as a trustee, under the supervision of the court. Anno., 46 A.L.R. 2d 502 (1956); see also Annos. 14 A.L.R. 1066 (1921), 101 A.L.R. 271 (1935), and 138 A.L.R. 440 (1942).
We find no error in the trial court's sustaining the exception to that part of the final account pertaining to an automobile insurance premium. Howell v. Howell, supra.
In summary, the decree of the chancery court is reversed in part, insofar as it holds that the note and deed of trust of the Highland Baptist Church are the property of the estate and not of Mrs. Vaughn, and judgment is rendered here adjudicating that these instruments are the individual property of the appellant-widow as the surviving joint tenant. In its construction of the will and refusal to close the estate, and in all other respects except that hereinabove stated, the decree is affirmed.
Affirmed in part, and in part reversed and judgment rendered here.
All Justices concur, except Roberds, J., who took no part.