Title: Wachovia Bank & Trust Company v. Hunt
Citation: 148 S.E.2d 41, 267 N.C. 173
Docket Number: 441
State: north-carolina
Issuer: north-carolina Supreme Court
Date: May 4, 1966

148 S.E.2d 41 (1966) 267 N.C. 173 WACHOVIA BANK &amp; TRUST COMPANY, Trustee under a Living Trust Agreement with Mary R. Hanes, Alexander S. Hanes, Jr., and Elizabeth H. Strubing, dated August 5, 1944, v. Anne Wright Hanes HUNT, Alexander Stephen Hanes, III, and Charles Robinson Hanes, II, by his Guardian Ad Litem, Lloyd C. Caudle. No. 441. Supreme Court of North Carolina. May 4, 1966. *43 Womble, Carlyle, Sandridge &amp; Rice, Winston-Salem, for plaintiff appellee. Herbert, James &amp; Williams, Charlotte, for Anne Wright Hanes Hunt, defendant appellee. Wardlow, Knox, Caudle &amp; Wade, Charlotte, for Alexander Stephen Hanes, III, and Charles Robinson Hanes, II, by his guardian ad litem, Lloyd C. Caudle, defendant appellants. SHARP, Justice. The first question which we must consider is not whether Anne Wright Hanes (now Hunt), as the spouse of Alexander Stephen Hanes, Jr. (one of the grantors and the issue of another grantor), is within "a class composed of grantors' issue and spouses thereof" and therefore a possible appointee of her husband, Alexander S. Hanes, Jr. Conceding arguendo that she was, yet she cannot take under his special power of appointment unless he exercised it in her favor by his general devise "unto my beloved wife, Anne Wright Hanes, all of my property * * *." A devise or bequest of all of testator's real or personal property, or both, is general. In re Marinos' Estate, 39 Cal. App. 2d 1, 102 P.2d 443. 38 C.J.S. p. 762 (1943); 96 C. J.S. Wills § 1130 (1957). Special powers of appointment are those in which the donee of the power is restricted to passing on the property to specified beneficiaries, to members of a specific class of beneficiaries, or to any beneficiaries except those specifically excluded. 41 Am.Jur., Powers § 4 (1942). "A power is general where no restriction is imposed upon the donee as to the person or persons to whom he may appoint or the amount which each person shall receive." O'Hara v. O'Hara, 185 Md. 321, 325, 44 A.2d 813, 815, 163 A.L.R. 1444, 1448. Clearly the power of appointment with which we are here concerned was a special power. To support the execution of any power of appointment, except where the intent is supplied by statute, the donee's intention to execute the power must appear. Where such intention does appear, either expressly or impliedly, in an instrument suitable to the execution of the power, the power is effectually exercised. 72 C.J.S. Powers § 40 (1951). In Carraway v. Moseley, 152 N.C. 351, 353-354, 67 S.E. 765, 766 (a case involving *44 a special power of appointment which the court held had not been exercised by a special devise of property), Walker, J., stated the rule in the following widely quoted language: See annotation incorporating the above in 1914D, Ann.Cas. 586. Applying these principles to the will of Alexander S. Hanes, Jr., no intention to execute the power in question is disclosed. The instrument contains no reference to the power or to the trust property itself. Furthermore, irrespective of the power, the will operated to vest in Anne Wright Hanes other property valued at $381,679.55. It was, therefore effectual "on its own" without construing it to be an exercise of the power. See Ryder v. Oates, 173 N.C. 569, 574, 92 S.E. 508, 511. To supply the necessary intent lacking in the will itself, appellees rely upon G.S. § 31-43 which provides: This statute (Pub.L.1844, ch. 88, § 5) is identical with § 27 of the English Wills Act of 1837 (7 Wm. IV &amp; 1 Vict., Ch. 26). It has been suggested that this Act was passed to guard against the inadvertence of a life tenant with a general power of appointment. Accustomed throughout his life to treating the land as if it were his in fee, he might overlook making a specific appointment of the particular property and attempt to dispose of it by a general devise. In such event, if he owned other property which would pass under the devise, the power remained unexecuted and his devisees lost the property by his default. Construing the Wills Act of 1837, the English courts have held that § 27 is applicable only to general powers of appointment. In In re Byron's Settlement, Williams v. Mitchell, [1891] 3 Ch. 474, B conveyed lands in trust for her daughter R and "for such person or persons (not being her said present husband, or any friend or relation of his) as R shall by deed or will appoint." In default of appointment, the ultimate remaindermen were the heirs of the grantor. At the time of her death R owned real estate other than the trust property. By her will she devised all of the property to her sister A and certain of A's descendants. In holding that R had not exercised her power and that her will was inoperative with reference to the trust property, Kekewich, J., said: Accord, Cloves v. Awdry, 12 Beav. 604, 50 Eng.Rep. 1191. Our research has revealed only one North Carolina case involving the exercise of a limited power in which the opinion refers to G.S. § 31-43 (then Rev. § 3143). In Ryder v. Oakes, supra, by a deed of settlement, W conveyed certain hotel property in trust for his wife for life with remainder over. He reserved "power to reappoint the property' in the event he survived his wife. By his will, he devised the residue of his estate to his wife for life, remainder to his children. W did not survive his wife; so no power existed. Notwithstanding, it was strenuously argued in the briefs that the hotel property had passed under his will. The comment of Clark, C. J., upon this contention was: In Holt v. Hogan, 58 N.C. 82, this Court, without mentioning the statute, held that a general devise of "the residue" of the estate of testatrix (who owned property in her own right) was not an effective exercise of a special power. Appellees rely upon Johnston v. Knight, 117 N.C. 122, 23 S.E. 92, which they cite as authority for their contention that "the rule of G.S. 31-43 is equally applicable where the power to appoint by will is limited to a certain class, if a general gift by will is made to a member of the class." We do not so interpret that case. In Johnston, T devised her estate to her sister H for life, remainder to P and the heirs of K, L and M (all brothers and sisters of T), in such proportion as H should appoint by her will. By her will, after making several specific legacies, H devised the balance of her estate to be equally divided between those persons named in the special power of which she was donee. In holding that H had exercised her power, the court, without mentioning Rev. § 3143, concluded that the will itself disclosed H's intention to exercise the power. The opinion pointed out that she had devised to all of the identical persons designated in the will of T and to no others and that she could have devised the property to no one else. We think that case merely applied the rule that where the donee of a power, general or special, clearly manifests an intention to execute it, effect will be given to his intent. Taylor v. Eatman, 92 N.C. 601. It did not extend the application of the statute to special powers. See Schaeffer v. Haseltine, 228 N.C. 484, 46 S.E.2d 463; Walsh v. Friedman, 219 N.C. 151, 13 S.E.2d 250. The effect of both § 27 of the English Wills Act and G.S. § 31-43, then, is that a general devise or bequest shall be construed to include any real or personal property which the testator may have power to appoint in any manner he may think *47 proper and shall operate as an execution of such power unless a contrary intention appears in the will. 41 Am.Jur., Powers § 43 (1942). A power to appoint in any manner the donee may think proper is a power upon which no restrictions are imposeda general power. G.S. § 31-43 thus applies only to general powers of appointment. We hold, therefore, that the general devise by Alexander S. Hanes, Jr., to his wife cannot be construed to include the trust property over which he had a special or limited power of appointment, since (1) his will discloses no intent to execute the power and (2) G.S. § 31-43 applies only to general powers. There having been no effectual exercise of the power by Alexander Hanes, Jr., it is necessary to answer the trustee's third question. Paragraph (2)(a) of the trust agreement provides that, after the death of Mary R. Hanes and Alexander Stephen Hanes, Jr. (the latter not having exercised his power), the income from his part shall be used for the benefit of the issue of Alexander S. Hanes, Jr., per stirpes "until such issue shall severally attain the age of 21 years, whereupon the properties then constituting each of such issue's share shall be distributed to him or her, discharged of all trusts." Alexander Stephen Hanes, III, having already attained the age of 21 years, is entitled to the immediate distribution of his one-half interest in the subject property. Error and remanded. MOORE, J., not sitting. PLESS, J., took no part in the consideration or decision of this case.