I.General Consideration

Editor’s Note. —

Many of the cases under this section were decided prior to the enactment of G.S. 41-6.3 , which abolished the rule in Shelley’s case.

History and purpose of this section. See Walker v. Trollinger, 192 N.C. 744 , 135 S.E. 871, 1926 N.C. LEXIS 404 (1926).

Estates Tail Converted. —

The section converted by one stroke of the legislative pen estates tail into fee simple. Hodges v. Lipscomb, 128 N.C. 57 , 38 S.E. 281, 1901 N.C. LEXIS 331 (1901).

Form of Acquisition Not Changed. —

The act of 1784, which subsequently converted the estate tail into a fee simple, did not change the original form of the acquisition, which still continued to be by purchase. Ballard v. Griffin, 4 N.C. 237 , 1815 N.C. LEXIS 31 (1815).

The word “children” is ordinarily a word of purchase. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

“Heirs of their bodies” is equivalent to the words “heirs general.” Revis v. Murphy, 172 N.C. 579 , 90 S.E. 573, 1916 N.C. LEXIS 349 (1916); Cohoon v. Upton, 174 N.C. 88 , 93 S.E. 446, 1917 N.C. LEXIS 28 (1917).

When the term “heirs of the body” is used in its technical sense, it imports a class of persons to take indefinitely in succession, from generation to generation. Ray v. Ray, 270 N.C. 715 , 155 S.E.2d 185, 1967 N.C. LEXIS 1411 (1967).

Remainder Dependent upon Estate Tail. —

The section will bar a remainder dependent upon an estate tail, in possession of tenant in tail, at the time of passing the section. Lane v. Davis, 2 N.C. 362 , 1796 N.C. LEXIS 64 (1796).

Confirmation of Alienation in Fee. —

This section converted no estates tail into estates in fee, but such whereof there was a person seized and possessed, and confirmed only such alienations in fee as had been made by tenants in tail in possession since the year 1777. Wells v. Newbolt, 1 N.C. 450 (1802).

II.Rule in Shelley’s Case

Statement of Rule. —

A good definition of the rule in Shelley’s case, and the most general, is as follows: “That when the ancestor by any gift or conveyance taketh an estate of freehold, and in the same gift or conveyance an estate is limited either mediately or immediately to his heirs, in fee or in tail, the word ‘heirs’ is a word of limitation of the estate and not a word of purchase.” Nichols v. Gladden, 117 N.C. 497 , 23 S.E. 459 (1895). See also the statement of the rule in Smith v. Proctor, 139 N.C. 314 , 51 S.E. 889, 2 L.R.A. (n.s.) 172 (1905); Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

The rule in Shelley’s case says, in substance, that if an estate of freehold be limited to A, with remainder to his heirs, general or special, the remainder, although importing an independent gift to the heirs, as original takers, shall confer the inheritance on A, the ancestor. Ray v. Ray, 270 N.C. 715 , 155 S.E.2d 185, 1967 N.C. LEXIS 1411 (1967).

Force of Rule in North Carolina. —

The common-law doctrine known as the rule in Shelley’s case is in force in this State. Nichols v. Gladden, 117 N.C. 497 , 23 S.E. 459, 1895 N.C. LEXIS 105 (1895) (decided under prior law) .

Rule has never been abolished in North Carolina, and this section does not affect that principle of law. Dawson v. Quinnerly, 118 N.C. 188 , 24 S.E. 483, 1896 N.C. LEXIS 32 (1896); Hammer v. Brantley, 244 N.C. 71 , 92 S.E.2d 424, 1956 N.C. LEXIS 642 (1956).

Nature and Operation of Rule. —

The rule in Shelley’s case is a rule of law and not of construction, and, no matter what the intention of the grantor or testator may have been, if an estate is granted or given to one for life and after his death to his heirs or “heirs of his body,” and no other words are superadded which to a certainty show that other persons than the heirs general of the first taker are meant, the rule applies and the whole estate vests in the first taker. Nichols v. Gladden, 117 N.C. 497 , 23 S.E. 459, 1895 N.C. LEXIS 105 (1895).

Where the conveyance is to the first taker for life and then by whatever language employed to his bodily heirs or heirs of his body, the rule in Shelley’s case applies and the first taker acquires a fee. Whitson v. Barnett, 237 N.C. 483 , 75 S.E.2d 391, 1953 N.C. LEXIS 670 (1953).

When a devise is to a named person for life with remainder after his death to “his heirs” or “his bodily heirs” or the “heirs of his body,” nothing else appearing, the devisee becomes seized of a fee simple estate upon the death of the testator subject to any prior life estate created by the will. Hammer v. Brantley, 244 N.C. 71 , 92 S.E.2d 424, 1956 N.C. LEXIS 642 (1956).

The rule in Shelley’s case operates as a rule of property without regard to the intent of the grantor or devisor. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

Rule in Shelley’s case applies to personalty as well as to realty. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

Whenever applicable, the rule in Shelley’s case applies to both real and personal property in this jurisdiction. Ray v. Ray, 270 N.C. 715 , 155 S.E.2d 185, 1967 N.C. LEXIS 1411 (1967).

Limitation within Rule Passes a Fee Simple. —

A limitation coming within the rule in Shelley’s case, recognized as existent in this State, operates as a rule of property, passing when applicable a fee simple, both in deeds and wills, regardless of a contrary intent on the part of the testator or grantor appearing in the instrument. Wallace v. Wallace, 181 N.C. 158 , 106 S.E. 501, 1921 N.C. LEXIS 36 (1921).

Difference between Words of Purchase and Words of Limitation. —

In considering the applicability of the rule in Shelley’s case, it is important to draw and constantly keep in mind the difference between words of purchase and words of limitation. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

When the rule in Shelley’s case says that the words “heirs” or the “heirs of the body” of A are words of limitation and not words of purchase, it simply means that “heirs” or the “heirs of the body” refer to and are read in connection with the estate given to A, extending or modifying that estate, and are not taken as describing a group to whom an estate will first attach. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

“Heirs” or “Heirs of the Body”. —

The words “heirs” or “heirs of the body” must be taken in their technical sense, or carry the estate to the entire line of heirs to hold as inheritors under our canons of descent; but should these words be used as only designating certain persons, or confining the inheritance to a restricted class of heirs, the rule does not apply, and the ancestor or the first taker acquires only a life estate according to the meaning of the express words of the instrument. Wallace v. Wallace, 181 N.C. 158 , 106 S.E. 501, 1921 N.C. LEXIS 36 (1921).

The rule in Shelley’s case applies whenever judicial exposition determines that heirs are described, though informally, under a term correctly descriptive of other objects, but stands excluded whenever it determines that other objects are described, though informally, under the term heirs. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

III.Application and Illustrative Cases

Deed Sufficient Formerly to Convey Fee Tail. —

A deed, which was sufficient under the old law to confer a fee tail, is sufficient under this section, where a contrary intent may not be gathered from the instrument construed as a whole, to convey an estate in fee simple, but such a deed must be distinguished from a conveyance in which the words “bodily heirs” are used as descriptio personarum, which merely conveys to them an estate in remainder and as purchasers from the grantor. Harrington v. Grimes, 163 N.C. 76 , 79 S.E. 301, 1913 N.C. LEXIS 122 (1913). See Whitefield v. Garriss, 134 N.C. 24 , 45 S.E. 904, 1903 N.C. LEXIS 196 (1903); Jones v. Ragsdale, 141 N.C. 200 , 53 S.E. 842, 1906 N.C. LEXIS 88 (1906); Sessoms v. Sessoms, 144 N.C. 121 , 56 S.E. 687, 1907 N.C. LEXIS 118 (1907); Perrett v. Bird, 152 N.C. 220 , 67 S.E. 507, 1910 N.C. LEXIS 245 (1910). See also Acker v. Pridgon, 158 N.C. 337 , 74 S.E. 335, 1912 N.C. LEXIS 45 (1912); Puckett v. Morgan, 158 N.C. 344 , 74 S.E. 15, 1912 N.C. LEXIS 47 (1912).

Conveyance to One and Heirs of the Body. —

A conveyance of land to A and “her heirs by the body of R (her husband) and assigns forever” was a fee tail at common law, but under this section it is converted into a fee simple absolute, unaffected by the fact that there were children of the marriage living at the time of the execution of the conveyance; and in this case, construing the instrument as a whole, it evidences the intent of the grantor that it should be so interpreted. Revis v. Murphy, 172 N.C. 579 , 90 S.E. 573, 1916 N.C. LEXIS 349 (1916); Whitley v. Arenson, 219 N.C. 121 , 12 S.E.2d 906, 1941 N.C. LEXIS 275 (1941).

If testatrix intended to use the term in its strict technical sense, a devise to one and his “bodily heirs” would violate the rule against perpetuities, or might create a fee tail, and in either case a fee simple would vest in the first taker. Elledge v. Parrish, 224 N.C. 397 , 30 S.E.2d 314, 1944 N.C. LEXIS 371 (1944).

An estate to H during his life, with remainder to the testator’s son “and his bodily heirs,” vests a life estate in the land in H, with an estate tail in remainder to the son, which, under our statute, is converted into a fee simple. And upon the falling in of the life estate, the son can convey a good fee simple title. Howard v. Edwards, 185 N.C. 604 , 116 S.E. 1, 1923 N.C. LEXIS 123 (1923) (distinguishing) Leathers v. Gray, 101 N.C. 162 , 7 S.E. 657, 1888 N.C. LEXIS 30 (1888) and Chamblee v. Broughton, 120 N.C. 170 , 27 S.E. 111, 1897 N.C. LEXIS 37 (1897).

A devise to A for life and at her death to the heirs of her body presents a classic case for application of the rule in Shelley’s case. Ray v. Ray, 270 N.C. 715 , 155 S.E.2d 185, 1967 N.C. LEXIS 1411 (1967).

By a devise to A for life and at her death to the heirs of her body, the rule in Shelley’s case, and the doctrine of merger, give A an estate tail which this section converts into a fee simple. Ray v. Ray, 270 N.C. 715 , 155 S.E.2d 185, 1967 N.C. LEXIS 1411 (1967).

Where a testatrix devised and bequeathed all her property to her daughter during her lifetime and at her death to the “heirs of her body, if any,” with further provision that if the daughter should die before testatrix without heirs of the body, the property should go to named collateral kin, the daughter took a fee tail under the rule in Shelley’s case, which was converted into a fee simple by this section. Ray v. Ray, 270 N.C. 715 , 155 S.E.2d 185, 1967 N.C. LEXIS 1411 (1967).

Child Adopted by Unmarried Daughter. —

Where will provided for remainder interest to an unmarried daughter “to have and to hold the same to her and the heirs of her body,” any child adopted by her would satisfy the conditions of the will and could inherit as a bodily heir. Russell v. Russell, 101 N.C. App. 284, 399 S.E.2d 415, 1991 N.C. App. LEXIS 24 (1991).

Deed to Daughter, “Her Children or Heirs”. —

Grantors executed a deed to their daughter and “her children or heirs.” At the time of the execution of the deed the daughter had no children. It was held that the deed conveyed an estate tail to the daughter, which estate is converted into a fee simple by this section, and the daughter had power to dispose of the property by will. Davis v. Brown, 241 N.C. 116 , 84 S.E.2d 334, 1954 N.C. LEXIS 556 (1954).

Conveyance to One and His Children. —

Where a conveyance is made to A and his children, and A has children at the time the deed is executed, A and his children take as tenants in common, but if A has no children at the time the deed is executed, A takes an estate tail which is converted into a fee by this section. Davis v. Brown, 241 N.C. 116 , 84 S.E.2d 334, 1954 N.C. LEXIS 556 (1954).

When the devise is to one for life and after his death to his children or issue, the rule in Shelley’s case has no application, unless it manifestly appears that such words are used in the sense of heirs generally. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

Devise to Go on Devisees’ Deaths to Their “Children & So On”. —

Where testatrix stated she “wanted” the land in question to go to her brother and at his death to his three sons and his named grandson, with further provision that at their deaths testatrix “wanted” the land to go to their “children & so on”, the brother took a life estate with remainder to his children and the named grandson in fee under the rule in Shelley’s case, since it is apparent that testatrix used the word “children” in the sense of an indefinite line of succession and created an estate tail converted into a fee by this section. Wilson v. Spain, 260 N.C. 482 , 133 S.E.2d 189, 1963 N.C. LEXIS 761 (1963).

Devise to One and Lawful Heirs of His Body. —

A devise to S and the lawful heirs of his body forever confers an estate in fee tail, converted into a fee simple under the section. Sessoms v. Sessoms, 144 N.C. 121 , 56 S.E. 687, 1907 N.C. LEXIS 118 (1907). See Wool v. Fleetwood, 136 N.C. 460 , 48 S.E. 785, 1904 N.C. LEXIS 291 (1904).

Devise to testator’s wife for her natural life and at her death to testator’s daughter and “her bodily heirs” vested a life estate in the land to the wife, with an estate tail in remainder to the daughter, whose interest was converted under this section into a defeasible fee simple, and, even though the wife conveyed her present life estate interest to her daughter, the daughter’s interest could only be defeated in the event that she died without having children. Russell v. Russell, 101 N.C. App. 284, 399 S.E.2d 415, 1991 N.C. App. LEXIS 24 (1991).

Where Words “Bodily Heirs” Not Used in Technical Sense. —

If it appears by correct construction that the words “bodily heirs” are not used in the technical sense as conveying the estate to the entire line of heirs of the first taker, as inheritors under the canons of descent, but as words designating certain persons, the rule in Shelley’s case does not apply. Whitson v. Barnett, 237 N.C. 483 , 75 S.E.2d 391, 1953 N.C. LEXIS 670 (1953).

Where the conveyance was made “to Roy Whitson and bodily heirs, and their heirs and assigns,” Roy Whitson being the father of four children, it was held that the words “bodily heirs” were intended to mean children and not heir general in the technical sense. The words were interpreted to mean “to Roy Whitson and children, and their heirs and assigns.” Whitson v. Barnett, 237 N.C. 483 , 75 S.E.2d 391, 1953 N.C. LEXIS 670 (1953).

Effect of G.S. 41-6 . —

Where a deed is executed to “M and the heirs of her body by her husband S begotten, or upon failure thereafter her death to the nearest heirs of S,” and at the date of the execution of the deed M has children living, the deed conveys a fee tail special to M which is converted to a fee simple by this section, defeasible upon her dying without surviving children by S, and her children do not take as tenants in common with her, G.S. 41-6 , providing that a limitation to the heirs of a living person shall be construed to be the children of such person, being applicable only when there is no precedent estate conveyed to the living person, and the condition as to the failure of heirs referring to the death of M without surviving children and not to the birth of issue, there being issue born at the date of the execution of the deed, and the ulterior limitation is not barred by the birth of such issue. Paul v. Paul, 199 N.C. 522 , 154 S.E. 825, 1930 N.C. LEXIS 169 (1930) (distinguishing) Sharpe v. Brown, 177 N.C. 294 , 98 S.E. 825, 1919 N.C. LEXIS 118 (1919). See Bank of Pilot Mt. v. Snow, 221 N.C. 14 , 18 S.E.2d 711, 1942 N.C. LEXIS 373 (1942).

A deed to a married woman and her heirs by her present husband, with granting clause, habendum and warranty to “parties of the second part, their heirs and assigns,” is held to convey to the married woman a fee tail special, which is converted into a fee simple absolute by this section. Whitley v. Arenson, 219 N.C. 121 , 12 S.E.2d 906, 1941 N.C. LEXIS 275 (1941).

A deed to a widow and the heirs of her body by her late husband creates an estate tail which is converted by this section into a fee simple absolute in the widow, and her children by her deceased husband take no interest in the land; G.S. 41-6 is not applicable, since it applies only when no preceding estate is conveyed to the “ancestor” of the “heirs.” Bank of Pilot Mt. v. Snow, 221 N.C. 14 , 18 S.E.2d 711, 1942 N.C. LEXIS 373 (1942).

A deed to grantor’s wife “and to her heirs” by grantor, conveys a fee tail special, converted by this section into a fee simple absolute. Pittman v. Stanley, 231 N.C. 327 , 56 S.E.2d 657, 1949 N.C. LEXIS 528 (1949).

A devise to testator’s wife, “to her and her heirs by me,” vests in the wife a fee tail special, converted by this section into a fee simple, and her estate is not affected or limited to a life estate with remainder in fee to the heirs of testator by subsequent provision in the item that testator’s wife should have exclusive and sole use of the property and “should she have living heirs by me, then all my estate . . . shall belong to her and her heirs in fee simple,” in the absence of a reverter or limitation over in the event the wife should not have children born to her marriage with testator. Sharpe v. Isley, 219 N.C. 753 , 14 S.E.2d 814, 1941 N.C. LEXIS 138 (1941).

Life Estate with Limitation over to Bodily Heirs. —

A devise of lands for life, followed by a separate paragraph, to the “bodily heirs” of the devisees named after their death, creates an estate in fee tail, which is enlarged into a fee simple under this section. Keziah v. Medlin, 173 N.C. 237 , 91 S.E. 836, 1917 N.C. LEXIS 282 (1917).

Where a husband conveys his lands to his wife for life and to her bodily heirs begotten by him, the estate conveyed is an estate tail special under the rule in Shelley’s case, converted into a fee simple absolute by this section. Morehead v. Montague, 200 N.C. 497 , 157 S.E. 793, 1931 N.C. LEXIS 371 (1931).

Conveyance to Husband and Wife for Life Then to Heirs of the Body of Wife. —

A deed conveyed to husband and wife a life estate and expressed grantor’s intent to convey only a lifetime right to said grantees, with provision that said grantees should have and hold said tract of land during their natural lives and then to the heirs of the body of the feme grantee. It was held that the husband took only a life estate, and the conveyance being to the wife and then to heirs of her body, the rule in Shelley’s case applied, and the estate in fee tail conveyed to the wife was converted by this section into a fee simple absolute. Edgerton v. Harrison, 230 N.C. 158 , 52 S.E.2d 357, 1949 N.C. LEXIS 593 (1949).

Devise “to Have and to Hold for the Heirs of Their Bodies”. —

A devise of lands to the wife of the testator for life, and at her death or remarriage to their two children, by name, to have and to hold during their natural lives for the heirs of their bodies, constitutes an estate tail, converted by this section into a fee simple. Washburn v. Biggerstaff, 195 N.C. 624 , 143 S.E. 210, 1928 N.C. LEXIS 162 (1928).

Remainder to “Male Heirs, They to Share and Share Alike”. —

The will in question devised certain lands to testator’s son for life “and then to be divided equally among his male heirs, they to share and share alike” and it was held that even if it be conceded that the words “male heirs” should be construed “heirs” under the provisions of this section, the addition of the words “share and share alike” prevents the application of the rule in Shelley’s case, and upon the death of the son, his sole male heir takes the fee in the property by purchase under the will. Cheshire v. Drewry, 213 N.C. 450 , 197 S.E. 1, 1938 N.C. LEXIS 111 (1938).

Devise to Grandchildren for Their Lives, Then “to Their Bodily Heirs”. —

The rule in Shelley’s case does not apply to a devise to testator’s grandchildren during the term of their natural lives, then “to their bodily heirs, or issue surviving them,” with limitation over of the share of any grandchild who should die without issue to his next of kin, since it is apparent that the word “heirs” was not used in its technical sense, and the grandchildren take only a life estate. Williams v. Johnson, 228 N.C. 732 , 47 S.E.2d 24, 1948 N.C. LEXIS 497 (1948).

The use of the word “children” following the life estate does not create a fee simple estate or fee tail estate which would be converted by this section into a fee simple estate where a will devises real estate to the three daughters of testator, naming them, “during the time of their natural lives” and provides that “the share of each one of my said daughters shall upon her death go to her children and their heirs absolutely,” for the word “children” is a word of purchase. Moore v. Baker, 224 N.C. 133 , 29 S.E.2d 452, 1944 N.C. LEXIS 317 (1944).

“Lawful Heirs”. —

Where a devise is to one for life and then to his “lawful heirs,” the word “lawful,” qualifying the word “heirs,” does not have the effect of preventing the latter word from operating as one of limitation and of restricting the meaning of the words “lawful heirs” to that of “children,” who will take not by descent from their parent, but by purchase from the devisor. Wool v. Fleetwood, 136 N.C. 460 , 48 S.E. 785, 1904 N.C. LEXIS 291 (1904).

“Heirs, if Any”. —

A conveyance to one for “his lifetime, and at his death to his heirs, if any,” invokes the application of the rule in Shelley’s case and vests a fee in the first taker. The use of the phrase “if any” does not prevent the application of the rule, since there is no limitation over. Glover v. Glover, 224 N.C. 152 , 29 S.E.2d 350, 1944 N.C. LEXIS 313 (1944).

“Heirs or Heiresses of Her Body”. —

A devise to P, “during her natural life, and after her death to the begotten heirs or heiresses of her body,” vested in P an absolute estate in fee simple. Leathers v. Gray, 101 N.C. 162 , 7 S.E. 657, 1888 N.C. LEXIS 30 (1888).

“Or Other Lineal Descendants”. —

The superadded words “or other lineal descendants . . . to have and to hold the same to them and their heirs, executors and administrators absolutely” do not demonstrate that testator contemplated an indefinite succession from generation to generation. Wright v. Vaden, 266 N.C. 299 , 146 S.E.2d 31, 1966 N.C. LEXIS 1329 (1966).

Devise “for Life Only”. —

A devise of lands to the testator’s named children “for life only and then to their body heirs,” falls within the rule in Shelley’s case, notwithstanding the use of the words “for life only,” and carries to the remainderman a fee tail under the old law, converted by our statute into a fee simple title. Merchants Nat'l Bank v. Dortch, 186 N.C. 510 , 120 S.E. 60, 1923 N.C. LEXIS 284 (1923) (citing) Harrington v. Grimes, 163 N.C. 76 , 79 S.E. 301, 1913 N.C. LEXIS 122 (1913).

Reverter upon Death without Surviving Heirs. —

The interpretation that a deed for life and then to “the surviving heirs of her body” conveys the fee simple title, under this section, does not apply when the grantor uses the additional words, “but should she die without leaving such heir or heirs, then the same is to revert back to her nearest of kin according to law,” for then the intent is manifest that the conveyance is of a defeasible fee depending upon whether the first taker died without leaving children surviving her. Smith v. Parke, 176 N.C. 406 , 97 S.E. 209, 1918 N.C. LEXIS 258 (1918).

A devise to testator’s daughter and her bodily heirs, and if she dies without bodily heirs, then in trust for the heirs of testator’s sisters, is held to create a fee simple estate in the daughter, defeasible upon her dying without children or issue, it being apparent that the words “bodily heirs” used in the devise meant children or issue, as otherwise the limitation over to the heirs of testator’s sisters would be meaningless. Murdock v. Deal, 208 N.C. 754 , 182 S.E. 466, 1935 N.C. LEXIS 123 (1935).

Where land is devised to a person for life at her death to vest in the testator’s children during their natural lives and at their death to vest in their lawful heirs, and should they leave no lawful heirs, then to the testator’s lawful heirs, such children take a fee simple absolute on the death of the life tenant. Wool v. Fleetwood, 136 N.C. 460 , 48 S.E. 785, 1904 N.C. LEXIS 291 (1904).

Where a testator devises realty to a grandson, and upon the grandson’s death without children, then the realty to descend to other grandchildren, such devise vests a fee simple estate in the first devisee, defeasible only on condition that he die without leaving heirs of his body. Whitefield v. Garriss, 134 N.C. 24 , 45 S.E. 904, 1903 N.C. LEXIS 196 (1903).

When Defeasible Estate Becomes Absolute. —

A conveyance to a granddaughter and the heirs of her own body passed an estate in fee tail, which by this section was converted into a fee simple, defeasible under the terms of the deed if no child was born to her, but which became absolute upon the birth of a child. Sharpe v. Brown, 177 N.C. 294 , 98 S.E. 825, 1919 N.C. LEXIS 118 (1919). See Paul v. Paul, 199 N.C. 522 , 154 S.E. 825, 1930 N.C. LEXIS 169 (1930).

An estate in remainder to the testator’s son “and to his children or issue, but in case he should die childless and without issue, then . . . to my heirs in equal degree in fee simple,” there being no child or children of the son until long after the testator’s death, was held to create an estate tail at common law, which was converted into a fee simple by this section, defeasible upon the testator’s son dying without issue, and as there was an ultimate limitation over to persons coming within its terms, the testator’s son and his child or issue could not convey a fee simple title. Ziegler v. Love, 185 N.C. 40 , 115 S.E. 887, 1923 N.C. LEXIS 10 (1923).

I.General Consideration

Survivorship Only Abolished as Incident of Joint Tenancy. —

This section abolished survivorship only where it follows as a legal incident to an existing joint tenancy. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Right of survivorship has been statutorily abolished where it follows as legal incident to an existing joint tenancy. In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770, 1990 N.C. App. LEXIS 497 (1990) (decided under law in effect prior to G.S. 53-146.1.).

“Estate” in Most General Sense Includes Choses in Action. —

“Estate” is derived from status, and in its most general sense means position or standing in respect to the things and concerns of this world. In this sense it includes choses in action. Pippin v. Ellison, 34 N.C. 61 , 1851 N.C. LEXIS 18 (1851); Webb v. Bowler, 50 N.C. 362 , 1858 N.C. LEXIS 51 (1858); Hurdle v. Outlaw, 55 N.C. 75 , 1854 N.C. LEXIS 18 8 (1854).

Estate is also used in a much more restricted sense, and is then put in opposition to a chose in action, or mere right, to signify something which one has in possession, or a vested remainder, or reversion without dispute or adverse possession. Taylor v. Dawson, 56 N.C. 86 , 1856 N.C. LEXIS 228 (1856). See Bond v. Hilton, 51 N.C. 180 , 1858 N.C. LEXIS 143 (1858).

Section Applies Only to Estates of Inheritance. —

The act of 1784, converting joint tenancies into estates in common, applies only to estates of inheritance. Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881).

If the purpose had been to include all estates in joint tenancy, that purpose would have been better served by abolishing the “jus accrescendi” in a few direct words to that effect, instead of resorting to words applicable only to estates of inheritance held in joint tenancy in real estate, and absolute estates held in joint tenancy in personalty. Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876).

This section which abolished the right of survivorship in joint tenancies in estates of inheritance, does not apply to a joint tenancy in a life estate where no estate of inheritance is involved. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Concurrent Life Estates Not Affected. —

Concurrent life estates still stand untouched by this section, and the old feudal presumption in favor of joint tenancies with survivorship remains. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Joint Estates for Life and Estates by Entirety Not Affected. —

Joint tenancies are not abolished by the section. It abolishes the right of survivorship in joint tenancies in fee, but does not affect joint estates for life or estates by entirety. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857); Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876); Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881); Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

In Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876) in construing the act of 1784, now this section, Chief Justice Pearson says: “It is obvious that these words cannot be made to apply to joint tenants for life”. Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

Legatees May Hold as Joint Tenants. —

Legatees may still hold by a joint tenancy in North Carolina, though the incident of survivorship was abolished by the act of 1784, now this section. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857).

When Remaindermen Take as Tenants in Common. —

A deed of gift, executed by W.B. to his son J.B., “during his natural life only, and then to return to the male children of the said J.B., lawfully begotten of his body, for the want of such to return to the male children of my other sons W and B, their proper use, benefit and behoof of him, them and every of them, and to their heirs and assigns forever,” vested a life estate in J.B., with remainder in fee to his sons as tenants in common under the section. Brown v. Ward, 103 N.C. 173 , 9 S.E. 300, 1889 N.C. LEXIS 91 (1889).

Survivorship May Be Provided for by Contract. —

This section abolishes survivorship, where the joint tenancy would otherwise have been created by the law, but does not operate to prohibit persons from entering into written contracts as to land, or verbal agreements as to personalty, such as to make the future rights of the parties depend upon the fact of survivorship. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895); Jones v. Waldroup, 217 N.C. 178 , 7 S.E.2d 366, 1940 N.C. LEXIS 204 (1940); Bunting v. Cobb, 234 N.C. 132 , 66 S.E.2d 661, 1951 N.C. LEXIS 415 (1951); Wilson County v. Wooten, 251 N.C. 667 , 111 S.E.2d 875, 1960 N.C. LEXIS 531 (1960).

This section does not operate to prohibit persons from entering into written contracts as to lands so as to make future rights of the parties depend upon survivorship. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Parties who wish to create a right of survivorship applicable to joint bank accounts must comply with requirements of G.S. 41-2.1(a) . In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770 (1990)decided under law in effect prior to G.S. 53-146.1.

Survivorship in Personalty Must Be Pursuant to Contract. —

Since the abolition of survivorship in joint tenancy, the right of survivorship in personalty, if such right exists, must be pursuant to contract and not by operation of law or statutory provision. Wilson v. Ervin, 227 N.C. 396 , 42 S.E.2d 468, 1947 N.C. LEXIS 439 (1947); Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

A verbal agreement between two parties owning a note, payable to them jointly, that upon the death of either without issue it shall belong to the survivor is valid. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895).

Joint Tenancy Severed by Deed of Trust. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court properly ruled that the son-in-law and daughter owned a one-half undivided interest in the land which was not encumbered by a deed of trust to the benefit of the mortgagee because, after the son-in-law and daughter and the mother executed a general warranty deed creating a joint tenancy with a right of survivorship between the mother and the son-in-law and daughter, that joint tenancy was severed by the filing of a deed of trust which only obligated the mother, as the accompanying mortgage was a conveyance, due to North Carolina being a title theory state, so the mother, on one hand, and the son-in-law and daughter, on the other hand, held the land as tenants in common. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Instrument Held Ineffective to Provide for Survivorship. —

While this section may not preclude tenants in common from providing for survivorship by adequate contract inter sese, an instrument executed by them which merely expresses a general intent that the survivor should take the fee, without any words of conveyance, is ineffective. The execution by the administrator of the deceased tenant in common of a deed to the surviving tenant, made under the supposed authority of the contract, is without effect. Pope v. Burgess, 230 N.C. 323 , 53 S.E.2d 159, 1949 N.C. LEXIS 630 (1949).

Joint Tenant’s Interest Did Not Pass to Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the mother’s interest as a tenant in common passed to the son-in-law and daughter upon the mother’s death because the mother’s interest as a tenant in common had no right of survivorship, since a joint tenancy previously created by a general warranty deed was severed by the filing of a deed of trust that obligated only the mother. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Interest of Tenant in Common Did Not Vest in Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the son-in-law and daughter owned the land in fee simple absolute upon the mother’s death because the mother’s interest in the property as a tenant in common did not vest in the son-in-law and daughter pursuant to a right of survivorship. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

II.Estates of Husband and Wife

Section Inapplicable to Conveyances to Husband and Wife. —

In construing this statute, the Supreme Court held that it had no application to an estate granted to husband and wife, on the ground that it is not an estate in joint tenancy, but an entirety estate. Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837); Gray v. Bailey, 117 N.C. 439 , 23 S.E. 318, 1895 N.C. LEXIS 87 (1895); Woolard v. Smith, 244 N.C. 489 , 94 S.E.2d 466, 1956 N.C. LEXIS 446 (1956).

The act of 1784, now this section, abolishing survivorship in joint tenancies, does not apply to conveyances to husband and wife, for the reason assigned in Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837) that “being in law but one person they have each the whole estate as one person; and on the death of either of them the whole estate continues in the survivor”. Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887); Smith v. Gordon, 204 N.C. 695 , 169 S.E. 634, 1933 N.C. LEXIS 240 (1933).

Survivorship in Joint Bank Accounts. —

Where agreements of husband and wife relating to savings accounts provide that the accounts are held by them as joint tenants with right of survivorship, and not as tenants in common, the right of survivorship exists pursuant to the contracts, and upon the death of the husband the widow is entitled to take the whole. Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

Estate by Entireties Not Abolished. —

It has been held in several well considered decisions of the Supreme Court that our Constitution and the later statutes relative to the property and rights of married women have not thus far destroyed or altered the nature of this estate by entireties, a conveyance to a husband and wife. Bruce v. Sugg, 109 N.C. 202 , 13 S.E. 790 (1891); Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903); West v. Aberdeen & R.R., 140 N.C. 620 , 53 S.E. 477, 1906 N.C. LEXIS 53 (1906); Bynum v. Wicker, 141 N.C. 95 , 53 S.E. 478, 1906 N.C. LEXIS 72 (1906); Jones v. W.A. Smith & Co., 149 N.C. 318 , 62 S.E. 1092, 1908 N.C. LEXIS 350 (1908); McKinnon, Currie & Co. v. Caulk, 167 N.C. 411 , 83 S.E. 559, 1914 N.C. LEXIS 137 (1914). See also Martin v. Lewis, 187 N.C. 473 , 122 S.E. 180, 1924 N.C. LEXIS 314 (1924).

The right of survivorship applies to estates in land conveyed jointly to husband and wife, and title vests in the heirs of the one surviving the other. Murchison v. Fogleman, 165 N.C. 397 , 81 S.E. 627, 1914 N.C. LEXIS 278 (1914).

A conveyance to a husband and wife, as such, creates an estate of entirety, and does not make them joint tenants or tenants in common. Neither can alien without the consent of the other, and the survivor takes the whole. Needham v. Branson, 27 N.C. 426 , 1845 N.C. LEXIS 128 (1845); Todd v. Zachary, 45 N.C. 286 , 1853 N.C. LEXIS 35 (1853); Woodford v. Higly, 60 N.C. 234 , 60 N.C. 237 , 1864 N.C. LEXIS 13 (1864); Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887).

Where the husband and wife purchase property, each furnishing a portion of the purchase money, an estate in entirety and not a joint estate is created which they hold per tout et non per my. Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903).

Interest of Husband and Wife as Tenants in Common. —

When a joint tenancy between a mother, on one hand, and a son-in-law and daughter, on the other hand, was severed by the filing of a deed of trust that obligated only the mother, the mother’s subsequent interest as a tenant in common was one-half of the property, and the son-in-law’s and daughter’s interest, as tenants by the entirety, was also one-half because the son-in-law and daughter were husband and wife, so the son-in-law and daughter held the property as a single tenancy by the entirety and were treated as a single party when determining interests in the joint tenancy with right of survivorship upon severance of the joint tenancy. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

III.Joint Tenancy in Partnership Property

Joint Tenancy of Partnership in Land. —

This section provides that land jointly purchased for partnership purposes shall, upon the death of one partner, survive to the others for the purpose of paying the partnership debts. Real estate held and used for partnership purposes is subject to partnership debts to the exclusion of the heir or widow of the deceased. When the partnership debts are satisfied, if there is any remainder, such share as would have fallen to the deceased partner, shall be delivered over to the heirs, executors, administrators or assigns. Stroud v. Stroud, 61 N.C. 525 , 1868 N.C. LEXIS 60 (1868).

Upon Settlement Partnership Land Descends as Real Estate. —

When land is purchased in fee by partnership funds and for partnership purposes, and one partner dies, upon the settlement of the partnership debts his share of the land descends to his heir as real estate. Summey v. Patton, 60 N.C. 601 (1864).

When lands are purchased by a partnership with partnership funds, upon the death of one of the partners, in the absence of any agreement in the articles of partnership to the contrary, his share therein descends to his heir at law as real estate, if the personal property of the partnership is sufficient to pay all the partnership debts and demands. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Heir May Recover from Surviving Partner. —

The heir at law to whom a deceased partner had conveyed by deed his share of lands purchased with partnership funds is entitled to the lands against the rights of the surviving partner, in an action by the latter for possession for the purpose of winding up the partnership affairs, when it appears that the partnership personalty is sufficient for the purpose of paying the partnership debts and satisfying any claim the surviving partner may have, and there is no provision in the articles of the partnership agreement of a contrary purpose. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Immaterial Whether Claim Is by Deed or Inheritance. —

When the rule applies that lands purchased by partnership funds descend to the heir at law, it is immaterial whether the heir of the deceased partner claims his interest by deed from him or by inheritance. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

G.S. 59-74 is to be read in connection with this section respecting the settlement of partnership affairs by surviving partners. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

The fact that the surviving partner instituting action on a partnership asset has not filed a bond as required by G.S. 59-74 , is not ground for nonsuit, since the requirement of a bond is for the protection of the estate of the deceased partner, and the objection is not available to one who is merely a debtor of the partnership. This conclusion is consonant with G.S. 59-75 , which provides that upon failure of the surviving partner to file bond, the clerk of the superior court shall appoint a collector of the partnership upon application of any person interested in the estate of the deceased partner. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

OPINIONS OF ATTORNEY GENERAL

Effect on Common Law Application to Joint Bank Accounts. — See opinion of the Attorney General to Mr. W.C. York, Department of Insurance, 41 N.C. Op. Att'y Gen. 352 (1971).

I.General Consideration

Editor’s Note. —

The cases under this section were decided prior to the enactment of G.S. 41-6.3 , which abolished the rule in Shelley’s case.

Purpose of Section. —

It seems that the main object of this section is to convert a contingent into a vested remainder under certain circumstances. It seems also to have been the purpose of the act to sustain a direct conveyance to the heirs of a living person. As there can be no heirs during the life of the ancestor, such a conveyance at common law would have been void unless there was something in the deed which indicated that by “the heirs” was meant the children of the person named. This section provides that in such a case the word “heirs” shall be construed to mean “children” and the limitation therefore would be good. By this construction of the section it does not affect the rule in Shelley’s case. Starnes v. Hill, 112 N.C. 1 , 16 S.E. 1011, 1893 N.C. LEXIS 159 (1893); Hartman v. Flynn, 189 N.C. 452 , 127 S.E. 517, 1925 N.C. LEXIS 332 (1925).

“Limitation” Explained. —

The word limitation has two different senses: the original sense, namely, that of a member of a sentence, expressing the limits or bounds to the quantity of an estate; and the derivative sense, namely, that of an entire sentence, creating and actually or constructively marking out the quantity of an estate. In this statute, the word is manifestly used in its derivative or secondary sense. Campbell v. Everhart, 139 N.C. 503 , 52 S.E. 201, 1905 N.C. LEXIS 158 (1905). See Starnes v. Hill, 112 N.C. 1 , 16 S.E. 1011, 1893 N.C. LEXIS 159 (1893).

The rule in Shelley’s case is not abrogated by this section. Starnes v. Hill, 112 N.C. 1 , 16 S.E. 1011, 1893 N.C. LEXIS 159 (1893).

Common-Law Rule Changed. —

While as a general common-law rule, subject to some exceptions, a conveyance of an estate for life in lands to another, with remainder to the heirs of the grantor, could not divest the grantor of the fee, under the rule that nemo est haeres viventis, this does not prevail under the provisions of this section. Thompson v. Batts, 168 N.C. 333 , 84 S.E. 347, 1915 N.C. LEXIS 48 (1915).

Section Applies Only When No Precedent Estate to Said Living Person. —

The Code of 1883, s. 1329, now this section, providing that a limitation to the heirs of a living person shall be construed to be the children of such person, applies only when there is no precedent estate conveyed to said living person. Jones v. Ragsdale, 141 N.C. 200 , 53 S.E. 842, 1906 N.C. LEXIS 88 (1906); Whitley v. Arenson, 219 N.C. 121 , 12 S.E.2d 906, 1941 N.C. LEXIS 275 (1941).

If it were not true that this section applies only when there is no precedent estate conveyed to said living person, it would not only repeal the rule in Shelley’s case, but would pervert every conveyance to “A and his heirs” into something entirely different from what those words have always been understood to mean. Marsh v. Griffin, 136 N.C. 333 , 48 S.E. 735, 1904 N.C. LEXIS 270 (1904).

Conveyance to Living Person and Limitation to Heirs. —

This section applies only when there is no precedent estate conveyed to said living person, nor is this section applicable where there is a conveyance to a living person, with a limitation to his heirs. Bank of Pilot Mt. v. Snow, 221 N.C. 14 , 18 S.E.2d 711, 1942 N.C. LEXIS 373 (1942).

Conveyance Must Be to Heirs of Living Person. —

This section applies only when the conveyance is to the heirs of a living person. Scott v. Jackson, 257 N.C. 658 , 127 S.E.2d 234, 1962 N.C. LEXIS 396 (1962) (commented on in 41 N.C.L. Rev. 317 (1963)) .

This section does not apply when the limitation is to a living person and his heirs. Whitley v. Arenson, 219 N.C. 121 , 12 S.E.2d 906, 1941 N.C. LEXIS 275 (1941).

II.Illustrative Cases

Devise to “Heirs of His Children”. —

By his will, the testator devised a lot to trustees for 20 years from the date of his death, and at the expiration of such term to the “heirs of his children, to be equally divided between them, per stirpes.” The testator left surviving two children, a son and a daughter, both of whom had children living at the date of testator’s death. The son and daughter are now living. Under this section the word “heirs,” as used in the will, must be construed to mean “children.” Lide v. Wells, 190 N.C. 37 , 128 S.E. 477, 1925 N.C. LEXIS 5 (1925).

A testator devised a lot to trustees for 20 years from the date of his death and provided that at the end of said period the estate should “be equally divided between the heirs of my children, per stirpes.” By virtue of this section, the word “heirs” as used in this item of the will, must be construed to mean the “children” of the son and daughter of the testator. Lide v. Mears, 231 N.C. 111 , 56 S.E.2d 404, 1949 N.C. LEXIS 494 (1949).

“Lawful Heirs of Her Body”. —

Where a testator, by separate devises, gave to each of his three daughters, who were his only heirs at law, a certain tract of his land, with provision in each item “to her and the lawful heirs of her body in fee simple forever, and if she should die without a lawful heir of her body, then the property to go to the other surviving heirs,” by the expression, “lawful heirs of her body,” in the connection used, the testator intended “child” of his daughters. Kornegay v. Cunningham, 174 N.C. 209 , 93 S.E. 754, 1917 N.C. LEXIS 58 (1917).

Remainder to Living Heirs of Grantor. —

Grantor conveyed the land in question to her son after the reservation of a life estate, and by habendum stipulated that the grantee should have an estate for the term of his natural life and at his death to his issue surviving, with further provision that should he die without issue “then to the living heirs of” the grantor. It was held that the other children of grantor have a remainder contingent upon the death of the grantee without issue, which interest cannot be defeated by a conveyance executed by the grantee with the joinder of the grantor. Ellis v. Barnes, 231 N.C. 543 , 57 S.E.2d 772, 1950 N.C. LEXIS 483 (1950).

Section Validates Conveyance Directly to Heirs of Living Person. —

By virtue of the section a deed conveying land directly to the “heirs” of a living person passes whatever title the grantor had to the children of such person. Campbell v. Everhart, 139 N.C. 503 , 52 S.E. 201, 1905 N.C. LEXIS 158 (1905).

A deed to “the heirs” of A, he being still alive, although void at common law, is good under this section, and is construed to be a limitation to the children of A, and includes after-born children. Graves v. Barrett, 126 N.C. 267 , 35 S.E. 539, 1900 N.C. LEXIS 229 (1900).

A devise to the “heirs” of a person will be construed to be to his “children” in the absence of a contrary intention expressed in the instrument. Moseley v. Knott, 212 N.C. 651 , 194 S.E. 100, 1937 N.C. LEXIS 392 (1937).

An estate granted to D for life and then to the heirs of S, who was then alive, is operative as to the conveyance of the remainder under Revival, s. 1583, now this section, which construes the word “heirs” to mean children, in such instances. Condor v. Secrest, 149 N.C. 201 , 62 S.E. 921, 1908 N.C. LEXIS 326 (1908).

Child Born during Life of Life Tenant. —

A devise was of lands to the widow of the testator for life, then to the heirs of his son J, and it appeared that the son was living at the time and had living children at the death of the testator and one born thereafter, during the continuance of the life estate. It was held that the devise, being to the heirs of a living person, conveyed such interest to the children of the person designated, and being, in terms, to a class, it included all who were members of the class and filled the description at the time the particular estate terminated, and therefore the child born after the death of the testator, but during the lifetime of the tenant for life, took his share with the other children of J. Cooley v. Lee, 170 N.C. 18 , 86 S.E. 720, 1915 N.C. LEXIS 322 (1915).

Limitation to Heirs of One with Conditional Limitation Over. —

Where an estate was devised to A “and the heirs of his body, but if he die without heirs living at the time of his death, then to the heirs of B,” “heirs” was construed to mean children. Smith v. Brisson, 90 N.C. 284 , 1884 N.C. LEXIS 215 (1884).

Limitation over Provided First Taker Dies Without Heirs. —

Where a testator devises land to his son with a limitation over to his daughters, provided the son dies without heirs, the word “heirs” is construed to mean “children.” Sain v. Baker, 128 N.C. 256 , 38 S.E. 858, 1901 N.C. LEXIS 379 (1901).

Where a devise of lands is limited over should the first taker die without heirs, evidencing that the intent of the testator made the contingency to depend upon the first taker’s dying without issue, this section has no application. Massengill v. Abell, 192 N.C. 240 , 134 S.E. 641, 1926 N.C. LEXIS 270 (1926).

Contingent Remainder Interests. —

Trial court erred in granting summary judgment in favor of a second son’s children because they received nothing under their great-grandfather’s (testator) will and their grantees received deeds from persons who had no interest in the property where the will created contingent remainder interests in the testator’s children that were satisfied and the property reverted to the testator’s heirs, inter alia, upon the death of his first son without lineal descendants. Barnes v. Scull, 237 N.C. App. 184, 765 S.E.2d 820, 2014 N.C. App. LEXIS 1177 (2014).

Reverter to Heirs upon Nonhappening of Contingency. —

A conveyance of land in contemplation of marriage, to M, “to descend to the heirs of the body of the said M in fee simple, the issue of such marriage, and on failure of issue to revert to the heirs of” the grantor, the “reverter” to his heirs under this section meant to his children after the death of his wife and the nonhappening of the stated contingency. Thompson v. Batts, 168 N.C. 333 , 84 S.E. 347, 1915 N.C. LEXIS 48 (1915).

“Lawfully Begotten Heirs of the Body”. —

It was held that “the lawfully begotten heirs of her body” in a will referred most obviously to the children of the devisee for life, of whom there were only two, and was construed to mean “the children of such person” since contrary intention did not appear from the will. Lockman v. Hobbs, 98 N.C. 541 , 4 S.E. 627, 1887 N.C. LEXIS 321 (1887).

When Children Illegitimate. —

Where a bequest is immediate — not dependent upon a preceding limited estate — to the heirs of a living person, and the children of such person are illegitimate, they have the right to take under the section which declares that a limitation to the “heirs” shall be construed to be the “children” of such person, unless a contrary intention appears. Howell v. Tyler, 91 N.C. 207 , 1884 N.C. LEXIS 48 (1884).

I.General Consideration

History of Section. —

It is conceded, on all hands, that the Statute of Uses, 27 Hen. VIII, c. 10, was in force and in use, in this State, up to the passage of the Revised Statutes (1836). Indeed, all of the conveyances of land adopted and used in this State are based on, and take effect by, the operation of that statute. In the Rev. Stat., c. 43, s. 4, and the Rev. Code, c. 43, s. 6, the words used in 27 Hen. VIII, c. 10, i.e., “When one person or persons stand, or be seized, or at any time thereafter shall happen to be seized of land, etc., to the use of any other person, persons, or body politic, by reason of any bargain, sale, feoffment, etc., or otherwise, by any manner or means whatsoever it be, the persons, etc., having the use, shall have the legal estate, etc.,” are omitted and the provision is simply “By deed of bargain and sale, lease and release and covenant to stand seized, the possession shall be transferred to the bargainee, releasee, covenantee, etc.” Substantially in this form the section is carried through all the various codes up to this one. The tendency, while no material change has been made, has been to make the section all inclusive by extending its application to every possible case involving the principle. Wilder v. Ireland, 53 N.C. 85 , 1860 N.C. LEXIS 163 (1860).

Possession Transferred. —

The statute of uses, substituted for 27 Hen. VIII, now this section, provides that the possession of the bargainor shall be transferred to the bargainee as perfectly as if the bargainee “had been enfeoffed at common law with the livery of seizin of the land intended to be conveyed, etc.” Kirby v. Boyette, 118 N.C. 244 , 24 S.E. 18, 1896 N.C. LEXIS 41 (1896).

Same Footing with Feoffments at Common Law. —

Deeds of bargain and sale, and covenants to stand seized to uses, are put on the same footing with feoffments at common law, with respect to seizin, the declaration of uses thereon, and the consideration. Ivey v. Granberry, 66 N.C. 223 , 1872 N.C. LEXIS 34 (1872); Love v. Hardin, 87 N.C. 249 , 1882 N.C. LEXIS 57 (1882).

A use may be limited on a use. Rowland v. Rowland, 93 N.C. 214 , 1885 N.C. LEXIS 42 (1885).

Necessity of Consideration. —

A deed of bargain and sale is governed in this State by the same principles which were applied to it in England. It must have a pecuniary, or other valuable, consideration. Blount v. Blount, 4 N.C. 389 , 1817 N.C. LEXIS 7 (1817); Brocket v. Foscue, 8 N.C. 64 , 1820 N.C. LEXIS 19 (1820); Bruce v. Faucett, 49 N.C. 391 , 1857 N.C. LEXIS 107 (1857).

If no consideration, either good or valuable, appears on the face of the instrument, or can be proved aliunde, the instrument will be void. Springs v. Hanks, 27 N.C. 30 , 1844 N.C. LEXIS 71 (1844); Jackson v. Hampton, 30 N.C. 457 , 1848 N.C. LEXIS 104 (1848); Bruce v. Faucett, 49 N.C. 391 , 1857 N.C. LEXIS 107 (1857).

Resulting Use at Common Law. —

At common law, where there was no consideration, the use would result to the feoffor, unless the declaration of the use or trust was contemporaneous with the transmutation of the legal title. Pittman v. Pittman, 107 N.C. 159 , 12 S.E. 61, 1890 N.C. LEXIS 28 (1890).

Love and Affection as Consideration. —

Though in form a deed is one of bargain and sale, yet if the only consideration is that of love and affection, it will operate as a covenant to stand seized. Slade v. Smith, 2 N.C. 326 (1796); Hatch v. Thompson, 14 N.C. 411 , 1832 N.C. LEXIS 64 (1832); Cobb v. Hines, 44 N.C. 343 , 1853 N.C. LEXIS 179 (1853); Bruce v. Faucett, 49 N.C. 391 , 1857 N.C. LEXIS 107 (1857).

Where Legal and Equitable Title in Same Person. —

Where one who has an equitable title acquires the legal title so that the same becomes united in the same person, the former is merged in the latter, and numerous decisions elsewhere are to the same effect. Peacock v. Stott, 101 N.C. 149 , 7 S.E. 885, 1888 N.C. LEXIS 27 (1888); Odom v. Morgan, 177 N.C. 367 , 99 S.E. 195, 1919 N.C. LEXIS 134 (1919).

Exceptions to Rule That Beneficial Use Is Converted into Legal Ownership. —

Where one person is seized to the use of another, the statute carries the legal estate to the person having the use. But three classes of cases are made exceptions to its operation, i.e.: (1) Where a use is limited on a use, (2) where a trustee is not seized but only possessed of a chattel interest, and (3) where the purposes of the trust make it necessary for the legal estate and the use to remain separate, as in the case of land conveyed for the separate use and maintenance of a married woman. Wilder v. Ireland, 53 N.C. 85 , 1860 N.C. LEXIS 163 (1860); Kirby v. Boyette, 118 N.C. 244 , 24 S.E. 18, 1896 N.C. LEXIS 41 (1896).

An estate of freehold to commence in futuro can be conveyed by a deed of bargain and sale operating under this section, or by executory devise; therefore, an estate to H for life and at her death to her children in fee, reserving a life estate to the grantor, is good. Savage v. Lee, 90 N.C. 320 , 1884 N.C. LEXIS 222 (1884).

Covenant to Stand Seized on Death of Grantor. —

Where there was a conveyance of real property upon the consideration of love and affection, reserving a life estate to the donor, it was held by the court that the conveyance was good; that it was a conveyance to stand seized to the use of the vendee on the death of the donor. Davenport v. Wynne, 28 N.C. 128 (1845). To the same effect in Hodges v. Spicer, 79 N.C. 223 , 1878 N.C. LEXIS 45 (1878).

There cannot be the least doubt but that a covenant to stand seized to the use of another, after his own life, is good to pass the estate intended; for the law raises in the grantor an estate for life in the meantime to support the future estate. This has been decided in a vast number of instances. There is no point better established by the authorities. Sasser v. Blyth, 2 N.C. 340 (1796) (overruling) Ward v. Ward, 1 N.C. 59 (1793); Savage v. Lee, 90 N.C. 320 , 1884 N.C. LEXIS 222 (1884).

Life Estate to Woman with Limitation Over to Children. —

Where one devised, in 1828, to a trustee, to the use and benefit of a woman, for her life, remainder to the use of all her children, it was held that the legal estate in the remainder, by force of the statute, passed to the children she had at the time of the devise, subject to the participation of such as she might thereafter have. Wilder v. Ireland, 53 N.C. 85 , 1860 N.C. LEXIS 163 (1860).

Future Contingent Use. —

It is settled that a future contingent use to one unknown, or not in esse, cannot be raised by a deed of bargain and sale. It is also settled that a use cannot be raised by a general power of appointment given to the taker of the first estate in the use; and the case is much stronger where the power of appointment is given to a stranger. Smith v. Smith, 46 N.C. 135 , 1853 N.C. LEXIS 95 (1853); Bruce v. Faucett, 49 N.C. 391 , 1857 N.C. LEXIS 107 (1857).

Shifting or Springing Use. —

Whenever the event happens when a shifting or springing use is to take effect, the statute of uses vests the legal seizin and ownership in the person entitled by virtue of the use. Lee v. Oates, 171 N.C. 717 , 88 S.E. 889, 1916 N.C. LEXIS 153 (1916).

Fee Simple Limited after a Fee Simple. —

A fee simple may be limited after a fee simple either by a deed or will by operation of the statute of uses; if by deed, it is a conditional limitation; if by will, it is an executory devise. Smith v. Brisson, 90 N.C. 284 , 1884 N.C. LEXIS 215 (1884). See Rowland v. Rowland, 93 N.C. 214 , 1885 N.C. LEXIS 42 (1885).

II.Trusts

This section merges the legal and equitable titles in the beneficiary of a passive trust, but as to active trusts, the legal title vests and remains in the trustee for the purpose of the trust. Fisher v. Fisher, 218 N.C. 42 , 9 S.E.2d 493, 1940 N.C. LEXIS 96 (1940). See Security Nat'l Bank v. Sternberger, 207 N.C. 811 , 178 S.E. 595, 1935 N.C. LEXIS 280 (1935).

Where the use is executed by the statute, the trustee takes no estate or interest, both the legal and equitable estates vesting in the cestui que trust; but where the use is not executed, the legal title passes to the trustee. Lee v. Oates, 171 N.C. 717 , 88 S.E. 889, 1916 N.C. LEXIS 153 (1916).

As to the wife’s life estate, so long as her husband lived, it was necessary that the trust for her separate use and maintenance should continue, as it was then active; but when her husband died, and the disability of coverture was removed, and there was no longer any necessity for a trustee to protect her interest, and as the trust then became passive, the statute executed the use and united the legal and equitable estates in her. Lee v. Oates, 171 N.C. 717 , 88 S.E. 889, 1916 N.C. LEXIS 153 (1916). See Perkins v. Brinkley, 133 N.C. 154 , 45 S.E. 541, 1903 N.C. LEXIS 34 (1903); Cameron v. Hicks, 141 N.C. 21 , 53 S.E. 728, 1906 N.C. LEXIS 61 (1906); Springs v. Hopkins, 171 N.C. 486 , 88 S.E. 774, 1916 N.C. LEXIS 111 (1916).

The Statute of Uses, 27 Henry VIII, preserved in this State by this section, merges the legal and equitable titles in the beneficiary of a passive trust. Wachovia Bank & Trust Co. v. Taylor, 255 N.C. 122 , 120 S.E.2d 588, 1961 N.C. LEXIS 568 (1961).

Where conveyance of wife’s property to trustee for her sole use and benefit during her life and, after her death, for the benefit of her husband was ineffective to create any estate or trust in favor of the husband because of noncompliance with a former version of G.S. 52-12 , a passive trust for the wife for her natural life was created and it was executed by the statute. Pilkington v. West, 246 N.C. 575 , 99 S.E.2d 798, 1957 N.C. LEXIS 500 (1957).

In a passive trust the legal and equitable titles are merged in the beneficiary by virtue of the statute of uses. Poindexter v. Wachovia Bank & Trust Co., 258 N.C. 371 , 128 S.E.2d 867, 1963 N.C. LEXIS 434 (1963).

Rule Does Not Apply to Resulting Trust. —

Where the plaintiff cited no North Carolina authority to support the argument that the statute of uses would be operative, and since the general rule is that the statute of uses applies only to express passive trusts and not to resulting or constructive trusts which arise by operation of law, under North Carolina law a resulting trust would not be executed. Greer v. United States, 448 F.2d 937, 1971 U.S. App. LEXIS 8251 (4th Cir. 1971).

No Application to Active Trusts. —

While this section converts the beneficial use into the legal ownership and unites the legal and equitable estates in the beneficiary, this rule applies only to passive or simple trusts and not to active trusts. Patrick v. Beatty, 202 N.C. 454 , 163 S.E. 572, 1932 N.C. LEXIS 134 (1932); Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936) (citing) Lee v. Oates, 171 N.C. 717 , 88 S.E. 889, 1916 N.C. LEXIS 153 (1916).

This section merges the legal and equitable titles in the beneficiary of a passive trust, but the rule established by the statute does not apply to active trusts. Finch v. Honeycutt, 246 N.C. 91 , 97 S.E.2d 478, 1957 N.C. LEXIS 377 (1957).

If the trust is active the legal and equitable titles do not merge. Poindexter v. Wachovia Bank & Trust Co., 258 N.C. 371 , 128 S.E.2d 867, 1963 N.C. LEXIS 434 (1963).

An active trust is one where there is a special duty to be performed by the trustee in respect to the estate, such as collecting the rents and profits, or selling the estate, or the execution of some particular purpose. Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936) (citing) Perkins v. Brinkley, 133 N.C. 154 , 45 S.E. 541, 1903 N.C. LEXIS 34 (1903); Finch v. Honeycutt, 246 N.C. 91 , 97 S.E.2d 478, 1957 N.C. LEXIS 377 (1957).

Where there is any control to be exercised by the trustee or any duty to be performed by him in relation to the trust property or in regard to the beneficiaries, the trust is an active trust, and the legal and equitable titles do not merge in the beneficiaries. Finch v. Honeycutt, 246 N.C. 91 , 97 S.E.2d 478, 1957 N.C. LEXIS 377 (1957).

Where a deed purports to convey land in trust, but prescribes no duties of any kind to be performed by the trustee, he is made a depositary only of title, and by operation of this section the legal, as well as the equitable, estate in the land passed to and became vested solely in the beneficiary. Pippin v. Barker, 233 N.C. 549 , 64 S.E.2d 830, 1951 N.C. LEXIS 337 (1951).

Trust for “Sole and Separate Use” of Married Woman. —

The words “for the sole and separate use,” or equivalent language, qualifying the estate of a trustee for a married woman, must be construed as manifesting the intent on the part of the grantor to limit her right of alienation to the mode and manner expressly provided in the instrument by which the estate is created. Kirby v. Boyette, 118 N.C. 244 , 24 S.E. 18, 1896 N.C. LEXIS 41 (1896).

Passive Trust for Husband and Wife. —

Where a husband purchases realty and has the deed made to a trustee of a passive trust for the benefit of himself and wife, nothing else appearing, the instrument creates an estate by entirety. Akin v. First Nat'1 Bank, 227 N.C. 453 , 42 S.E.2d 518, 1947 N.C. LEXIS 444 (1947).

I.General Consideration

As to the history and purpose of this section, see McLean v. Shaw, 125 N.C. 491 , 34 S.E. 634, 1899 N.C. LEXIS 246 (1899); Rumbo v. Gay Mfg. Co., 129 N.C. 9 , 39 S.E. 581, 1901 N.C. LEXIS 3 (1901); Campbell v. Cronly, 150 N.C. 457 , 64 S.E. 213, 1909 N.C. LEXIS 79 (1909); Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924).

This section is highly remedial. Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924).

This is a remedial statute which has been liberally construed; it is more comprehensive than the old suit in equity to remove a cloud from title. Jacobi Hdwe. Co. v. Jones Cotton Co., 188 N.C. 442 , 124 S.E. 756, 1924 N.C. LEXIS 92 (1924); Maynard v. Holder, 216 N.C. 524 , 5 S.E.2d 535, 1939 N.C. LEXIS 33 (1939).

This statute is remedial in nature, designed to provide a means for determining all adverse claims to land, including those formerly encompassed within the equitable proceedings to remove clouds on title. Boyd v. Watts, 73 N.C. App. 566, 327 S.E.2d 46, 1985 N.C. App. LEXIS 3335 (1985), rev'd in part, 316 N.C. 622 , 342 S.E.2d 840, 1986 N.C. LEXIS 2161 (1986).

This section is liberally construed. York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

Liberally Construed to Execute Legislative Intent. —

This section and the amendatory acts thereto, being remedial in nature, should have a liberal construction in order to execute fully the legislative intention and will. Stocks v. Stocks, 179 N.C. 285 , 102 S.E. 306, 1920 N.C. LEXIS 226 (1920).

Construction to advance the remedy and permit the courts to bring the parties to an issue. Asheville Land Co. v. Lange, 150 N.C. 26 , 63 S.E. 164, 1908 N.C. LEXIS 125 (1908); Wachovia Bank & Trust Co. v. Miller, 243 N.C. 1 , 89 S.E.2d 765, 1955 N.C. LEXIS 705 (1955); Heath v. Turner, 309 N.C. 483 , 308 S.E.2d 244, 1983 N.C. LEXIS 1432 (1983).

The beneficial purpose of this section is to free the land of the cloud resting upon it and make its title clear and indisputable, so that it may enter the channels of commerce and trade unfettered and without the handicap of suspicion. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971); Heath v. Turner, 309 N.C. 483 , 308 S.E.2d 244, 1983 N.C. LEXIS 1432 (1983).

Requirements for Prima Facie Case. —

In order to establish a prima facie case for removing a cloud on title, a plaintiff must meet two requirements: (1) plaintiff must own the land in controversy, or have some estate or interest in it; and (2) defendant must assert some claim in the land which is adverse to plaintiff’s title, estate or interest. Chicago Title Ins. Co. v. Wetherington, 127 N.C. App. 457, 490 S.E.2d 593, 1997 N.C. App. LEXIS 983 (1997).

The section deprives the defendant of no right, but affords him every opportunity of defending the validity of his title; but in the interest of peace and the settlement of controversies, it allows his adversary to put to the test of early judicial investigation, and does not compel plaintiff to wait on the defendant’s pleasure as to the time when the inquiry shall be made, and thus give defendant an unfair advantage over him. Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668 , 96 S.E. 99, 1918 N.C. LEXIS 135 (1918), writ of error dismissed, 252 U.S. 341, 40 S. Ct. 330, 64 L. Ed. 601, 1920 U.S. LEXIS 1581 (1920).

The fact that the plaintiff brings his action under this section deprives the defendant of no right. He has the right to defend the validity of his alleged title on every relevant ground available in any type of action involving recovery or possession of real property. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953).

Record of Exercising Option to Renew Lease Note Necessary. —

In a suit to quiet title brought by a lessor, the trial court properly held that lessees had a leasehold interest in a tract through 2011, provided that they continued to tender rent; it was not necessary under G.S. 47-18 to record the exercise of an option to renew a lease, and by accepting rent for over 30 years, the lessor and its predecessors had waived the requirement of notice to extend the lease. Spruce Pine Indus. Park, Inc. v. Explosives Supply Co., 179 N.C. App. 524, 634 S.E.2d 264, 2006 N.C. App. LEXIS 1974 (2006).

The distinction between a suit to remove a cloud upon title and an action to quiet title under this section is clear. In the old equity action, to remove a cloud upon title to real property, the proceeding was an equitable one and was intended to remove a particular instrument or documentary evidence of title or encumbrance against the title, which was hanging over or threatening a plaintiff’s rights therein. In a suit to quiet title to real property under this section, the proceeding is designed and intended to provide a means for determining all adverse claims, equitable or otherwise. It is not limited to a particular instrument, bit of evidence, or encumbrance but is aimed at silencing all adverse claims, documentary or otherwise. Any action that could have been brought under the old equitable proceeding to remove a cloud upon title may now be brought under the provisions of this section. York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

The General Assembly did not include personal property under the provisions of this section. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

A bill to quiet title or to remove a cloud on title to personal property may be maintained in equity, in the absence of statutory authorization, where, by reason of exceptional circumstances, there is no adequate remedy at law. Newman Mach. Co. v. Newman, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

Even though there is no statute in North Carolina authorizing suits to quiet title to personalty, the Supreme Court adheres to the general rule that such suits may be maintained in equity where, due to exceptional circumstances, there is no adequate remedy at law. Newman Mach. Co. v. Newman, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

Since North Carolina has no statute regarding suits in equity to remove cloud or quiet title to personalty, the Supreme Court applies to such suits the same principles which obtained prior to enactment of this section when title to land was involved. Newman Mach. Co. v. Newman, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

In order to remove a cloud from a title, it is not necessary to allege and prove that the plaintiff had an estate in or title to the lands in controversy. It is only required that the plaintiff or plaintiffs have such an interest in the lands as to make the claim of the defendants adverse to him or them. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

Burden on Plaintiffs. —

In an action to quiet title under this section plaintiffs bear the burden of proving valid title in themselves which may be accomplished by either (1) reliance on the Real Property Marketable Title Act, or (2) utilization of traditional methods of proving title. Chappell v. Donnelly, 113 N.C. App. 626, 439 S.E.2d 802, 1994 N.C. App. LEXIS 159 (1994).

Title Not Necessarily Put in Issue. —

By suit to remove a cloud from title, a plaintiff does not necessarily put his title in issue. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

For requirements in equity suits to remove cloud and quiet title to realty prior to enactment of this section, see Newman Mach. Co. v. Newman, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

If title becomes involved in a processioning proceeding under G.S. 38-1 through 38-4, the proceeding becomes in effect an action to quiet title under this section. Roberts v. Sawyer, 229 N.C. 279 , 49 S.E.2d 468, 1948 N.C. LEXIS 465 (1948); Bumgarner v. Corpening, 246 N.C. 40 , 97 S.E.2d 427, 1957 N.C. LEXIS 357 (1957).

Where the only issue to be tried is the location of a dividing line, it is a processioning proceeding under Chapter 38. However, where title to the land is put in issue the clerk has no authority to pass on any question involved. He must transfer the proceeding to the regular session of superior court where it becomes in effect an action to quiet title pursuant to this section. Cobb v. Spurlin, 73 N.C. App. 560, 327 S.E.2d 244, 1985 N.C. App. LEXIS 3328 (1985).

A declaratory action is an appropriate remedy to perform the function of the customary action to quiet title. York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

Restraining Sale Under Execution. —

Under this section the sheriff’s sale of land by execution under a judgment may now be restrained by suit in equity when it will cast an additional cloud upon the title of the owner of the lands. Mizell v. Bazemore, 194 N.C. 324 , 139 S.E. 453, 1927 N.C. LEXIS 87 (1927).

No statute of limitations runs against plaintiff bringing action for removal of a cloud upon title. Such an action is a continuing right, which exists as long as there is occasion for its exercise. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Theory of Relief May Determine Applicability of Limitations. —

There is no express statute of limitations governing actions to quiet title under this section. It thus is necessary to refer to plaintiffs’ underlying theory of relief to determine which statute, if any, applies. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

When Quiet Title Actions Are Treated as Ejectment Actions. —

Actions to remove a cloud upon title are in essence ejectment actions and are properly reviewed as such where defendants are in actual possession and plaintiffs seek to recover possession. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Action Held Not One for Ejectment. —

Where plaintiffs made no specific allegation that defendants were in actual possession at the time of the filing of their action, and did not seek specifically to recover possession in their demand for relief, but merely prayed for rents and profits and removal of certain deeds as a cloud upon their title, plaintiffs’ action was not in essence one for ejectment controlled by G.S. 1-38 and G.S. 1-40 ; rather, plaintiffs’ action was one to remove a cloud upon title which was not barred by any statute of limitations. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Quitclaim Deeds Conveyed Interest In Land to Corporation. —

Trial court erred in granting a homeowners association (HOA) summary judgment, declaring that it was the fee simple owner of a strip of land between a subdivision and the Atlantic Ocean, because the deeds conveying land to the HOA did not include a conveyance of the oceanfront strip; quitclaim deeds conveyed all interest the developer of the subdivision had in the oceanfront strip to the corporation the owners of beachfront lots set up. Le Oceanfront, Inc. v. Lands End of Emerald Isle Ass'n, 238 N.C. App. 405, 768 S.E.2d 15, 2014 N.C. App. LEXIS 1337 (2014).

Deed Void. —

There was no genuine issue of material fact as to the validity of a deed because the deed was void whether due to notarization if the deed was to the notary and her husband or the deed was materially altered after execution without the grantor’s knowledge or consent. Quinn v. Quinn, 243 N.C. App. 374, 777 S.E.2d 121, 2015 N.C. App. LEXIS 817 (2015).

Although a deed of trust omitted the amount of a lien, it directed an inquirer to the source of such information by stating that the principal sum was evidenced by a note, which it not only incorporated by reference into the deed of trust, but identified with specificity. Thus, as the deed of trust was valid, summary judgment was granted in favor of the creditor on debtor’s cause of action for quiet title under North Carolina law, and debtor’s arguments with respect to avoidance of an affidavit of correction pursuant to 11 U.S.C.S. § 522 were rendered moot by the validity of the deed of trust. Hurlburt v. Black, 2016 Bankr. LEXIS 4150 (Bankr. E.D.N.C. Dec. 5, 2016).

II.Nature and Scope of Remedy

A.Purpose

This section was designed and intended to afford a remedy wherever one owns or has an estate or interest in real property, whether he is in or out of possession, and another wrongfully sets up a claim to an estate or interest therein which purports to affect adversely the estate or interest of the true owner and which is reasonably calculated to burden and embarrass such owner in the full and proper enjoyment of his proprietary rights, including the right to dispose of the same at its fair market value. And it should and does extend to such adverse and wrongful claims, whether in writing or parol, whenever a claim by parol, if established, could create an interest or estate in the property, as in case of a parol trust or a lease not required to be in writing. And suit should be allowed, too, when existent records or written instruments reasonably present such a claim, the statute preventing all hardship in such cases by its provision that if the holder does not insist on the same in his answer or does not answer at all, the plaintiff shall pay the costs. Satterwhite v. Gallagher, 173 N.C. 525 , 92 S.E. 369, 1917 N.C. LEXIS 338 (1917); Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668 , 96 S.E. 99, 1918 N.C. LEXIS 135 (1918), writ of error dismissed, 252 U.S. 341, 40 S. Ct. 330, 64 L. Ed. 601, 1920 U.S. LEXIS 1581 (1920).

This section was designed to avoid some of the limitations imposed upon the remedies formerly embraced by a bill of peace or bill quia timet, and to establish an easy method of quieting titles of land against adverse claims. Newman Mach. Co. v. Newman, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

To Leave Lands Unfettered. —

The beneficial purpose of this section is to free the land of the cloud resting upon it and make its title clear and indisputable, so that it may enter the channels of commerce and trade unfettered and without the handicap of suspicion, instead of remaining idle and unremunerative. Christman v. Hilliard, 167 N.C. 4 , 82 S.E. 949, 1914 N.C. LEXIS 41 (1914); Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668 , 96 S.E. 99, 1918 N.C. LEXIS 135 (1918), writ of error dismissed, 252 U.S. 341, 40 S. Ct. 330, 64 L. Ed. 601, 1920 U.S. LEXIS 1581 (1920); Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924).

To Broaden the Equitable Remedy. —

This section, giving the owner of lands the right to remove a cloud upon his title, is much broader in its scope and purpose than the equitable remedy theretofore allowed and administered in this State, and includes not only the right to remove an apparent lien under a docketed judgment, but also the potential claim of a wife to her inchoate right of dower in her husband’s lands. Southern State Bank v. Summer, 187 N.C. 762 , 122 S.E. 848, 1924 N.C. LEXIS 394 (1924).

The statute has been said to be an extension of the remedy in equity theretofore existing for the removal of clouds on title, and is intended to afford an easy and expeditious mode of determining all conflicting claims to land, whether derived from a common source or from different and independent sources. It is highly remedial and beneficial in its nature, and should therefore be construed liberally. It is also a statute of repose, and for that reason is entitled to favorable consideration. Christman v. Hilliard, 167 N.C. 4 , 82 S.E. 949, 1914 N.C. LEXIS 41 (1914); Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668 , 96 S.E. 99, 1918 N.C. LEXIS 135 (1918), writ of error dismissed, 252 U.S. 341, 40 S. Ct. 330, 64 L. Ed. 601, 1920 U.S. LEXIS 1581 (1920); East Carolina Lumber Co. v. Pamlico County, 242 N.C. 728 , 89 S.E.2d 381, 1955 N.C. LEXIS 658 (1955).

The General Assembly of 1893 enacted the statute now codified as this section to avoid some of the limitations imposed upon the remedies formerly sought by a bill of peace or a bill quia timet, and to establish an easy method of quieting titles to land against adverse claims. Wells v. Clayton, 236 N.C. 102 , 72 S.E.2d 16, 1952 N.C. LEXIS 491 (1952).

Equitable Estoppel. —

Where a loan company sought to quiet title to real property, an equitable estoppel claim did not fail because the attorney who closed the loan did not know and had no way of knowing that the payoff amount included in the letter contained a latent $ 100,000.00 error. Since the attorney’s actions were reasonable, the trial court properly concluded that the doctrine of equitable estoppel applied. Countrywide Home Loans, Inc. v. Bank One, N.A., 190 N.C. App. 586, 661 S.E.2d 259, 2008 N.C. App. LEXIS 1004 (2008).

B.Interest Necessary to Bring Action

Suit may be instituted by any person against any other person claiming an interest adverse to his title. Rutherford v. Ray, 147 N.C. 253 , 61 S.E. 57, 1908 N.C. LEXIS 47 (1908).

An action must be based upon plaintiffs’ ownership of some title, estate, or interest in real property, and defendants’ assertion of some claim adverse to plaintiffs’ title, estate, or interest, which adverse claim must be presently determinable. Vandiford v. Vandiford, 241 N.C. 42 , 84 S.E.2d 278, 1954 N.C. LEXIS 540 (1954).

Plaintiff Need Not Prove Estate in or Title to Land. —

The contention that a plaintiff in an action brought under this section must allege and prove that at the commencement of the action and at its trial he had an estate in or title to the land, cannot be sustained. It is only required that he have such an interest in the land that the claim of the defendant is adverse to him. Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924). But see Johnston v. Kramer Bros. & Co., 203 F. 733, 1913 U.S. Dist. LEXIS 1770 (D.N.C. 1913); Etheridge v. Wescott, 244 N.C. 637 , 94 S.E.2d 846, 1956 N.C. LEXIS 509 (1956).

Failure to Prove Prescriptive Easement. —

There was inadequate evidence to take the issue of a prescriptive easement to the jury because the defendants had the burden of proving the elements necessary for a prescriptive easement and failed to meet that burden. Nichols v. Wilson, 116 N.C. App. 286, 16 N.C. App. 286, 448 S.E.2d 119, 1994 N.C. App. LEXIS 919 (1994).

The statutory action to quiet title to realty consists of two essential elements. The first is that the plaintiff must own the land in controversy, or have some estate or interest in it; and the second is that the defendant must assert some claim to such land adverse to the plaintiff’s title, estate or interest. Wells v. Clayton, 236 N.C. 102 , 72 S.E.2d 16, 1952 N.C. LEXIS 491 (1952).

Remedy Given Whether in or out of Possession. —

This section affords the remedy whenever one owns or has an estate or interest in real property, whether he is in or out of possession, and another sets up a claim to an estate or interest therein which purports to affect adversely the estate or interest of the true owner and which is reasonably calculated to burden and embarrass such owner in the full enjoyment or disposition of his property at a fair market value; the statute affords a remedy by disclaimer when the party does not in fact claim the “adverse interest” which is alleged to be a cloud on the title of the true owner. Satterwhite v. Gallagher, 173 N.C. 525 , 92 S.E. 369, 1917 N.C. LEXIS 338 (1917); Vick v. Winslow, 209 N.C. 540 , 183 S.E. 750, 1936 N.C. LEXIS 285 (1936). See Daniels v. Baxter, 120 N.C. 14 , 26 S.E. 635, 1897 N.C. LEXIS 5 (1897).

The authorities to the effect that only one in possession may maintain an action to remove a cloud from title, were decisions rendered prior to the act of 1893, c. 6, Revisal, s. 1589. Since that statute, it is held that the action is maintainable, though plaintiff is not in the present possession or control of the property. Daniels v. Baxter, 120 N.C. 14 , 26 S.E. 635, 1897 N.C. LEXIS 5 (1897); Campbell v. Cronly, 150 N.C. 457 , 64 S.E. 213, 1909 N.C. LEXIS 79 (1909); Speas v. Woodhouse, 162 N.C. 66 , 77 S.E. 1000, 1913 N.C. LEXIS 312 (1913).

Under this section, the plaintiff is not required to show that he is either in or out of possession. Nor is the plaintiff required to show that the defendant is an occupant or any more than a claimant of the land in controversy. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953).

Action Is Maintainable Though Plaintiff Might Have Maintained Ejectment. —

This section is broad enough to cover an action to quiet the title to real property though the person sued may be wrongfully in possession and the plaintiff might have maintained ejectment. The complaint would not be demurrable merely for the reason that the allegations might be sufficient to support a possessory action. Pressly v. Walker, 238 N.C. 732 , 78 S.E.2d 920, 1953 N.C. LEXIS 619 (1953).

Adverse Claimant to Execution Debtor. —

If real estate levied upon should be claimed by one other than the execution debtor, then nothing can more quickly bring up for trial the plaintiff’s prayer to have the cloud removed from his title than to allow the execution sale to take place. If the purchaser should delay to commence suit for recovery of possession, then the claimant can commence proceedings under the section. McLean v. Shaw, 125 N.C. 491 , 34 S.E. 634, 1899 N.C. LEXIS 246 (1899).

Judgment Lien. —

In McLean v. Shaw, 125 N.C. 491 , 34 S.E. 634 (1899), it was held that it was not in contemplation of the act that a judgment lien should be included in the terms “estate” and “interest,” as they are used in this section. This case was decided at September term, 1899. The legislature, at its session in 1903, by chapter 763, amended Laws 1893, c. 6, s. 1, by adding thereto the last sentence of the present section. “Estate” and “interest” now expressly embrace a judgment lien. Crockett v. Bray, 151 N.C. 615 , 66 S.E. 666, 1910 N.C. LEXIS 185 (1910).

Correction of Life Estate into Fee Simple. —

Defendants have a right, in order to avoid multiplicity of suits, to ask for the correction of a life estate deed, under which they claim, into a fee simple deed, by way of counterclaim, not merely as a matter of defense, but to remove a cloud upon the title, under this section. McLamb v. McPhail, 126 N.C. 218 , 35 S.E. 426, 1900 N.C. LEXIS 219 (1900).

When Land Conveyed Pendente Lite. —

Where the owner of lands in possession thereof or entitled thereto brings his action claiming as such owner to remove as a cloud upon his title the lien of one claiming under his mortgage, and pendente lite conveys the land to another with full warranty deed, he may continue to prosecute his suit against the mortgagee as to the title, being a real party in interest under G.S. 1-57 , without claim of the right to the possession, under the provisions of this section; and where issue has been joined, he may, if successful, recover his costs. Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924).

Nonpayment of Taxes. —

In a suit to remove a cloud on the title to lands, the suggestion that plaintiff’s ancestors have not, for many years, paid the tax on the land, is immaterial, because to do so does not, under any statute in force in this State, work a forfeiture of title, otherwise than by a sale conducted in conformity with the law. Johnston v. Kramer Bros. & Co., 203 F. 733, 1913 U.S. Dist. LEXIS 1770 (D.N.C. 1913).

Standing Sufficiently Pled. —

Plaintiff sufficiently pled standing to sue to quiet title to the property; plaintiff attached the deed of trust to the plaintiff’s verified complaint, which showed the company’s security interest, and the plaintiff also alleged that the company assigned the deed of trust to the plaintiff, citing to the entry in the register of deeds that reflected the assignment. U.S. Bank N.A. v. Estate of Wood, 268 N.C. App. 311, 836 S.E.2d 270, 2019 N.C. App. LEXIS 887 (2019).

Lack of Standing. —

Mortgage company that had no standing to dispute a foreclosure sale of the subject property also had no standing to bring a quiet title action against the purchaser in that foreclosure sale. Beneficial Mortg. Co. v. Hamidpour, 155 N.C. App. 641, 574 S.E.2d 163, 2002 N.C. App. LEXIS 1571 (2002).

Standing Found. —

At least to the extent that the action was an action to quiet title pursuant to G.S. 41-10 , the pleadings raised an actual controversy which was a proper subject for an action under the Uniform Declaratory Judgment Act, G.S. 1-254 . Therefore, the appellate court affirmed the trial court’s denial of the county and the company’s motion to dismiss the claims of the purported heirs for want of standing. Metcalf v. Black Dog Realty, LLC, 200 N.C. App. 619, 684 S.E.2d 709, 2009 N.C. App. LEXIS 1722 (2009).

Summary judgment quieting title in the seller of lots in a subdivision was properly granted; the seller had sought to quiet title to a parcel adjacent to the subdivision that was discovered when a new survey revealed that the seller and her husband did not convey all of certain real estate when they sold the subdivision lots, and the seller’s title to this parcel was superior to that of the owners of lots in the subdivision, who purported to divide the parcel among themselves. Hensley v. Samel, 163 N.C. App. 303, 593 S.E.2d 411, 2004 N.C. App. LEXIS 375 (2004).

Summary Judgment Quieting Title to County Property Should Have Been Granted. —

By the July deed, the property owner conveyed his entire fee simple absolute interest in the property to the county, and the additional language in the deed did not create any limitations or conditions upon the fee simple interest; moreover, municipalities and counties had statutory authority to change the use of real property or to sell or dispose of real property, without regard to the method or purpose of its acquisition or to its intended or actual governmental or other prior use, G.S. 160A-265 , and the heirs had not alleged that the county did not follow proper statutory procedures under G.S. 160A-266 et seq., in its sale of the property to the company. Therefore, summary judgment in favor of the heirs on the basis of express or implied dedication of the property to use as a site for a courthouse or county offices or a public park was in error and was reversed; as there were no genuine issues of material fact and the company was entitled to judgment as a matter of law quieting title to the property under G.S. 41-10 , the trial court should have granted summary judgment to the company as to its action to quiet title, and should have granted summary judgment in favor of the county and the company by way of declaratory judgment pursuant to G.S. 1-253 et seq., on all substantive issues. Metcalf v. Black Dog Realty, LLC, 200 N.C. App. 619, 684 S.E.2d 709, 2009 N.C. App. LEXIS 1722 (2009).

Summary Judgment Improper When Boundary Unclear. —

Because a genuine issue of material fact existed, the court of appeals erred in affirming the dismissal of plaintiffs’ claim seeking a declaratory judgment that the disputed land was within the boundary of a lot, that the title be quieted, and that defendant’s encroachments be removed and granting summary judgment to the defendant; with reference only to an ambiguous map, what the grantor intended the boundary to be remained unclear, and the parties’ intent was a question of fact for a jury. Daughtridge v. Tanager Land, LLC, 373 N.C. 182 , 835 S.E.2d 411, 2019 N.C. LEXIS 1187 (2019).

C.What Constitutes Cloud

Includes Any Adverse Interest. —

The language of this section is broad and liberal, showing the purpose of the General Assembly to permit any person to bring an action against another who claims an interest or estate in real property adverse to him. Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924).

Action Lies to Prevent Creation of Cloud. —

An action will lie, not only to remove an existing cloud on title, but also to prevent one from being created, and where the object is merely preventive an injunction is the proper remedy to restrain the doing of the wrongful act. Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668 , 96 S.E. 99, 1918 N.C. LEXIS 135 (1918), writ of error dismissed, 252 U.S. 341, 40 S. Ct. 330, 64 L. Ed. 601, 1920 U.S. LEXIS 1581 (1920).

Defendant Need Only Be Claimant. —

Under Laws 1893, c. 6, now this section, a plaintiff may maintain an action to remove a cloud from his title without showing that the defendant is an occupant or any more than a claimant of the land in controversy. Duncan v. Hall, 117 N.C. 443 , 23 S.E. 362, 1895 N.C. LEXIS 88 (1895).

Adverse Claim Must Be Presently Determinable. —

This section applies only to the extent the alleged adverse claims are presently determinable. Vandiford v. Vandiford, 241 N.C. 42 , 84 S.E.2d 278, 1954 N.C. LEXIS 540 (1954).

Apparent Invalidity of Defendant’s Title. —

The plaintiff is not required to have possession as a condition precedent to his right of action, nor will the apparent invalidity of defendant’s title deprive him of the statutory remedy. Daniels v. Baxter, 120 N.C. 14 , 26 S.E. 635, 1897 N.C. LEXIS 5 (1897); Rumbo v. Gay Mfg. Co., 129 N.C. 9 , 39 S.E. 581, 1901 N.C. LEXIS 3 (1901); Beck v. Meroney, 135 N.C. 532 , 47 S.E. 613, 1904 N.C. LEXIS 62 (1904); Campbell v. Cronly, 150 N.C. 457 , 64 S.E. 213, 1909 N.C. LEXIS 79 (1909); Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668 , 96 S.E. 99, 1918 N.C. LEXIS 135 (1918), writ of error dismissed, 252 U.S. 341, 40 S. Ct. 330, 64 L. Ed. 601, 1920 U.S. LEXIS 1581 (1920).

Obscure Contingent Limitations. —

This section enlarges the power of the courts to entertain suits to quiet titles, where the conditions were formerly such that a possessory action could not be brought; and the section is liberally construed, so that the court can acquire jurisdiction to clear up obscure contingent limitations which are imposed upon titles. Campbell v. Cronly, 150 N.C. 457 , 64 S.E. 213, 1909 N.C. LEXIS 79 (1909).

Will of Living Person. —

A paper-writing, in form a will, executed by a person now living, is without legal significance either as a transfer of title or as a cloud thereon, until death of the testator and probate of the instrument. Vandiford v. Vandiford, 241 N.C. 42 , 84 S.E.2d 278, 1954 N.C. LEXIS 540 (1954).

Invalid Judgment as Cloud. —

A judgment, if invalid, would be such a cloud on the title, or such a direct menace to it, as to fall within the provisions of this section. Stocks v. Stocks, 179 N.C. 285 , 102 S.E. 306, 1920 N.C. LEXIS 226 (1920).

An action to quiet title or to remove a cloud from title is equitable in its nature, and may now be maintained to remove from the title a cloud created by the apparent lien of an invalid judgment docketed in the county where the land lies. Holden v. Totten, 224 N.C. 547 , 31 S.E.2d 635, 1944 N.C. LEXIS 422 (1944).

In an action to remove a cloud from plaintiff’s title, caused by a docket judgment alleged to be invalid, a demurrer to the complaint, as not stating a cause of action, was properly overruled, this section being sufficiently broad to entitle plaintiff to maintain an independent action. Exum v. Carolina R.R., 222 N.C. 222 , 22 S.E.2d 424, 1942 N.C. LEXIS 69 (1942).

Judgment Obtained by Fraud. —

A complaint alleged, in effect, that the plaintiff had her dower laid off in the lands of her deceased husband, in which the defendant, her son, was properly represented, and thereafter the son, without the service of summons upon her, instituted an independent proceeding to annul the judgment, and falsely represented to her that the action had been withdrawn, and that she should not further consider it, and in consequence, and through his false representation, obtained a judgment in his favor, destroying her dower right. The complaint was held sufficient for the plaintiff to maintain an independent action to set aside the former judgment upon the issue of fraud, and also under this section to remove the former judgment as a cloud upon her title. Stocks v. Stocks, 179 N.C. 285 , 102 S.E. 306, 1920 N.C. LEXIS 226 (1920).

Tax Deed. —

Where a judgment entered in favor of the county in an action against the owner of land for taxes has been set aside upon motion after notice to the parties, the owner, in an action to remove cloud upon title, is entitled to judgment cancelling the tax deed. Galer v. Auburn-Asheville Co., 204 N.C. 683 , 169 S.E. 642, 1933 N.C. LEXIS 237 (1933).

Deed of Trust. —

Property owner was entitled to have title to real property quieted in the owner under G.S. 41-10 , as the owner filed a notice of lis pendens of an action against a trustor and cross-indexed it under G.S. 1-118 prior to defendants’ execution of a deed of trust by a trustee and a beneficiary on the property; thus, the deed of trust was an invalid cloud upon the owner’s title. Kelley v. CitiFinancial Servs., 205 N.C. App. 426, 696 S.E.2d 775, 2010 N.C. App. LEXIS 1308 (2010).

Foreclosure of Mortgage Given by Tenant in Common Prior to Partition. —

The purchaser of land from one tenant in common, after the land had been allotted to the tenant in a special proceeding for partition, may maintain a suit to restrain foreclosure of a mortgage executed by the other tenant in common prior to partition, when the mortgagee advertises and seeks to sell a one-half interest in the entire tract, since such foreclosure would constitute a cloud on the purchaser’s title. Rostan v. Huggins, 216 N.C. 386 , 5 S.E.2d 162, 1939 N.C. LEXIS 174 (1939).

Contract Without Married Woman’s Privy Examination. —

A contract to convey the lands of a married woman, signed by her and her husband, but without her privy examination, when recorded is a cloud upon her title to the lands and subject to her suit to remove the same, within the intent and meaning of this section, though she is and remains in possession of the land. Satterwhite v. Gallagher, 173 N.C. 525 , 92 S.E. 369, 1917 N.C. LEXIS 338 (1917).

Usurious charge of interest on notes did not affect the validity of the mortgage or deed of trust securing them under G.S. 24-2 , and a suit brought to remove a cloud upon title to the lands under this section to the extent of the usurious charge of interest on the notes could not be maintained. Briggs v. Industrial Bank, 197 N.C. 120 , 147 S.E. 815, 1929 N.C. LEXIS 164 (1929).

Proof Required of Plaintiff. —

In a suit to remove a cloud upon the plaintiff’s title under this section, the defendant claimed under a sale by foreclosure of a mortgage which the plaintiff attacked for fraud. It was held that the burden of proof was on the plaintiff to show the fraud by the preponderance of the evidence, and not by clear, strong and cogent proof as required in the information or correction of a conveyance of land. Ricks v. Brooks, 179 N.C. 204 , 102 S.E. 207, 1920 N.C. LEXIS 208 (1920).

III.Pleading and Practice

A.In General

When Suit Treated as Action of Ejectment. —

A suit instituted to determine conflicting claims to real property, under Laws 1893, c. 6, now this section, may be properly treated as an action of ejectment, when the complaint alleges ownership in the plaintiff and possession in the defendant. Hines v. Moye, 125 N.C. 8 , 34 S.E. 103, 1899 N.C. LEXIS 158 (1899); Baldwin v. Hinton, 243 N.C. 113 , 90 S.E.2d 316, 1955 N.C. LEXIS 557 (1955); Hayes v. Ricard, 244 N.C. 313 , 93 S.E.2d 540, 1956 N.C. LEXIS 412 (1956).

Trustee Improper Party In Quiet Title Action. —

Substituted trustee was an improper party to join as a defendant in a purchaser’s action to quiet title because there were no statutory duties for the trustee to fulfill, and his participation in the proceeding served no purpose. Greene v. Tr. Servs. of Carolina, LLC, 244 N.C. App. 583, 781 S.E.2d 664, 2016 N.C. App. LEXIS 57 (2016).

Plaintiff Has Burden of Establishing Title. —

In an action to quiet title, the burden of proof is on the plaintiff to establish his title. He may do so by traditional methods or by reliance on the Real Property Marketable Title Act, Chapter 47B. Heath v. Turner, 309 N.C. 483 , 308 S.E.2d 244, 1983 N.C. LEXIS 1432 (1983).

The plaintiff is not bound to show as an independent proposition the invalidity and wrongfulness of the adverse claim. These matters are inseparably interwoven in the two essential elements of the action. The claim of the defendant is necessarily invalid and wrongful if it is adverse to the title, estate or interest of the true owner. Wells v. Clayton, 236 N.C. 102 , 72 S.E.2d 16, 1952 N.C. LEXIS 491 (1952).

The plaintiff is not required to allege or show the specific circumstances giving rise to the defendant’s adverse claim, unless it is essential for the plaintiff to overcome such claim in order to establish his own title, estate or interest. Hence, it is ordinarily sufficient for the plaintiff to allege and show in general terms that the defendant is asserting some claim adverse to him. Wells v. Clayton, 236 N.C. 102 , 72 S.E.2d 16, 1952 N.C. LEXIS 491 (1952).

When Court Will Hear and Determine Without Action. —

The courts will hear and determine a controversy submitted without action in suits brought by and against the parties in interest, wherein a vendee has refused to accept the title on the ground of its being doubtful, either in the exercise of their equitable jurisdiction, treating the controversy as a bill for specific performance, or under the provisions of this section, for the purpose of removing clouds upon obscure titles. Campbell v. Cronly, 150 N.C. 457 , 64 S.E. 213, 1909 N.C. LEXIS 79 (1909).

When Adverse Claim Invalid. —

Under Laws 1893, c. 6, now this section, where, in an action to determine conflicting claims to real property, plaintiff being in possession, the court finds the claim of defendant to be invalid, the action should not be dismissed, but the court should enter its decree removing the cloud upon the title. Rumbo v. Gay Mfg. Co., 129 N.C. 9 , 39 S.E. 581, 1901 N.C. LEXIS 3 (1901).

Sufficiency of Evidence. —

In a quiet title action, plaintiffs’ evidence was sufficient to show that the disputed area lay within the boundaries of their land, while defendants’ reliance on parol evidence to show that the disputed land belonged to them was improper. Defendants failed to establish that their title was superior to plaintiffs’ title. McLennan v. Josey, 234 N.C. App. 45, 758 S.E.2d 888, 2014 N.C. App. LEXIS 489 (2014).

Complaint Upheld. —

Plaintiffs’ complaint, which alleged that noncompliance with legal formalities voided two deeds, but did not allege fraud, despite failure to state specific facts underlying these allegations, nevertheless, under the liberal theory of notice pleading, was minimally sufficient to state a claim for relief under this section. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

No defense bond is required in an action to quiet title under this section. Roberts v. Sawyer, 229 N.C. 279 , 49 S.E.2d 468, 1948 N.C. LEXIS 465 (1948).

A judgment binds parties and privies only. Hines v. Moye, 125 N.C. 8 , 34 S.E. 103, 1899 N.C. LEXIS 158 (1899).

Default Judgment against Non-Responding Defendants Cannot Automatically Extend to Answering Defendants. —

A default final judgment against the non-responding defendants/property buyers did not adjudicate any rights, i.e. quiet title under this provision, between plaintiffs/conveyors of property and answering defendants/alleged innocent bona fide purchasers for value nor did it result in any admissions on behalf of defendant-appellants, bar any of their defenses or claims, or prejudice their rights. Little v. Barson Fin. Servs. Corp., 138 N.C. App. 700, 531 S.E.2d 889, 2000 N.C. App. LEXIS 792 (2000).

Costs. —

Where the defendant disclaims title to lands in a suit to remove a cloud thereon, the plaintiff is chargeable with the costs under the express provisions of this section. Clemmons v. Jackson, 183 N.C. 382 , 111 S.E. 609, 1922 N.C. LEXIS 277 (1922).

In an action for trespass and for damages, the plaintiff, after trial of issues as to trespass, etc., may not abandon these contentions upon the trial, and have the court consider the action as an equitable one to remove a cloud upon the title, and so avoid the payment of the full amount of the costs incident to the litigated issues. Clemmons v. Jackson, 183 N.C. 382 , 111 S.E. 609, 1922 N.C. LEXIS 277 (1922).

B.Pleadings

Sufficiency of Bill of Complaint. —

Where a bill asserts that the complainant is the owner of certain designated lands, sets forth the chain of title, and alleges that the defendant claims an adverse interest in the said lands, which claim renders sale impossible and otherwise casts a cloud over complainant’s title, it sufficiently states a cause of action to quiet title under this section. North Carolina Mining Co. v. Westfeldt, 151 F. 290, 1907 U.S. App. LEXIS 4966 (C.C.D.N.C. 1907), rev'd, 166 F. 706, 1909 U.S. App. LEXIS 4298 (4th Cir. 1909).

A complaint, which alleged that defendant city claimed, without legal right thereto, a right-of-way on and over plaintiff’s land, and that such claim was a cloud on his title, was sufficient to state a cause of action within the purview of this section. Cannon v. City of Wilmington, 242 N.C. 711 , 89 S.E.2d 595, 1955 N.C. LEXIS 686 (1955), cert. denied, 352 U.S. 842, 77 S. Ct. 66, 1 L. Ed. 2d 58, 1956 U.S. LEXIS 540 (1956).

In an action to remove a cloud on title, a complaint alleging that defendants claimed under a receiver’s deed and that the trustee in a prior deed of trust executed by the debtor was not a party to the receivership proceedings, is demurrable, since the mere fact that the trustee in the deed of trust was not a party does not in itself render the receiver’s deed ineffectual. East Carolina Lumber Co. v. Pamlico County, 250 N.C. 681 , 110 S.E.2d 278, 1959 N.C. LEXIS 478 (1959).

A complaint alleging that plaintiffs are the owners of a described tract of land by record title and that the State claims an interest therein by virtue of a specified registered deed, that plaintiffs have a superior title, and that the State’s claim constituted a cloud on plaintiff’s title is sufficient to state a cause of action to quiet title, and such action may be maintained against the State under the provisions of G.S. 41-10.1 . Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381, 1966 N.C. LEXIS 1442 (1966).

A complaint meets the minimum requirements of this section where it alleges that the plaintiffs own the described land and that the defendant claims an interest therein adverse to them. York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

In a suit brought by mortgagors against various defendants alleging various federal and North Carolina state law claims related to a mortgage on their home, a magistrate judge recommended granting the motion to dismiss for failure to state a claim filed by defendants as to the mortgagors’ quiet title claims because the mortgagors made general allegations that defendants had created defects in the chain of title, but they have not alleged that defendants claimed any adverse interest in the property. Bryant v. Wells Fargo Bank, N.A., 861 F. Supp. 2d 646, 2012 U.S. Dist. LEXIS 38102 (E.D.N.C.), dismissed, 861 F. Supp. 2d 646, 2012 U.S. Dist. LEXIS 36686 (E.D.N.C. 2012).

District court adopted the recommendation of the magistrate judge with respect to a mortgagor’s quiet title claim and dismissed it because the mortgagor did not allege any facts providing a basis for removing the deed of trust as an encumbrance on his property, when it was undisputed that he defaulted on his mortgage loan, and defendants were not asserting any other encumbrance adverse to him, thus, there was no basis for a quiet title claim. Joy v. MERSCORP, Inc., 935 F. Supp. 2d 848, 2013 U.S. Dist. LEXIS 43892 (E.D.N.C. 2013).

Superior court properly granted the bank’s motion to dismiss the purchaser’s quiet title claim because the amended complaint failed to sufficiently allege a claim to quiet title; the amended complaint’s allegations established that the bank had a valid interest in the property because it alleged that the bank submitted the promissory note secured by the deed of trust, indorsed in blank, to the clerk of court at the foreclosure special proceeding. Greene v. Tr. Servs. of Carolina, LLC, 244 N.C. App. 583, 781 S.E.2d 664, 2016 N.C. App. LEXIS 57 (2016).

Superior court properly granted the bank’s motion to dismiss the purchaser’s quiet title claim because the amended complaint failed to show that the deed of trust was invalid; the promissory note and the deed of trust were not separated through the securitization process because the transfer of the note constituted an effective assignment of the deed of trust, and the holder of a note could enforce both the note and the deed of trust. Greene v. Tr. Servs. of Carolina, LLC, 244 N.C. App. 583, 781 S.E.2d 664, 2016 N.C. App. LEXIS 57 (2016).

A cause of action to remove a cloud from title is made out when the plaintiff introduces evidence that he has an interest in a described tract of land and the defendant is asserting, or attempting to assert, an unjust claim thereto. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

Unnecessary to Allege Possession. —

This section removed the necessity for alleging that the defendant was in possession. The plaintiff may now set out his claim of title, and if defendant disclaims any adverse claim, the plaintiff pays the cost, and the title as between them is settled. Asheville Land Co. v. Lange, 150 N.C. 26 , 63 S.E. 164, 1908 N.C. LEXIS 125 (1908).

When Occupation Is Alleged. —

But where the plaintiff alleges an occupation as the cause of action, not only must the allegation and proof correspond, but the testimony offered to show possession is open to objection and exception on the ground of competency. Duncan v. Hall, 117 N.C. 443 , 23 S.E. 362, 1895 N.C. LEXIS 88 (1895).

Plaintiff’s failure to show fee simple title to all the lands claimed is not fatal to its case. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

Admission. —

Where the defendants, by answer, admitted that the plaintiff owned an interest in the described lands, but asserted they also had an interest therein, this admission gave the plaintiff standing in court to challenge the defendants’ claim as a cloud upon its title. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

Answer Sufficient to Raise Issue. —

Where the complaint in a suit to remove a cloud upon plaintiff’s title to land alleges that the plaintiff is the owner of the locus in quo, and asks for a reformation of his deed to the lands to show that by mutual mistake the name of the grantee therein was that of a private business enterprise he was conducting, and that accordingly the defendants claimed an interest therein, an allegation in the answer in reply that the defendant had no knowledge or information sufficient to form a belief as to whether the plaintiff was conducting a business in the name of the grantee in the deed is sufficient to raise the issue, and a judgment in plaintiff’s favor upon the pleadings is reversible error. Brinson v. Morris, 192 N.C. 214 , 134 S.E. 453, 1926 N.C. LEXIS 261 (1926).

Issue as to Delivery of Deed. —

Delivery of a deed is essential to its validity, and where the pleadings and evidence raise the question of delivery under this section the court’s refusal to submit an issue thereon entitles appellant to a new trial. Ferguson v. Ferguson, 206 N.C. 483 , 174 S.E. 304, 1934 N.C. LEXIS 224 (1934).

Pleadings Sufficient for Determination of Damages as in Condemnation. —

Where, in addition, to the fact that general relief was prayed, the parties specifically asked that their rights be determined, and defendant, relying upon the right of eminent domain, asserted its right to flood lands in which plaintiffs owned mineral interests in derogation of plaintiffs’ right of access, it was held that the damages resulting to plaintiffs from such floodings must be ascertained as in a suit for condemnation. Duke Power Co. v. Toms, 118 F.2d 443, 1941 U.S. App. LEXIS 4026 (4th Cir. 1941).

The burden rests upon the defendant to establish a title which he has set up to defeat the complainant’s claim of ownership. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

When the defendants alleged their title had its origin in a certain grant, from which they and their predecessors derived title, they thereby assumed the burden of locating the calls of the grant on the ground, and of showing that the grant covered at least a part of the lands described in the complaint. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

Where the defendants claim by record title, and not by adverse possession, and allege their record title had its genesis in a certain grant, the state of the pleadings casts upon them the burden of tracing their title to that grant. Resort Dev. Co. v. Phillips, 278 N.C. 69 , 178 S.E.2d 813, 1971 N.C. LEXIS 940 (1971).

C.Jurisdiction of Courts

Advisory Jurisdiction of Courts. —

The advisory jurisdiction of courts of equity does not extend to the mere construction of a will to ascertain the rights thereunder of devisees or legatees. And such jurisdiction is not sustained under this section, when the suit is not brought by the plaintiff against some person claiming an adverse estate or interest. Heptinstall v. Newsome, 146 N.C. 503 , 60 S.E. 416, 1908 N.C. LEXIS 250 (1908).

Dismissal of a suit brought by a group of beachfront landowners against the State of North Carolina, the State of North Carolina Department of Environment and Natural Resources, the Coastal Resources Commission, the Division of Coastal Management, and its director, was upheld on appeal because the landowners failed to allege in their complaint sufficient allegations to establish that the State of North Carolina asserted any claim of title to their land under G.S. 41-10.1 to have constituted a waiver of the state’s sovereign immunity with regard to the landowners’ suit to prevent the general public from interfering with their use of certain beach property, which the landowners claimed was deeded to them. Fabrikant v. Currituck County, 174 N.C. App. 30, 621 S.E.2d 19, 2005 N.C. App. LEXIS 2219 (2005).

Concurrent Jurisdiction of State and Federal Courts. —

The remedy given by statutes of this character may be enforced in the federal court when the parties are inhabitants of different states. Johnston v. Kramer Bros. & Co., 203 F. 733, 1913 U.S. Dist. LEXIS 1770 (D.N.C. 1913).

Where there is an action pending in the State courts to try the title to lands under this section, the State courts have thereby acquired jurisdiction over the property, and the federal courts will not entertain a suit in equity on the same facts and for the same relief. Westfeldt v. North Carolina Mining Co., 166 F. 706, 1909 U.S. App. LEXIS 4298 (4th Cir.), cert. denied, 214 U.S. 516, 29 S. Ct. 697, 53 L. Ed. 1064, 1909 U.S. LEXIS 2069 (1909).

This section does not enlarge the jurisdiction of federal courts of equity, as it merely regulates procedure and does not create any substantive right. And, even if it could be considered as creating an equitable right, it would not authorize the trial by a federal court of equity of what is in essence an action of ejectment, for the reason that in such action the defendant is entitled under the federal Constitution to a trial by jury. Wood v. Phillips, 50 F.2d 714, 1931 U.S. App. LEXIS 4554 (4th Cir. 1931).

In an action under this section, while it is true that a federal court of equity lacks jurisdiction of a suit brought against a number of defendants claiming severally different portions of the land in dispute, that ground may oust the court’s jurisdiction only in respect to those defendants who raise the objection, and, where title and possession in the complainant is sufficiently alleged, it is error to dismiss the suit as to those defendants who have made no defense, but submitted themselves and their interests to the jurisdiction of the court. New Jersey & N.C. Land & Lumber Co. v. Gardner-Lacy Lumber Co., 178 F. 772, 1910 U.S. App. LEXIS 4560 (4th Cir. 1910).

Removal of Action to Federal Court. —

Action to quiet title to real property in which plaintiff, the record owner, alleged that defendant had placed an IRS tax lien on the property, and that defendant’s IRS tax lien was acting as a cloud on plaintiff’s title and preventing plaintiff from selling or alienating the property was properly removed to federal district court, as the essential focus of plaintiff’s action was the validity, priority, and extinguishment of the IRS tax lien. Wilkinson v. United States, 724 F. Supp. 1200, 1989 U.S. Dist. LEXIS 13846 (W.D.N.C. 1989).

I.General Consideration

Constitutionality and Validity. —

Revisal, s. 1590, now this section, providing for the sale of contingent remainders, is constitutional and valid. Smith v. Miller, 151 N.C. 620 , 66 S.E. 671, 1910 N.C. LEXIS 186 (1910).

This section does not interfere with the essential rights of ownership, but, operating in addition to those already possessed, is constitutional and valid. Pendleton v. Williams, 175 N.C. 248 , 95 S.E. 500, 1918 N.C. LEXIS 48 (1918).

Retroactive Effect. —

Chapter 99, Laws 1903, Rev., s. 1590, now this section, is valid, even when allowed to reach back and affect estates already created by will, though only so far as it is permitted to apply to interests not yet vested. Anderson v. Wilkins, 142 N.C. 154 , 55 S.E. 272, 1906 N.C. LEXIS 232 (1906). See Springs v. Scott, 132 N.C. 548 , 44 S.E. 116, 1903 N.C. LEXIS 322 (1903).

The decision in Springs v. Scott was approved in Hodges v. Lipscomb, 133 N.C. 199 , 45 S.E. 556 (1903), a case in which it appeared that the will was made prior to the passage of Laws 1903, c. 99. It was there held that the act of 1903 operated retrospectively, so as to apply to contingent interest created by a will which had already taken effect by the death of the testator. Anderson v. Wilkins, 142 N.C. 154 , 55 S.E. 272, 1906 N.C. LEXIS 232 (1906).

Purpose of Section. —

To prevent any possible doubt of the existence of the power of the court, upon the application of all the parties in interest, the trustee representing contingent remaindermen, and to provide for its exercise and protect the interest of all parties in remainder, whether in esse or not, the act of 1903, now this section, was passed. McAfee v. Green, 143 N.C. 411 , 55 S.E. 828, 1906 N.C. LEXIS 365 (1906).

The purpose of this section is not to obtain predictive declarations of future rights of the parties, inter se, but rather to promote the interest of all the parties by allowing the sale of desirable land free from restrictions imposed by the presence of uncertainties as to whom the land will ultimately belong. Crumpton v. Crumpton, 290 N.C. 651 , 227 S.E.2d 587, 1976 N.C. LEXIS 1126 (1976), overruled in part, Crumpton v. Mitchell, 303 N.C. 657 , 281 S.E.2d 1, 1981 N.C. LEXIS 1200 (1981).

The remedial purpose of this section may be served where there are contingent remainders over to persons not in being, or the contingency has not happened which will determine who the ultimate remaindermen are, but to achieve the desired result the provisions of the statute must be observed. Barnes v. Dortch, 245 N.C. 369 , 95 S.E.2d 872, 1957 N.C. LEXIS 455 (1957).

Section Does Not Destroy Interest of Remote Contingent Remaindermen. —

It will be noted that this section does not, either in its terms or purpose, profess or undertake to destroy the interest of the contingent remaindermen in the property, but only contemplates and provides for a change of investment, and, subject to the right to use a reasonable portion of the amount for the improvement of the remainder, when properly safeguarded, it impresses upon the fund the same contingencies and limitations as were imposed upon the original property. Dawson v. Wood, 177 N.C. 158 , 98 S.E. 459, 1919 N.C. LEXIS 93 (1919).

It was not the purpose of this section to destroy the interest of the remote contingent remaindermen, but to enable the present owners to sell the property and make a good title to the same, and to require that the proceeds be held as a fund, subject to the claims of persons who may ultimately be entitled thereto, and safeguard their rights in all respects. Poole & Blue, Inc. v. Thompson, 183 N.C. 588 , 112 S.E. 323, 1922 N.C. LEXIS 321 (1922). See Lancaster v. Lancaster, 209 N.C. 673 , 184 S.E. 527, 1936 N.C. LEXIS 316 (1936).

When Section Applicable. —

This section (before the 1927 amendment) and G.S. 41-12 apply only to a sale of property in which there are or have been contingent interests. Waddell v. United Cigar Stores, 195 N.C. 434 , 142 S.E. 585, 1928 N.C. LEXIS 113 (1928).

The 1927 amendment, where the land is unproductive, etc., extends the right of action to include life estates where there are vested remaindermen and reversioners without their joinder. The section theretofore had reference only to contingent remainders. Stepp v. Stepp, 200 N.C. 237 , 156 S.E. 804, 1931 N.C. LEXIS 289 (1931).

A sale under this section can be ordered only in a “special proceeding,” which must be instituted before the clerk of the superior court, and the section has no application to an action for waste under G.S. 1-533 . Parrish v. Parrish, 247 N.C. 584 , 101 S.E.2d 480, 1958 N.C. LEXIS 583 (1958).

Strict Compliance Required. —

In order that a valid conveyance of the land in fee simple be made pursuant to this section, it is essential that the provisions of the statute be strictly complied with. Blades v. Spitzer, 252 N.C. 207 , 113 S.E.2d 315, 1960 N.C. LEXIS 417 (1960).

Applied to Charitable and Other Trusts. —

Courts, in the exercise of general equitable jurisdiction, may, in proper instances, decree a sale of estate in remainder and affected by contingent interests, for reinvestment, or a portion thereof, when it is shown that it is necessary for the preservation of the estate and the protection of its owners; and this principle is not infrequently applied in the proper administration of charitable and other trusts, notwithstanding limitations in instruments creating them that apparently impose restrictions on the powers of the trustee in this respect, when it is properly established that the sale is required by the necessities of the case and the successful carrying out of the dominant purposes of the trust. Middleton v. Rigsbee, 179 N.C. 437 , 102 S.E. 780, 1920 N.C. LEXIS 262 (1920).

The sale of an estate in remainder affected under the terms of a will with certain ultimate and contingent interests in trust will not be affected by a clause in the will requiring that the principal of the trust fund shall not be used or diminished during the period of 30 years, with a certain exception, the limitation applying only to the administration of the trust estate, and not preventing the court from ordering a sale when required by the necessities of the estate for its preservation. Middleton v. Rigsbee, 179 N.C. 437 , 102 S.E. 780, 1920 N.C. LEXIS 262 (1920).

Section Does Not Limit Power of Court over Trusts. —

This section, authorizing those who have a vested interest in land with contingent remainders over to persons not in being to petition for and procure the sale of the land for reinvestment, does not limit the power of the court to supervise the administration of trust estates and to enter such orders and decrees in respect thereto as circumstances may require, so that the interest of contingent remaindermen and other beneficial owners may be sold to preserve the trust estate from destruction. First-Citizens Bank & Trust Co. v. Rasberry, 226 N.C. 586 , 39 S.E.2d 601, 1946 N.C. LEXIS 276 (1946).

Power of Court Independent of Section. —

The court, without regard to the Act of 1903, now this section, has the power to order the sale of real estate limited to a tenant for life, with remainder to children or issue, and upon failure thereof, over to persons, all or some of whom are not in esse, when one of the class being first in remainder after the expiration of the life estate is in esse and a party to the proceeding to represent the class, and upon decree passed, and sale and title made pursuant thereto, the purchaser acquires a perfect title as against all persons in esse or in posse. Springs v. Scott, 132 N.C. 548 , 44 S.E. 116, 1903 N.C. LEXIS 322 (1903).

While the courts of this State do not have inherent power to decree a sale and pass title to the purchaser of lands, with remainder limited upon a contingency that would prevent the ascertainment of the ultimate takers, or any of them, till the death of the life tenant, this power is now conferred by the express terms of our statute in all cases where there is a vested interest in real estate, with a contingent interest over to persons not in being, or when the contingency has not happened which shall determine who the remaindermen are, under the procedure therein laid down. Dawson v. Wood, 177 N.C. 158 , 98 S.E. 459, 1919 N.C. LEXIS 93 (1919).

Decree May Be Binding on Persons Not in Esse. —

A lease authorized by the decree of a court of chancery may be binding upon beneficiaries not in esse, when their interests are the same as those of persons in being who are subjected by due process to the jurisdiction of the court. Waddell v. United Cigar Stores, 195 N.C. 434 , 142 S.E. 585, 1928 N.C. LEXIS 113 (1928) (wherein a lease of trust property was held valid over the objection that it might extend beyond the term of the trust) .

Status of Remainders. —

Contingent remainders are no longer considered mere possibilities which cannot be transferred, but a remainderman whose estate is contingent may convey it. 2 N.C.L. Rev. 126; Beacon v. Amos, 161 N.C. 357 , 77 S.E. 407, 1913 N.C. LEXIS 238 (1913).

II.Action in Superior Court for Sale

General Requirements for Sale. —

Lands devised for life with contingent limitations over may be sold for reinvestment under the provisions of this section, under the court’s order, subject to its future approval of the sale, when it is made to appear that the best interest of all parties so requires, and those living and in present interest are represented in person, and unborn children by guardian ad litem. McLean v. Caldwell, 178 N.C. 424 , 100 S.E. 888, 1919 N.C. LEXIS 474 (1919).

Jurisdiction Cannot Be Conferred by Consent. —

Jurisdiction of the superior court of an action by owner of a vested estate against contingent remaindermen to sell land cannot be conferred by consent, and this section, authorizing such an action, must be strictly complied with. Watson v. United States, 34 F. Supp. 777, 1940 U.S. Dist. LEXIS 2654 (D.N.C. 1940).

Jurisdiction on Appeal from Proceedings Improperly Brought before Clerk. —

Where an action is wrongfully brought before the clerk of the superior court and is taken to the superior court by appeal, the superior court having original jurisdiction, it will be retained for hearing. Springs v. Scott, 132 N.C. 548 , 44 S.E. 116, 1903 N.C. LEXIS 322 (1903).

Lands subject to contingent limitations may be sold by order of the judge of the superior court in term (now during a session of court), on appeal in proceedings in partition improperly brought before the clerk, by retaining jurisdiction for the purpose of settling the controversy. Ryder v. Oates, 173 N.C. 569 , 92 S.E. 508, 1917 N.C. LEXIS 346 (1917).

Authority of Clerk. —

It was not contemplated by this section that the rights of parties should be entrusted to the clerks of the superior court in ordinary special proceedings without approval or confirmation by a judge of the superior court. Ray v. Poole, 187 N.C. 749 , 123 S.E. 5, 1924 N.C. LEXIS 391 (1924).

Proceedings Brought under G.S. 46-3 . —

A tenant for life may not, directly or indirectly, affect the title of those in remainder, whether having a vested or contingent interest in the lands, by joining them in their proceedings for a division or sale for that purpose, brought before the clerk of the court under the provisions of G.S. 46-3 , and these proceedings so brought cannot be validated by derivative jurisdiction in the superior court, on appeal, under the provisions of this section, it being required that the proceedings be originally brought in the latter jurisdiction, with certain requirements for the protection of contingent remaindermen, which must be strictly followed; and, though under G.S. 46-23 and G.S. 46-24 a sale is provided when the land is affected with a contingent interest in remainder, not presently determinable, the proceedings are therein required to be brought upon petition of such remaindermen, and not upon that of the life tenants. Ray v. Poole, 187 N.C. 749 , 123 S.E. 5, 1924 N.C. LEXIS 391 (1924).

Life Tenant May Not Have Partition under G.S. 46-24 . —

A tenant for life in lands may not by adversary proceedings against the remaindermen compel the sale of lands for partition of the proceeds under G.S. 46-24 , but upon a proper showing the sale for reinvestment may be ordered in equitable proceedings under the provisions of this section. Smith v. Suitt, 199 N.C. 5 , 153 S.E. 602, 1930 N.C. LEXIS 47 (1930).

Who May Institute Suit. —

Proceedings to have lands sold that are subject to a life estate, with limitation over, upon contingencies which will prevent the ascertainment of the remaindermen during the life of the first taker, etc., may be instituted by any person having a present vested interest in the lands. Dawson v. Wood, 177 N.C. 158 , 98 S.E. 459, 1919 N.C. LEXIS 93 (1919).

The life beneficiary of a trust estate has a vested equitable estate therein so as to entitle her to institute proceedings for the sale of lands of the estate for reinvestment, and the trustees are proper parties to the proceeding. Blades v. Spitzer, 252 N.C. 207 , 113 S.E.2d 315, 1960 N.C. LEXIS 417 (1960).

Plaintiff Must Have Vested Interest. —

In a proceeding under this section to sell real property in which there is a contingent interest, plaintiff must be a person having a vested interest in the property to be sold, and the sale must be passed upon by the judgment of the superior court. The contingent interest alone cannot be sold. Butler v. Winston, 223 N.C. 421 , 27 S.E.2d 124, 1943 N.C. LEXIS 291 (1943).

Where one who had no vested estate in land brought action in the superior court against contingent remaindermen to sell land, the court lacked jurisdiction of the action, and hence the judgment ordering sale of the land was void and could be collaterally attacked. Watson v. United States, 34 F. Supp. 777, 1940 U.S. Dist. LEXIS 2654 (D.N.C. 1940). See Barnes v. Dortch, 245 N.C. 369 , 95 S.E.2d 872, 1957 N.C. LEXIS 455 (1957).

Necessary Parties. —

Where timber growing upon lands was devised to testator’s daughter for her life, and at her death to such of her children and grandchildren then living as she might have appointed in her will, or, upon her failure to exercise the power of appointment, to her children and grandchildren then living, objection to proceedings brought by the devisee and her children and grandchildren then living on the ground that no one having a vested interest in the land had been made a party could not be sustained. Midyette v. Lycoming Timber & Lumber Co., 185 N.C. 423 , 117 S.E. 386, 1923 N.C. LEXIS 96 (1923). See Thompson v. Humphrey, 179 N.C. 44 , 101 S.E. 738, 1919 N.C. LEXIS 8 (1919).

In proceedings under this section certain contingent interests in land held in trust were sold and reinvested in other lands in accordance with the terms of the trust in the original deed conveying them. The title acquired under the original deed in trust by the trustee had become passive in him, and it was held that as, under the statute of uses, the legal and equitable title had merged in the same person, neither the trustee nor his heirs were necessary parties to the owner’s action against a purchaser to enforce his contract of purchase, and especially so when all vested and contingent interests were represented by some of the parties to the suit. Lee v. Oates, 171 N.C. 717 , 88 S.E. 889, 1916 N.C. LEXIS 153 (1916).

Construing the statute, as amended, in Hodges v. Lipscomb, 133 N.C. 199 , 45 S.E. 556 (1903), the court held that it was only necessary to make parties defendant those of the contingent remaindermen who, on the happening of the contingency, would presently have an estate in the property at the time of action commenced, and as to others more remotely interested they could have their interest represented and protected by the guardian ad litem as the statute provides. Dawson v. Wood, 177 N.C. 158 , 98 S.E. 459, 1919 N.C. LEXIS 93 (1919).

A special proceeding under this section to authorize the sale for reinvestment of certain land in which there are contingent interests must be brought by a person having a vested interest in the land and those, who on the happening of the contingency would presently have an estate in the property at the time the proceeding is commenced, made parties and served with summons. Barnes v. Dortch, 245 N.C. 369 , 95 S.E.2d 872, 1957 N.C. LEXIS 455 (1957).

Effect of Omission of Persons Having Contingent Interests. —

An order of sale and judgment of confirmation will not be vacated on the ground that certain contingent remaindermen were not made parties to the proceedings to sell, where the interest of the contingent remaindermen has, since the sale, been extinguished by failure of the contingency. Beam v. Gilkey, 225 N.C. 520 , 35 S.E.2d 641, 1945 N.C. LEXIS 366 (1945).

Setting Aside Sale for Failure to Serve Summons on Infant. —

Where in proceedings to sell lands affected with contingent interests the provisions of this section have been observed, and the clerk has appointed a guardian ad litem for contingent interests and for infant parties, the failure to serve summons on a minor is to be regarded as an irregularity that will not render the sale void and a nullity. However, on a proper showing, the sale may be set aside as to all the parties except an innocent purchaser without notice of the irregularity; and on appeal to the Supreme Court, when this fact is not apparent, the case will be remanded for its ascertainment. Welch v. Welch, 194 N.C. 633 , 140 S.E. 436, 1927 N.C. LEXIS 164 (1927).

Where Guardian Appointed after Sale. —

In a proceeding under this section to sell all the contingent interest in certain lands of minors and unborn children, where petitioners were represented by a guardian, judgment of sale signed on the day before the guardian’s appointment was void. Butler v. Winston, 223 N.C. 421 , 27 S.E.2d 124, 1943 N.C. LEXIS 291 (1943).

When Action Abates. —

An action against a contingent remainderman to sell the lands under this section abates upon the death of the remainderman prior to the termination of the life estate, when his limitation over is made to depend upon his surviving the life tenant. Redden v. Toms, 211 N.C. 312 , 190 S.E. 490, 1937 N.C. LEXIS 78 (1937).

Estoppel by Judgment. —

Where an executor under a will with power to sell the lands of his testate and reinvest the proceeds, etc., has died, and all persons in present and contingent interest have been made parties to an action wherein the court has substituted another as trustee, upon like trusts in every respect, and the decree was not appealed from, all the privies and parties are estopped as to all issuable matters therein, and may not deny the power of the substituted trustee to make sale of the lands as fully as the executor under the will was therein authorized to make. Hayden v. Hayden, 178 N.C. 259 , 100 S.E. 515, 1919 N.C. LEXIS 435 (1919).

Preliminary Judgment for Payment of Betterments. —

Where a preliminary judgment in proceedings to sell lands with contingent interests provides for the payment of betterments to the life tenant, and in this respect the judgment is not excepted to or appealed from, it is conclusive upon the parties as an estoppel. Pendleton v. Williams, 175 N.C. 248 , 95 S.E. 500, 1918 N.C. LEXIS 48 (1918).

Judgment under Former Law Does Not Work Estoppel. —

A former action determined before the enactment on the subject by the legislature, holding that contingent remainders in lands, etc., cannot be sold unless all persons who may by any possibility be interested unite in the decree, cannot estop the parties to proceedings thereafter brought under the provisions of this section. Pendleton v. Williams, 175 N.C. 248 , 95 S.E. 500, 1918 N.C. LEXIS 48 (1918).

Irregularities in Judgment against Person Having no Interest. —

Irregularity of entering a consent judgment against testator’s minor grandson without investigation and approval of the court may be disregarded where the minor had no interest. Beam v. Gilkey, 225 N.C. 520 , 35 S.E.2d 641, 1945 N.C. LEXIS 366 (1945).

III.Sale and Reinvestment

Section Contemplates Reinvestment. —

This section contemplates that the proceeds of the sale, less expenses and perhaps the present worth of the life tenant’s share, will be reinvested, either in purchasing or in improving real estate. Crumpton v. Crumpton, 290 N.C. 651 , 227 S.E.2d 587, 1976 N.C. LEXIS 1126 (1976), overruled in part, Crumpton v. Mitchell, 303 N.C. 657 , 281 S.E.2d 1, 1981 N.C. LEXIS 1200 (1981).

Public or Private Sale Permissible. —

The sale of estates affected with contingent interests, under the provisions of this section, may, in the sound discretion of the trial judge and subject to his approval, be made either at public auction or by private negotiation, as the best interests of the parties may require. Middleton v. Rigsbee, 179 N.C. 437 , 102 S.E. 780, 1920 N.C. LEXIS 262 (1920). See McAfee v. Green, 143 N.C. 411 , 55 S.E. 828, 1906 N.C. LEXIS 365 (1906).

Where the sale of land affected with remote contingent interests not ascertainable at the time, comes within the provisions of this section, the court having jurisdiction may order the property disposed of either at a public or private sale, when it is shown that, as to the one or the other, the best interests of the parties will be promoted, subject always to the approval of the court. Poole & Blue, Inc. v. Thompson, 183 N.C. 588 , 112 S.E. 323, 1922 N.C. LEXIS 321 (1922).

Where the provisions of this section have been observed in the sale of lands affected with contingent interests, the commissioner appointed to make the sale may effect the same by private negotiations, subject to the approval of the court, when it is properly made to appear that the best interests of the parties so require. Midyette v. Lycoming Timber & Lumber Co., 185 N.C. 423 , 117 S.E. 386, 1923 N.C. LEXIS 96 (1923).

Sale of Lands with Contingent Interests. —

The court has the power to order the private sale of lands affected with contingent interests under the provisions of this section under a proper finding that it would be to the best interests of all concerned, without submitting this issue to the jury, and where the proceedings are properly had and all parties are before the court, the objection is untenable that the sale was made under the decision of the court, and the parties had not agreed thereto. DeLaney v. Clark, 196 N.C. 282 , 145 S.E. 398, 1928 N.C. LEXIS 350 (1928). See Ryder v. Oates, 173 N.C. 569 , 92 S.E. 508, 1917 N.C. LEXIS 346 (1917).

Bond Required. —

Where the court decrees a sale of trust property for reinvestment, the trustees should be required to give bond, or other legal provision should be made, to assure the safety of the funds arising from the sale, notwithstanding that the will provides that the trustees should not be required to give bond in administering the trust, since in acting under the decree of the court the trustees act as commissioners of the court and not necessarily as trustees under the will. Blades v. Spitzer, 252 N.C. 207 , 113 S.E.2d 315, 1960 N.C. LEXIS 417 (1960).

Decree Must Provide for Reinvestment. —

Where real estate is sold under order of the court, the decree must provide for investment of the fund in such way as the court may deem best for the protection of all persons who have or may have remote or contingent interests. Springs v. Scott, 132 N.C. 548 , 44 S.E. 116, 1903 N.C. LEXIS 322 (1903).

Discretion of Court and Clerk in Reinvestment. —

Before the 1923 amendment, which inserted the first sentence of the third paragraph of this section, it was held that the preservation of the proceeds of the sale of lands, under this section, was referred to the sound discretion of the trial judge, and no error was found to an order requiring the funds to be paid into the office of the clerk of the superior court, to be loaned out by him or otherwise invested as required by law until the happening of the contingency, except that it should be so modified as to require that interest on these loans be allowed the owners of the particular estate, it appearing that they were given the usufruct of the land. Pendleton v. Williams, 175 N.C. 248 , 95 S.E. 500, 1918 N.C. LEXIS 48 (1918).

Time of Reinvestment. —

In Laws 1905, c. 548, the reinvestment in realty was required to be within two years, but such requirement was removed by the later Laws 1907, cc. 956 and 980, leaving the matter of reinvestment somewhat in the discretion of the court, but with clear intimation that the fund should be reinvested in realty when an advantageous opportunity should be offered. Dawson v. Wood, 177 N.C. 158 , 98 S.E. 459, 1919 N.C. LEXIS 93 (1919).

Effect of Omitting Bond Required by G.S. 1-407 . —

In all cases where property affected with unascertainable contingent remainders is ordered sold under the provisions of this section, it is now required by G.S. 1-407 that a bond be given to assure the safety of the funds arising from the sale; but where this is omitted from a judgment otherwise regular, it will not affect the title conveyed, though the decree should be modified in that respect by proper steps taken in the superior court. Poole & Blue, Inc. v. Thompson, 183 N.C. 588 , 112 S.E. 323, 1922 N.C. LEXIS 321 (1922).

Where an order has been made for the sale of timber growing upon lands affected with contingent interests, the court should also require its commissioner appointed for the sale to give bond for the preservation and proper application of the proceeds of sale, etc., under G.S. 1-407 ; but this provision does not affect the title of the purchaser, who is not required to see to the application of the funds, and the proper order in this respect may be supplied by amendment or supplementary decree. Midyette v. Lycoming Timber & Lumber Co., 185 N.C. 423 , 117 S.E. 386, 1923 N.C. LEXIS 96 (1923).

Purchaser’s Liability Ends When Money Paid into Court. —

A purchaser of devised lands affected with a life estate and contingent limitation over, sold for reinvestment under the provisions of this section, is not ordinarily charged with the duty of looking after the proper disposition of the purchase money, and upon paying it into court, under its order, he is quit of further obligation concerning it. McLean v. Caldwell, 178 N.C. 424 , 100 S.E. 888, 1919 N.C. LEXIS 474 (1919).

Where the purchaser at a sale of lands for reinvestment pays his money into the court or to the person authorized by order of court to receive it, ordinarily he is not required to see to the proper application of the fund, its safety being taken care of by the court in its final decree. DeLaney v. Clark, 196 N.C. 282 , 145 S.E. 398, 1928 N.C. LEXIS 350 (1928).

Purchaser Takes Fee Simple Title. —

A purchaser at a sale of land with contingent interests allowed under the provisions of this section acquires a fee simple title, upon payment of purchase price to the court or person authorized to receive it, without being required to see to the application of the funds, and on such payment made is quit of all obligations concerning it. Pendleton v. Williams, 175 N.C. 248 , 95 S.E. 500, 1918 N.C. LEXIS 48 (1918).

Commissioner Held Without Authority to Insert Restrictions in Deed. —

Where a commissioner was authorized by the court to sell part of the lands of an estate for reinvestment under the provisions of this section, and there were no restrictions in regard to the use of the property of the estate, and in the commissioner’s report and recommendation of the offer to purchase, no authority to restrict the use of the property was asked, and none granted in the order of the court, it was held that the commissioner was without authority to insert restrictions in the deed to the purchaser, his authority being limited under the order of the court to the sale of the property and the distribution of the proceeds of sale. Southern Real Estate Loan & Trust Co. v. Atlantic Ref. Co., 208 N.C. 501 , 181 S.E. 633, 1935 N.C. LEXIS 62 (1935).

IV.Illustrative Cases

Where lands are affected with a contingent interest in remainder, not determinable during the life of the tenant for life, the holder of the vested interest and those in immediate remainder may proceed to have the lands sold under the provisions of this section, and have those remotely interested represented by guardian ad litem for the protection of their interests; and where it is made to appear that the interest of all parties requires, or will be materially enhanced by it, the court may order a sale of the property, or any part thereof, for reinvestment, either in purchasing or improving real estate, etc., or invested temporarily to be held under the same contingencies in like manner as the property ordered to be sold. Poole & Blue, Inc. v. Thompson, 183 N.C. 588 , 112 S.E. 323, 1922 N.C. LEXIS 321 (1922).

Complaints Held Good on Demurrer. —

A testator devised his improved and unimproved lands, in the corporate limits of a town, to his daughter for life with remainder to her children living at her death, with ulterior limitations over to trustees on certain contingencies, and the life tenant brought proceedings for sale and reinvestment of the proceeds under the provisions of this section, having made parties of the persons interested in accordance with the statute, and alleged that by the sale the income would be largely increased, that the sale of the contemplated part to a purchaser she had secured for a certain price would enable her to make improvements on the land then without income, to make houses on other parts of the land more profitable for rental purposes, etc., that the property as it stood was rapidly depreciating, and that there were no available funds, otherwise, to meet the necessary and insistent demands. It was held that a demurrer was bad, and properly overruled. Middleton v. Rigsbee, 179 N.C. 437 , 102 S.E. 780, 1920 N.C. LEXIS 262 (1920).

Where the complaint of a life tenant alleges that the land is unproductive and income therefrom is insufficient to pay the taxes and reasonable upkeep, and prays that the land be sold in accordance with this section, the demurrer of the vested remaindermen is improperly sustained, the complaint alleging at least one good cause for action. Stepp v. Stepp, 200 N.C. 237 , 156 S.E. 804, 1931 N.C. LEXIS 289 (1931).

Suit Regarding Management of Trust Estate. —

In a suit regarding the management of a trust estate where the trustee and the testator’s wife and children are parties and the one living grandchild is made a party defendant and is represented by a guardian ad litem, who also represents as a class the other grandchildren not in esse, all parties having an interest in the estate are properly represented, and the judgment of the court is binding as to all interests. Spencer v. McCleneghan, 202 N.C. 662 , 163 S.E. 753, 1932 N.C. LEXIS 183 (1932).

Where the grantors in a deed have erroneously assumed that they had title to the lands which they conveyed in fee, but which were affected by future contingent interest not at present ascertainable, and thereafter bring action to make title under the provisions of this section, and in these proceedings have protected the interest of the remote remaindermen by the appointment for them of a guardian ad litem, and have fully set forth the facts and circumstances of the former sale, and bring in the proceeds and submit them to the jurisdiction and orders of the court, the final judgment authorizing and confirming the sale, being had in conformity with the provisions of the statute, perfects the title, and same will inure to the benefit of the covenantee in the former deed, and for a breach of this covenant only nominal damages are recoverable. Myer v. Thompson, 183 N.C. 543 , 112 S.E. 328, 1922 N.C. LEXIS 313 (1922).

Testator devised land to his five brothers and sisters and a nephew “for their lives and then to their children.” The life tenants partitioned the land into equal shares, and the lot partitioned to a surviving brother, aged 75 without children, was conveyed by the children of the four deceased life tenants and the other surviving life tenant and her children to the wife of the surviving brother. The petitioners who purchased the lot from the surviving brother and his wife were not entitled to sell it by virtue of a proceeding under this section where the heirs of the testator living at the time of the proceeding were not made parties, since upon the death of the brother without issue the land would revert to the heirs of the testator living at that time. Barnes v. Dortch, 245 N.C. 369 , 95 S.E.2d 872, 1957 N.C. LEXIS 455 (1957).

A will devised a life estate to daughter with remainder to her children but she renounced her life estate and it was adjudicated that the renunciation of the life estate accelerated the vesting of title in members of the class in esse at the time. It was held that the acceleration of the estate of the remaindermen did not change the date when the final roll call will be made to ascertain members of the class, and although members of the class in esse are not required to account for rents and profits pending the birth of other members of the class, after-born children must be let in, and the fee simple title to the land cannot be conveyed prior to the death of the life tenant except for reinvestment pursuant to judicial decree. Neill v. Bach, 231 N.C. 391 , 57 S.E.2d 385, 1950 N.C. LEXIS 461 (1950).

A devise of an estate in trust with provision that the income therefrom should be paid to a designated beneficiary for life and, upon her death, the corpus should be divided among her children, with further provision that the child or children of any deceased child of the life tenant should take such child’s share, requires that the remaindermen be ascertained upon the falling in of the life estate, who then take under the will and not as heirs of the life tenant, so that this section is applicable. Blades v. Spitzer, 252 N.C. 207 , 113 S.E.2d 315, 1960 N.C. LEXIS 417 (1960).

Foreclosure of Tax Lien. —

Where land held by a life tenant with contingent limitation over, the persons entitled to the remainder not being determinable until the death of the life tenant, was mortgaged by the life tenant and the mortgage was foreclosed upon default, it was held that in an action to foreclose the lien for taxes against the land under former G.S. 105-414, in which the purchaser at the foreclosure sale, the life tenant and the known contingent remaindermen were made parties, and the minor contingent remaindermen, the unknown contingent remaindermen and those not in esse were represented by guardian ad litem under this section, and the provisions of both statutes were fully and accurately followed, the purchaser at the commissioner’s sale acquired the fee simple title. Rodman v. Norman, 221 N.C. 320 , 20 S.E.2d 294, 1942 N.C. LEXIS 460 (1942).

Sale of Growing Timber. —

The timber growing upon lands devised to the testator’s named daughter for her sole and separate use during her life only, and at her death to such of her children and grandchildren then living as she may have appointed in her will, and upon her failure to have done so, to her children and grandchildren then living, during the life of the daughter, was affected by the contingencies contemplated by this section. Midyette v. Lycoming Timber & Lumber Co., 185 N.C. 423 , 117 S.E. 386, 1923 N.C. LEXIS 96 (1923).

Order of Sale Held Invalid. —

The proceeding in which an order for the sale of a lot was made was not instituted and was not conducted in accordance with this section. The power of sale was not exercised by virtue of the statute. The proceeding was brought before the clerk, and not in term. The minors were not represented by guardian ad litem appointed by the judge, but by a next friend appointed by the clerk. The order of sale was signed, not during the term (now session) of the superior court in Haywood County, but by the judge holding the courts of the twentieth district (which includes Haywood County), at Sylva, in Jackson County, in said district. The order of sale could not, therefore, be held valid. Lide v. Wells, 190 N.C. 37 , 128 S.E. 477, 1925 N.C. LEXIS 5 (1925).

Effect of Invalid Decree for Sale and Reinvestment. —

In an action brought under the provisions of this section, to sell certain lands devised to E for life with a contingent remainder to her children, it appeared that to further a scheme to erect a hotel on one of the lots, the court had decreed the sale of certain other of the lands and had appointed a commissioner to act in furtherance of its object. The lands were sold and the proceeds applied to the building of the hotel, but the funds being only sufficient to erect the skeleton work of the hotel, other of the lands were decreed by the court to be sold, and their proceeds to be likewise applied; these would not be sufficient for the purpose, and when erected the hotel would not be a desirable investment, especially in the unfurnished condition in which it then would be left. It was held: (1) That the decree for the further sale and reinvestment was void, not meeting the statutory requirement that the interests involved should be properly safeguarded; (2) that the court was without authority to order an investment or reinvestment of funds not then available, but depending upon the outcome of future sales of the land, and of this, notice was implied to third persons; (3) that the purchasers at the sale of the land derived to a clear title thereto; (4) that the commissioner came under no personal liability to the contractor or materialmen of the hotel building; (5) that endorsers of a note made to procure money for building the hotel had no claim on the hotel lot; (6) that the commissioner should sell the hotel lot and report to the court, and that the proceeds be held for the benefit of the devisees to the extent of the value of the lots and the costs of improvements thereon free from the claims of materialmen, etc. Smith v. Miller, 151 N.C. 620 , 66 S.E. 671, 1910 N.C. LEXIS 186 (1910).

Mortgage for Permanent Improvements Held Improper. —

The locus in quo was devised to testator’s daughter for life with limitation over to the daughter’s children. The daughter and her husband expended large sums in making permanent improvements upon the property, and instituted this proceeding against their children, in esse or which might thereafter be born, seeking to have a mortgage in the sum of $20,900 placed on the property to refinance an existing mortgage on the property in the sum of $10,000, and also unsecured notes executed by the life tenant representing a part of the moneys used in making said improvements. It was held that since the remaindermen were in no way liable for any sums expended by the life tenant in making permanent improvements, the finding by the court that the execution of the mortgage to refinance the indebtedness would materially enhance the interest of the remaindermen was erroneous, and judgment directing the execution of the mortgage to refinance the indebtedness should be reversed. Hall v. Hall, 219 N.C. 805 , 15 S.E.2d 273, 1941 N.C. LEXIS 152 (1941).

A. General Purpose

B. Section 1(a)(1): Nonvested Property Interests that are Initially Valid

C. Section 1(a)(2): Wait-and-See — Nonvested Property Interests whose Validity is Initially in Abeyance

1. The 90-Year Permissible Vesting Period

2. Technical Violations of the Common-Law Rule

D. Sections 1(b)(1) and 1(c)(1): Powers of Appointment that are Initially Valid

E. Sections 1(b)(2) and 1(c)(2): Wait-and-See — Powers of Appointment whose Validity is Initially in Abeyance

F. The Validity of the Donee’s Exercise of a Valid Power

G. Section 1(e): Effect of Certain “Later-of” Type Language; Coordination of Generation-Skipping Transfer Tax Regulations With Uniform Act

H. Subsidiary Common-Law Doctrines: Whether Superseded by this Act

Common-Law Rule Against Perpetuities Superseded . As provided in Section 9, this Act supersedes the common-law Rule Against Perpetuities (Common-law Rule) in jurisdictions previously adhering to it (or repeals any statutory version or variation thereof previously in effect in the jurisdiction). The Common-law Rule (or the statutory version or variation thereof) is replaced by the Statutory Rule Against Perpetuities (Statutory Rule) set forth in this section and by the other provisions in this Act.

Subsidiary Doctrines Continue in Force Except to the Extent the Provisions of Act Conflict with Them . The courts in interpreting the Common-law Rule developed several subsidiary doctrines. In accordance with the general principle of statutory construction that statutes in derogation of the common law are to be construed narrowly, a subsidiary doctrine is superseded by this Act only to the extent the provisions of the Act conflict with it. A listing and discussion of such subsidiary doctrines, such as the constructional preference for validity, the all-or-nothing rule for class gifts, and the doctrine of infectious invalidity, appears later, in Part G of this Comment.

Application . Unless excluded by Section 4, the Statutory Rule Against Perpetuities (Statutory Rule) applies to nonvested property interests and to powers of appointment over property or property interests that are nongeneral powers, general testamentary powers, or general powers not presently exercisable because of a condition precedent.

The Statutory Rule does not apply to vested property interests (e.g., X’s interest in Example (23) of this Comment) or to presently exercisable general powers of appointment (e.g., G’s power in Example (19) of this Comment; G’s power in Example (1) in the Comment to Section 2; A’s power in Example (2) in the Comment to Section 2; X’s power in Example (3) in the Comment to Section 2; A’s noncumulative power of withdrawal in Example (4) in the Comment to Section 2).

1. GENERAL PURPOSE   Section 1 sets forth the Statutory Rule Against Perpetuities (Statutory Rule). As explained above, the Statutory Rule supersedes the Common-law Rule Against Perpetuities (Common-law Rule) or any statutory version or variation thereof.
2. SECTION 1(a)(1): NONVESTED PROPERTY INTERESTS THAT ARE INITIALLY VALID   Nonvested Property Interest. Section 1(a) sets forth the Statutory Rule Against Perpetuities with respect to nonvested property interests. A nonvested property interest (also called a contingent property interest) is a future interest in property that is subject to an unsatisfied condition precedent. In the case of a class gift, the interests of all the unborn members of the class are nonvested because they are subject to the unsatisfied condition precedent of being born. At common law, the interests of all potential class members must be valid or the class gift is invalid. As pointed out in more detail later in this Comment, this so-called all-or-nothing rule with respect to class gifts is not superseded by this Act, and so remains in effect under the Statutory Rule. Consequently, all class gifts that are subject to open are to be regarded as nonvested property interests for the purposes of this Act.
3. SECTION 1(a)(2): WAIT-AND-SEE — NONVESTED PROPERTY INTERESTS WHOSE VALIDITY IS INITIALLY IN ABEYANCE   Unlike the Common-Law Rule, the Statutory Rule Against Perpetuities does not automatically invalidate nonvested property interests for which there is no validating life. A nonvested property interest that does not meet the requirements for validity under Section 1(a)(1) might still be valid under the wait-and-see provisions of Section 1(a)(2). Such an interest is invalid under Section 1(a)(2) only if in actuality it does not vest (or terminate) during the permissible vesting period. Such an interest becomes invalid, in other words, only if it is still in existence and nonvested when the permissible vesting period expires.

The Common-law Rule’s Validating and Invalidating Sides . The Common-law Rule Against Perpetuities is a rule of initial validity or invalidity. At common law, a nonvested property interest is either valid or invalid as of its creation . Like most rules of property law, the Common-law Rule has both a validating and an invalidating side. Both sides are derived from John Chipman Gray’s formulation of the Common-law Rule:

No [nonvested property] interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.

J. Gray, The Rule Against Perpetuities § 201 (4th ed. 1942). From this formulation, the validating and invalidating sides of the Common-law Rule are derived as follows:

Validating Side of the Common-law Rule . A nonvested property interest is valid when it is created (initially valid) if it is then certain to vest or terminate (fail to vest) — one or the other — no later than 21 years after the death of an individual then alive.

Invalidating Side of the Common-law Rule . A nonvested property interest is invalid when it is created (initially invalid) if there is no such certainty.

J. Gray, The Rule Against Perpetuities § 201 (4th ed. 1942). From this formulation, the validating and invalidating sides of the Common-law Rule are derived as follows:

Validating Side of the Common-law Rule . A nonvested property interest is valid when it is created (initially valid) if it is then certain to vest or terminate (fail to vest) — one or the other — no later than 21 years after the death of an individual then alive.

Invalidating Side of the Common-law Rule . A nonvested property interest is invalid when it is created (initially invalid) if there is no such certainty.

Invalidating Side of the Common-law Rule . A nonvested property interest is invalid when it is created (initially invalid) if there is no such certainty.

Notice that the invalidating side focuses on a lack of certainty , which means that invalidity under the Common-law Rule is not dependent on actual post-creation events but only on possible post-creation events. Actual post-creation events are irrelevant, even those that are known at the time of the lawsuit. It is generally recognized that the invalidating side of the Common-law Rule is harsh because it can invalidate interests on the ground of possible post-creation events that are extremely unlikely to happen and that in actuality almost never do happen, if ever.

The Statutory Rule Against Perpetuities . The essential difference between the Common-law Rule and its statutory replacement is that the Statutory Rule preserves the Common-law Rule’s overall policy of preventing property from being tied up in unreasonably long or even perpetual family trusts or other property arrangements, while eliminating the harsh potential of the Common-law Rule. The Statutory Rule achieves this result by codifying (in slightly revised form) the validating side of the Common-law Rule and modifying the invalidating side by adopting a wait-and-see element. Under the Statutory Rule, interests that would have been initially valid at common law continue to be initially valid, but interests that would have been initially invalid at common law are invalid only if they do not actually vest or terminate within the permissible vesting period set forth in Section 1(a)(2). Thus, the Uniform Act recasts the validating and invalidating sides of the Rule Against Perpetuities as follows:

Validating Side of the Statutory Rule : A nonvested property interest is initially valid if, when it is created, it is then certain to vest or terminate (fail to vest) — one or the other — no later than 21 years after the death of an individual then alive. The validity of a nonvested property interest that is not initially valid is in abeyance. Such an interest is valid if it vests within the permissible vesting period after its creation.

Invalidating Side of the Statutory Rule : A nonvested property interest that is not initially valid becomes invalid (and subject to reformation under Section 3) if it neither vests nor terminates within the permissible vesting period after its creation.

Invalidating Side of the Statutory Rule : A nonvested property interest that is not initially valid becomes invalid (and subject to reformation under Section 3) if it neither vests nor terminates within the permissible vesting period after its creation.

As indicated, this modification of the invalidating side of the Common-law Rule is generally known as the wait-and-see method of perpetuity reform. The wait-and-see method of perpetuity reform was approved by the American Law Institute as part of the Restatement (Second) of Property (Donative Transfers) §§ 1.1-1.6 (1983). For a discussion of the various methods of perpetuity reform, including the wait-and-see method and the Restatement (Second)’s version of wait-and-see, see Waggoner, Perpetuity Reform , 81 Mich.L.Rev. 1718 (1983).

Section 1(a)(1) Codifies the Validating Side of the Common-law Rule . The validating side of the Common-law Rule is codified in Section 1(a)(1) (and, with respect to powers of appointment, in Sections 1(b)(1) and 1(c)(1)).

A nonvested property interest that satisfies the requirement of Section 1(a)(1) is initially valid. That is, it is valid as of the time of its creation. There is no need to subject such an interest to the waiting period set forth in Section 1(a)(2), nor would it be desirable to do so.

For a nonvested property interest to be valid as of the time of its creation under Section 1(a)(1), there must then be a certainty that the interest will either vest or terminate — an interest terminates when vesting becomes impossible — no later than 21 years after the death of an individual then alive. To satisfy this requirement, it must be established that there is no possible chain of events that might arise after the interest was created that would allow the interest to vest or terminate after the expiration of the 21-year period following the death of an individual in being at the creation of the interest. Consequently, initial validity under Section 1(a)(1) can be established only if there is an individual for whom there is a causal connection between the individual’s death and the interest’s vesting or terminating no later than 21 years thereafter. The individual described in subsection (a)(1) (and subsections (b)(1) and (c)(1) as well) is often referred to as the “validating life,” the term used throughout the Comments to this Act.

Determining Whether There is a Validating Life . The process for determining whether a validating life exists is to postulate the death of each individual connected in some way to the transaction, and ask the question: Is there with respect to this individual an invalidating chain of possible events? If one individual can be found for whom the answer is No, that individual can serve as the validating life. As to that individual there will be the requisite causal connection between his or her death and the questioned interest’s vesting or terminating no later than 21 years thereafter.

In searching for a validating life, only individuals who are connected in some way to the transaction need to be considered, for they are the only ones who have a chance of supplying the requisite causal connection. Such individuals vary from situation to situation, but typically include the beneficiaries of the disposition, including the taker or takers of the nonvested property interest, and individuals related to them by blood or adoption, especially in the ascending and descending lines. There is no point in even considering the life of an individual unconnected to the transaction — an individual from the world at large who happens to be in being at the creation of the interest. No such individual can be a validating life because there will be an invalidating chain of possible events as to every unconnected individual who might be proposed: Any such individual can immediately die after the creation of the nonvested property interest without causing any acceleration of the interest’s vesting or termination. (The life expectancy of any unconnected individual, or even the probability that one of a number of new-born babies will live a long life, is irrelevant.)

Example (1) — Parent of Devisees as the Validating Life . G devised property “to A for life, remainder to A’s children who attain 21.” G was survived by his son (A), by his daughter (B), by A’s wife (W), and by A’s two children (X and Y).

The nonvested property interest in favor of A’s children who reach 21 satisfies Section 1(a)(1)’s requirement, and the interest is initially valid. When the interest was created (at G’s death), the interest was then certain to vest or terminate no later than 21 years after A’s death.

The process by which A is determined to be the validating life is one of testing various candidates to see if any of them have the requisite causal connection. As noted above, no one from the world at large can have the requisite causal connection, and so such individuals are disregarded. Once the inquiry is narrowed to the appropriate candidates, the first possible validating life that comes to mind is A, who does in fact fulfill the requirement: Since A’s death cuts off the possibility of any more children being born to him, it is impossible, no matter when A dies, for any of A’s children to be alive and under the age of 21 beyond 21 years after A’s death. (See the discussion of subsection (d), below.)

A is therefore the validating life for the nonvested property interest in favor of A’s children who attain 21. None of the other individuals who is connected to this transaction could serve as the validating life because an invalidating chain of possible post-creation events exists as to each one of them. The other individuals who might be considered include W, X, Y, and B. In the case of W, an invalidating chain of events is that she might predecease A, A might remarry and have a child by his new wife, and such child might be alive and under the age of 21 beyond the 21-year period following W’s death. With respect to X and Y, an invalidating chain of events is that they might predecease A, A might later have another child, and that child might be alive and under 21 beyond the 21-year period following the death of the survivor of X and Y. As to B, she suffers from the same invalidating chain of events as exists with respect to X and Y. The fact that none of these other individuals can serve as the validating life is of no consequence, however, because only one such individual is required for the validity of a nonvested interest to be established, and that individual is A.

The Rule of Subsection (d) . The rule established in subsection (d) plays a significant role in the search for a validating life. Subsection (d) declares that the possibility that a child will be born to an individual after the individual’s death is to be disregarded. It is important to note that this rule applies only for the purposes of determining the validity of an interest (or power of appointment) under paragraph (1) of subsection (a), (b), or (c). The rule of subsection (d) does not apply, for example, to questions such as whether or not a child who is born to an individual after the individual’s death qualifies as a taker of a beneficial interest — as a member of a class or otherwise. Neither subsection (d), nor any other provision of this Act, supersedes the widely accepted common-law principle, sometimes codified, that a child in gestation (a child sometimes described as a child en ventre sa mere ) who is later born alive is regarded as alive at the commencement of gestation.

The limited purpose of subsection (d) is to solve a perpetuity problem caused by advances in medical science. The problem is illustrated by a case such as Example (1), above — “to A for life, remainder to A’s children who reach 21.” When the Common-law Rule was developing, the possibility was recognized, strictly speaking, that one or more of A’s children might reach 21 more than 21 years after A’s death. The possibility existed because A’s wife (who might not be a life in being) might be pregnant when A died. If she was, and if the child was born viable a few months after A’s death, the child could not reach his or her 21st birthday within 21 years after A’s death. The device then invented to validate the interest of A’s children was to “extend” the allowable perpetuity period by tacking on a period of gestation, if needed. As a result, the common-law perpetuity period was comprised of three components: (1) a life in being (2) plus 21 years (3) plus a period of gestation, when needed. Today, thanks to sperm banks, frozen embryos, and even the possibility of artificially maintaining the body functions of deceased pregnant women long enough to develop the fetus to viability (see Detroit Free Press, July 31, 1986, at 5A; Ann Arbor News, Oct. 30, 1978, at C5 (AP story); N.Y. Times, Dec. 6, 1977, at 30; N.Y. Times, Dec. 2, 1977, at B16) — advances in medical science unanticipated when the Common-law Rule was in its developmental stages — having a pregnant wife at death is no longer the only way of having children after death. These medical developments, and undoubtedly others to come, make the mere addition of a period of gestation inadequate as a device to confer initial validity under Section 1(a)(1) on the interest of A’s children in the above example. The rule of subsection (d), however, does insure the initial validity of the children’s interest. Disregarding the possibility that children of A will be born after his death allows A to be the validating life. None of his children, under this assumption, can reach 21 more than 21 years after his death.

Note that subsection (d) subsumes not only the case of children conceived after death, but also the more conventional case of children in gestation at death. With subsection (d) in place, the third component of the common-law perpetuity period is unnecessary and has been jettisoned. The perpetuity period recognized in paragraph (1) of subsections (a), (b), and (c) has only two components: (1) a life in being (2) plus 21 years.

As to the legal status of conceived-after-death children, that question has not yet been resolved. For example, if in Example (1) it in fact turns out that A does leave sperm on deposit at a sperm bank and if in fact A’s wife does become pregnant as a result of artificial insemination, the child or children produced thereby might not be included at all in the class gift. Cf. Restatement (Second) of Property (Donative Transfers) Introductory Note to Ch. 26 at pp. 2-3 (Tent. Draft No. 9, 1986). Without trying to predict how that matter will be settled in the future, the best way to handle the problem from the perpetuity perspective is subsection (d)’s rule requiring the possibility of post-death children to be disregarded.

Recipients as Their Own Validating Lives . It is well established at common law that, in appropriate cases, the recipient of an interest can be his or her own validating life. See, e.g., Rand v. Bank of California, 236 Or. 619, 388 P.2d 437 (1964). Given the right circumstances, this principle can validate interests that are contingent on the recipient’s reaching an age in excess of 21, or are contingent on the recipient’s surviving a particular point in time that is or might turn out to be in excess of 21 years after the interest was created or after the death of a person in being at the date of creation.

Example (2) — Devisees as Their Own Validating Lives . G devised real property “to A’s children who attain 25.” A predeceased G. At G’s death, A had three living children, all of whom were under 25.

The nonvested property interest in favor of A’s children who attain 25 is validated by Section 1(a)(1). Under subsection (d), the possibility that A will have a child born to him after his death (and since A predeceased G, after G’s death) must be disregarded. Consequently, even if A’s wife survived G, and even if she was pregnant at G’s death or even if A had deposited sperm in a sperm bank prior to his death, it must be assumed that all of A’s children are in being at G’s death. A’s children are, therefore, their own validating lives. (Note that subsection (d) requires that in determining whether an individual is a validating life, the possibility that a child will be born to “an” individual after the individual’s death must be disregarded. The validating life and the individual whose having a post-death child is disregarded need not be the same individual.) Each one of A’s children, all of whom under subsection (d) are regarded as alive at G’s death, will either reach the age of 25 or fail to do so within his or her own lifetime. To say this another way, it is certain to be known no later than at the time of the death of each child whether or not that child survived to the required age.

Validating Life Can Be Survivor of Group . In appropriate cases, the validating life need not be individualized at first. Rather the validating life can initially (i.e., when the interest was created) be the unidentified survivor of a group of individuals. It is common in such cases to say that the members of the group are the validating lives , but the true meaning of the statement is that the validating life is the member of the group who turns out to live the longest. As the court said in Skatterwood v. Edge, 1 Salk. 229, 91 Eng. Rep. 203 (K.B. 1697), “for let the lives be never so many, there must be a survivor, and so it is but the length of that life; for Twisden used to say, the candles were all lighted at once.”

Example (3) — Case of Validating Life Being the Survivor of a Group . G devised real property “to such of my grandchildren as attain 21.” Some of G’s children are living at G’s death.

The nonvested property interest in favor of G’s grandchildren who attain 21 is valid under Section 1(a)(1). The validating life is that one of G’s children who turns out to live the longest. Since under subsection (d), it must be assumed that none of G’s children will have post-death children, it is regarded as impossible for any of G’s grandchildren to be alive and under 21 beyond the 21-year period following the death of G’s last surviving child.

Example (4) — Sperm Bank Case . G devised property in trust, directing the income to be paid to G’s children for the life of the survivor, then to G’s grandchildren for the life of the survivor, and on the death of G’s last surviving grandchild, to pay the corpus to G’s great-grandchildren then living. G’s children all predeceased him, but several grandchildren were living at G’s death. One of G’s predeceased children (his son, A) had deposited sperm in a sperm bank. A’s widow was living at G’s death.

The nonvested property interest in favor of G’s great-grandchildren is valid under Section 1(a)(1). The validating life is the last surviving grandchild among the grandchildren living at G’s death. Under subsection (d), the possibility that A will have a child conceived after G’s death must be disregarded. Note that subsection (d) requires that in determining whether an individual is a validating life, the possibility that a child will be born to “an” individual after the individual’s death is disregarded. The validating life and the individual whose having a post-death child is disregarded need not be the same individual. Thus in this example, by disregarding the possibility that A will have a conceived-after-death child, G’s last surviving grandchild becomes the validating life because G’s last surviving grandchild is deemed to have been alive at G’s death, when the great-grandchildren’s interests were created.

Example (5) — Child in Gestation Case . G devised property in trust, to pay the income equally among G’s living children; on the death of G’s last surviving child, to accumulate the income for 21 years; on the 21st anniversary of the death of G’s last surviving child, to pay the corpus and accumulated income to G’s then-living descendants, per stirpes; if none, to X Charity. At G’s death his child (A) was 6 years old, and G’s wife (W) was pregnant. After G’s death, W gave birth to their second child (B).

The nonvested property interests in favor of G’s descendants and in favor of X Charity are valid under Section 1(a)(1). The validating life is A. Under subsection (d), the possibility that a child will be born to an individual after the individual’s death must be disregarded for the purposes of determining validity under Section 1(a)(1) . Consequently, the possibility that a child will be born to G after his death must be disregarded; and the possibility that a child will be born to any of G’s descendants after their deaths must also be disregarded.

Note, however, that the rule of subsection (d) does not apply to the question of the entitlement of an after-born child to take a beneficial interest in the trust. The common-law rule (sometimes codified) that a child in gestation is treated as alive, if the child is subsequently born viable, applies to this question. Thus, subsection (d) does not prevent B from being an income beneficiary under G’s trust, nor does it prevent a descendant in gestation on the 21st anniversary of the death of G’s last surviving child from being a member of the class of G’s “then-living descendants,” as long as such descendant has no then-living ancestor who takes instead.

Different Validating Lives Can and in Some Cases Must Be Used . Dispositions of property sometimes create more than one nonvested property interest. In such cases, the validity of each interest is treated individually. A validating life that validates one interest might or might not validate the other interests. Since it is not necessary that the same validating life be used for all interests created by a disposition, the search for a validating life for each of the other interests must be undertaken separately.

Perpetuity Saving Clauses and Similar Provisions . Knowledgeable lawyers almost routinely insert perpetuity saving clauses into instruments they draft. Saving clauses contain two components, the first of which is the perpetuity-period component . This component typically requires the trust or other arrangement to terminate no later than 21 years after the death of the last survivor of a group of individuals designated therein by name or class. (The lives of corporations, animals, or sequoia trees cannot be used.) The second component of saving clauses is the gift-over component . This component expressly creates a gift over that is guaranteed to vest at the termination of the period set forth in the perpetuity-period component, but only if the trust or other arrangement has not terminated earlier in accordance with its other terms.

It is important to note that regardless of what group of individuals is designated in the perpetuity-period component of a saving clause, the surviving member of the group is not necessarily the individual who would be the validating life for the nonvested property interest or power of appointment in the absence of the saving clause. Without the saving clause, one or more interests or powers may in fact fail to satisfy the requirement of paragraph (1) of subsections (a), (b), or (c) for initial validity. By being designated in the saving clause, however, the survivor of the group becomes the validating life for all interests and powers in the trust or other arrangement: The saving clause confers on the last surviving member of the designated group the requisite causal connection between his or her death and the impossibility of any interest or power in the trust or other arrangement remaining in existence beyond the 21-year period following such individual’s death.

Example (6) — Valid Saving Clause Case . A testamentary trust directs income to be paid to the testator’s children for the life of the survivor, then to the testator’s grandchildren for the life of the survivor, corpus on the death of the testator’s last living grandchild to such of the testator’s descendants as the last living grandchild shall by will appoint; in default of appointment, to the testator’s then-living descendants, per stirpes. A saving clause in the will terminates the trust, if it has not previously terminated, 21 years after the death of the testator’s last surviving descendant who was living at the testator’s death. The testator was survived by children.

In the absence of the saving clause, the nongeneral power of appointment in the last living grandchild and the nonvested property interest in the gift-in-default clause in favor of the testator’s descendants fail the test of Sections 1(a)(1) and 1(c)(1) for initial validity. That is, were it not for the saving clause, there is no validating life. However, the surviving member of the designated group becomes the validating life, so that the saving clause does confer initial validity on the nongeneral power of appointment and on the nonvested property interest under Sections 1(a)(1) and 1(c)(1).

If the governing instrument designates a group of individuals that would cause it to be impracticable to determine the death of the survivor, the common-law courts have developed the doctrine that the validity of the nonvested property interest or power of appointment is determined as if the provision in the governing instrument did not exist. See cases cited in Restatement (Second) of Property (Donative Transfers) (1983), Reporter’s Note No. 3 at p. 45. See also Restatement (Second) of Property (Donative Transfers) § 1.3(1) Comment a (1983); Restatement of Property § 374 and Comment l (1944); 6 American Law of Property § 24.13 (A. Casner ed. 1952); 5A R. Powell, The Law of Real Property Para. 766[5] (1985); L. Simes & A. Smith, The Law of Future Interests § 1223 (2d ed. 1956). If, for example, the designated group in Example (6) were the residents of X City (or the members of Y Country Club) living at the time of the testator’s death, the saving clause would not validate the power of appointment or the nonvested property interest. Instead, the validity of the power of appointment and the nonvested property interest would be determined as if the provision in the governing instrument did not exist. Since without the saving clause the power of appointment and the nonvested property interest would fail to satisfy the requirements of Sections 1(a)(1) and 1(c)(1) for initial validity, their validity would be governed by Sections 1(a)(2) and 1(c)(2).

The application of the above common-law doctrine, which is not superseded by this Act and so remains in full force, is not limited to saving clauses. It also applies to trusts or other arrangements where the period thereof is directly linked to the life of the survivor of a designated group of individuals. An example is a trust to pay the income to the grantor’s descendants from time to time living, per stirpes, for the period of the life of the survivor of a designated group of individuals living when the nonvested property interest or power of appointment in question was created, plus the 21-year period following the survivor’s death; at the end of the 21-year period, the corpus is to be divided among the grantor’s then-living descendants, per stirpes, and if none, to the XYZ Charity. If the group of individuals so designated is such that it would be impracticable to determine the death of the survivor, the validity of the disposition is determined as if the provision in the governing instrument did not exist. The term of the trust is therefore governed by the 90- year permissible vesting period of paragraph (2) of subsections (a), (b), or (c) of the Statutory Rule.

Additional references . Restatement (Second) of Property (Donative Transfers) § 1.3(1) (1983), and the Comments thereto; Waggoner, Perpetuity Reform , 81 Mich.L.Rev. 1718, 1720-1726 (1983).

1. The 90-Year Permissible Vesting Period

Since a wait-and-see rule against perpetuities, unlike the Common-law Rule, makes validity or invalidity turn on actual post-creation events, it requires that an actual period of time be measured off during which the contingencies attached to an interest are allowed to work themselves out to a final resolution. The Statutory Rule Against Perpetuities establishes a permissible vesting period of 90 years. Nonvested property interests that have neither vested nor terminated at the expiration of the 90-year permissible vesting period become invalid.

As explained in the Prefatory Note, the permissible vesting period of 90 years is not an arbitrarily selected period of time. On the contrary, the 90-year period represents a reasonable approximation of — a proxy for — the period of time that would, on average, be produced through the use of an actual set of measuring lives identified by statute and then adding the traditional 21-year tack-on period after the death of the survivor.

2. Technical Violations of the Common-Law Rule

One of the harsh aspects of the invalidating side of the Common-Law Rule, against which the adoption of the wait-and-see element in Section 1(a)(2) is designed to relieve, is that nonvested property interests at common law are invalid even though the invalidating chain of possible events almost certainly will not happen. In such cases, the violation of the Common-law Rule could be said to be merely technical. Nevertheless, at common law, the nonvested property interest is invalid.

Cases of technical violation fall generally into discrete categories, identified and named by Professor Leach in Perpetuities in a Nutshell , 51 Harv.L.Rev. 638 (1938), as the fertile octogenarian, the administrative contingency, and the unborn widow. The following three examples illustrate how Section 1(a)(2) affects these categories.

Example (7) — Fertile Octogenarian Case . G devised property in trust, directing the trustee to pay the net income therefrom “to A for life, then to A’s children for the life of the survivor, and upon the death of A’s last surviving child to pay the corpus of the trust to A’s grandchildren.” G was survived by A (a female who had passed menopause) and by A’s two adult children (X and Y).

The remainder interest in favor of G’s grandchildren would be invalid at common law, and consequently is not validated by Section 1(a)(1). There is no validating life because, under the common law’s conclusive presumption of lifetime fertility, which is not superseded by this Act (see Part H, below), A might have a third child (Z), conceived and born after G’s death, who will have a child conceived and born more than 21 years after the death of the survivor of A, X, and Y.

Under Section 1(a)(2), however, the remote possibility of the occurrence of this chain of events does not invalidate the grandchildren’s interest. The interest becomes invalid only if it remains in existence and nonvested 90 years after G’s death. The chance that the grandchildren’s remainder interest will become invalid under Section 1(a)(2) is negligible.

Example (8) — Administrative Contingency Case . G devised property “to such of my grandchildren, born before or after my death, as may be living upon final distribution of my estate.” G was survived by children and grandchildren.

The remainder interest in favor of A’s grandchildren would be invalid at common law, and consequently is not validated by Section 1(a)(1). The final distribution of G’s estate might not occur within 21 years of G’s death, and after G’s death grandchildren might be conceived and born who might survive or fail to survive the final distribution of G’s estate more than 21 years after the death of the survivor of G’s children and grandchildren who were living at G’s death.

Under Section 1(a)(2), however, the remote possibility of the occurrence of this chain of events does not invalidate the grandchildren’s remainder interest. The interest becomes invalid only if it remains in existence and nonvested 90 years after G’s death. Since it is almost certain that the final distribution of G’s estate will occur well within this 90-year period, the chance that the grandchildren’s interest will be invalid is negligible.

Example (9) — Unborn Widow Case . G devised property in trust, the income to be paid “to my son A for life, then to A’s spouse for her life, and upon the death of the survivor of A and his spouse, the corpus to be delivered to A’s then living descendants.” G was survived by A, by A’s wife (W), and by their adult children (X and Y).

Unless the interest in favor of A’s “spouse” is construed to refer only to W, rather than to whoever is A’s spouse when he dies, if anyone, the remainder interest in favor of A’s descendants would be invalid at common law, and consequently is not validated by Section 1(a)(1). There is no validating life because A’s spouse might not be W; A’s spouse might be someone who was conceived and born after G’s death; she might outlive the death of the survivor of A, W, X, and Y by more than 21 years; and descendants of A might be born or die before the death of A’s spouse but after the 21-year period following the death of the survivor of A, W, X, and Y.

Under Section 1(a)(2), however, the remote possibility of the occurrence of this chain of events does not invalidate the descendants’ remainder interest. The interest becomes invalid only if it remains in existence and nonvested 90 years after G’s death. The chance that the descendants’ remainder interest will become invalid under the Statutory Rule is small.

Age Contingencies in Excess of 21 . Another category of technical violation of the Common-Law Rule arises in cases of age contingencies in excess of 21 where the takers cannot be their own validating lives (unlike Example (2), above). The violation of the Common-law Rule falls into the technical category because the insertion of a saving clause would in almost all cases allow the disposition to be carried out as written. In effect, the Statutory Rule operates like the perpetuity-period component of a saving clause.

Example (10) — Age Contingency in Excess of 21 Case . G devised property in trust, directing the trustee to pay the income “to A for life, then to A’s children; the corpus of the trust is to be equally divided among A’s children who reach the age of 30.” G was survived by A, by A’s spouse (H), and by A’s two children (X and Y), both of whom were under the age of 30 when G died.

The remainder interest in favor of A’s children who reach 30 is a class gift. At common law, the interests of all potential class members must be valid or the class gift is totally invalid. Leake v. Robinson, 2 Mer. 363, 35 Eng. Rep. 979 (Ch. 1817). This Act does not supersede the all-or-nothing rule for class gifts (see Part G, below), and so the all-or-nothing rule continues to apply under this Act. Although X and Y will either reach 30 or die under 30 within their own lifetimes, there is at G’s death the possibility that A will have an afterborn child (Z) who will reach 30 or die under 30 more than 21 years after the death of the survivor of A, H, X, and Y. The class gift would be invalid at common law and consequently is not validated by Section 1(a)(1).

Under Section 1(a)(2), however, the possibility of the occurrence of this chain of events does not invalidate the children’s remainder interest. The interest becomes invalid only if an interest of a class member remains nonvested 90 years after G’s death.

Although unlikely, suppose that at A’s death Z’s age is such that he could be alive and under the age of 30 at the expiration of the allowable waiting period. Suppose further that at A’s death X or Y or both is over the age of 30. The court, upon the petition of an interested person, must under Section 3 reform G’s disposition. See Example (3) in the Comment to Section 3.

D. SECTIONS 1(b)(1) AND 1(c)(1): POWERS OF APPOINTMENT THAT ARE INITIALLY VALID Powers of Appointment . Sections 1(b) and 1(c) set forth the Statutory Rule Against Perpetuities with respect to powers of appointment. A power of appointment is the authority, other than as an incident of the beneficial ownership of property, to designate recipients of beneficial interests in or powers of appointment over property. Restatement (Second) of Property (Donative Transfers) § 11.1 (1986). The property or property interest subject to a power of appointment is called the “appointive property.”

The various persons connected to a power of appointment are identified by a special terminology. The “donor” is the person who created the power of appointment. The “donee” is the person who holds the power of appointment, i.e., the powerholder. The “objects” are the persons to whom an appointment can be made. The “appointees” are the persons to whom an appointment has been made. The “takers in default” are the persons whose property interests are subject to being defeated by the exercise of the power of appointment and who take the property to the extent the power is not effectively exercised. Restatement (Second) of Property (Donative Transfers) § 11.2 (1986).

A power of appointment is “general” if it is exercisable in favor of the donee of the power, the donee’s creditors, the donee’s estate, or the creditors of the donee’s estate. A power of appointment that is not general is a “nongeneral” power of appointment. Restatement (Second) of Property (Donative Transfers) § 11.4 (1986).

A power of appointment is “presently exercisable” if, at the time in question, the donee can by an exercise of the power create an interest in or a power of appointment over the appointive property. Restatement (Second) of Property (Donative Transfers) § 11.5 (1986). A power of appointment is “testamentary” if the donee can exercise it only in the donee’s will. Restatement of Property § 321 (1940). A power of appointment is “not presently exercisable because of a condition precedent” if the only impediment to its present exercisability is a condition precedent, i.e., the occurrence of some uncertain event. Since a power of appointment terminates on the donee’s death, a deferral of a power’s present exercisability until a future time (even a time certain) imposes a condition precedent that the donee be alive at that future time.

A power of appointment is a “fiduciary” power if it is held by a fiduciary and is exercisable by the fiduciary in a fiduciary capacity. A power of appointment that is exercisable in an individual capacity is a “nonfiduciary” power. As used in this Act, the term “power of appointment” refers to “fiduciary” and to “nonfiduciary” powers, unless the context indicates otherwise.

Although Gray’s formulation of the Common-law Rule Against Perpetuities does not speak directly of powers of appointment, the Common-law Rule is applicable to powers of appointment (other than presently exercisable general powers of appointment). The principle of subsections (b)(1) and (c)(1) is that a power of appointment that satisfies the Common-law Rule Against Perpetuities is valid under the Statutory Rule Against Perpetuities, and consequently it can be validly exercised, without being subjected to a waiting period during which the power’s validity is in abeyance.

Two different tests for validity are employed at common law, depending on what type of power is at issue. In the case of a nongeneral power (whether or not presently exercisable) and in the case of a general testamentary power , the power is initially valid if, when the power was created, it is certain that the latest possible time that the power can be exercised is no later than 21 years after the death of an individual then in being. In the case of a general power not presently exercisable because of a condition precedent , the power is initially valid if it is then certain that the condition precedent to its exercise will either be satisfied or become impossible to satisfy no later than 21 years after the death of an individual then in being. Subsections (b)(1) and (c)(1) codify these rules. Under either test, initial validity depends on the existence of a validating life. The procedure for determining whether a validating life exists is essentially the same procedure explained in Part B, above, pertaining to nonvested property interests.

Example (11) — Initially Valid General Testamentary Power Case . G devised property “to A for life, remainder to such persons, including A’s estate or the creditors of A’s estate, as A shall by will appoint.” G was survived by his daughter (A).

A’s power, which is a general testamentary power, is valid as of its creation under Section 1(c)(1). The test is whether or not the power can be exercised beyond 21 years after the death of an individual in being when the power was created (G’s death). Since A’s power cannot be exercised after A’s death, the validating life is A, who was in being at G’s death.

Example (12) — Initially Valid Nongeneral Power Case . G devised property “to A for life, remainder to such of A’s descendants as A shall appoint.” G was survived by his daughter (A).

A’s power, which is a nongeneral power, is valid as of its creation under Section 1(c)(1). The validating life is A; the analysis leading to validity is the same as applied in Example (11), above.

Example (13) — Case of Initially Valid General Power Not Presently Exercisable Because of a Condition Precedent . G devised property “to A for life, then to A’s first born child for life, then to such persons, including A’s first born child or such child’s estate or creditors, as A’s first born child shall appoint.” G was survived by his daughter (A), who was then childless.

The power in A’s first born child, which is a general power not presently exercisable because of a condition precedent, is valid as of its creation under Section 1(b)(1). The power is subject to a condition precedent — that A have a child — but this is a contingency that under subsection (d) is deemed certain to be resolved one way or the other within A’s lifetime. A is therefore the validating life: The power cannot remain subject to the condition precedent after A’s death. Note that the latest possible time that the power can be exercised is at the death of A’s first born child, which might occur beyond 21 years after the death of A (and anyone else who was alive when G died). Consequently, if the power conferred on A’s first born child had been a nongeneral power or a general testamentary power, the power could not be validated by Section 1(c)(1); instead, the power’s validity would be governed by Section 1(c)(2).

E. SECTIONS 1(b)(2) AND 1(c)(2): WAIT-AND-SEE — POWERS OF APPOINTMENT WHOSE VALIDITY IS INITIALLY IN ABEYANCE Under the Common-law Rule, a general power not presently exercisable because of a condition precedent is invalid as of the time of its creation if the condition might neither be satisfied nor become impossible to satisfy within a life in being plus 21 years. A nongeneral power (whether or not presently exercisable) or a general testamentary power is invalid as of the time of its creation if it might not terminate (by irrevocable exercise or otherwise) within a life in being plus 21 years.

Sections 1(b)(2) and 1(c)(2), by adopting the wait-and-see method of perpetuity reform, shift the ground of invalidity from possible to actual post-creation events. Under these subsections, a power of appointment that would have violated the Common-law Rule, and therefore fails the subsection (b)(1) or (c)(1) tests for initial validity, is nevertheless not invalid as of the time of its creation. Instead, its validity is in abeyance. A general power not presently exercisable because of a condition precedent is invalid only if in actuality the condition neither is satisfied nor becomes impossible to satisfy within the 90-year permissible vesting period. A nongeneral power or a general testamentary power is invalid only if in actuality it does not terminate (by irrevocable exercise or otherwise) within the 90-year permissible period.

Example (14) — General Testamentary Power Case . G devised property “to A for life, then to A’s first born child for life, then to such persons, including the estate or the creditors of the estate of A’s first born child, as A’s first born child shall by will appoint; in default of appointment, to G’s grandchildren in equal shares.” G was survived by his daughter (A), who was then childless, and by his son (B), who had two children (X and Y).

Since the general testamentary power conferred on A’s first born child fails the test of Section 1(c)(1) for initial validity, its validity is governed by Section 1(c)(2). If A has a child, such child’s death must occur within 90 years of G’s death for any provision in the child’s will purporting to exercise the power to be valid.

Example (15) — Nongeneral Power Case . G devised property “to A for life, then to A’s first born child for life, then to such of G’s grandchildren as A’s first born child shall appoint; in default of appointment, to the children of G’s late nephew, Q.” G was survived by his daughter (A), who was then childless, by his son (B), who had two children (X and Y), and by Q’s two children (R and S).

Since the nongeneral power conferred on A’s first born child fails the test of Section 1(c)(1) for initial validity, its validity is governed by Section 1(c)(2). If A has a child, such child must exercise the power within 90 years after G’s death or the power becomes invalid.

Example (16) — General Power Not Presently Exercisable Because of a Condition Precedent . G devised property “to A for life, then to A’s first born child for life, then to such persons, including A’s first born child or such child’s estate or creditors, as A’s first born child shall appoint after reaching the age of 25; in default of appointment, to G’s grandchildren.” G was survived by his daughter (A), who was then childless, and by his son (B), who had two children (X and Y).

The power conferred on A’s first born child is a general power not presently exercisable because of a condition precedent. Since the power fails the test of Section 1(b)(1) for initial validity, its validity is governed by Section 1(b)(2). If A has a child, such child must reach the age of 25 (or die under 25) within 90 years after G’s death or the power is invalid.

Fiduciary Powers . Purely administrative fiduciary powers are excluded from the Statutory Rule under Sections 4(2) and (3), but the only distributive fiduciary power that is excluded is the power described in Section 4(4). Otherwise, distributive fiduciary powers are subject to the Statutory Rule. Such powers are usually nongeneral powers.

Example (17) — Trustee’s Discretionary Powers Over Income and Corpus . G devised property in trust, the terms of which were that the trustee was authorized to accumulate the income or pay it or a portion of it out to A during A’s lifetime; after A’s death, the trustee was authorized to accumulate the income or to distribute it in equal or unequal shares among A’s children until the death of the survivor; and on the death of A’s last surviving child to pay the corpus and accumulated income (if any) to B. The trustee was also granted the discretionary power to invade the corpus on behalf of the permissible recipient or recipients of the income.

The trustee’s nongeneral powers to invade corpus and to accumulate or spray income among A’s children are not excluded by Section 4(4), nor are they initially valid under Section 1(c)(1). Their validity is, therefore, governed by Section 1(c)(2). Both powers become invalid thereunder, and hence no longer exercisable, 90 years after G’s death.

It is doubtful that the powers will become invalid, because the trust will probably terminate by its own terms earlier than the expiration of the permissible 90-year period. But if the powers do become invalid, and hence no longer exercisable, they become invalid as of the time the permissible 90-year period expires. Any exercises of either power that took place before the expiration of the permissible 90-year period are not invalidated retroactively. In addition, if the powers do become invalid, a court in an appropriate proceeding must reform the instrument in accordance with the provisions of Section 3.

F. THE VALIDITY OF THE DONEE’S EXERCISE OF A VALID POWER The fact that a power of appointment is valid, either because it (i) was not subject to the Statutory Rule to begin with, (ii) is initially valid under Sections 1(b)(1) or 1(c)(1), or (iii) becomes valid under Sections 1(b)(2) or 1(c)(2), means merely that the power can be validly exercised. It does not mean that any exercise that the donee decides to make is valid. The validity of the interests or powers created by the exercise of a valid power is a separate matter, governed by the provisions of this Act. A key factor in deciding the validity of such appointed interests or appointed powers is determining when they were created for purposes of this Act. Under Section 2, as explained in the Comment thereto, the time of creation is when the power was exercised if it was a presently exercisable general power; and if it was a nongeneral power or a general testamentary power, the time of creation is when the power was created. This is the rule generally accepted at common law (see Restatement (Second) of Property (Donative Transfers) § 1.2, Comment d (1983); Restatement of Property § 392 (1944)), and it is the rule adopted under this Act (except for purposes of Section 5 only, as explained in the Comment to Section 5).

Example (18) — Exercise of a Nongeneral Power of Appointment . G was the life income beneficiary of a trust and the donee of a nongeneral power of appointment over the succeeding remainder interest, exercisable in favor of M’s descendants (except G). The trust was created by the will of G’s mother, M, who predeceased him. G exercised his power by his will, directing the income to be paid after his death to his brother B’s children for the life of the survivor, and upon the death of B’s last surviving child, to pay the corpus of the trust to B’s grandchildren. B predeceased M; B was survived by his two children, X and Y, who also survived M and G.

G’s power and his appointment are valid. The power and the appointed interests were created at M’s death when the power was created, not on G’s death when it was exercised. See Section 2. G’s power passes Section 1(c)(1)’s test for initial validity: G himself is the validating life. G’s appointment also passes Section 1(a)(1)’s test for initial validity: Since B was dead at M’s death, the validating life is the survivor of B’s children, X and Y.

Suppose that G’s power was exercisable only in favor of G’s own descendants, and that G appointed the identical interests in favor of his own children and grandchildren. Suppose further that at M’s death, G had two children, X and Y, and that a third child, Z, was born later. X, Y, and Z survived G. In this case, the remainder interest in favor of G’s grandchildren would not pass Section 1(a)(1)’s test for initial validity. Its validity would be governed by Section 1(a)(2), under which it would be valid if G’s last surviving child died within 90 years after M’s death.

If G’s power were a general testamentary power of appointment, rather than a nongeneral power, the solution would be the same. The period of the Statutory Rule with respect to interests created by the exercise of a general testamentary power starts to run when the power was created (at M’s death, in this example), not when the power was exercised (at G’s death).

Example (19) — Exercise of a Presently Exercisable General Power of Appointment . G was the life income beneficiary of a trust and the donee of a presently exercisable general power of appointment over the succeeding remainder interest. G exercised the power by deed, directing the trustee after his death to pay the income to G’s children in equal shares for the life of the survivor, and upon the death of his last surviving child to pay the corpus of the trust to his grandchildren.

The validity of G’s power is not in question: A presently exercisable general power of appointment is not subject to the Statutory Rule Against Perpetuities. G’s appointment, however, is subject to the Statutory Rule. If G reserved a power to revoke his appointment, the remainder interest in favor of G’s grandchildren passes Section 1(a)(1)’s test for initial validity. Under Section 2, the appointed remainder interest was created at G’s death. The validating life for his grandchildren’s remainder interest is G’s last surviving child.

If G’s appointment were irrevocable, however, the grandchildren’s remainder interest fails the test of Section 1(a)(1) for initial validity. Under Section 2, the appointed remainder interest was created upon delivery of the deed exercising G’s power (or when the exercise otherwise became effective). Since the validity of the grandchildren’s remainder interest is governed by Section 1(a)(2), the remainder interest becomes invalid, and the disposition becomes subject to reformation under Section 3, if G’s last surviving child lives beyond 90 years after the effective date of G’s appointment.

Example (20) — Exercises of Successively Created Nongeneral Powers of Appointment . G devised property to A for life, remainder to such of A’s descendants as A shall appoint. At his death, A exercised his nongeneral power by appointing to his child B for life, remainder to such of B’s descendants as B shall appoint. At his death, B exercised his nongeneral power by appointing to his child C for life, remainder to C’s children. A and B were living at G’s death. Thereafter, C was born. A later died, survived by B and C. B then died survived by C.

A’s nongeneral power passes Section 1(c)(1)’s test for initial validity. A is the validating life. B’s nongeneral power, created by A’s appointment, also passes Sections 1(c)(1)’s test for initial validity. Since under Section 2 the appointed interests and powers are created at G’s death, and since B was then alive, B is the validating life for his nongeneral power. (If B had been born after G’s death, however, his power would have failed Section 1(c)(1)’s test for initial validity; its validity would be governed by Section 1(c)(2), and would turn on whether or not it was exercised by B within 90 years after G’s death.)

Although B’s power is valid, his exercise may be partly invalid. The remainder interest in favor of C’s children fails the test of Section 1(a)(1) for initial validity. The period of the Statutory Rule begins to run at G’s death, under Section 2. (Since B’s power was a nongeneral power, B’s appointment under the common-law relation back doctrine of powers of appointment is treated as having been made by A. If B’s appointment related back no further than that, of course, it would have been validated by Section 1(a)(1) because C was alive at A’s death. However, A’s power was also a nongeneral power, so relation back goes another step. A’s appointment — which now includes B’s appointment — is treated as having been made by G.) Since C was not alive at G’s death, he cannot be the validating life. And, since C might have more children more than 21 years after the deaths of A and B and any other individual who was alive at G’s death, the remainder interest in favor of his children is not initially validated by Section 1(a)(1). Instead, its validity is governed by Section 1(a)(2), and turns on whether or not C dies within 90 years after G’s death.

Note that if either A’s power or B’s power (or both) had been a general testamentary power rather than a nongeneral power, the above solution would not change. However, if either A’s power or B’s power (or both) had been a presently exercisable general power, B’s appointment would have passed Sections 1(a)(1)’s test for initial validity. (If A had the presently exercisable general power, the appointed interests and power would be created at A’s death, not G’s; and if the presently exercisable general power were held by B, the appointed interests and power would be created at B’s death.)

Common-Law “Second-look” Doctrine . As indicated above, both at common law and under this Act (except for purposes of Section 5 only, as explained in the Comment to Section 5), appointed interests and powers established by the exercise of a general testamentary power or a nongeneral power are created when the power was created, not when the power was exercised. In applying this principle, the common law recognizes a so-called doctrine of second look, under which the facts existing on the date of the exercise are taken into account in determining the validity of appointed interests and appointed powers. E.g., Warren’s Estate , 320 Pa. 112, 182 A. 396 (1930); In re Estate of Bird , 225 Cal.App.2d 196, 37 Cal.Rptr. 288 (1964). The common-law’s second-look doctrine in effect constitutes a limited wait-and-see doctrine, and is therefore subsumed under but not totally superseded by this Act. The following example, which is a variation of Example (18) above, illustrates how the second-look doctrine operates at common law and how the situation would be analyzed under this Act.

Example (21) — Second-look Case . G was the life income beneficiary of a trust and the donee of a nongeneral power of appointment over the succeeding remainder interest, exercisable in favor of G’s descendants. The trust was created by the will of his mother, M, who predeceased him. G exercised his power by his will, directing the income to be paid after his death to his children for the life of the survivor, and upon the death of his last surviving child, to pay the corpus of the trust to his grandchildren. At M’s death, G had two children, X and Y. No further children were born to G, and at his death X and Y were still living.

The common-law solution of this example is as follows: G’s appointment is valid under the Common-law Rule. Although the period of the Rule begins to run at M’s death, the facts existing at G’s death can be taken into account. This second look at the facts discloses that G had no additional children. Thus the possibility of additional children, which existed at M’s death when the period of the Rule began to run, is disregarded. The survivor of X and Y, therefore, becomes the validating life for the remainder interest in favor of G’s grandchildren, and G’s appointment is valid. The common-law’s second-look doctrine would not, however, save G’s appointment if he actually had one or more children after M’s death and if at least one of these after-born children survived G.

Under this Act, if no additional children are born to G after M’s death, the common-law second-look doctrine can be invoked as of G’s death to declare G’s appointment then to be valid under Section 1(a)(1); no further waiting is necessary. However, if additional children are born to G and one or more of them survives G, Section 1(a)(2) applies and the validity of G’s appointment depends on G’s last surviving child dying within 90 years after M’s death.

Additional References . Restatement (Second) of Property (Donative Transfers) § 1.2, Comments d, f, g, and h; § 1.3, Comment g; § 1.4, Comment l (1983).

G. SECTION 1(e): EFFECT OF CERTAIN “LATER-OF” TYPE LANGUAGE; COORDINATION OF GENERATION-SKIPPING TRANSFER TAX REGULATIONS WITH UNIFORM ACT Effect of Certain “Later-of” Type Language . Section 1(e) was added to the Uniform Act in 1990. It primarily applies to a non-traditional type of “later-of” clause (described below). Use of that type of clause might have produced unintended consequences, which are now rectified by the addition of Section 1(e).

In general, perpetuity saving or termination clauses can be used in either of two ways. The predominant use of such clauses is as an override clause. That is, the clause is not an integral part of the dispositive terms of the trust, but operates independently of the dispositive terms; the clause provides that all interests must vest no later than at a specified time in the future, and sometimes also provides that the trust must then terminate, but only if any interest has not previously vested or if the trust has not previously terminated. The other use of such a clause is as an integral part of the dispositive terms of the trust; that is, the clause is the provision that directly regulates the duration of the trust. Traditional perpetuity saving or termination clauses do not use a “later-of” approach; they mark off the maximum time of vesting or termination only by reference to a 21-year period following the death of the survivor of specified lives in being at the creation of the trust.

Section 1(e) applies to a non-traditional clause called a “later-of” (or “longer-of”) clause. Such a clause might provide that the maximum time of vesting or termination of any interest or trust must occur no later than the later of (A) 21 years after the death of the survivor of specified lives in being at the creation of the trust or (B) 90 years after the creation of the trust.

Under the Uniform Act as originally promulgated, this type of “later-of” clause would not achieve a “later-of” result. If used as an override clause in conjunction with a trust whose terms were, by themselves, valid under the Common-law Rule, the “later-of” clause did no harm. The trust would be valid under the Common-law Rule as codified in Section 1(a)(1) because the clause itself would neither postpone the vesting of any interest nor extend the duration of the trust. But, if used either (1) as an override clause in conjunction with a trust whose terms were not valid under the Common-law Rule or (2) as the provision that directly regulated the duration of the trust, the “later-of” clause would not cure the perpetuity violation in case (1) and would create a perpetuity violation in case (2). In neither case would the clause qualify the trust for validity at common law under Section 1(a)(1) because the clause would not guarantee that all interests will be certain to vest or terminate no later than 21 years after the death of an individual then alive. In any given case, 90 years can turn out to be longer than the period produced by the specified-lives-in-being-plus-21-years language. **

Because the clause would fail to qualify the trust for validity under the Common-law Rule of Section 1(a)(1), the nonvested interests in the trust would be subject to the wait-and-see element of Section 1(a)(2) and vulnerable to a reformation suit under Section 3. Under Section 1(a)(2), an interest that is not valid at common law is invalid unless it actually vests or terminates within 90 years after its creation. Section 1(a)(2) does not grant such nonvested interests a permissible vesting period of either 90 years or a period of 21 years after the death of the survivor of specified lives in being. Section 1(a)(2) only grants such interests a period of 90 years in which to vest.

The operation of Section 1(a), as outlined above, is also supported by perpetuity policy. If Section 1(a) allowed a “later-of” clause to achieve a “later-of” result, it would authorize an improper use of the 90-year permissible vesting period of Section 1(a)(2). The 90-year period of Section 1(a)(2) is designed to approximate the period that, on average , would be produced by using actual lives in being plus 21 years. Because in any given case the period actually produced by lives in being plus 21 years can be shorter or longer than 90 years, an attempt to utilize a 90-year period in a “later-of” clause improperly seeks to turn the 90-year average into a minimum.

Set against this background, the addition of Section 1(e) is quite beneficial. Section 1(e) limits the effect of this type of “later-of” language to 21 years after the death of the survivor of the specified lives, in effect transforming the clause into a traditional perpetuity saving/termination clause. By doing so, Section 1(e) grants initial validity to the trust under the Common-law Rule as codified in Section 1(a)(1) and precludes a reformation suit under Section 3.

Note that Section 1(e) covers variations of the “later-of” clause described above, such as a clause that postpones vesting until the later of (A) 20 years after the death of the survivor of specified lives in being or (B) 89 years. Section 1(e) does not, however, apply to all dispositions that incorporate a “later-of” approach. To come under Section 1(e), the specified-lives prong must include a tack-on period of up to 21 years. Without a tack-on period, a “later-of” disposition, unless valid at common law, comes under Section 1(a)(2) and is given 90 years in which to vest. An example would be a disposition that creates an interest that is to vest upon “the later of the death of my widow or 30 years after my death.”

Coordination of the Federal Generation-Skipping Transfer Tax with the Uniform Statutory Rule . In 1990, the Treasury Department announced a decision to coordinate the tax regulations under the “grandfathering” provisions of the federal generation-skipping transfer tax with the Uniform Act. Letter from Michael J. Graetz, Deputy Assistant Secretary of the Treasury (Tax Policy), to Lawrence J. Bugge, President, National Conference of Commissioners on Uniform State Laws (Nov. 16, 1990) (hereinafter Treasury Letter ).

Section 1433(b)(2) of the Tax Reform Act of 1986 generally exempts (“grandfathers”) trusts from the federal generation-skipping transfer tax that were irrevocable on September 25, 1985. This section adds, however, that the exemption shall apply “only to the extent that such transfer is not made out of corpus added to the trust after September 25, 1985.” The provisions of Section 1433(b)(2) were first implemented by Temp. Treas. Reg. § 26.2601-1, promulgated by T.D. 8187 on March 14, 1988. Insofar as the Uniform Act is concerned, a key feature of that temporary regulation is the concept that the statutory reference to “corpus added to the trust after September 25, 1985” not only covers actual post-9/25/85 transfers of new property or corpus to a grandfathered trust but “constructive” additions as well. Under the temporary regulation as first promulgated, a “constructive” addition occurs if, after 9/25/85, the donee of a nongeneral power of appointment exercises that power “in a manner that may postpone or suspend the vesting, absolute ownership or power of alienation of an interest in property for a period, measured from the date of creation of the trust, extending beyond any life in being at the date of creation of the trust plus a period of 21 years. If a power is exercised by creating another power it will be deemed to be exercised to whatever extent the second power may be exercised.” Temp. Treas. Reg. § 26.2601- 1(b)(1)(v)(B)(2) (1988).

Because the Uniform Act was promulgated in 1986 and applies only prospectively, any “grandfathered” trust would have become irrevocable prior to the enactment of the Uniform Act in any state. Nevertheless, the second sentence of Section 5(a) extends the wait-and-see approach to post-effective-date exercises of nongeneral powers even if the power itself was created prior to the effective date of the Uniform Act in any state. Consequently, a post-effective-date exercise of a nongeneral power of appointment created in a “grandfathered” trust could come under the provisions of the Uniform Act.

The literal wording, then, of Temp. Treas. Reg. § 26.2601-1(b)(1)(v)(B)(2) (1988), as first promulgated, could have jeopardized the grandfathered status of an exempt trust if (1) the trust created a nongeneral power of appointment, (2) the donee exercised that nongeneral power, and (3) the Uniform Act is the perpetuity law applicable to the donee’s exercise. This possibility arose not only because the donee’s exercise itself might come under the 90-year permissible vesting period of Section 1(a)(2) if it otherwise violated the Common-law Rule and hence was not validated under Section 1(a)(1). The possibility also arose in a less obvious way if the donee’s exercise created another nongeneral power. The last sentence of the temporary regulation states that “if a power is exercised by creating another power it will be deemed to be exercised to whatever extent the second power may be exercised.”

In late March 1990, the National Conference of Commissioners on Uniform State Laws (NCCUSL) filed a formal request with the Treasury Department asking that measures be taken to coordinate the regulation with the Uniform Act. By the Treasury Letter referred to above, the Treasury Department responded by stating that it “will amend the temporary regulations to accommodate the 90-year period under USRAP as originally promulgated [in 1986] or as amended [in 1990 by the addition of subsection (e)].” This should effectively remove the possibility of loss of grandfathered status under the Uniform Act merely because the donee of a nongeneral power created in a grandfathered trust inadvertently exercises that power in violation of the Common-law Rule or merely because the donee exercises that power by creating a second nongeneral power that might, in the future, be inadvertently exercised in violation of the Common-law Rule.

The Treasury Letter states, however, that any effort by the donee of a nongeneral power in a grandfathered trust to obtain a “later-of” specified-lives-in-being-plus-21-years or 90-years approach will be treated as a constructive addition, unless that effort is nullified by state law. As explained above, the Uniform Act, as originally promulgated in 1986 or as amended in 1990 by the addition of Section 1(e), nullifies any direct effort to obtain a “later-of” approach by the use of a “later-of” clause.

The Treasury Letter states that an indirect effort to obtain a “later-of” approach would also be treated as a constructive addition that would bring grandfathered status to an end, unless the attempt to obtain the later-of approach is nullified by state law. The Treasury Letter indicates that an indirect effort to obtain a “later-of” approach could arise if the donee of a nongeneral power successfully attempts to prolong the duration of a grandfathered trust by switching from a specified-lives-in-being-plus-21-years perpetuity period to a 90-year perpetuity period, or vice versa. Donees of nongeneral powers in grandfathered trusts would therefore be well advised to resist any temptation to wait until it becomes clear or reasonably predictable which perpetuity period will be longer and then make a switch to the longer period if the governing instrument creating the power utilized the shorter period. No such attempted switch and no constructive addition will occur if in each instance a traditional specified-lives-in-being-plus-21-years perpetuity saving clause is used.

Any such attempted switch is likely in any event to be nullified by state law and, if so, the attempted switch will not be treated as a constructive addition. For example, suppose that the original grandfathered trust contained a standard perpetuity saving clause declaring that all interests in the trust must vest no later than 21 years after the death of the survivor of specified lives in being. In exercising a nongeneral power created in that trust, any indirect effort by the donee to obtain a “later-of” approach by adopting a 90-year perpetuity saving clause will likely be nullified by Section 1(e). If that exercise occurs at a time when it has become clear or reasonably predictable that the 90-year period will prove longer, the donee’s exercise would constitute language in a governing instrument that seeks to operate in effect to postpone the vesting of any interest until the later of the specified-lives-in-being-plus-21-years period or 90 years. Under Section 1(e), “that language is inoperative to the extent it produces a period of time that exceeds 21 years after the death of the survivor of the specified lives.”

Quite apart from Section 1(e), the relation-back doctrine generally recognized in the exercise of nongeneral powers stands as a doctrine that could potentially be invoked to nullify an attempted switch from one perpetuity period to the other perpetuity period. Under that doctrine, interests created by the exercise of a nongeneral power are considered created by the donor of that power. See, e.g., Restatement (Second) of Property, Donative Transfers § 11.1 comment b (1986). As such, the maximum vesting period applicable to interests created by the exercise of a nongeneral power would apparently be covered by the perpetuity saving clause in the document that created the power, notwithstanding any different period the donee purports to adopt.

H. SUBSIDIARY COMMON-LAW DOCTRINES: WHETHER SUPERSEDED BY THIS ACT As noted at the beginning of this Comment, the courts in interpreting the Common-law Rule developed several subsidiary doctrines. This Act does not supersede those subsidiary doctrines except to the extent the provisions of this Act conflict with them. As explained below, most of these common-law doctrines remain in full force or in force in modified form.

Constructional Preference for Validity . Professor Gray in his treatise on the Common-law Rule Against Perpetuities declared that a will or deed is to be construed without regard to the Rule, and then the Rule is to be “remorselessly” applied to the provisions so construed. J. Gray, The Rule Against Perpetuities § 629 (4th ed. 1942). Some courts may still adhere to this proposition. Colorado Nat’l Bank v. McCabe, 143 Colo. 21, 353 P.2d 385 (1960). Most courts, it is believed, would today be inclined to adopt the proposition put by the Restatement of Property § 375 (1944), which is that where an instrument is ambiguous — that is, where it is fairly susceptible to two or more constructions, one of which causes a Rule violation and the other of which does not — the construction that does not result in a Rule violation should be adopted. Cases supporting this view include Southern Bank & Trust Co. v. Brown, 271 S.C. 260, 246 S.E.2d 598 (1978); Davis v. Rossi, 326 Mo. 911, 34 S.W.2d 8 (1930); Watson v. Goldthwaite, 184 N.E.2d 340, 343 (Mass. 1962); Walker v. Bogle, 244 Ga. 439, 260 S.E.2d 338 (1979); Drach v. Ely, 703 P.2d 746 (Kan. 1985).

The constructional preference for validity is not superseded by this Act, but its role is likely to be different. The situation is likely to be that one of the constructions to which the ambiguous instrument is fairly susceptible would result in validity under Section 1(a)(1), 1(b)(1), or 1(c)(1), but the other construction does not necessarily result in invalidity; rather it results in the interest’s validity being governed by Section 1(a)(2), 1(b)(2), or 1(c)(2). Nevertheless, even though the result of adopting the other construction is not as harsh as it is at common law, it is expected that the courts will incline toward the construction that validates the disposition under Section 1(a)(1), 1(b)(1), or 1(c)(1).

Conclusive Presumption of Lifetime Fertility . At common law, all individuals — regardless of age, sex, or physical condition — are conclusively presumed to be able to have children throughout their entire lifetimes. This principle is not superseded by this Act, and in view of new advances in medical science that allow women to become pregnant after menopause by way of test-tube fertilization (see Sauer, Paulson & Lobo, A Preliminary Report on Oocyte Donation Extending Reproductive Potential to Women Over 40 , 323 N.Eng.J.Med. 1157 (1990)) and the widely accepted rule of construction that adopted children are presumptively included in class gifts, the conclusive presumption of lifetime fertility is not unrealistic. Since even elderly individuals probably cannot be excluded from adopting children based on their ages alone, the possibility of having children by adoption is seldom extinct. See, generally, Waggoner In re Lattouf’s Will and the Presumption of Lifetime Fertility in Perpetuity Law , 20 San Diego L.Rev. 763 (1983). Under this Act, the main force of this principle is felt in Example (7), above, where it prevents a nonvested property interest from passing the test for initial validity under Section 1(a)(1).

Act Supersedes Doctrine of Infectious Invalidity . At common law, the invalidity of an interest can, under the doctrine of infectious invalidity, be held to invalidate one or more otherwise valid interests created by the disposition or even invalidate the entire disposition. The question turns on whether the general dispositive scheme of the transferor will be better carried out by eliminating only the invalid interest or by eliminating other interests as well. This is a question that is answered on a case-by-case basis. Several items are relevant to the question, including who takes the stricken interests in place of those the transferor designated to take.

The doctrine of infectious invalidity is superseded by this Act by Section 3, under which courts, upon the petition of an interested person, are required to reform the disposition to approximate as closely as possible the transferor’s manifested plan of distribution when an invalidity under the Statutory Rule occurs.

Separability . The common law’s separability doctrine is that when an interest is expressly subject to alternative contingencies, the situation is treated as if two interests were created in the same person or class. Each interest is judged separately; the invalidity of one of the interests does not necessarily cause the other one to be invalid. This common-law principle was established in Longhead v. Phelps, 2 Wm.Bl. 704, 96 Eng. Rep. 414 (K.B. 1770), and is followed in this country. L. Simes & A. Smith, The Law of Future Interests § 1257 (2d ed. 1956); 6 American Law of Property § 24.54 (A. Casner ed. 1952); Restatement of Property § 376 (1944). Under this doctrine, if property is devised “to B if X-event or Y-event happens,” B in effect has two interests, one contingent on X-event happening and the other contingent on Y-event happening. If the interest contingent on X-event but not the one contingent on Y-event is invalid, the consequence of separating B’s interest into two is that only one of them, the one contingent on X-event, is invalid. B still has a valid interest — the one contingent on the occurrence of Y-event.

The separability principle is not superseded by this Act. As illustrated in the following example, its invocation will usually result in one of the interests being initially validated by Section 1(a)(1) and the validity of the other interests being governed by Section 1(a)(2).

Example (22) — Separability Case . G devised real property “to A for life, then to A’s children who survive A and reach 25, but if none of A’s children survives A or if none of A’s children who survives A reaches 25, then to B.” G was survived by his brother (B), by his daughter (A), by A’s husband (H), and by A’s two minor children (X and Y).

The remainder interest in favor of A’s children who reach 25 fails the test of Section 1(a)(1) for initial validity. Its validity is, therefore, governed by Section 1(a)(2) and depends on each of A’s children doing any one of the following things within 90 years after G’s death: predeceasing A, surviving A and failing to reach 25, or surviving A and reaching 25.

Under the separability doctrine, B has two interests. One of them is contingent on none of A’s children surviving A. That interest passes Section 1(a)(1)’s test for initial validity; the validating life is A. B’s other interest, which is contingent on none of A’s surviving children reaching 25, fails Section 1(a)(1)’s test for initial validity. Its validity is governed by Section 1(a)(2) and depends on each of A’s surviving children either reaching 25 or dying under 25 within 90 years after G’s death.

Suppose that after G’s death, A has a third child (Z). A subsequently dies, survived by her husband (H) and by X, Y, and Z. This, of course, causes B’s interest that was contingent on none of A’s children surviving A to terminate. If X, Y, and Z had all reached the age of 25 by the time of A’s death, their interest would vest at A’s death, and that would end the matter. If one or two, but not all three of them, had reached the age of 25 at A’s death, B’s other interest — the one that was contingent on none of A’s surviving children reaching 25 — would also terminate. As for the children’s interest, if the after- born child Z’s age was such at A’s death that Z could not be alive and under the age of 25 at the expiration of the allowable waiting period, the class gift in favor of the children would be valid under Section 1(a)(2), because none of those then under 25 could fail either to reach 25 or die under 25 after the expiration of the allowable 90-year waiting period. If, however, Z’s age at A’s death was such that Z could be alive and under the age of 25 at the expiration of the 90-year permissible vesting period, the circumstances requisite to reformation under Section 3(2) would arise, and the court would be justified in reforming G’s disposition by reducing the age contingency with respect to Z to the age he would reach on the date when the permissible vesting period is due to expire. See Example (3) in the Comment to Section 3. So reformed, the class gift in favor of A’s children could not become invalid under Section 1(a)(2), and the children of A who had already reached 25 by the time of A’s death could receive their shares immediately.

The “All-or-Nothing” Rule with Respect to Class Gifts; the Specific Sum and Sub-Class Doctrines . The common law applies an “all-or-nothing” rule with respect to class gifts, under which a class gift stands or falls as a whole. The all-or-nothing rule, usually attributed to Leake v. Robinson, 2 Mer. 363, 35 Eng. Rep. 979 (Ch. 1817), is commonly stated as follows: If the interest of any potential class member might vest too remotely, the entire class gift violates the Rule. Although this Act does not supersede the basic idea of the much-maligned “all-or-nothing” rule, the evils sometimes attributed to it are substantially if not entirely eliminated by the wait-and-see feature of the Statutory Rule and by the availability of reformation under Section 3, especially in the circumstances described in Sections 3(2) and (3). For illustrations of the application of the all-or-nothing rule under this Act, see Examples (3), (4), and (6) in the Comment to Section 3.

The common law also recognizes a doctrine called the specific-sum doctrine, which is derived from Storrs v. Benbow, 3 De G.M. & G. 390, 43 Eng. Rep. 153 (Ch. 1853), and states: If a specified sum of money is to be paid to each member of a class, the interest of each class member is entitled to separate treatment and is valid or invalid under the Rule on its own. The common law also recognizes a doctrine called the sub-class doctrine, which is derived from Cattlin v. Brown, 11 Hare 372, 68 Eng. Rep. 1318 (Ch. 1853), and states: If the ultimate takers are not described as a single class but rather as a group of subclasses, and if the share to which each separate subclass is entitled will finally be determined within the period of the Rule, the gifts to the different subclasses are separable for the purpose of the Rule. American Security & Trust Co. v. Cramer, 175 F. Supp. 367 (D.D.C. 1959); Restatement of Property § 389 (1944). The specific-sum and sub-class doctrines are not superseded by this Act. The operation of the specific-sum doctrine under this Act is illustrated in the following example.

Example (23) — Specific-Sum Case . G bequeathed “$10,000 to each child of A, born before or after my death, who attains 25.” G was survived by A and by A’s two children (X and Y). X but not Y had already reached 25 at G’s death. After G’s death a third child (Z) was born to A.

If the phrase “born before or after my death” had been omitted, the class would close as of G’s death under the common-law’s rule of construction known as the rule of convenience: The after-born child, Z, would not be entitled to a $10,000 bequest, and the interests of both X and Y would be valid upon their creation at G’s death. X’s interest would be valid because it was initially vested; neither the Common-law Rule nor the Statutory Rule applies to interests that are vested upon their creation. Although the interest of Y was not vested upon its creation, it would be initially valid under Section 1(a)(1) because Y would be his own validating life; Y will either reach 25 or die under 25 within his own lifetime.

The inclusion of the phrase “before or after my death,” however, would probably be construed to mean that G intended after-born children to receive a $10,000 bequest. See Earle Estate , 369 Pa. 52, 85 A.2d 90 (1951). Assuming that this construction were adopted, the specific-sum doctrine allows the interest of each child of A to be treated separately from the others for purposes of the Statutory Rule. For the reasons cited above, the interests of X and Y are initially valid under Section 1(a)(1). The nonvested interest of Z, however, fails Section 1(a)(1)’s test for initial validity; there is no validating life because Z, who was not alive when the interest was created, could reach 25 or die under 25 more than 21 years after the death of the survivor of A, X, and Y. Under Section 1(a)(2), the validity of Z’s interest depends on Z’s reaching (or failing to reach) 25 within 90 years after G’s death.

The operation of the sub-class doctrine under this Act is illustrated in the following example.

Example (24) — Sub-Class Case . G devised property in trust, directing the trustee to pay the income “to A for life, then in equal shares to A’s children for their respective lives; on the death of each child, the proportionate share of corpus of the one so dying shall go to the children of such child.” G was survived by A and by A’s two children (X and Y). After G’s death, another child (Z) was born to A. A now has died, survived by X, Y, and Z.

Under the sub-class doctrine, each remainder interest in favor of the children of a child of A is treated separately from the others. This allows the remainder interest in favor of X’s children and the remainder interest in favor of Y’s children to be validated under Section 1(a)(1). X is the validating life for the one, and Y is the validating life for the other.

The remainder interest in favor of the children of Z fails Section 1(a)(1)’s test for initial validity; there is no validating life because Z, who was not alive when the interest was created, could have children more than 21 years after the death of the survivor of A, X, and Y. Under Section 1(a)(2), the validity of the remainder interest in favor of Z’s children depends on Z’s dying within 90 years after G’s death.

Note why both of the requirements of the sub-class rule are met. The ultimate takers are described as a group of sub-classes rather than as a single class: “children of the child so dying,” as opposed to “grandchildren.” The share to which each separate sub-class is entitled is certain to be finally determined within a life in being plus 21 years: As of A’s death, who is a life in being, it is certain to be known how many children he had surviving him; since in fact there were three, we know that each sub-class will ultimately be entitled to one-third of the corpus, neither more nor less. The possible failure of the one-third share of Z’s children does not increase to one-half the share going to X’s and Y’s children; they still are entitled to only one-third shares. Indeed, should it turn out that X has children but Y does not, this would not increase the one-third share to which X’s children are entitled.

Example (25) — General Testamentary Powers — Sub-Class Case . G devised property in trust, directing the trustee to pay income “to A for life, then in equal shares to A’s children for their respective lives; on the death of each child, the proportionate share of corpus of the one so dying shall go to such persons as the one so dying shall by will appoint; in default of appointment, to G’s grandchildren in equal shares.” G was survived by A and by A’s two children (X and Y). After G’s death, another child (Z) was born to A.

The general testamentary powers conferred on each of A’s children are entitled to separate treatment under the principles of the sub-class doctrine. See above. Consequently, the powers conferred on X and Y, A’s children who were living at G’s death, are initially valid under Section 1(c)(1). But the general testamentary power conferred on Z, A’s child who was born after G’s death, fails the test of Section 1(c)(1) for initial validity. The validity of Z’s power is governed by Section 1(c)(2). Z’s death must occur within 90 years after G’s death if any provision in Z’s will purporting to exercise his power is to be valid.

Duration of Indestructible Trusts — Termination of Trusts by Beneficiaries . The widely accepted view in American law is that the beneficiaries of a trust other than a charitable trust can compel its premature termination if all beneficiaries consent and if such termination is not expressly restrained or impliedly restrained by the existence of a “material purpose” of the settlor in establishing the trust. Restatement (Second) of Trusts § 337 (1959); IV A. Scott, The Law of Trusts § 337 (3d ed. 1967). A trust that cannot be terminated by its beneficiaries is called an indestructible trust.

It is generally accepted that the duration of the indestructibility of a trust, other than a charitable trust, is limited to the applicable perpetuity period. See Restatement (Second) of Trusts § 62, Comment o (1959); Restatement (Second) of Property (Donative Transfers) § 2.1 and Legislative Note and Reporter’s Note (1983); I A. Scott, The Law of Trusts § 62.10(2) (3d ed. 1967); J. Gray, The Rule Against Perpetuities § 121 (4th ed. 1942); L. Simes & A. Smith, The Law of Future Interests § 1391-93 (2d ed. 1956).

Nothing in this Act supersedes this principle. One modification, however, is necessary: As to trusts that contain a nonvested property interest or power of appointment whose validity is governed by the wait-and-see element adopted in Section 1(a)(2), 1(b)(2), or 1(c)(2), the courts can be expected to determine that the applicable perpetuity period is 90 years.

** By substantial analogous authority, the specified-lives-in-being-plus-21-years prong of the “later-of” clause under discussion is not sustained by the separability doctrine (described in Part H of the Comment to Section 1). See, e.g., Restatement of Property § 376 Comments e and f and illustration 3 (1944); Easton v. Hall, 323 Ill. 397, 154 N.E. 216 (1926); Thorne v. Continental Nat’l Bank & Trust Co., 305 Ill. App. 222, 27 N.E.2d 302 (1940). The inapplicability of the separability doctrine is also supported by perpetuity policy, as described in the text above.

I.General Consideration

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(b), now recodified as subsections (a)-(d) of this section.

Survivorship Only Abolished as Incident of Joint Tenancy. —

This section abolished survivorship only where it follows as a legal incident to an existing joint tenancy. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Right of survivorship has been statutorily abolished where it follows as legal incident to an existing joint tenancy. In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770, 1990 N.C. App. LEXIS 497 (1990) (decided under law in effect prior to G.S. 53-146.1.).

“Estate” in Most General Sense Includes Choses in Action. —

“Estate” is derived from status, and in its most general sense means position or standing in respect to the things and concerns of this world. In this sense it includes choses in action. Pippin v. Ellison, 34 N.C. 61 , 1851 N.C. LEXIS 18 (1851); Webb v. Bowler, 50 N.C. 362 , 1858 N.C. LEXIS 51 (1858); Hurdle v. Outlaw, 55 N.C. 75 , 1854 N.C. LEXIS 18 8 (1854).

Estate is also used in a much more restricted sense, and is then put in opposition to a chose in action, or mere right, to signify something which one has in possession, or a vested remainder, or reversion without dispute or adverse possession. Taylor v. Dawson, 56 N.C. 86 , 1856 N.C. LEXIS 228 (1856). See Bond v. Hilton, 51 N.C. 180 , 1858 N.C. LEXIS 143 (1858).

Section Applies Only to Estates of Inheritance. —

The act of 1784, converting joint tenancies into estates in common, applies only to estates of inheritance. Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881).

If the purpose had been to include all estates in joint tenancy, that purpose would have been better served by abolishing the “jus accrescendi” in a few direct words to that effect, instead of resorting to words applicable only to estates of inheritance held in joint tenancy in real estate, and absolute estates held in joint tenancy in personalty. Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876).

This section which abolished the right of survivorship in joint tenancies in estates of inheritance, does not apply to a joint tenancy in a life estate where no estate of inheritance is involved. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Concurrent Life Estates Not Affected. —

Concurrent life estates still stand untouched by this section, and the old feudal presumption in favor of joint tenancies with survivorship remains. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Joint Estates for Life and Estates by Entirety Not Affected. —

Joint tenancies are not abolished by the section. It abolishes the right of survivorship in joint tenancies in fee, but does not affect joint estates for life or estates by entirety. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857); Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876); Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881); Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

In Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876) in construing the act of 1784, now this section, Chief Justice Pearson says: “It is obvious that these words cannot be made to apply to joint tenants for life”. Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

Legatees May Hold as Joint Tenants. —

Legatees may still hold by a joint tenancy in North Carolina, though the incident of survivorship was abolished by the act of 1784, now this section. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857).

When Remaindermen Take as Tenants in Common. —

A deed of gift, executed by W.B. to his son J.B., “during his natural life only, and then to return to the male children of the said J.B., lawfully begotten of his body, for the want of such to return to the male children of my other sons W and B, their proper use, benefit and behoof of him, them and every of them, and to their heirs and assigns forever,” vested a life estate in J.B., with remainder in fee to his sons as tenants in common under the section. Brown v. Ward, 103 N.C. 173 , 9 S.E. 300, 1889 N.C. LEXIS 91 (1889).

Survivorship May Be Provided for by Contract. —

This section abolishes survivorship, where the joint tenancy would otherwise have been created by the law, but does not operate to prohibit persons from entering into written contracts as to land, or verbal agreements as to personalty, such as to make the future rights of the parties depend upon the fact of survivorship. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895); Jones v. Waldroup, 217 N.C. 178 , 7 S.E.2d 366, 1940 N.C. LEXIS 204 (1940); Bunting v. Cobb, 234 N.C. 132 , 66 S.E.2d 661, 1951 N.C. LEXIS 415 (1951); Wilson County v. Wooten, 251 N.C. 667 , 111 S.E.2d 875, 1960 N.C. LEXIS 531 (1960).

This section does not operate to prohibit persons from entering into written contracts as to lands so as to make future rights of the parties depend upon survivorship. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Parties who wish to create a right of survivorship applicable to joint bank accounts must comply with requirements of G.S. 41-2.1(a) . In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770 (1990)decided under law in effect prior to G.S. 53-146.1.

Survivorship in Personalty Must Be Pursuant to Contract. —

Since the abolition of survivorship in joint tenancy, the right of survivorship in personalty, if such right exists, must be pursuant to contract and not by operation of law or statutory provision. Wilson v. Ervin, 227 N.C. 396 , 42 S.E.2d 468, 1947 N.C. LEXIS 439 (1947); Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

A verbal agreement between two parties owning a note, payable to them jointly, that upon the death of either without issue it shall belong to the survivor is valid. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895).

Joint Tenancy Severed by Deed of Trust. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court properly ruled that the son-in-law and daughter owned a one-half undivided interest in the land which was not encumbered by a deed of trust to the benefit of the mortgagee because, after the son-in-law and daughter and the mother executed a general warranty deed creating a joint tenancy with a right of survivorship between the mother and the son-in-law and daughter, that joint tenancy was severed by the filing of a deed of trust which only obligated the mother, as the accompanying mortgage was a conveyance, due to North Carolina being a title theory state, so the mother, on one hand, and the son-in-law and daughter, on the other hand, held the land as tenants in common. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Instrument Held Ineffective to Provide for Survivorship. —

While this section may not preclude tenants in common from providing for survivorship by adequate contract inter sese, an instrument executed by them which merely expresses a general intent that the survivor should take the fee, without any words of conveyance, is ineffective. The execution by the administrator of the deceased tenant in common of a deed to the surviving tenant, made under the supposed authority of the contract, is without effect. Pope v. Burgess, 230 N.C. 323 , 53 S.E.2d 159, 1949 N.C. LEXIS 630 (1949).

Joint Tenant’s Interest Did Not Pass to Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the mother’s interest as a tenant in common passed to the son-in-law and daughter upon the mother’s death because the mother’s interest as a tenant in common had no right of survivorship, since a joint tenancy previously created by a general warranty deed was severed by the filing of a deed of trust that obligated only the mother. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Interest of Tenant in Common Did Not Vest in Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the son-in-law and daughter owned the land in fee simple absolute upon the mother’s death because the mother’s interest in the property as a tenant in common did not vest in the son-in-law and daughter pursuant to a right of survivorship. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

II.Estates of Husband and Wife

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(b), now recodified as subsections (a)-(d) of this section.

Section Inapplicable to Conveyances to Husband and Wife. —

In construing this statute, the Supreme Court held that it had no application to an estate granted to husband and wife, on the ground that it is not an estate in joint tenancy, but an entirety estate. Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837); Gray v. Bailey, 117 N.C. 439 , 23 S.E. 318, 1895 N.C. LEXIS 87 (1895); Woolard v. Smith, 244 N.C. 489 , 94 S.E.2d 466, 1956 N.C. LEXIS 446 (1956).

The act of 1784, now this section, abolishing survivorship in joint tenancies, does not apply to conveyances to husband and wife, for the reason assigned in Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837) that “being in law but one person they have each the whole estate as one person; and on the death of either of them the whole estate continues in the survivor”. Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887); Smith v. Gordon, 204 N.C. 695 , 169 S.E. 634, 1933 N.C. LEXIS 240 (1933).

Survivorship in Joint Bank Accounts. —

Where agreements of husband and wife relating to savings accounts provide that the accounts are held by them as joint tenants with right of survivorship, and not as tenants in common, the right of survivorship exists pursuant to the contracts, and upon the death of the husband the widow is entitled to take the whole. Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

Estate by Entireties Not Abolished. —

It has been held in several well considered decisions of the Supreme Court that our Constitution and the later statutes relative to the property and rights of married women have not thus far destroyed or altered the nature of this estate by entireties, a conveyance to a husband and wife. Bruce v. Sugg, 109 N.C. 202 , 13 S.E. 790 (1891); Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903); West v. Aberdeen & R.R., 140 N.C. 620 , 53 S.E. 477, 1906 N.C. LEXIS 53 (1906); Bynum v. Wicker, 141 N.C. 95 , 53 S.E. 478, 1906 N.C. LEXIS 72 (1906); Jones v. W.A. Smith & Co., 149 N.C. 318 , 62 S.E. 1092, 1908 N.C. LEXIS 350 (1908); McKinnon, Currie & Co. v. Caulk, 167 N.C. 411 , 83 S.E. 559, 1914 N.C. LEXIS 137 (1914). See also Martin v. Lewis, 187 N.C. 473 , 122 S.E. 180, 1924 N.C. LEXIS 314 (1924).

The right of survivorship applies to estates in land conveyed jointly to husband and wife, and title vests in the heirs of the one surviving the other. Murchison v. Fogleman, 165 N.C. 397 , 81 S.E. 627, 1914 N.C. LEXIS 278 (1914).

A conveyance to a husband and wife, as such, creates an estate of entirety, and does not make them joint tenants or tenants in common. Neither can alien without the consent of the other, and the survivor takes the whole. Needham v. Branson, 27 N.C. 426 , 1845 N.C. LEXIS 128 (1845); Todd v. Zachary, 45 N.C. 286 , 1853 N.C. LEXIS 35 (1853); Woodford v. Higly, 60 N.C. 234 , 60 N.C. 237 , 1864 N.C. LEXIS 13 (1864); Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887).

Where the husband and wife purchase property, each furnishing a portion of the purchase money, an estate in entirety and not a joint estate is created which they hold per tout et non per my. Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903).

Interest of Husband and Wife as Tenants in Common. —

When a joint tenancy between a mother, on one hand, and a son-in-law and daughter, on the other hand, was severed by the filing of a deed of trust that obligated only the mother, the mother’s subsequent interest as a tenant in common was one-half of the property, and the son-in-law’s and daughter’s interest, as tenants by the entirety, was also one-half because the son-in-law and daughter were husband and wife, so the son-in-law and daughter held the property as a single tenancy by the entirety and were treated as a single party when determining interests in the joint tenancy with right of survivorship upon severance of the joint tenancy. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

III.Joint Tenancy in Partnership Property

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(b), now recodified as subsections (a)-(d) of this section.

Joint Tenancy of Partnership in Land. —

This section provides that land jointly purchased for partnership purposes shall, upon the death of one partner, survive to the others for the purpose of paying the partnership debts. Real estate held and used for partnership purposes is subject to partnership debts to the exclusion of the heir or widow of the deceased. When the partnership debts are satisfied, if there is any remainder, such share as would have fallen to the deceased partner, shall be delivered over to the heirs, executors, administrators or assigns. Stroud v. Stroud, 61 N.C. 525 , 1868 N.C. LEXIS 60 (1868).

Upon Settlement Partnership Land Descends as Real Estate. —

When land is purchased in fee by partnership funds and for partnership purposes, and one partner dies, upon the settlement of the partnership debts his share of the land descends to his heir as real estate. Summey v. Patton, 60 N.C. 601 (1864).

When lands are purchased by a partnership with partnership funds, upon the death of one of the partners, in the absence of any agreement in the articles of partnership to the contrary, his share therein descends to his heir at law as real estate, if the personal property of the partnership is sufficient to pay all the partnership debts and demands. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Heir May Recover from Surviving Partner. —

The heir at law to whom a deceased partner had conveyed by deed his share of lands purchased with partnership funds is entitled to the lands against the rights of the surviving partner, in an action by the latter for possession for the purpose of winding up the partnership affairs, when it appears that the partnership personalty is sufficient for the purpose of paying the partnership debts and satisfying any claim the surviving partner may have, and there is no provision in the articles of the partnership agreement of a contrary purpose. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Immaterial Whether Claim Is by Deed or Inheritance. —

When the rule applies that lands purchased by partnership funds descend to the heir at law, it is immaterial whether the heir of the deceased partner claims his interest by deed from him or by inheritance. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

G.S. 59-74 is to be read in connection with this section respecting the settlement of partnership affairs by surviving partners. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

The fact that the surviving partner instituting action on a partnership asset has not filed a bond as required by G.S. 59-74 , is not ground for nonsuit, since the requirement of a bond is for the protection of the estate of the deceased partner, and the objection is not available to one who is merely a debtor of the partnership. This conclusion is consonant with G.S. 59-75 , which provides that upon failure of the surviving partner to file bond, the clerk of the superior court shall appoint a collector of the partnership upon application of any person interested in the estate of the deceased partner. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

OPINIONS OF ATTORNEY GENERAL

EDITOR’S NOTE.— The opinion below was rendered under former G.S. 41-2(b), now recodified as subsections (a)-(d) of this section, or prior law.

Effect on Common Law Application to Joint Bank Accounts. — See opinion of the Attorney General to Mr. W.C. York, Department of Insurance, 41 N.C. Op. Att'y Gen. 352 (1971).

I.General Consideration

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(a), now recodified as subdivision (c)(3) of this section.

Survivorship Only Abolished as Incident of Joint Tenancy. —

This section abolished survivorship only where it follows as a legal incident to an existing joint tenancy. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Right of survivorship has been statutorily abolished where it follows as legal incident to an existing joint tenancy. In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770, 1990 N.C. App. LEXIS 497 (1990) (decided under law in effect prior to G.S. 53-146.1.).

“Estate” in Most General Sense Includes Choses in Action. —

“Estate” is derived from status, and in its most general sense means position or standing in respect to the things and concerns of this world. In this sense it includes choses in action. Pippin v. Ellison, 34 N.C. 61 , 1851 N.C. LEXIS 18 (1851); Webb v. Bowler, 50 N.C. 362 , 1858 N.C. LEXIS 51 (1858); Hurdle v. Outlaw, 55 N.C. 75 , 1854 N.C. LEXIS 18 8 (1854).

Estate is also used in a much more restricted sense, and is then put in opposition to a chose in action, or mere right, to signify something which one has in possession, or a vested remainder, or reversion without dispute or adverse possession. Taylor v. Dawson, 56 N.C. 86 , 1856 N.C. LEXIS 228 (1856). See Bond v. Hilton, 51 N.C. 180 , 1858 N.C. LEXIS 143 (1858).

Section Applies Only to Estates of Inheritance. —

The act of 1784, converting joint tenancies into estates in common, applies only to estates of inheritance. Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881).

If the purpose had been to include all estates in joint tenancy, that purpose would have been better served by abolishing the “jus accrescendi” in a few direct words to that effect, instead of resorting to words applicable only to estates of inheritance held in joint tenancy in real estate, and absolute estates held in joint tenancy in personalty. Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876).

This section which abolished the right of survivorship in joint tenancies in estates of inheritance, does not apply to a joint tenancy in a life estate where no estate of inheritance is involved. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Concurrent Life Estates Not Affected. —

Concurrent life estates still stand untouched by this section, and the old feudal presumption in favor of joint tenancies with survivorship remains. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Joint Estates for Life and Estates by Entirety Not Affected. —

Joint tenancies are not abolished by the section. It abolishes the right of survivorship in joint tenancies in fee, but does not affect joint estates for life or estates by entirety. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857); Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876); Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881); Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

In Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876) in construing the act of 1784, now this section, Chief Justice Pearson says: “It is obvious that these words cannot be made to apply to joint tenants for life”. Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

Legatees May Hold as Joint Tenants. —

Legatees may still hold by a joint tenancy in North Carolina, though the incident of survivorship was abolished by the act of 1784, now this section. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857).

When Remaindermen Take as Tenants in Common. —

A deed of gift, executed by W.B. to his son J.B., “during his natural life only, and then to return to the male children of the said J.B., lawfully begotten of his body, for the want of such to return to the male children of my other sons W and B, their proper use, benefit and behoof of him, them and every of them, and to their heirs and assigns forever,” vested a life estate in J.B., with remainder in fee to his sons as tenants in common under the section. Brown v. Ward, 103 N.C. 173 , 9 S.E. 300, 1889 N.C. LEXIS 91 (1889).

Survivorship May Be Provided for by Contract. —

This section abolishes survivorship, where the joint tenancy would otherwise have been created by the law, but does not operate to prohibit persons from entering into written contracts as to land, or verbal agreements as to personalty, such as to make the future rights of the parties depend upon the fact of survivorship. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895); Jones v. Waldroup, 217 N.C. 178 , 7 S.E.2d 366, 1940 N.C. LEXIS 204 (1940); Bunting v. Cobb, 234 N.C. 132 , 66 S.E.2d 661, 1951 N.C. LEXIS 415 (1951); Wilson County v. Wooten, 251 N.C. 667 , 111 S.E.2d 875, 1960 N.C. LEXIS 531 (1960).

This section does not operate to prohibit persons from entering into written contracts as to lands so as to make future rights of the parties depend upon survivorship. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Parties who wish to create a right of survivorship applicable to joint bank accounts must comply with requirements of G.S. 41-2.1(a) . In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770 (1990)decided under law in effect prior to G.S. 53-146.1.

Survivorship in Personalty Must Be Pursuant to Contract. —

Since the abolition of survivorship in joint tenancy, the right of survivorship in personalty, if such right exists, must be pursuant to contract and not by operation of law or statutory provision. Wilson v. Ervin, 227 N.C. 396 , 42 S.E.2d 468, 1947 N.C. LEXIS 439 (1947); Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

A verbal agreement between two parties owning a note, payable to them jointly, that upon the death of either without issue it shall belong to the survivor is valid. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895).

Joint Tenancy Severed by Deed of Trust. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court properly ruled that the son-in-law and daughter owned a one-half undivided interest in the land which was not encumbered by a deed of trust to the benefit of the mortgagee because, after the son-in-law and daughter and the mother executed a general warranty deed creating a joint tenancy with a right of survivorship between the mother and the son-in-law and daughter, that joint tenancy was severed by the filing of a deed of trust which only obligated the mother, as the accompanying mortgage was a conveyance, due to North Carolina being a title theory state, so the mother, on one hand, and the son-in-law and daughter, on the other hand, held the land as tenants in common. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Instrument Held Ineffective to Provide for Survivorship. —

While this section may not preclude tenants in common from providing for survivorship by adequate contract inter sese, an instrument executed by them which merely expresses a general intent that the survivor should take the fee, without any words of conveyance, is ineffective. The execution by the administrator of the deceased tenant in common of a deed to the surviving tenant, made under the supposed authority of the contract, is without effect. Pope v. Burgess, 230 N.C. 323 , 53 S.E.2d 159, 1949 N.C. LEXIS 630 (1949).

Joint Tenant’s Interest Did Not Pass to Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the mother’s interest as a tenant in common passed to the son-in-law and daughter upon the mother’s death because the mother’s interest as a tenant in common had no right of survivorship, since a joint tenancy previously created by a general warranty deed was severed by the filing of a deed of trust that obligated only the mother. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Interest of Tenant in Common Did Not Vest in Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the son-in-law and daughter owned the land in fee simple absolute upon the mother’s death because the mother’s interest in the property as a tenant in common did not vest in the son-in-law and daughter pursuant to a right of survivorship. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

II.Estates of Husband and Wife

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(a), now recodified as subdivision (c)(3) of this section.

Section Inapplicable to Conveyances to Husband and Wife. —

In construing this statute, the Supreme Court held that it had no application to an estate granted to husband and wife, on the ground that it is not an estate in joint tenancy, but an entirety estate. Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837); Gray v. Bailey, 117 N.C. 439 , 23 S.E. 318, 1895 N.C. LEXIS 87 (1895); Woolard v. Smith, 244 N.C. 489 , 94 S.E.2d 466, 1956 N.C. LEXIS 446 (1956).

The act of 1784, now this section, abolishing survivorship in joint tenancies, does not apply to conveyances to husband and wife, for the reason assigned in Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837) that “being in law but one person they have each the whole estate as one person; and on the death of either of them the whole estate continues in the survivor”. Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887); Smith v. Gordon, 204 N.C. 695 , 169 S.E. 634, 1933 N.C. LEXIS 240 (1933).

Survivorship in Joint Bank Accounts. —

Where agreements of husband and wife relating to savings accounts provide that the accounts are held by them as joint tenants with right of survivorship, and not as tenants in common, the right of survivorship exists pursuant to the contracts, and upon the death of the husband the widow is entitled to take the whole. Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

Estate by Entireties Not Abolished. —

It has been held in several well considered decisions of the Supreme Court that our Constitution and the later statutes relative to the property and rights of married women have not thus far destroyed or altered the nature of this estate by entireties, a conveyance to a husband and wife. Bruce v. Sugg, 109 N.C. 202 , 13 S.E. 790 (1891); Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903); West v. Aberdeen & R.R., 140 N.C. 620 , 53 S.E. 477, 1906 N.C. LEXIS 53 (1906); Bynum v. Wicker, 141 N.C. 95 , 53 S.E. 478, 1906 N.C. LEXIS 72 (1906); Jones v. W.A. Smith & Co., 149 N.C. 318 , 62 S.E. 1092, 1908 N.C. LEXIS 350 (1908); McKinnon, Currie & Co. v. Caulk, 167 N.C. 411 , 83 S.E. 559, 1914 N.C. LEXIS 137 (1914). See also Martin v. Lewis, 187 N.C. 473 , 122 S.E. 180, 1924 N.C. LEXIS 314 (1924).

The right of survivorship applies to estates in land conveyed jointly to husband and wife, and title vests in the heirs of the one surviving the other. Murchison v. Fogleman, 165 N.C. 397 , 81 S.E. 627, 1914 N.C. LEXIS 278 (1914).

A conveyance to a husband and wife, as such, creates an estate of entirety, and does not make them joint tenants or tenants in common. Neither can alien without the consent of the other, and the survivor takes the whole. Needham v. Branson, 27 N.C. 426 , 1845 N.C. LEXIS 128 (1845); Todd v. Zachary, 45 N.C. 286 , 1853 N.C. LEXIS 35 (1853); Woodford v. Higly, 60 N.C. 234 , 60 N.C. 237 , 1864 N.C. LEXIS 13 (1864); Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887).

Where the husband and wife purchase property, each furnishing a portion of the purchase money, an estate in entirety and not a joint estate is created which they hold per tout et non per my. Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903).

Interest of Husband and Wife as Tenants in Common. —

When a joint tenancy between a mother, on one hand, and a son-in-law and daughter, on the other hand, was severed by the filing of a deed of trust that obligated only the mother, the mother’s subsequent interest as a tenant in common was one-half of the property, and the son-in-law’s and daughter’s interest, as tenants by the entirety, was also one-half because the son-in-law and daughter were husband and wife, so the son-in-law and daughter held the property as a single tenancy by the entirety and were treated as a single party when determining interests in the joint tenancy with right of survivorship upon severance of the joint tenancy. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

III.Joint Tenancy in Partnership Property

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(a), now recodified as subdivision (c)(3) of this section.

Joint Tenancy of Partnership in Land. —

This section provides that land jointly purchased for partnership purposes shall, upon the death of one partner, survive to the others for the purpose of paying the partnership debts. Real estate held and used for partnership purposes is subject to partnership debts to the exclusion of the heir or widow of the deceased. When the partnership debts are satisfied, if there is any remainder, such share as would have fallen to the deceased partner, shall be delivered over to the heirs, executors, administrators or assigns. Stroud v. Stroud, 61 N.C. 525 , 1868 N.C. LEXIS 60 (1868).

Upon Settlement Partnership Land Descends as Real Estate. —

When land is purchased in fee by partnership funds and for partnership purposes, and one partner dies, upon the settlement of the partnership debts his share of the land descends to his heir as real estate. Summey v. Patton, 60 N.C. 601 (1864).

When lands are purchased by a partnership with partnership funds, upon the death of one of the partners, in the absence of any agreement in the articles of partnership to the contrary, his share therein descends to his heir at law as real estate, if the personal property of the partnership is sufficient to pay all the partnership debts and demands. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Heir May Recover from Surviving Partner. —

The heir at law to whom a deceased partner had conveyed by deed his share of lands purchased with partnership funds is entitled to the lands against the rights of the surviving partner, in an action by the latter for possession for the purpose of winding up the partnership affairs, when it appears that the partnership personalty is sufficient for the purpose of paying the partnership debts and satisfying any claim the surviving partner may have, and there is no provision in the articles of the partnership agreement of a contrary purpose. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Immaterial Whether Claim Is by Deed or Inheritance. —

When the rule applies that lands purchased by partnership funds descend to the heir at law, it is immaterial whether the heir of the deceased partner claims his interest by deed from him or by inheritance. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

G.S. 59-74 is to be read in connection with this section respecting the settlement of partnership affairs by surviving partners. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

The fact that the surviving partner instituting action on a partnership asset has not filed a bond as required by G.S. 59-74 , is not ground for nonsuit, since the requirement of a bond is for the protection of the estate of the deceased partner, and the objection is not available to one who is merely a debtor of the partnership. This conclusion is consonant with G.S. 59-75 , which provides that upon failure of the surviving partner to file bond, the clerk of the superior court shall appoint a collector of the partnership upon application of any person interested in the estate of the deceased partner. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

OPINIONS OF ATTORNEY GENERAL

EDITOR’S NOTE.— The opinion below was rendered under former G.S. 41-2(a), now recodified as subdivision (c)(3) of this section, or prior law.

Effect on Common Law Application to Joint Bank Accounts. — See opinion of the Attorney General to Mr. W.C. York, Department of Insurance, 41 N.C. Op. Att'y Gen. 352 (1971).

I.General Consideration

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(b), now recodified as this section.

Survivorship Only Abolished as Incident of Joint Tenancy. —

This section abolished survivorship only where it follows as a legal incident to an existing joint tenancy. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Right of survivorship has been statutorily abolished where it follows as legal incident to an existing joint tenancy. In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770, 1990 N.C. App. LEXIS 497 (1990) (decided under law in effect prior to G.S. 53-146.1.).

“Estate” in Most General Sense Includes Choses in Action. —

“Estate” is derived from status, and in its most general sense means position or standing in respect to the things and concerns of this world. In this sense it includes choses in action. Pippin v. Ellison, 34 N.C. 61 , 1851 N.C. LEXIS 18 (1851); Webb v. Bowler, 50 N.C. 362 , 1858 N.C. LEXIS 51 (1858); Hurdle v. Outlaw, 55 N.C. 75 , 1854 N.C. LEXIS 18 8 (1854).

Estate is also used in a much more restricted sense, and is then put in opposition to a chose in action, or mere right, to signify something which one has in possession, or a vested remainder, or reversion without dispute or adverse possession. Taylor v. Dawson, 56 N.C. 86 , 1856 N.C. LEXIS 228 (1856). See Bond v. Hilton, 51 N.C. 180 , 1858 N.C. LEXIS 143 (1858).

Section Applies Only to Estates of Inheritance. —

The act of 1784, converting joint tenancies into estates in common, applies only to estates of inheritance. Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881).

If the purpose had been to include all estates in joint tenancy, that purpose would have been better served by abolishing the “jus accrescendi” in a few direct words to that effect, instead of resorting to words applicable only to estates of inheritance held in joint tenancy in real estate, and absolute estates held in joint tenancy in personalty. Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876).

This section which abolished the right of survivorship in joint tenancies in estates of inheritance, does not apply to a joint tenancy in a life estate where no estate of inheritance is involved. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Concurrent Life Estates Not Affected. —

Concurrent life estates still stand untouched by this section, and the old feudal presumption in favor of joint tenancies with survivorship remains. Dew v. Shockley, 36 N.C. App. 87, 243 S.E.2d 177, 1978 N.C. App. LEXIS 2409 , cert. denied, 295 N.C. 465 , 246 S.E.2d 9, 1978 N.C. LEXIS 899 (1978).

Joint Estates for Life and Estates by Entirety Not Affected. —

Joint tenancies are not abolished by the section. It abolishes the right of survivorship in joint tenancies in fee, but does not affect joint estates for life or estates by entirety. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857); Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876); Blair v. Osborne, 84 N.C. 417 , 1881 N.C. LEXIS 100 (1881); Powell v. Morisey, 84 N.C. 421 , 1881 N.C. LEXIS 101 (1881); Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

In Powell v. Allen, 75 N.C. 450 , 1876 N.C. LEXIS 318 (1876) in construing the act of 1784, now this section, Chief Justice Pearson says: “It is obvious that these words cannot be made to apply to joint tenants for life”. Burton v. Cahill, 192 N.C. 505 , 135 S.E. 332, 1926 N.C. LEXIS 335 (1926).

Legatees May Hold as Joint Tenants. —

Legatees may still hold by a joint tenancy in North Carolina, though the incident of survivorship was abolished by the act of 1784, now this section. Vass v. Freeman, 56 N.C. 221 , 1857 N.C. LEXIS 169 (1857).

When Remaindermen Take as Tenants in Common. —

A deed of gift, executed by W.B. to his son J.B., “during his natural life only, and then to return to the male children of the said J.B., lawfully begotten of his body, for the want of such to return to the male children of my other sons W and B, their proper use, benefit and behoof of him, them and every of them, and to their heirs and assigns forever,” vested a life estate in J.B., with remainder in fee to his sons as tenants in common under the section. Brown v. Ward, 103 N.C. 173 , 9 S.E. 300, 1889 N.C. LEXIS 91 (1889).

Survivorship May Be Provided for by Contract. —

This section abolishes survivorship, where the joint tenancy would otherwise have been created by the law, but does not operate to prohibit persons from entering into written contracts as to land, or verbal agreements as to personalty, such as to make the future rights of the parties depend upon the fact of survivorship. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895); Jones v. Waldroup, 217 N.C. 178 , 7 S.E.2d 366, 1940 N.C. LEXIS 204 (1940); Bunting v. Cobb, 234 N.C. 132 , 66 S.E.2d 661, 1951 N.C. LEXIS 415 (1951); Wilson County v. Wooten, 251 N.C. 667 , 111 S.E.2d 875, 1960 N.C. LEXIS 531 (1960).

This section does not operate to prohibit persons from entering into written contracts as to lands so as to make future rights of the parties depend upon survivorship. Vettori v. Fay, 262 N.C. 481 , 137 S.E.2d 810, 1964 N.C. LEXIS 658 (1964).

Parties who wish to create a right of survivorship applicable to joint bank accounts must comply with requirements of G.S. 41-2.1(a) . In re Estate of Heffner, 99 N.C. App. 327, 392 S.E.2d 770 (1990)decided under law in effect prior to G.S. 53-146.1.

Survivorship in Personalty Must Be Pursuant to Contract. —

Since the abolition of survivorship in joint tenancy, the right of survivorship in personalty, if such right exists, must be pursuant to contract and not by operation of law or statutory provision. Wilson v. Ervin, 227 N.C. 396 , 42 S.E.2d 468, 1947 N.C. LEXIS 439 (1947); Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

A verbal agreement between two parties owning a note, payable to them jointly, that upon the death of either without issue it shall belong to the survivor is valid. Taylor v. Smith, 116 N.C. 531 , 21 S.E. 202, 1895 N.C. LEXIS 243 (1895).

Joint Tenancy Severed by Deed of Trust. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court properly ruled that the son-in-law and daughter owned a one-half undivided interest in the land which was not encumbered by a deed of trust to the benefit of the mortgagee because, after the son-in-law and daughter and the mother executed a general warranty deed creating a joint tenancy with a right of survivorship between the mother and the son-in-law and daughter, that joint tenancy was severed by the filing of a deed of trust which only obligated the mother, as the accompanying mortgage was a conveyance, due to North Carolina being a title theory state, so the mother, on one hand, and the son-in-law and daughter, on the other hand, held the land as tenants in common. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Instrument Held Ineffective to Provide for Survivorship. —

While this section may not preclude tenants in common from providing for survivorship by adequate contract inter sese, an instrument executed by them which merely expresses a general intent that the survivor should take the fee, without any words of conveyance, is ineffective. The execution by the administrator of the deceased tenant in common of a deed to the surviving tenant, made under the supposed authority of the contract, is without effect. Pope v. Burgess, 230 N.C. 323 , 53 S.E.2d 159, 1949 N.C. LEXIS 630 (1949).

Joint Tenant’s Interest Did Not Pass to Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the mother’s interest as a tenant in common passed to the son-in-law and daughter upon the mother’s death because the mother’s interest as a tenant in common had no right of survivorship, since a joint tenancy previously created by a general warranty deed was severed by the filing of a deed of trust that obligated only the mother. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

Interest of Tenant in Common Did Not Vest in Daughter and Son-in-Law. —

When a mortgagee sought to foreclose on land held by a daughter and son-in-law and the daughter’s mother, a trial court erred in ruling that the son-in-law and daughter owned the land in fee simple absolute upon the mother’s death because the mother’s interest in the property as a tenant in common did not vest in the son-in-law and daughter pursuant to a right of survivorship. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

II.Estates of Husband and Wife

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(b), now recodified as this section.

Section Inapplicable to Conveyances to Husband and Wife. —

In construing this statute, the Supreme Court held that it had no application to an estate granted to husband and wife, on the ground that it is not an estate in joint tenancy, but an entirety estate. Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837); Gray v. Bailey, 117 N.C. 439 , 23 S.E. 318, 1895 N.C. LEXIS 87 (1895); Woolard v. Smith, 244 N.C. 489 , 94 S.E.2d 466, 1956 N.C. LEXIS 446 (1956).

The act of 1784, now this section, abolishing survivorship in joint tenancies, does not apply to conveyances to husband and wife, for the reason assigned in Motley v. Whitemore, 19 N.C. 537 , 1837 N.C. LEXIS 80 (1837) that “being in law but one person they have each the whole estate as one person; and on the death of either of them the whole estate continues in the survivor”. Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887); Smith v. Gordon, 204 N.C. 695 , 169 S.E. 634, 1933 N.C. LEXIS 240 (1933).

Survivorship in Joint Bank Accounts. —

Where agreements of husband and wife relating to savings accounts provide that the accounts are held by them as joint tenants with right of survivorship, and not as tenants in common, the right of survivorship exists pursuant to the contracts, and upon the death of the husband the widow is entitled to take the whole. Bowling v. Bowling, 243 N.C. 515 , 91 S.E.2d 176, 1956 N.C. LEXIS 370 (1956).

Estate by Entireties Not Abolished. —

It has been held in several well considered decisions of the Supreme Court that our Constitution and the later statutes relative to the property and rights of married women have not thus far destroyed or altered the nature of this estate by entireties, a conveyance to a husband and wife. Bruce v. Sugg, 109 N.C. 202 , 13 S.E. 790 (1891); Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903); West v. Aberdeen & R.R., 140 N.C. 620 , 53 S.E. 477, 1906 N.C. LEXIS 53 (1906); Bynum v. Wicker, 141 N.C. 95 , 53 S.E. 478, 1906 N.C. LEXIS 72 (1906); Jones v. W.A. Smith & Co., 149 N.C. 318 , 62 S.E. 1092, 1908 N.C. LEXIS 350 (1908); McKinnon, Currie & Co. v. Caulk, 167 N.C. 411 , 83 S.E. 559, 1914 N.C. LEXIS 137 (1914). See also Martin v. Lewis, 187 N.C. 473 , 122 S.E. 180, 1924 N.C. LEXIS 314 (1924).

The right of survivorship applies to estates in land conveyed jointly to husband and wife, and title vests in the heirs of the one surviving the other. Murchison v. Fogleman, 165 N.C. 397 , 81 S.E. 627, 1914 N.C. LEXIS 278 (1914).

A conveyance to a husband and wife, as such, creates an estate of entirety, and does not make them joint tenants or tenants in common. Neither can alien without the consent of the other, and the survivor takes the whole. Needham v. Branson, 27 N.C. 426 , 1845 N.C. LEXIS 128 (1845); Todd v. Zachary, 45 N.C. 286 , 1853 N.C. LEXIS 35 (1853); Woodford v. Higly, 60 N.C. 234 , 60 N.C. 237 , 1864 N.C. LEXIS 13 (1864); Long v. Barnes, 87 N.C. 329 , 1887 N.C. LEXIS 373 (1887).

Where the husband and wife purchase property, each furnishing a portion of the purchase money, an estate in entirety and not a joint estate is created which they hold per tout et non per my. Ray v. Long, 132 N.C. 891 , 44 S.E. 652, 1903 N.C. LEXIS 368 (1903).

Interest of Husband and Wife as Tenants in Common. —

When a joint tenancy between a mother, on one hand, and a son-in-law and daughter, on the other hand, was severed by the filing of a deed of trust that obligated only the mother, the mother’s subsequent interest as a tenant in common was one-half of the property, and the son-in-law’s and daughter’s interest, as tenants by the entirety, was also one-half because the son-in-law and daughter were husband and wife, so the son-in-law and daughter held the property as a single tenancy by the entirety and were treated as a single party when determining interests in the joint tenancy with right of survivorship upon severance of the joint tenancy. Countrywide Home Loans, Inc. v. Reed, 220 N.C. App. 504, 725 S.E.2d 667, 2012 N.C. App. LEXIS 658 (2012).

III.Joint Tenancy in Partnership Property

Editor’s Note. —

Most of the cases below were decided under former G.S. 41-2(b), now recodified as this section.

Joint Tenancy of Partnership in Land. —

This section provides that land jointly purchased for partnership purposes shall, upon the death of one partner, survive to the others for the purpose of paying the partnership debts. Real estate held and used for partnership purposes is subject to partnership debts to the exclusion of the heir or widow of the deceased. When the partnership debts are satisfied, if there is any remainder, such share as would have fallen to the deceased partner, shall be delivered over to the heirs, executors, administrators or assigns. Stroud v. Stroud, 61 N.C. 525 , 1868 N.C. LEXIS 60 (1868).

Upon Settlement Partnership Land Descends as Real Estate. —

When land is purchased in fee by partnership funds and for partnership purposes, and one partner dies, upon the settlement of the partnership debts his share of the land descends to his heir as real estate. Summey v. Patton, 60 N.C. 601 (1864).

When lands are purchased by a partnership with partnership funds, upon the death of one of the partners, in the absence of any agreement in the articles of partnership to the contrary, his share therein descends to his heir at law as real estate, if the personal property of the partnership is sufficient to pay all the partnership debts and demands. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Heir May Recover from Surviving Partner. —

The heir at law to whom a deceased partner had conveyed by deed his share of lands purchased with partnership funds is entitled to the lands against the rights of the surviving partner, in an action by the latter for possession for the purpose of winding up the partnership affairs, when it appears that the partnership personalty is sufficient for the purpose of paying the partnership debts and satisfying any claim the surviving partner may have, and there is no provision in the articles of the partnership agreement of a contrary purpose. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

Immaterial Whether Claim Is by Deed or Inheritance. —

When the rule applies that lands purchased by partnership funds descend to the heir at law, it is immaterial whether the heir of the deceased partner claims his interest by deed from him or by inheritance. Sherrod v. Mayo, 156 N.C. 144 , 72 S.E. 216, 1911 N.C. LEXIS 145 (1911).

G.S. 59-74 is to be read in connection with this section respecting the settlement of partnership affairs by surviving partners. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

The fact that the surviving partner instituting action on a partnership asset has not filed a bond as required by G.S. 59-74 , is not ground for nonsuit, since the requirement of a bond is for the protection of the estate of the deceased partner, and the objection is not available to one who is merely a debtor of the partnership. This conclusion is consonant with G.S. 59-75 , which provides that upon failure of the surviving partner to file bond, the clerk of the superior court shall appoint a collector of the partnership upon application of any person interested in the estate of the deceased partner. Coppersmith v. Upton, 228 N.C. 545 , 46 S.E.2d 565, 1948 N.C. LEXIS 279 (1948).

OPINIONS OF ATTORNEY GENERAL

EDITOR’S NOTE.— The opinion below was rendered under former G.S. 41-2(b), now recodified as this section, or prior law.

Effect on Common Law Application to Joint Bank Accounts. — See opinion of the Attorney General to Mr. W.C. York, Department of Insurance, 41 N.C. Op. Att'y Gen. 352 (1971).