Wachovia Bank & T. Co. v. John Thomasson Const. Co.Annotate this Case
164 S.E.2d 519 (1968)
3 N.C. App. 157
WACHOVIA BANK AND TRUST COMPANY, Trustee, and the Alexander Children's Center, a Charitable Corporation, v. JOHN THOMASSON CONSTRUCTION CO., Inc., a corporation.
Court of Appeals of North Carolina.
December 11, 1968.
Certiorari Allowed January 31, 1969.
*522 Helms, Mulliss & Johnston by E. Osborne Ayscue, Jr., Charlotte, for plaintiff appellees.
James O. Cobb, Charlotte, for defendant appellant.
The defendant presents two questions for consideration: (1) Did the trial court commit error in holding that the restriction in the Garsed deed was void as against public policy? (2) Did the trial court commit error in holding that, under the facts and circumstances in the record, equitable jurisdiction could be exercised in order to permit the sale of a portion of the real property?"There can not be a co-existence of a fee-simple estate and a total restriction upon its alienation during any period of time, however short it may be. One person can not own the fee and another person the right of alienation." Latimer v. Waddell, 119 N.C. 370, 26 S.E. 122, 3 L.R.A.,N.S., 668.
This principle was applied to a charitable trust in Hass v. Hass, 195 N.C. 734, 143 S.E. 541, where the Court stated:"The second sentence in item 2 of said will, to wit: `It is my will that my real estate be not sold, but that the rents and profits for ninety-nine years be paid to the authorities aforesaid for the blind children as aforesaid,' if construed as an attempt to restrain the alienation of the real estate, devised in fee to the defendant, the State School for the Blind and Deaf, is of no legal effect and is void in law."
Prohibitions against alienation imposed by the transferor of legal and equitable fees and legal life estates upon the transferee are held by the common law to be invalid as against public policy. Bogert, Trust and Trustees, 2d Edition, § 349. While some authorities hold that this common law rule does not apply to a prohibition against the transfer of trust property by a trustee for a charity, there are many authorities to the contrary. Hass v. Hass, supra, is cited by Bogert as placing North Carolina among those authorities to the contrary. Bogert points out that courts, which hold that this common law rule is inapplicable to a trustee's power of sale, may have been influenced by the rule that charitable trusts may be perpetual and that inalienability of the trust property would, therefore, follow as a practical matter. However, he further points out that "[i]f the restraint on the trustees is regarded as illegal, the effect is to leave the trust in force without any restriction. *523 The trust does not fall. The restriction alone is declared void." Bogert, supra.
We conclude that the trial court was correct in holding that the trustee took title in fee simple absolute upon the death of the life tenant without restraint or restriction on the power of alienability.
The second question may also be answered in the negative."* * * [C]ourts of equity have jurisdiction to order, and in proper cases do order, the alienation of property devised for charitable uses. * * * The power is not infrequently exercised where conditions change and circumstances arise which make the alienation of the property, in whole or in part, necessary or beneficial to the administration of the charity. * * * [C]ourts of equity have long exercised the jurisdiction to sell property devised for charitable uses, where, on account of changed conditions, the charity would fail or its usefulness would be materially impaired without a sale." Holton v. Elliott, 193 N.C. 708, 138 S.E. 3.
Alexander will not cease to exist if the contract in this instance is not performed. However, nonperformance would materially impair the usefulness of Alexander as a charitable institution since the property in question is now unproductive and idle and since the present and future needs of Alexander do not necessitate retention. The property in question is not selfsustaining and does not produce enough income to pay ad valorem taxes. If the taxes are not paid, the property could be lost unless other funds of Alexander are used for the payment of these taxes. Without question, the grantor did not foresee thirty-eight years ago the discontinuance of the dairy farm or the growth in population and territory of Charlotte. The chief object of the grantor's bounty was to increase the effectiveness of the charities being performed by Alexander for the children in the territory served by Alexander. The proposed sale and the judgment of the trial court will carry out the primary purpose of the grantor. The evidence supports the findings of fact and the findings of fact in this case support the judgment entered.
MALLARD, C. J., and MORRIS, J., concur.