Williams v. Mullen

228 S.E.2d 512 (1976)

31 N.C. App. 41

Lottie Lee WILLIAMS v. Margaret Lee MULLEN and James L. Talton, Co-Administrators of the Estate of Lucy Lee Barbee.

No. 7611SC317.

Court of Appeals of North Carolina.

October 6, 1976.

*514 Mast, Tew, Nail & Moore, P. A. by George B. Mast and Joseph T. Nail, Smithfield, for plaintiff-appellee.

L. Austin Stevens and R. E. Batton, Smithfield, for defendants-appellants.

BRITT, Judge.

Defendants assign as error the failure of the trial court to grant their motions for directed verdict interposed at the close of plaintiff's evidence and renewed at the close of all the evidence. We think the assignment has merit.

The question presented is whether the evidence was sufficient to show that intestate created an express, oral trust in the bonds for the use and benefit of plaintiff. We hold that it was not.

"`Express', or as they sometimes are called, `direct', trusts are those trusts intentionally created by the direct and positive act of the settlor, by some writing, deed, or will, or an oral declaration. . . ." 76 Am.Jur.2d, Trusts § 15, p. 263. The essentials of a valid express trust are: (1) sufficient words to create it; (2) a definite subject matter; (3) an ascertained object; and (4) designated beneficiaries. Lee, North Carolina Law of Trusts § 1a, p. 2.

Concerning an express parol trust, the North Carolina Supreme Court has stated *515 that: "The declaration of a trust in personalty is not required to be in writing, and if in writing, it may be contained in letters or other writings. . . . No technical terms need be used. It is sufficient if the language used shows the intention to create a trust, clearly points out the property, the disposition to be made of it, and the beneficiary." Witherington v. Herring, 140 N.C. 495, 497, 53 S.E. 303, 304 (1906). "It is well established in this jurisdiction that a trust in personalty may be created by parol, and that no particular form of words is required for the purpose, and that the same will be recognized and enforced whenever it is manifest that a trust is intended . ." (Emphasis added.) Rousseau v. Call, 169 N.C. 173, 85 S.E. 414 (1915).

Where competent evidence is introduced to establish a parol trust, it is the duty of the trial court to submit it to the jury, and it is for the jury to say whether the evidence is "clear, strong, cogent and convincing." Taylor v. Wahab, 154 N.C. 219, 70 S.E. 173 (1911). In the instant case, a sufficient intention to create a trust was not shown by the evidence. "The intention to create a trust must be sufficiently expressed, and the declaration of trust must show the intention with reasonable certainty. It must be clear that a trust was intended. It is necessary that there be a definite, unequivocal, explicit declaration of trust, or circumstances which show with reasonable certainty . . . that a trust was intended to be created. The declaration must show a desire to pass benefits through the medium of a trust and not through some related or similar instrumentality." 89 C.J.S. Trusts § 43, pp. 776-778.

In Buffaloe v. Barnes, 226 N.C. 313, 38 S.E.2d 222 (1946), the testator purchased certain stock with his own funds and had the certificates issued to himself and his niece as joint tenants with the rights of survivorship. At his death testator was in exclusive possession of the stock certificates. The court held that the transaction was not sufficient to create a gift or a trust. As stated by Professor Lee, "equity will not convert an imperfect gift into a declaration of trust." Lee, North Carolina Law of Trusts § 1d, p. 4. Intestate in the present case at most made an ineffective gift of the bonds.

In Wescott v. Bank, 227 N.C. 39, 40 S.E.2d 461 (1946), the decedent attempted to create a trust fund for his grandfather by the deposit of money in a savings account in decedent's name. The court stated (p. 42, 40 S.E.2d p. 433): "Here the essentials of an express trust are lacking. There was no evidence of a transfer or assignment of a present beneficial interest in the fund deposited in the defendant Bank. There was only evidence of a desire that in the event of the depositor's death the grandfather should be the beneficiary."

In Sinclair v. Travis, 231 N.C. 345, 353, 57 S.E.2d 394, 400 (1949), the court quoted with approval from Wescott as follows: "An express trust . . . is a fiduciary relationship with respect to property, subjecting the person by whom the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it . . . The term signifies the relationship resulting from the equitable ownership of property in one person entitling him to certain duties on the part of another person holding the legal title . . . To constitute this relationship there must be a transfer of the title by the donor or settlor for the benefit of another."

The trial court erred in denying defendants' motion for directed verdict. The question with respect to plaintiff's interest in the $2,000 bond because of its issuance to intestate or plaintiff was not raised on this appeal, therefore, we render no decision on that question.

For the reasons stated, the judgment is

Reversed.

HEDRICK and MARTIN, JJ., concur.