
62 S.E.2d 713 (1950)
233 N.C. 1
CARTER et al.
v.
KEMPTON et al.
No. 531.
Supreme Court of North Carolina.
December 13, 1950.
*716 Garland & Garland, Gastonia, and Frank H. Kennedy, Charlotte, for plaintiff appellees.
Tillett, Campbell, Craighill & Rendleman, Charlotte, for appellee Madge Carter Kempton.
S. B. Dolley, Gastonia, guardian ad litem, in propria persona.
BARNHILL, Justice.
Family settlements, when fairly made, are favorites of the law. They are bottomed on a sound public policy which seeks to preserve estates and to promote and encourage family accord. These statements in varying forms are to be found in many of our decisions. See Redwine v. Clodfelter, 226 N.C. 366, 38 S.E.2d 203, and cases cited. But when a testamentary trust is the subject matter of the agreement, there are material limitations upon their application.
(1) The will creating a trust is not to be treated as an instrument to be amended or revoked at the will of devisees or to be sustained sub modo only after something has been sweated out of it for the heirs at law. The power of the court is exercised not to defeat or destroy, but to preserve, it.
(2) The rule that the law looks with favor upon family agreements does not prevail when the rights of infants are involved. A court of equity looks with a jealous eye on a contract that materially affects the rights of infants. Their welfare is the guiding star in determining its reasonableness and validity.
(3) A court of equity will not modify or permit the modification of a trust on technical objections merely because its terms are objectionable to interested parties or their welfare will be served thereby. It must be made to appear that some exigency, contingency, or emergency has arisen which makes the action of the court indispensable to the preservation of the trust and the protection of infants. See Redwine v. Clodfelter, supra.
(4) To invoke the jurisdiction of a court of equity the condition or emergency asserted must be one not contemplated by the testator and which, had it been anticipated, would undoubtedly have been provided for; and in affording relief against such exigency or emergency, the court must, as far as possible, place itself in the position of the testator and do with the trust estate what the testator would have done had he anticipated the emergency. Cutter v. American Trust Co., 213 N.C. 686, 197 S.E. 542. It is not the province of the courts to substitute their judgment or the wishes of the beneficiaries for the judgment and wishes of the testator. The controlling objective is to preserve the trust and effectuate the primary purpose of the testator. Trustees of Watt Hospital v. Board of Com'rs. for Durham County, 231 N.C. 604, 58 S.E.2d 696; Moses H. Cone Memorial Hospital v. Cone, 231 N.C. 292, 56 S.E.2d 709; Penick v. Bank of Wadesboro, 218 N.C. 686, 12 S.E.2d 253.
(5) The exigency, contingency, or emergency necessary to invite the intervention of the courts must relate to and grow out of the trust itself or directly affect the corpus thereof or the income therefrom.
The interest of the infant grandchildren, in esse and in posse, depends upon whether the date appointed in the will for *717 the completion of the trust, and the division and delivery of the estate to those named as the ultimate takers, is a time annexed to the substance of the gift, marking the creation of the estate and the time of its vesting, or whether it operates as a mere postponement of the complete enjoyment of the estate, vesting at the death of the testator.
Where an active trust is created for the use and benefit of named beneficiaries, or there is a gift of all or a part of the income therefrom to the beneficiaries, pending final division, or there is other language in the will evidencing a clear intent that a beneficial interest in the estate shall vest in the parties named immediately upon the death of the testator, with directions to the trustees to divide and deliver the estate at a stated time in the future, the interest vests immediately upon the death of the testator and the date of division merely postpones the complete enjoyment thereof. Coddington v. Stone, 217 N.C. 714, 9 S.E.2d 420; Robinson v. Robinson, 227 N.C. 155, 41 S.E.2d 282; Sutton v. Quinerly, 228 N.C. 106, 44 S.E.2d 521.
Conversely, if there is no gift of the estate, or the income therefrom, or other interest therein, distinct from the provision for its division, which is to be made equally between all the children and, for the first time, upon the termination of the trust, the "when" of the division is of the essence of the donation and is a condition precedent. It marks the time of vesting as well as the time of the full enjoyment of the gift. Anderson v. Felton, 36 N.C. 55; Guyther v. Taylor, 38 N.C. 323; Bowen v. Hackney, 136 N.C. 187, 48 S.E. 633, 67 L.R.A. 440; Fuller v. Fuller, 58 N.C. 223; McDonald v. Howe, 178 N.C. 257, 100 S.E. 427; Scales v. Barringer, 192 N.C. 94, 133 S.E. 410; Knox v. Knox, 208 N.C. 141, 179 S.E. 610. See also notes, L.R.A.1915C, 1014.
Such gifts come within the rule which annexes the time to the substance of the legacy and makes the right dependent upon the capacity of the legatee to answer at the time designated. Giles v. Franks, 17 N.C. 521.
When the time is annexed to the substance of the gift or devise, as a condition precedent, it is contingent and transmissible. Bowen v. Hackney, supra.
The will devises the estate of the testator to the named trustees for a period of twenty years. They are directed to pay one beneficiary $140 per month and permit her to occupy the residence as a home. The trustees are authorized in their discretion to use income or principal to alleviate any emergency arising in the affairs of either of testator's children or the issue of a deceased child. Any funds so expended are to be "charged to the recipient thereof or handled in such way as the trustees see fit, so as to equalize the ultimate distribution of the estate among" testator's "children and issue." If the interest of any "heir, next of kin, legatee, devisee, beneficiary" shall be forfeited under paragraph 2(11) of the will, then such interest to which he or she "might otherwise become entitled" is devised or bequeathed "to such of the beneficiaries * * * as shall not have violated" this provision of the will. These compose all the dispositive provisions of the will.
There is no direct gift to the children of any part of the corpus of the estate, or the income therefrom, apart from the provisions of paragraph 2(4) directing a division of the property at the end of 20 years. The gift to them must be implied from the language there used. Delete that paragraph and the children take nothing under the will.
At the end of the twenty-year period, the trustees are to divide the estate among testator's children. In the division of the property they are to receive it in equal shares. As they are the beneficiaries of the division, the property, by necessary implication, is given to them, title thereto vesting at the time of the division.
The devise therefore falls within the second class of cases above cited. The gift annexes the time to the substance of the legacy as a condition precedent. It is of such nature as to vest in the infants a contingent interest therein. This is not the time or the occasion for defining the exact nature of that interest. Suffice it to say that it is sufficient to invoke the protective jurisdiction of a court of equity.
*718 The testator has provided the method of administration of his estate desired by him, and he has entrusted that administration to those named in his will. A court of equity will not divide or otherwise alter the trust so established for any of the reasons advanced in this proceeding. If the trustees are or become persistently disregardful of their fiduciary obligations, other adequate remedies are available, and the courts, on proper application, will unhesitatingly enforce them, even to the extent of assuming complete supervisory authority over the estate. First-Citizens Bank & Trust Co. v. Rasberry, 226 N.C. 586, 39 S.E.2d 601.
The proposed settlement materially modifies the original trust as created by the testator and "sweats out" something for one of the beneficiaries. Redwine v. Clodfelter, supra. It divides the estate which, under the will, is to be held intact for a period of twenty years. It appoints, and vests with discretionary power, a trustee other than those named in the will. It vests in Mrs. Kempton the right to claim the income from one-third of the estate and to deduct therefrom funds with which to pay her counsel for personal services rendered to her. While not all inclusive, these specifications serve to point out that material modifications are proposed.
The former actions instituted by defendant Kempton were not against the trustees, as such, and in no wise involved the corpus of the estate. They were bottomed squarely on allegations of mala fides on the part of the trustees in the administration of the trust. She did not sue in her own behalf. She sought, in behalf of A. B. Carter, Inc., to recover from the trustees, as individuals, profits they had earned by dealing in trust property for the benefit of themselves and members of their families. That there was merit in her allegations is made evident by the fact that the trustees paid her more than $150,000 to settle the actions. The sum, however, was not paid by the trustees out of gains they had wrongfully received. It was paid out of the funds of A. B. Carter, Inc. The purpose of the actions was to recover for the corporation. Yet the corporation paid. Just why, we are unable to perceive.
The pending action instituted by Mrs. Kempton seeks to have the court construe the will, particularly in respect of the power of the trustees to fix their own salaries and bonuses and in respect of similar matters, and to recover funds allegedly unlawfully paid to themselves out of the trust estate.
Yet it is contended, and the court below found, that if that action is prosecuted to final judgment and they are required to answer the charges leveled at them therein, it will perpetuate the family feud engendered by the original actions, plunge the family into litigation, act as a constant barrier to the establishment of family peace, and tend to destroy the peace, honor, and dignity of the family.
If to be compelled to discharge the simple but important duty of accounting for their actions as trustees will disclose facts which will have such serious results, it is high time they should be compelled to do so. If they have nothing to hide, disclosure will hurt no one.
If deep-seated suspicion between the trustees and some of the beneficiaries exists, and pending litigation will be bitter, and the trustees resent the constant surveillance of Mrs. Kempton, these conditions arise out of the mental attitudes of the parties. They are not due to any defect in the trust, unforeseen by the testator. Careful adherence to the duties and obligations imposed upon the trustees, and the prompt disclosure of those matters which should be made known to the interested parties, will go far toward removing existing irritations.
In this connection it is not amiss to call attention to the fact that while the property is devised to the trustees "to receive * * * dispose of, or lease all or any part" thereof coming into their hands "as though they were absolute owners thereof", the language "as though they were absolute owners thereof" relates to the management and disposition of the property and not to the beneficial ownership thereof. It does not relieve the trustees of the duty to manage and account for the assets of the estate as fiduciaries. Although they, as *719 trustees, are vested with absolute title to the property during the twenty-year period, subject to the duty to account for same at the expiration of the trust, they will be held accountable for any bad faith or abuse of discretion in the management thereof.
Interference with the trust by altering the provisions thereof to prevent losses resulting from the gossip which may arise when actions based on allegations of maladministration are instituted, and the other disturbing influences growing out of such actions, are not within the equity jurisdiction of the court. Furthermore, it may not be said that it was not within the contemplation of the testator that suits might be instituted for breach of fiduciary duties and that there would be reactions therefrom which might injuriously affect the trust estate. Doubtless this is what he had in mind when he adjured his trustees to endeavor to work harmoniously together.
The court is not justified in altering a trust to preserve the spiritual values of family affection. In family settlement cases that objective, worthy though it is, cannot be made the sole basis of decision. The court acts when, and only when, it is necessary to preserve the trust and effectuate its primary purpose. This does not include the threat to the estate incident to squabbling between the trustees and beneficiaries regarding the proper administration of the trust. Such questions in respect thereto, which have been raised by the parties to this proceeding, can be settled by the courts without resort to a division or modification of the trust.
The proposed division of the trust estate is not primarily to preserve the estate, for there is no reason to believe that the present trustees cannot, if they will, manage the estate as advantageously as any one else. It is proposed so as to dispense with the watchful eye of one of the beneficiaries and terminate her recurring forceful reminders that the trustees are disregardful of the fiduciary duties imposed upon them by the will.
In the final analysis, the conditions about which the parties complain are created by family differences which only incidentally affect the trust. The trust is merely caught in the rip tide of family dissension. This will not suffice to support the proposed settlement.
Upon a full consideration of the record before us we are constrained to conclude that the approval of the proposed settlement by the court below was not well advised. The judgment entered to that end is
Reversed.
