The opinion of the court was delivered by: Lake, Justice.
Appeal by respondents pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 126 N.C. App. 593, 486 S.E.2d 458 (1997), affirming a judgment entered by Caldwell, J., on 15 December 1995, in Superior Court, Catawba County. Heard in the Supreme Court 15 December 1997.
This appeal presents the single issue of whether beneficiaries under a holographic will may testify in a caveat proceeding as to oral communications between themselves and the decedent with regard to the testator's intent to make a new will or about specific bequests to be contained in a new will. The Court of Appeals majority concluded that Rule 601(c) of the North Carolina Rules of Evidence, the Dead Man's Statute, does not disqualify interested beneficiaries from testifying with regard to oral communications between themselves and the decedent. The Court of Appeals thus sustained the judgment of the trial court, thereby invalidating the original will under which the respondents, Duke University and Rutgers Preparatory School, were principal beneficiaries. For the reasons stated below, we reverse the decision of the Court of Appeals.
Decedent, William Smith Lanyon Lamparter, was born 1 July 1926. He graduated from Rutgers Preparatory School and Duke University. The decedent never married and had no children. He died with an estate valued at approximately one million dollars. On 10 March 1980, decedent executed an attested will in which he provided support for his mother during her lifetime. Duke University and Rutgers were the primary residuary beneficiaries. Mr. Lamparter also made bequests to many friends and relatives including his cousin, Nadine Lanyon Smith Rogel; her son; and other caveators in this action. Decedent kept a copy of his will in his home and provided copies to Rogel and C. Walton Hamilton, the named co-executors in the will; his attorney, F. Gwynn Harper, Jr.; and his accountant, Joanne Linda Waxman.
Decedent's mother died in 1980. In 1985, decedent prepared a document entirely in his own handwriting entitled, "Codicil to My Will," which was dated and signed. In 1986, decedent made some minor modifications to his 1985 codicil, dating and signing each modification. In the late 1980s, decedent underwent surgery for cancer and thereafter spent his time in a chair in his study surrounded by his papers, bills, books and mail. In the latter years of decedent's life, he had discussions with his attorney and with Ms. Waxman with regard to changing his will and with regard to what would be legally necessary to prepare a new will.
In January 1992, decedent's cancer returned, and he was hospitalized for the last time. Several of his friends and relatives, including Michael Koch and Nadine Rogel, went to decedent's home and found beside his chair in the study eight handwritten pages appearing to be a holographic will (hereinafter "undated memorandum"), which revoked all previously executed testamentary documents including the 1985 handwritten codicil. Decedent died two days later.
On 9 April 1992, the executrix named in the will, Nadine Rogel, filed with the Clerk of Superior Court, Catawba County, for probate the following documents: (1) the decedent's typed will dated 10 March 1980; (2) the handwritten document entitled "Codicil to My Will"; and (3) the eight-page undated memorandum, expressly revoking all previous wills and testaments. The clerk admitted the 1980 will to probate and issued Letters Testamentary to Ms. Rogel, as Executrix of the Estate of William Smith Lanyon Lamparter. On 15 September 1992, the executrix filed a declaratory judgment action, seeking a determination as to whether the decedent died testate and the effect of the two handwritten documents. The trial court held that the typed will and the handwritten codicil were valid and that the undated memorandum was invalid. On appeal, the Court of Appeals held that the trial court did not have subject matter jurisdiction to determine the validity of the will and vacated the judgment. Rogel v. Johnson, 114 N.C. App. 239, 441 S.E.2d 558, disc. rev. denied, 336 N.C. 609, 447 S.E.2d 401 (1994).
On 13 October 1994, the caveators, nine individuals who were named beneficiaries under the undated memorandum, including decedent's cousins, friends and longtime housekeeper, filed this proceeding alleging that the undated memorandum was the decedent's last will and testament. The caveators amended their complaint to allege, in the alternative, that the purported handwritten codicil was a valid codicil to the probated 1980 will. Respondents, Duke University and Rutgers Preparatory School, filed a Rule 12(b)(6) motion to dismiss, and the caveators filed a motion for summary judgment. Both of these motions were denied.
At the commencement of trial, respondents made a motion in limine, pursuant to Rule 601 of the North Carolina Rules of Evidence, to prohibit the caveators from testifying as to conversations they had with decedent about his will. The trial court denied the motion on the ground that the intent of the testator is a relevant, material and competent fact to which the beneficiaries may testify in order to establish a valid holographic will, pursuant to N.C.G.S. § 31-10(b). At trial, for the purpose of showing the decedent's intent, the five witnesses for the caveators all testified to conversations they had with decedent in his final years about his plans to write a new will, and they further testified with regard to specific bequests he planned to include in this new will. Respondents repeatedly objected to such testimony. Over objection, Nadine Rogel was permitted to testify that in 1990, Mr. Lamparter "said he was going to change his will drastically, that there were people who were very, very caring to him through his illness, and that he wanted to remember them." Ms. Rogel continued to testify that Mr. Lamparter told her he would be including Frances Davenport, Rick Berry, and Terry and Rebekah Henderson in his will. In addition to this testimony, four caveators and beneficiaries under the undated memorandum--Frances Davenport, the housekeeper; Richard Berry; Terry Henderson; and Michael Koch--were also allowed to testify with regard to conversations they had with Mr. Lamparter concerning his intent to make a new will and his proposed specific bequests to be made therein.
At the close of the caveators' evidence, and again at the close of all the evidence, the parties moved for a directed verdict. All motions were denied. The jury found that the eight-page undated memorandum was indeed the last will and testament of the decedent, and on 15 December 1995, judgment was entered reflecting this verdict. Respondents appealed to the Court of Appeals, a majority of which upheld this judgment.
The North Carolina "Dead Man's Statute," formerly N.C.G.S. § 8-51 and now codified in Rule 601(c) of the Rules of Evidence, N.C.G.S. § 8C-1, Rule 601(c), has traditionally prohibited testimony involving both "transactions" and "communications" by individuals who would potentially benefit from the alleged statements of a deceased individual. See In re Will of Lomax, 226 N.C. 498, 39 S.E.2d 388 (1946); In re Will of Brown, 194 N.C. 583, 140 S.E. 192 (1927). The statute, or rule as now codified, is applicable only to oral communications between the party interested in the event and the deceased. The Dead Man's Statute was intended "as a shield to protect against fraudulent and unfounded claims." Carswell v. Greene, 253 N.C. 266, 270, 116 S.E.2d 801, 804 (1960). As this Court stated in Carswell:
The reasoning behind G.S. 8-51 and the decided cases thereunder, is succinctly stated by Stacy, J., later C.J., in Sherrill v. Wilhelm, [182 N.C. 673, 675, 110 S.E. 95, 96 (1921)]: "Death having closed the mouth of one of the parties, (with respect to a personal transaction or communication) it is but meet that the law should not permit the other to speak of those matters which are forbidden by the statute. Men quite often understand and interpret personal transactions and communications differently, at best; and the Legislature, in its wisdom, has declared that an ex parte statement of such matters shall not be received in evidence."
Carswell, 253 N.C. at 269, 116 S.E.2d at 803.
As to matters "forbidden by the statute," Rule 601(c) provides in pertinent part:
(c) Disqualification of interested persons.--Upon the trial of an action, or the hearing upon the merits of a special proceeding, a party or a person interested in the event . . . shall not be examined as a witness in his own behalf . . . concerning any oral ...