Bird v. The Wilmington Society of Fine Arts

• Decision Date: 28 May 1945
• Citation: 43 A.2d 476,28 Del.Ch. 449
• Court: Supreme Court of Delaware
• Parties: SAMUEL B. BIRD, Defendant Below, Appellant, v. THE WILMINGTON SOCIETY OF THE FINE ARTS, a corporation of the State of Delaware, Defendant Below, Appellee, and Wilmington Trust Company, a corporation of the State of Delaware, Trustee under the will of Joseph Bancroft, Deceased, Complainant Below, Appellee

43 A.2d 476

28 Del.Ch. 449

SAMUEL B. BIRD, Defendant Below, Appellant, v. THE WILMINGTON SOCIETY OF THE FINE ARTS, a corporation of the State of Delaware, Defendant Below, Appellee, and Wilmington Trust Company, a corporation of the State of Delaware, Trustee under the will of Joseph Bancroft, Deceased, Complainant Below, Appellee

Supreme Court of Delaware

May 28, 1945

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Appeal from Court of Chancery in and for New Castle County.

Statement of the Case. This case involved a construction of the will of Joseph Bancroft. Joseph Bancroft died May 6, 1936, having first made his last will and testament dated May 14, 1931 which, after his death, was duly probated. Letters testamentary were duly granted and, after settlement of the estate, the residue came into the possession of Wilmington Trust Company, Trustee under items or paragraphs 10, 11 and 12 of the will. Paragraph 10 of the will provided, in part, that Elizabeth H. Bancroft, the widow of the testator, should receive the net income of the trust estate for and during her life.

Elizabeth H. Bancroft, widow of the testator, died October 28, 1941.

Other material portions of items 10 and 12 of the will of Joseph Bancroft, and dealing with the trust estate held by Wilmington Trust Company, were as follows:

"10 -- Upon the death of my said wife, in further trust, to transfer convey unto my nephew, Samuel B. Bird, if he is then living, all the stock which I may own in Joseph Bancroft and Sons Company, a corporation existing under the laws of the State of Delaware. In further trust, upon the death of my said wife, all the rest, residue and remainder of said trust property and estate, to assign, transfer and convey unto Wilmington Society of Fine Arts, a corporation existing under the laws of the State of Delaware, to use to establish and maintain a suitable memorial in memory of my father and mother."

"12 -- I authorize and empower my said trustee in its discretion to sell or dispose of any real or personal property forming a part of the said trust, either at public or private sale, and without liability on the part of the purchaser to see to the application of the purchase price, or any part thereof, the proceeds received from such sale or sales to be held subject to the trusts aforesaid; provided, however, that the said trustee shall not sell or dispose of my stock in the Joseph Bancroft and Sons Company without the consent of my nephew, the said Samuel B. Bird, and if such stock shall be so sold, the proceeds received therefrom shall upon the death of my said wife be paid unto my said nephew."

At the time of the death of Joseph Bancroft he was the legal owner of 300 shares of preferred stock of Joseph Bancroft and Sons Company, and 5000 shares of common stock of said company, evidenced by certificates in the name of Joseph Bancroft. These shares formed a part of the trust estate, and after the death of Elizabeth H. Bancroft, the widow of the testator, the above mentioned shares were transferred and delivered to Samuel B. Bird, the appellant.

Mary R. Bancroft, the mother of Joseph Bancroft, the testator, owned certain shares, both preferred and common, of Joseph Bancroft and Sons Company. Mary R. Bancroft died in 1933, and before the death of Joseph Bancroft. After the death of Joseph Bancroft, in 1936, the surviving executrix of Mary R. Bancroft transferred to the executors of Joseph Bancroft 859 shares of the preferred stock of Joseph Bancroft and Sons Company, and 100 shares of the common stock of the company. These shares became part of the trust estate, and, after the death of Elizabeth H. Bancroft, widow of the testator, were also transferred and delivered to Samuel B. Bird, the appellant.

The difficulties of the case arise from the following facts. Samuel Bancroft, Jr., the father of the testator, died in 1915. He was possessed of a large real and personal estate approximating $ 2,000,000.00, including therein 1473 shares of preferred stock of Joseph Bancroft and Sons Company, and 7215 shares of common stock of said company. His estate was shared equally by his widow, Mary R. Bancroft, a son, Joseph Bancroft (herein called the testator), and Elizabeth R. B. Bird, a daughter. Shortly after the death of Samuel Bancroft, Jr., and on March 16, 1916, a corporation was formed by the said Mary R. Bancroft, Joseph Bancroft and Elizabeth R. B. Bird, called "Estate of Samuel Bancroft, Jr., Incorporated." The corporation was formed to take over, hold, manage and dispose of the real and personal property late of Samuel Bancroft, Jr., and all such property, consisting of stocks, bonds, mortgages, collateral loans, notes and real estate, was conveyed, assigned or transferred to the corporation. Shares of stock of the corporation were issued in equal shares to the said Mary R. Bancroft, Joseph Bancroft and Elizabeth R. B. Bird, four shares being issued to each of said persons. The corporation from time to time sold some of its assets, and reinvested the proceeds, and paid dividends to its stockholders, and continued to function until its subsequent dissolution.

After the death of Mary R. Bancroft in 1933, her 4 shares of "Estate of Samuel Bancroft, Jr., Incorporated" were divided, and two shares became vested in Wilmington Trust Company and Daniel M. Bates, Trustees under the will of Mary R. Bancroft, and the remaining two shares were eventually transferred by the surviving executrix of Mary R. Bancroft to the executors of Joseph Bancroft, and became a part of the trust estate under the will of Joseph Bancroft. From the foregoing it appears that from the formation of the company in 1916 to the death of Mary R. Bancroft in 1933, the stockholding in the "Estate of Samuel Bancroft, Jr., Incorporated" was one-third in Mary R. Bancroft, one-third in Joseph Bancroft, and one-third in Elizabeth R. B. Bird. After the assignments following the death of Mary R. Bancroft, the holdings were, trustees under the will of Joseph Bancroft one-half, Elizabeth R. B. Bird one-third, and trustees under the will of Mary R. Bancroft one-sixth.

In 1940, some four years after the death of Joseph Bancroft, and during the life of his widow, the corporation "Estate of Samuel Bancroft, Jr. Incorporated" was dissolved and its assets distributed in accordance with the stock-holdings. Among the assets coming into the hands of the trustees under the will of Joseph Bancroft (as stated in the original bill of complaint) were 886 shares of the preferred stock of Joseph Bancroft and Sons Company, and 11,650 of the common stock of said company (being one-half of 1772 shares of preferred stock, and one-half of 23,300 shares of common stock held by "Estate of Samuel Bancroft, Jr. Incorporated" at the time of its dissolution).

After the death of Elizabeth H. Bancroft, the trustee under the will of Joseph Bancroft, with the consent of both the appellant and of Wilmington Fine Arts Society, and without prejudice to either, sold 665 shares of the preferred stock received at the dissolution of the "Estate of Samuel Bancroft, Jr. Incorporated." The sale was for $ 75.00 per share, amounting to $ 49,875.00, and resulting, after taxes, &c., to $ 45,769.56.

The trustee therefore holds for distribution the following assets (or proceeds thereof) received upon the dissolution of the corporation "Estate of Samuel Bancroft, Jr. Incorporated", viz., 221 shares of preferred stock of Joseph Bancroft and Sons Company (being balance unsold) and 11,650 shares of common stock of said company, and $ 45,769.56, the net proceeds of the portion of the preferred stock which was sold.

The appellant contends that the last mentioned stock and the proceeds of sale passed to him under the terms of Item 10 of the will of Joseph Bancroft. The appellee, the Wilmington Society of the Fine Arts, disputes that contention. The Chancellor in the court below, and in an opinion reported in, Wilmington Trust Co. v. Wilmington Soc. of Fine Arts, 27 Del.Ch. 243, 34 A.2d 308, 314 held that

"The bequest to Samuel B. Bird did not include any stock in the Bancroft Company, held by the Estate Corporation at Joseph Bancroft's death, and subsequently distributed on its dissolution."

This appeal followed.

The appellant at the trial below introduced a considerable amount of extrinsic evidence for the purpose of showing the intent of the testator and the proper construction of the language of his will. This evidence was considered in detail by the Chancellor, and, to some extent, in the following opinion.

Robert H. Richards and Aaron Finger, for appellant.

Hugh M. Morris, Alexander L. Nichols, and S. Samuel Arsht, for appellees.

Layton, C. J., and Richards, Rodney, Speakman, and Terry, JJ., sitting.

OPINION

Before entering upon a consideration or construction of the words of this particular will it would seem not inappropriate to recast some general principles applicable to that construction.

It is a familiar expression that all rules of construction of wills have for their object the ascertainment of the intent of the testator. This object is basic and fundamental, for it is only to ascertain the intent of the testator that rules of construction can or should have existence, and no rule could be well founded which has another primary object.

Now what intent of the testator is sought to be ascertained? A court can never commence its study of a will by utilizing its knowledge of the surroundings and circumstances of a testator, and from these infer an intent which in its opinion should or probably did exist, and then construe the will to give effect to that intent. The intent of a testator in a testamentary instrument which is sought to be ascertained is not that a general intent sought...