Fidelity Title & Trust Co. v. Young

• Citation: 125 A. 871,101 Conn. 359
• Parties: FIDELITY TITLE & TRUST CO. v. YOUNG ET AL.
• Decision Date: 28 July 1924
• Court: Supreme Court of Connecticut

125 A. 871

101 Conn. 359

FIDELITY TITLE & TRUST CO. v. YOUNG ET AL.

Supreme Court of Errors of Connecticut.

July 28, 1924

Case Reserved from Superior Court, Fairfield County; John W Banks, Judge.

Suit by the Fidelity Title & Trust Company, executor and trustee against Velma A. Young and others, for construction of the will of George T. Otte, deceased. Reserved, upon an agreed statement of facts, for advice of the court. Questions answered.

George T. Otte, formerly a resident of Greenwich, but at the time of his death a resident of Darien in the probate district of Stamford, died February 13, 1922, seized of a considerable estate, consisting entirely of personality, and leaving a will, executed May 13, 1916, which disposed of his whole estate. The will has been admitted to probate and the plaintiff, named therein as sole executor and trustee qualified and is acting as such. All debts and expenses of administration have been paid. At the time of the execution of the will, the testator owned 660 shares of the capital stock of Butler Bros., an Illinois corporation, of the par value of $100 each.

In 1917 the testator acquired 220 additional shares of the corporation, by the exercise of his stockholder's right to subscribe for such additional shares, at the par value of $100 each. Later he sold 40 shares, and remained owner of 840 shares in February, 1920, when the corporation voted to reduce the par value of its shares to $20 each, and to issue to each of its stockholders 5 shares of the par value of $20 for each $100 share surrendered for exchange. At the same time the corporation increased its capital stock by issuing additional shares of the par value of $20 each, which new shares were offered to its stockholders at $40 a share. The testator exchanged his certificates for 840 shares of the par value of $100, for certificates for 4,200 shares of the par value of $20, and also subscribed for 420 of the new $20 stock, some of which he sold in March, 1920, leaving 4,465 shares of the par value of $20, which he held until his death, and which came into the possession of his executor at his death.

The testator's will, executed in 1916, remained unchanged up to his death in 1922. It contained the following bequests which give rise to the questions upon which our advice is asked:

" Third. I give and bequeath to my wife, Latcher Otte ten thousand (10,000) dollars in cash, absolutely and forever; and I give and bequeath to the Fidelity Title and Trust Company of Stamford, Connecticut, two hundred and fifty (250) shares of the stock of Butler Brothers, or its equivalent in cash at the time of my decease should I not then be the owner of said stock, in trust nevertheless for the following uses and purposes."

Briefly stated, the trust was to pay the net income of the fund to the testator's wife during her life; and at her death, to pay over the principal to the two daughters of the testator, share and share alike.

" Fifth. I give and bequeath to my friend, Albertina M. Jones, of said Greenwich, five thousand (5,000) dollars in cash, one hundred and fifty (150) shares of stock of Butler Brothers, and my canary diamond solitaire ring, absolutely and forever."

By the ninth clause of the will, all the rest and residue of the testator's estate was given to the Fidelity Title & Trust Company, in trust to pay at first the income thereof, and finally the principal, share and share alike, to the testator's two daughters.

The testator's wife, Latcher Otte, died in 1918 before the death of the testator. Both of the testator's daughters, Velma A. Young and Viola M. Close, are married and are living.

The questions reserved for the advice of this court are stated as follows:

" (1) Whether, under the third article of said will, the defendants Velma A. Young and Viola M. Close are each entitled to 125 shares of the stock of said Butler Brothers of the present par value of $20 a share, or are each entitled to 625 shares of said stock. (2) Whether, under the fifth article of said will, the defendant Albertina M. Jones is entitled to 150 shares of the stock of said Butler Brothers of the present par value of $20 a share, or is entitled to 750 shares of said stock."

Frank P. Barrett, of Stamford, for plaintiff.

Frederick C. Taylor, of Stamford, for defendant Albertina M. Jones.

William S. Hirschberg, of Greenwich, for defendants Velma A. Young and Viola M. Close.

BEACH, J. (after stating the facts as above).

The claim of Albertina M. Jones, legatee under the fifth clause of the will, is that the bequest to her of 150 shares of Butler Bros. stock is descriptive of the par value of $100 each, as they existed at the date of the will, each of which shares was afterward split up into, and is now represented by, five shares of stock of the par value of $20 each, and that she is entitled to 750 of such shares.

The claim of the testator's daughters, who are the present beneficiaries under the third clause of the will, and also the beneficiaries under the residuary clause, is that the bequests of 250 shares in the third clause, and of 150 shares in the fifth clause, are to be construed as gifts of like numbers of such shares as they existed at the death of the testator, and will be satisfied by the delivery of the stated number of shares of the present par value of $20 each.

The principal claims made on behalf of the daughters are that these legacies are general legacies, that the will speaks from the death of the testator, and that the testator's failure to make any change in his will after the par value of the stock had been reduced is strong evidence that he acquiesced in the consequent diminution of the intrinsic value of the original bequests.

On the other hand, Mrs. Jones' claims are that the legacies are specific and, though specific, there was no ademption, because the change in the stock was purely formal; that, even if general, the rule that the will speaks from the death of the testator does not apply to the terms in which the testator describes the subject-matter of the bequests, and that, whether general or specific, the intent of the testator was to give a definite number of such shares of Butler Bros. as existed at the date of the will.

We take up first the question whether the bequests are general or specific. It seems to be well settled that a bequest of shares of stock in a named corporation will be treated as a general legacy, unless a contrary intent appears from the will. Two reasons are given for this: To prevent an ademption in case the testator parts with the stock before his death, and to secure uniformity of contribution, in case of a deficiency of assets. Dryden v. Owings, 49 Md. 356; Johnson v. Conover, 54 N.J. Eq. 333, 35 A. 291; Giddings v. Seward, 16 N.Y. 365; Ives v. Canby (C. C.) 48 F. 718; Perry v. Maxwell, 17 N.C. (2 Dev. Eq.) 488.

This rule, like most rules for the construction of wills, is a device for securing uniformity of decision, and for giving effect to the probable intent of the testator, when the will fails to give any sufficient indication of his actual intent. Necessarily the rule yields to the testator's intent, when that can be gathered from the will. The stock illustration given in the books is that a gift of " 100 shares of stock of the A. B. Company," standing by itself, will be treated as a general or pecuniary legacy, to be paid in shares of the named stock; but that a gift of 100 shares of " my stock" in the A. B. Company is a specific legacy.

The decisions go much further than that. Thus a provision against ademption is held to be sufficient evidence of an intent to make a specific gift. Mowry, Petitioner, 16 R.I. 514, 17 A 553; In re Foote, 39 Mass. (22 Pick.) 299. A direction to the executor to make good in cash any deficiency of such shares which...