Gist v. Craig

• Decision Date: 07 December 1927
• Docket Number: 12295.
• Citation: 141 S.E. 26,142 S.C. 407
• Parties: GIST et al. v. CRAIG et al.
• Court: South Carolina Supreme Court

141 S.E. 26

142 S.C. 407

GIST et al. v. CRAIG et al.

No. 12295.

Supreme Court of South Carolina

December 7, 1927

Appeal from Common Pleas Circuit Court of Union County; M. L Bonham, Judge.

Action by W. H. Gist and another, executors of the will of Mrs. Dorcas L. Rice, deceased, against S.D. Craig and others, to have the rights of the parties under two wills adjudicated. From the decree, defendant L. R. Craig and others appeal. Modified and remanded.

The decrees of the trial court were as follows:

Decree Dated March 18, 1925.

Dr. L S. Douglass, late of Chester county, S. C., departed this life in 1897 leaving of force his last will and testament of which his wife, Mrs. Dorcas L. Douglass, was the duly appointed and qualified executrix. She died January 2, 1924 not having been discharged as such executrix, and the defendant J. L. Glenn is the duly appointed administrator de bonis non, cum testamento annexo, of the estate of Dr Douglass. Mrs. Dorcas L. Douglass married, as her second husband, J. G. Rice of Union county, S. C., and died January 2, 1924, leaving of force her last will and testament of which the plaintiffs W. H. Gist and James H. Glenn are the duly appointed and qualified executors. Questions have arisen of the proper construction of certain provisions of each of these wills upon which the parties in interest ask the determination of the court. Hence this action, which is predicated on an agreed statement of facts, which action was heard by me at February, 1925, term of the court of common pleas for Union county, in which county Mrs. Rice resided at the time of her death and where her will is probated.

The first question for adjudication arises in this wise: After making bequests to various of his kindred, Dr. Douglass, by the seventh paragraph of his will, provided, "I give and bequeath and devise to my beloved wife Dorcas L. Douglass, all of my real estate including moneys, bonds, stocks, notes, and mortgages accounts and all other property of whatsoever nature to have and to hold the same during her natural life, and at the decease of my wife Dorcas L. Douglass I give and devise _______________" here follow sundry devises and bequests in remainder with which we are not concerned. Item 14 of the will is as follows: "All the residue of my estate remaining at the death of my beloved wife Dorcas L. Douglass, I give and bequeath and devise equally to be divided between Sylvester D. Craig, son of J. E. Craig, and Dr. Lawrence Craig, son of John Craig, and L. Sylvester Harrison." L. Sylvester Harrison has died leaving as his sole heirs at law and distributees his daughters, Mrs. Louise Harrison Helms and Mrs. Lawrence Harrison Gamble, who take his share. At the time of his death Dr. Douglass owned 15 shares of the capital stock of the Winnsboro Bank, of the par value of $100 per share, which at the time of his death was worth $102 the share. After the death of Dr. Douglass two of these shares were retired by the bank at the value of $175 per share and the proceeds, $350, were paid to Mrs. Douglass. It is agreed that the remaining 13 shares of this stock have a present value of $240 the share, arising from undivided profits of the bank. At the time of the death of Mrs. Rice, the life tenant, there remained for distribution of the estate of Dr. Douglass only a tract of land, and this 13 shares of stock and the $350 arising from the retiring of the other two shares. We are not concerned in this action with the tract of land.

By item 2 of her will Mrs. Rice provided as follows: "I give, devise and bequeath to Sylvester Douglass Craig, all of my shares of stock in the Winnsboro Bank, Winnsboro, S. C." It is admitted that Mrs. Rice received during her lifetime the income, or declared dividends, on this stock, and the $350 which is the value at which two shares were retired, which sum the executors have in hand, under the provisions of the will of Dr. Douglass, S.D. Craig, L. R. Craig, and Mrs. Helms and Mrs. Gamble (the last two representing their father L. Sylvester Harrison), take the stock in the Winnsboro Bank at its value at the time of the death of the testator, to wit, $102, in the following proportions, one-third to S.D. Craig, one-third to L. R. Craig, one-sixth to Mrs. Helms, and one-sixth to Mrs. Gamble, and this includes the two shares retired except as to the increase thereof. Do they take the remainder of the $350 and the undivided profits on the stock, undeclared and still in the hands of the bank, under this same provision of the will of Dr. Douglass, or do these go to S.D. Craig? In other words, did Mrs. Rice, the life tenant under the will of Dr. Douglass, have power to dispose of these accretions to the value of said stock, or are they a part of the capital of said stock, and pass under the provisions of the will of Dr. Douglass in relation to the disposition of this stock?

Perhaps no question has given rise to more discussion and diversity of legal opinion and adjudication than this. Two distinct lines of cases are traceable throughout these discussions and decisions, the one known as the "Massachusetts Rule" and the other as the "South Carolina Rule." The former holds that the life tenant enjoys the usufruct, the income from such bequests, but has no control over, nor power of disposition of, the undeclared, undivided increment or profits pertaining to the stock; and that these become a part of the corpus of the stock, and go with the original corpus. To this rule the courts of a number of the states adhere. The courts of South Carolina, Pennsylvania, and Mississippi, notably, take the contrary view. It would be interesting to analyze these different views, and determine fundamentally which is the correct one, but in this case such course would entail a work of supererogation, because in this state the question is set at rest, in my opinion, by the case of Wallace v. Wallace, 90 S.C. 61, 72 S.E. 553, following Cobb v. Fant, 36 S.C. 1, 14 S.E. 959. In the able opinion of the circuit judge who heard the case of Wallace v. Wallace, whose opinion was affirmed on appeal, this was said: "While upon the subject of the distributions of dividends or earnings upon stock between life tenant and remaindermen the courts are much divided, I am of the opinion that the strongest consideration of reason and justice support the rule which apportions such dividends or earnings between life tenant and remaindermen according to the time when such earnings were made, and not according to the chance action of corporate officers in withholding or declaring dividends." This ruling is upheld in the strong opinion of Mr. Justice (now Chief Justice) Gary, and is the law in this state. Its wisdom and reason appeal irresistibly to our sense of justice. I therefore adjudge that Mrs. Rice had the power to dispose of the earnings and dividends undeclared or undivided, on the stock of the Winnsboro Bank, and these with the amount of the two retired shares, which is in excess of $102 per share, the value at the time of the death of Dr. Douglass, pass to Sylvester Douglass Craig under item 2 of her will.

The second cardinal question in the case arises from apparent conflict in the provisions of item 1, and the unnumbered clause following item 5 of the will of Mrs. Dorcas L. Rice. Item 1 is as follows: "I give, devise and bequeath to Louise Douglass Harrison sixteen (16) shares of the National Loan and Exchange Bank stock in Columbia, S. C., my gold watch, all of my silver, household furniture, automobile and all of my personal property owned by me not mentioned herein." Items 2, 3, 4, and 5 make certain devises and bequests not involved in this action. The unnumbered item of the will which follows immediately item 5 is as follows: "All the rest and residue of my estate real and mixed I order converted into money as soon as can be conveniently done after my decease, for that purpose I do hereby authorize and empower my executors hereinafter named and the survivors of them to sell all of my real estate either by public or private sale, for the best price that can be gotten for the same and grant, convey and assure to the purchasers thereof in fee simple, collect all notes and mortgages due me and when all of my real estate has been sold and all of my notes and mortgages collected I will and direct that all monies collected from said sales be paid to the Epworth Orphanage at Columbia, S. C., by my executors hereinafter named." At the time of her death Mrs. Rice had to her checking account in the Bank of Carlisle $4,445.73, in Winnsboro Bank $767, in National Exchange Bank $197.60. She had two certificates of time deposits issued by the Bank of Carlisle, one for $5,693.35 and one for $2,076.49; Liberty bonds at the value of $2,500, nine shares Am. Products Export and Import Corporation of the value of $35, and four bales of cotton appraised at $570. I permitted the introduction of testimony to show that the amounts of $5,693.35 and $2,076.49 were derived from the collection of two notes and mortgages, which collections were made by Mrs. Rice after the execution of her will in 1916.

Mrs Helms claims all of these sums under item 1 of the will of Mrs. Rice, and Epworth Orphanage claims them under the so-called residuary clause thereof. This will was drawn by a layman, a very intelligent man, the cashier of a bank; but he was not versed in law, nor was he adept in the art of drawing wills. I am not sure that his ineptness has not resulted in the testatrix dying intestate as to the items above enumerated, except as to the two certificates of deposit. But intestacy is not favored by the law, and it is manifest that the testatrix attempted, and intended, to dispose of all of her estate. She uses the expression, "all the rest and...