McGee v. McGee, 78-128-A

Citation413 A.2d 72,122 R.I. 837
Decision Date31 March 1980
Docket NumberNo. 78-128-A,78-128-A
PartiesRichard J. McGEE, Administrator c.t.a. v. Philip McGEE et al. ppeal.
CourtUnited States State Supreme Court of Rhode Island
OPINION

WEISBERGER, Justice.

This is a complaint for declaratory judgment, in which the plaintiff administrator, Richard J. McGee (Richard), sought directions from the Superior Court in respect to the construction of certain provisions of the will of his mother, Claire E. McGee, and instructions relating to payment of debts and distribution of assets from the testatrix's estate. The sole issue presented by this appeal concerns the question of the ademption of an allegedly specific legacy to the grandchildren of the decedent and the consequent effect of such ademption upon payment of a bequest in the amount of $20,000 to Fedelma Hurd (Hurd), a friend of the testatrix. The provisions of the will pertinent to this appeal read as follows:

"CLAUSE ELEVENTH:

I give and bequeath to my good and faithful friend FEDELMA HURD, the sum of Twenty Thousand ($20,000.00) Dollars, as an expression to her of my appreciation for her many kindnesses.

"CLAUSE TWELFTH:

I give and bequeath all of my shares of stock in the Texaco Company, and any and all monies standing in my name on deposit in any banking institution as follows:

(a) My Executor shall divide the shares of stock, or the proceeds thereof from a sale of same, with all of my monies, standing on deposit in my name, in any bank, into three (3) equal parts and shall pay 1/3 over to the living children of my beloved son, PHILIP; 1/3 to the living children of my beloved son, RICHARD and 1/3 over to the living children of my beloved son, JOSEPH. Each of my grandchildren shall share equally the 1/3 portion given to them. " (Emphasis added.)

At the time of the execution of the will and up until a short time before the death of the testatrix, a substantial sum of money was on deposit in her name at the People's Savings Bank in Providence. About five weeks prior to his mother's death, Richard, proceeding pursuant to a written power of attorney as modified by an addendum executed the following month, withdrew approximately $50,000 from these savings accounts. Of this amount, he applied nearly $30,000 towards the purchase of four United States Treasury bonds, commonly denominated as "flower bonds," from the Federal Trust Company in Waterville, Maine (Richard then resided in that state). His objective in executing this transaction was to effect an advantageous method of satisfying potential federal estate tax liability. 1 The bonds, however, did not serve the intended purpose since at the time of Mrs. McGee's death her gross estate was such that apparently no federal estate tax liability was incurred. The remainder of the monies withdrawn from the savings accounts were deposited in Claire McGee's checking account to pay current bills and in a savings account in Richard's name to be transferred to his mother's account as the need might arise for the payment of her debts and future obligations. The sole sum that is now the subject of this appeal is the approximately $30,000 held in the form of United States Treasury bonds.

The complaint for declaratory judgment sought instructions concerning whether the administrator should first satisfy the specific legacy to the grandchildren from the proceeds of the sale of the flower bonds or whether he should first pay the $20,000 bequest to Fedelma Hurd, since the estate lacked assets sufficient to satisfy both bequests.

After hearing evidence and considering legal memoranda filed by the parties, the trial justice found that the bequest to the grandchildren contained in the twelfth clause of the will constituted a specific legacy. He held further, however, that Rhode Island regarded the concept of ademption with disfavor and he sought, therefore, to effectuate the intent of the testatrix. He proceeded to determine that since there is an assumption that one intends to leave his property to those who are the natural objects of his bounty, rather than to strangers, the administrator "should trace the funds used to purchase the Flower Bonds and should satisfy the specific legacy to the grandchildren" under the twelfth clause of the will. Consequently, the trial justice held that the legacy to Fedelma Hurd under the eleventh clause of the will must fail. This appeal ensued.

The McGee grandchildren suggest that the principal design of the testatrix's estate plan, ascertainable from a contemplation of the testamentary disposition of her property, was to benefit her family rather than "outsiders." They urge us to consider her intentions which they assure us were concerned, in part, with protecting the family interests from an anticipated reduction of the estate's value by taxes in determining whether the transfer of the funds in her accounts did in fact work an ademption. In addition, Richard points out that the decedent did not herself purchase these bonds. On the contrary, Richard acquired them in order to help discharge anticipated tax obligations of the estate and informed his mother of them only subsequently to the purchase. He argues, furthermore, not only that the funds with which he purchased the flower bonds originated in his mother's accounts, but also that since these bonds "are as liquid as cash" they are indeed monies standing in the decedent's name on deposit in a banking institution. He suggests that this description conforms in every respect to the formula drafted into the twelfth clause of her will. Merely the form of the legacy has changed, according to Richard, not its essential character, quality, or substance.

In response, appellant asserts that an ademption occurred by the voluntary act of the testatrix during her lifetime, since her son withdrew the funds as an authorized agent operating under a lawful power of attorney. There is evidence, moreover, that the testatrix subsequently ratified the purchase of the bonds when Richard afterwards told her of his actions and their intended effect upon estate taxes. 2 As a consequence, Hurd asserts that there was no longer any money standing on deposit in the name of the testatrix in any bank with which to discharge the specific legacy to the grandchildren. These transactions resulted in an extinction of the subject matter of the legacy. Hurd argues, in addition, that the intention of the testatrix, even if discernible, is irrelevant to the question of the ademption of the bequest. She therefore contends that her general legacy should be payable from the proceeds of the sale of the flower bonds.

At the outset, we recognize that the instant case concerns specifically the concept of ademption by extinction, a legal consequence that may attend a variety of circumstances occasioned either by operation of law or by the actions of a testator himself or through his guardian, conservator, or agent. Gardner v. McNeal, 117 Md. 27, 82 A. 988 (1911); In re Wright, 7 N.Y.2d 365, 165 N.E.2d 561, 197 N.Y.S.2d 711 (1960). In particular, a testamentary gift of specific real or personal property may be adeemed fail completely to pass as prescribed in the testator's will when the particular article devised or bequeathed no longer exists as part of the testator's estate at the moment of his death because of its prior consumption, loss, destruction, substantial change, sale, or other alienation subsequent to the execution of the will. In consequence, neither the gift, its proceeds, nor similar substitute passes to the beneficiary, and this claim to the legacy is thereby barred. Atkinson, Handbook of the Law of Wills § 134 at 741, 743-44 (2d ed. 1953); 6 Bowe & Parker, Page on the Law of Wills § 54.1 at 242, § 54.9 at 256-57 (1962); Note, Wills: Ademption of Specific Legacies and Devises, 43 Cal.L.Rev. 151 (1955).

The principle of ademption by extinction has reference only to specific devises and bequests and is thus inapplicable to demonstrative or general testamentary gifts. 6 Page, supra § 54.3 at 245, § 54.5 at 248. In Haslam v. de Alvarez, 70 R.I. 212, 38 A.2d 158 (1944), we prescribed the criteria for determining the character of a legacy, relying on the earlier case of Dean v. Rounds, 18 R.I. 436, 27 A. 515 (1893), wherein we held that "(a) specific legacy, as the term imports, is a gift or bequest of some definite specific thing, something which is capable of being designated and identified." Id. When the testator intends that the legatee shall receive the exact property bequeathed rather than its corresponding quantitative or ad valorem equivalent, the gift is a specific one, and when "the main intention is that the legacy be paid by the delivery of the identical thing, and that thing only, and in the event that at the time of the testator's death such thing is no longer in existence, the legacy will not be paid out of his general assets." Hanley v. Fernell, 54 R.I. 84, 86, 170 A. 88, 89 (1934). In particular, the designation and identification of the specific legacy in a testator's will describe the gift in a manner that serves to distinguish it from all other articles of the same general nature and prevents its distribution from the general assets of the testator's estate. 6 Page, supra § 48.3 at 11-12.

In the case at bar, the trial justice construed the twelfth clause of Mrs. McGee's will as bequeathing a specific legacy to her grandchildren. While it is true that the party who contends the legacy is a specific one must bear the burden of proof on this issue, DiCristofaro v. Beaudry, 113 R.I. 313, 320 A.2d 597 (1974), and appellant, in her brief, characterized the twelfth clause as a bequest of a particular residuary gift, the trial justice apparently found that petitioner's contentions met the...

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  • Stewart v. Sewell, No. M2003-01031-COA-R3-CV (TN 4/14/2005)
    • United States
    • Supreme Court of Tennessee
    • 14 Abril 2005
    ...in ademption by extinction cases is in harmony with the modern holdings found in the majority of states. E.g., McGee v. McGee, 122 R.I. 837, 413 A.2d 72 (R.I.1980). In McGee, the Rhode Island Supreme Court defines the rule and persuasively analyzes the policy supporting it. The McGee court ......
  • In re Estate of Greenamyre
    • United States
    • Court of Appeals of Tennessee
    • 7 Diciembre 2005
    ...irrelevant who or what initiates "the doing." Balfour, 198 S.W. at 71. In re Estate of Hume, 984 S.W.2d at 604. Citing McGee v. McGee, 122 R.I. 837, 413 A.2d 72 (1980), the court concluded that the "rule that the intent of the testator is irrelevant in ademption by extinction cases is in ha......
  • In re Estate of Geary
    • United States
    • Court of Appeals of Tennessee
    • 29 Febrero 2008
    ...(2) whether it is found in the estate at the time of the testator's death. Estate of Hume, 984 S.W.2d at 605 (citing McGee v. McGee, 122 R.I. 837, 413 A.2d 72, 76-77 (1980)). "The extinction of the property bequeathed works an ademption regardless of the testator's intent." Id. A specific l......
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