Stayton v. Delaware Trust Co.
| Decision Date | 20 January 1965 |
| Citation | 206 A.2d 509,42 Del.Ch. 158 |
| Parties | Margaret W. STAYTON, Executrix under the Will of Leon B. Stayton, Sr., deceased, and Margaret W. Stayton, individually, Plaintiff, v. DELAWARE TRUST COMPANY, a corporation of the State of Delaware, Leon B. Stayton, Jr., and David F. Anderson, guardian ad litem for Eleanor V. Stayton, Defendants. |
| Court | Court of Chancery of Delaware |
Clyde M. England, Jr., of Killoran & Van Brunt, Wilmington, for plaintiff.
Richard L. McMahon, of Berl, Potter & Anderson, Wilmington, for defendants.
SHORT, Vice Chancellor:
Plaintiff, executrix, seeks instructions as to the proper distribution of certain assets which have come into her possession. The case of before the court on cross motions for summary judgment based upon the pleadings, affidavits and stipulations of counsel.
Leon B. Stayton, Sr. (testator) died on December 18, 1961. By Paragraph SECOND (a) of his last will and testament, dated June 11, 1954, testator provided as follows:
'All corporate stocks and debentures of every kind owned by me at my death and all real estate owned by me at the time of my death, including all buildings and improvements thereon and all rights and other interest pertaining thereto, I give, devise and bequeath unto the Delaware Trust Company of Wilmington, Delaware, or to its successors in TRUST NEVERTHELESS, to hold, manager, invest and reinvest the same, to collect the income arising therefrom and to pay over the net income thereof to my wife, Margaret W. Stayton, for the rest of her natural life, if she survives me.'
The will provided that upon the death of his wife, Margaret W. Stayton, the trustee was to pay over two-thirds of the principal and accumulated income to his son, Leon B. Stayton, Jr., and the remaining one-third was to be held in trust for his daughter, Eleanor V. Stayton, for her support and maintenance, and at her death to be paid over to Leon B. Stayton, Jr.
Testator devised and bequeathed the residue of his estate to his wife, Margaret W. Stayton, 'absolutely and forever if she survives me.'
At the date of his death, Leon B. Stayton, Sr., was the owner of three parcels of real estate and had registered in his name shares of stock in several corporations having an appraised value of upwards of $70,000.00.
On November 26, 1961 Florence V. Stayton, the mother of Leon B. Stayton, Sr. died testate. By her last will and testament, dated July 12, 1950, Florence V. Stayton devised and bequeathed a one-half interest in the residue of her estate to her son, Leon B. Stayton, Sr. The will appointed Leon B. Stayton, Sr. and his sister, Audrey Stayton Christfield, executors. They qualified as such executors but the estate remained unsettled at the time of the death of Leon B. Stayton, Sr.
On May 9, 1963 the surviving executrix of Florence V. Stayton, deceased, passed her first and final account and thereafter distributed corporate stocks having a value in excess of $70,000 to plaintiff, executrix, such distribution representing the interest of the estate of Leon B. Stayton, Sr. in the residue of the personal estate of Florence V. Stayton. The stocks so distributed were listed separately in the inventory of the estate of the testator which was filed on February 7, 1964. Plaintiff, executrix, thereafter filed her first account disclosing the payment of all debts. Her complaint requests the instructions of the court as to whether the stocks which she has received from the estate of Florence V. Stayton should be distributed to the trustee, Delaware Trust Company, or to herself as residuary legatee.
In support of her motion Margaret W. Stayton has filed affidavits of Leon B. Stayton, Jr., one of the defendants and the ultimate beneficiary of the trust provided for in Paragraph Second (a) of testator's will. One of these affidavits sets forth the following facts: At the date of his death testator was 67 years of age and Margaret W. Stayton was 66 years of age; at that time, as well as at the date of the will, Margaret W. Stayton had a modest separate estate, though she held jointly with testator property consisting of a checking account, government bonds and a mortgage having a fair market value on the date of the testator's death of $32,843.36; that testator had suffered a heart attack in 1943 and was in a poor state of health thereafter; that on many occasions testator had expressed to his son, the affiant, 'the very firm belief that he would predecease his mother.' In his other affidavit Leon B. Stayton, Jr. produced a copy of a letter written by testator to his mother dated February 7, 1956 in which testator set forth the property which was to compose the trust found established by his will, naming specifically the companies in which he held stock, with the addition 'and others,' and in which letter language appears which might be taken as supporting the affiant's assertion of testator's belief 'that he would precease his mother.' Further reference to this letter will be hereafter made.
There is also of record the affidavit of the attorney for the estate of Florence V. Stayton from which the following additional facts appear: that on December 18, 1961, the date of testator's death, it was apparent that the executors of Florence V. Stayton would be required to sell certain assets of the estate in order to pay debts and administration expenses, but that no decision had been reached at that time as to which assets would be sold; that subsequent to December 18, 1961, in the course of administration, the surviving executrix had sold stock worth approximately $14,000.00 to provide funds for those purposes.
None of the facts set forth in the affidavits mentioned are controverted by defendants. The parties have stipulated that on June 11, 1954, the date of testator's will, his mother, Florence V. Stayton, 'was in a good state of health consistent with her age.'
Plaintiff, Margaret W. Stayton, contends that in the circumstances appearing the stocks received by her, as executrix of testator's estate, from the estate of Florance V. Stayton, should be distributed to her as residuary beneficiary in any event, whether the will is construed according to the ordinary meaning of the language therein used, or in the light of surrounding circumstances. She argues first of all that testator did not 'own' at the time of his death any stocks which were held in the residue of his mother's unsettled estate. She contends, also, that the surrounding circumstances, and particularly testator's belief that he would predecease his mother, militate against a construction that he intended such stocks to comprise a part of the trust created by his will.
Defendants contend that testator did 'own' the stock which passed to his estate under the residuary provisions of his mother's will. They also argue that it is clear from the terms of the will that testator intended to dispose of his entire estate, other than household effects and miscellaneous chattels, through the trust.
The question presented is: In circumstances such as here appear, what title or interest does one of two or more residuary legatees have in specific assets which constitute the residue of an unsettled estate? No Delaware case answers the question. Authority elsewhere is limited in number. But such cases as there are seem to agree that the residuary legatee has no title, legal or equitable, to any specific asset of the residue. Thus, in Mechanics Bank v. Yale University, 111 Conn. 452, 150 A. 526, a case factually similar to the present, it was held that testator, the sole residuary legatee of his mother's will, had, at the time of his death, only an interest in the mother's unsettled estate, with no present right or ownership of corporate stock belonging to that estate, and that the interest of testator in the mother's estate constituted a part of his residuary estate and not of a trust created by his will of 'all my stocks and bonds.' Since the case was one for construction of the testator's will, the court, of course, based its holding on intent as ascertained from 'the terms of the will when read in the light of the surrounding circumstances.' The circumstances, as noted, bore a marked similarity to those here appearing. Though the Connecticut court construed the interest of the testator according to a principle of Ohio law that so long as an estate remains unsettled, the property in the hands of an executor 'is in custody of the law,' I attribute little significance to that circumstances as the court had concluded, prior to any mention of what law determined the testator's interest, that he had no title, legal or equitable, to any stock belonging to the estate of his mother. Neither is it significant that in the later case of Parlato v. McCarthy, 136 Conn. 126, 69 A.2d 648, dictum in the Mechanics Bank case, to the effect that Connecticut law was in accord with the principle of Ohio law referred to, was repudiated. The Parlato case involved the question of the constitutionalty of a proration tax statute. While the court discussed 'vested rights' of heirs, devisees and legatees, the question here posed was not in issue, and there is no pretense in the majority opinion which could be taken to indicate that the result reached in the Mechanics Bank case was deemed improper, regardless of the law applicable to the case.
Whether or not property in the possession of an executor is, by the law of this State, in custody of the law need not be decided as I do not think that the answer to the question posed is dependent upon such a proposition. But see Bowles v. R. G. Dun-Bradstreet Corp., 25 Del.Ch. 32, 12 A.2d 392, where this court said that possession of an executor 'is regarded as being virtually in the custody and control of the court in which his letters were granted.'
In Attorney General v. Lord Sudeley, [1896] 1 Q.B. 354, a testator bequeathed one-fourth of the residue of his estate to his wife. While ...
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