Yancey v. National Trust Co.

• Decision Date: 06 March 1969
• Citation: 251 A.2d 561
• Parties: Richard B. YANCEY, individually and as Executor, Trustee, Administrator c.t.a. of the Estate of Philo B. Yancey, deceased, Plaintiff Below, Appellant, v. NATIONAL TRUST COMPANY, Ltd., a Canadian corporation, Raymond C. Dougherty, Jean Yancey Paterson, individually and as Executors and Trustees of the Last Will and Testament of Philo B. Yancey, and E. I. Du Pont De Nemours and Company, a Delaware corporation, Defendants Below, Appellees.
• Court: United States State Supreme Court of Delaware

Page 561

251 A.2d 561

Richard B. YANCEY, individually and as Executor, Trustee Administrator c.t.a. of the Estate of Philo B Yancey, deceased, Plaintiff Below, Appellant, v. NATIONAL TRUST COMPANY, Ltd., a Canadian corporation Raymond C. Dougherty, Jean Yancey Paterson, individually and as Executors and Trustees of the Last Will and Testament of Philo B. Yancey, and E. I. Du Pont De Nemours and Company, a Delaware corporation, Defendants Below, Appellees.

Supreme Court of Delaware.

March 6, 1969.

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

William D. Bailey, Jr., of Bayard, Brill & Handelman, Wilmington, for appellant.

Richard L. McMahon, of Potter, Anderson & Corroon, Wilmington, for National Trust Co., Ltd., Raymond C. Dougherty, and Jean Yancey Paterson, appellees.

Henry W. Bryan, Wilmington, for E. I. duPont de Nemours and Co., appellee.

WOLCOTT, C.J., and CAREY, J., and QUILLEN, Judge, sitting.

WOLCOTT, Chief Justice.

The plaintiff, Richard B. Yancey, appeals from an order of the Court of Chancery quashing the sequestration of common stock of the duPont Company.

The facts are, as alleged by the plaintiff, that Philo B. Yancey died a resident of Montreal, Canada. His will, establishing testamentary trusts, was admitted to probate in the Province of Quebec, Canada, in 1942.

Richard B. Yancey, National Trust Company, Limited, Edward B. Yancey, and John M. Yancey, qualified in the Province of Quebec as co-executors and co-trustees of the Estate of Philo B. Yancey, deceased. Prior to August 14, 1942, Edward B. Yancey resigned as an executor and trustee, and was replaced by Raymond C. Dougherty. Subsequently, John M. Yancey died and was replaced by Jean Yancey Paterson as an executor and trustee. All of the presently serving executors and trustees are domiciled in Canada with the exception of Richard B. Yancey, the plaintiff, who is domiciled in the State of Virginia.

The bulk of the assets of Philo B. Yancey, deceased, were and are located in Canada, but he died owning two burial crypts in Virginia; Oregon real estate valued at $1500.00, and shares of duPont stock, the certificates for which, at the time of his death, were in the vault of Wilmington Trust Company at Wilmington, Delaware. ¹

The answer of the duPont Company's transfer agent shows the duPont shares to be registered on the stockholder ledgers of the duPont Company in the name of 'Estate of Philo B. Yancey, National Trust Co., Ltd., Richard B. Yancey, Jean Y. Paterson, and Raymond C. Dougherty, Executors.' ²

Against the will of the plaintiff, the duPont stock certificates were removed from Wilmington to Canada. An attempt was made to transfer them on the records of the duPont Company, but was forestalled by the sequestration. On information and belief, the plaintiff asserts that National Trust Co., Ltd. has allocated this stock to the testamentary trust under the will of Philo B. Yancey established for his benefit, and to the trust for the benefit of Mrs. Lillian Yancey, domiciled in Mexico. The beneficiaries of all the testamentary trusts are: Richard B. Yancey of Virginia; Mrs. Jean Y. Paterson of Canada; Mrs. Lillian Yancey of Mexico, and Mrs. Jessie Yancey of Canada. ³

Following the attempt to transfer title of the duPont stock, the plaintiff filed this action naming as defendants the three foreign co-executors and co-trustees of the Estate of Philo B. Yancey, deceased, and also the duPont Company. The action seeks to enjoin the transfer of title of the stock without the assent of the plaintiff, and also seeks an accounting from the foreign defendants of the assets of the estate they have caused to be removed from Delaware.

Personal service was obtained on the duPont Company. The appearance of the Canadian defendants was sought to be coerced by the sequestration, under 10 Del.C. § 366, of the duPont stock registered in the name of the estate, the situs of which, by reason of 8 Del.C. § 169, is in Delaware despite the removal of the certificates to Canada. An order of sequestration was entered and the stock seized pursuant to it.

Following the stock seizure, the Canadian defendants appeared specially and moved to quash the sequestration on the ground, Inter alia, that they had no property interest in the shares which are registered in their names as executors. The Vice Chancellor quashed the sequestration on this ground; i.e., the nonresident defendants had no beneficial interest in the shares. Yancey v. E. I. duPont de Nemours & Company, Del.Ch., 243 A.2d 75. ⁴

Richard B. Yancey, plaintiff here and one of the Canadian co-executors, residing in Virginia, qualified in that state along with National Trust Company, Ltd. as ancillary administrator c.t.a. of the Estate of Philo B. Yancey. Later, the appointment of National Trust Company, Ltd. was declared void Ab initio. Richard B. Yancey has also qualified as ancillary administrator c.t.a. in Delaware.

The gravamen of the complaint is that plaintiff as sole executor and trustee residing in the United States may be subjected to personal liability under U.S. Treasury regulations for estate taxes imposed on the Estate of Philo B. Yancey to the extent of the value of the Yancey Estate assets located in the United States at the time of the death of Yancey. No steps have been taken to comply with the Treasury regulations, and plaintiff alleges that if the duPont stock is removed to Canada, the remaining assets of the estate in the United States will be insufficient to discharge any possible tax assessment. He alleges that in that event he would become personally liable for such tax.

The precise question before us in this appeal is the nature of the title and interest in the seized stock of the defendants.

The sequestration order here under consideration directed the seizure of 'all shares (of duPont stock) standing in the name of each or any of said individual defendants (naming them) and National Trust Company, Limited, or in or to which each or any of them may have or hold any right, title or interest.'

Defendants contend that direction to seize the interest of the 'individu...