THE FIRST NATIONAL BANK OF BOSTON & others, executors, vs. IDA S. CHARLTON & others.
Devise and Legacy, General or specific.
A testator, at a time when he owned over fifty-eight thousand shares of stock of a certain corporation, made a deposit of ten thousand shares thereof and a provision in his will, executed shortly thereafter, with respect thereto, in a way which showed clearly that he knew of and appreciated the difference between a specific and a general legacy. At all times between the date of the will and the day of his death he held many more than twenty thousand shares, and at his death he owned over two hundred twelve thousand shares. By his will he devised three parcels of real estate "and . . . also" twenty thousand shares of stock of that corporation to trustees for the benefit of his wife, children and descendants and stated: "It is my desire that the Trustees shall keep said . . . stock intact unless in their unanimous opinion it seems advisable to invest it in other securities, and it shall not be a reason for said sale and reinvestment that said stock has considerably enhanced in market value." After he made his will and before his death, there were stock dividends declared on the stock and its par value was reduced. Upon an appeal from a decree of a probate court upon a petition by the executor for instructions, it was held, that
(1) The legacy of the twenty thousand shares to the trust was a general legacy;
(2) The trustees were entitled to receive only twenty thousand of the shares;
(3) It was unnecessary to consider the effect of the stock dividend or of the reduction of the par value of the stock in the testator's lifetime.
PETITION, filed in the Probate Court for the county of Bristol on April 21, 1931, and afterwards amended, by the executors of the will of Earle P. Charlton, late of Fall River, for instructions as to the eighth clause of the will, (1) as to whether the devisees under said clause were entitled to twenty thousand shares of the stock of F. W. Woolworth Co.; (2) as to whether the devisees under said clause were ent itled to fifty thousand shares of the stock
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of F. W. Woolworth Co.; and (3) as to whether the devisees under said clause were entitled to seventy-five thousand shares of the stock of F. W. Woolworth Co.
In the Probate Court, a guardian ad litem was appointed to represent certain minors and persons unborn or unascertained who might become interested.
The case then was heard by Hitch, J., upon an agreed statement of facts. Material facts are stated in the opinion. By order of the judge a final decree was entered stating that the gift of twenty thousand shares of the stock of F. W. Woolworth Co. in said eighth clause of the will was a specific legacy; and that therefore the trustees were entitled to the fifty thousand shares into which their twenty thousand shares were changed by the reduction of the par value of the stock from $25 per share, as it was when the will was made, to $10 per share in the lifetime of the testator and the issuance of fifty thousand shares in place of the twenty thousand named in the will.
Ida S. Charlton and others, and trustees under the tenth clause of the will appealed.
J. E. Carroll, stated the case.
F. D. Putnam, (W. C. Jaycox with him,) for Ida S. Charlton and others.
A. W. Milliken, for guardian ad litem, & R. Gray for The First National Bank of Boston and others, trustees, submitted a brief.
WAIT, J. The executors of the will of Earle P. Charlton filed this petition for instructions whether devisees under the eighth clause of that will are entitled to twenty thousand, thirty thousand or seventy-five thousand shares of the stock of the F. W. Woolworth Co. The petition shows that at the date of the execution of the will, Charlton owned fifty-eight thousand five hundred ninety-two shares in that company, then of a par value of $25. In 1926 the company declared a stock dividend of fifty per cent, by virtue of which he received twenty-nine thousand five hundred shares. In 1929 the company reduced the par value of the stock to $10 per share, and voted to issue to stockholders two and one half shares of the $10 for each
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share of the $25 par stock. Under this he became entitled to and received two hundred twenty thousand one hundred forty-five shares of $10 par stock. From time to time he purchased and transferred shares of the stock; but at all times between the date of the will and the day of his death he held greatly more than twenty thousand shares. At his death he owned two hundred twelve thousand one hundred thirty-five shares. Shortly before the execution of the will he placed certificates for ten thousand shares with The First National Bank of Boston to be held separate and subject to his order. These ten thousand shares were dealt with in the seventh clause of the will. The executors have been instructed with regard to them in a decision made this day in First National Bank of Boston v. Union Hospital of Fall River, ante, 64.
By the eighth clause of the will, the testator devised three parcels of real estate "and in addition to these three parcels and buildings, rents and income, I also devise Twenty thousand (20,000) shares of the Common Stock of the F. W. Woolworth Co. to the Trustees named in the Eleventh clause of this Will, same to be known as the Charlton Building Trust." He then set out the disposition to be made of income and principal, which was to be for the benefit of his wife, his children, and descendants. He stated: "It is my desire that the Trustees shall keep said Woolworth stock intact unless in their unanimous opinion it seems advisable to invest it in other securities, and it shall not be a reason for said sale and reinvestment that said stock has considerably enhanced in market value." No gifts of shares of stock other than the two foregoing were made by the will.
The crucial question for decision is whether this gift of twenty thousand shares was a general or a specific legacy. The guardian appointed to represent minors and persons unborn or unascertained who may be interested under the eighth clause and the trustees under that clause contend that it is specific. The probate judge instructed the trustees on the basis that it is specific.
In the decision already referred to we pointed out the
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characteristics of a specific legacy. We need not repeat. We decided that the gift of the ten thousand shares held apart from the remainder of his stockholdings in the F. W. Woolworth Co. up to the time of Charlton's death and then standing apart from them was specific. We are unable to reach that decision here. The tendency of courts is to regard legacies to be general. Foote, appellant, 22 Pick. 299, 302. Ordinarily a gift of stock is general. It authorizes the executor of the will to deliver to the legatee the number of shares given, if the testator has left a larger number in his estate; or to go into the market and buy a sufficient number to satisfy the gift, if there are no such shares or an insufficient number in the estate. Slade v. Talbot, 182 Mass. 256, 258, and cases cited. Johnson v. Goss, 128 Mass. 433, 435. Thayer v. Paulding, 200 Mass. 98. Fall River National Bank v. Estes, 279 Mass. 380. An intent to make the gift specific may be shown. If it is specific, then the gift fails if, by the testator's act, the stock described in the will is not in the estate. See Harvard Unitarian Society v. Tufts, 151 Mass. 76. The rule of construction is that the testator's intent shall prevail if it can be ascertained from the language of the whole will considered in the light of the circumstances and without contravening any rule of law. Applying that rule to the facts before us we think the gift here was general. By the way in which he dealt with the ten thousand shares mentioned in the seventh clause, the testator showed clearly that he knew of and appreciated the difference between a specific and a general legacy. In that case he earmarked certificates for ten thousand shares so that, whatever might be his holdings at his death, those shares could be identified and known to be the very thing given by the clause of the will - the thing that was to be turned over when he died if it was then his property; the thing that would be lost to the legatee if, before he died, he had destroyed its identity or parted with it. In the case before us he did nothing of the kind. Instead he devised land and added a gift of twenty thousand shares of Woolworth stock which, if he had none in his estate when he died, the executors were
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impliedly directed to go into the market and buy. He did not even refer to the stock as "my" stock which, under the decision in Harvard Unitarian Society v. Tufts, 151 Mass. 76, might be enough to make certain that he intended the gift to be specific. It is true that he directed that "said Woolworth stock" be kept intact; but those words relate to the stock when the executors had obtained it, and do not indicate an appropriation by the testator of identifiable property to the gift. See Pope v. Hinckley, 209 Mass. 323, 328. The latter is the essential thing in making the gift other than general: a specification by the testator of property then his or contemplated to become subject to the will which can be identified when he comes to die. Foote, appellant, 22 Pick. 299. Bullard v. Leach, 213 Mass. 117. Tomlinson v. Bury, 145 Mass. 346. This difference in his dealing with the gifts destroys any inference that he intended both to be specific founded upon the fact that only in those two gifts did he bequeath Woolworth stock.
Since the gift was general, it is unnecessary to consider the effect of the stock dividend or of the "split-up" resulting from the reduction of par value.
The decree of the Probate Court is reversed; and answer to the questions of the petition is to be made to (1), yes; to (2) and (3), no. The case is remanded for entry of a decree not inconsistent herewith; such order for compensation for the guardian ad litem and costs including charges and expenses of counsel is to be made as the judge of probate may deem just and equitable. G. L. (Ter. Ed.) c. 215, ยง 45.
Ordered accordingly.