Folta v. Riefle

467 S.W.2d 84

• Court: Supreme Court of Missouri
• Decided: March 8, 1971
• Docket: No. 55172
• Status: Published

Opinions

MORGAN, Judge.

In this will construction case, only one question need be answered. It is: should the additional shares of corporate stock issued as a result of a two-for-one stock split be distributed to the named legatees of the original shares, or should such shares be added to the residuary clause and distributed to the recipients thereof? The probate court ordered that such new shares be delivered to the named legatees, but the trial court found otherwise and ordered the additional shares distributed to the residuary legatees. We reverse.

Factually, it appears that Mrs. Emma Rose Leonard executed her last will and testament on December 11, 1959. At that time she owned 1,500 shares of the common stock of American Telephone and Telegraph Company, which had a par value of $331/$ per share. On May 28, 1964, the company recapitalized, reducing the par value of its common stock to $16⅜ per share, and distributed new shares on a two-for-one basis. Immediately prior to the new issue, she had owned 1,450 shares which were replaced by 2,900 shares. Fifty (50) original shares bequeathed to her husband were sold after his death on May 7, 1960.

After bequests of a specified sum of money to each of several brothers and sisters, testatrix, in paragraph 4, provided:

“To my nephews and nieces, or the descendants of each, or to the heirs at law at the date of my death of each, if in any case there are no descendants I give and bequeath the total of One Thousand Four Hundred Fifty (1,450) Shares of the Common Stock of the American Telephone and Telegraph Company, in the number of shares of such Common Stock set down immediately after and following the name of each, as follows: (Thereafter, twenty-three such persons were named with a specific number of shares set opposite the name of each.)

Paragraph 5 bequeathed fifty shares to her husband which were sold after his death. Paragraphs 6, 7, 8, 9 and 10 set out specific bequests of rings, oil paintings and release of certain debts owed testatrix. Paragraph 11 would have given all household items to the husband. Paragraph 12 created a trust to manage “all the rest, residue and remainder” of the property to provide an income for the husband, and upon his death to terminate, and the assets thereof to be distributed to five nieces (residuary legatees), who were also named as legatees of a certain number of shares of stock in paragraph 4. The latter provision was set out in subparagraph 12(d), and provided:

“Upon the death of my said beloved husband, Thomas L. Leonard, my trust estate hereby created shall cease and determine and the entire net corpus thereof, including all increments of every kind and character, shall be paid over * * * to * * * [five named nieces]” (Emphasis added.)

Paragraph 13 provided:

“Should my beloved husband predecease me, or should he and I die as the result of a common accident, then, and in such event, all trust provisions herein shall become null and void and all property of which I may die possessed shall be distributed under the terms and conditions herein set forth relative to the termination of my trust estate upon the death of my said beloved husband, Thomas L. Leonard.” (Emphasis added.)

Paragraph 14 called for the lapse of any bequest to those that might contest the will. Paragraph 15 provided, in part: “I direct my Executors to pay all * * * taxes * * * against any gift, devise or bequest, out of the general assets of my estate * * * taxes * * * shall not be charged against or deducted from any such gift * * *."

The cause was tried on a stipulation of facts plus limited testimony of one residuary legatee; and as noted, the trial court entered judgment in favor the residuary legatees for the added 1,450 shares resulting from the stock split. From the findings and conclusions of record, the court’s reasoning appears to have been “that testatrix had full knowledge of the second split and had full knowledge that 2,900 shares were in the agency account”; that she had such knowledge for “seventeen months and thirteen days before [her] death”; that "the additional 1,450 shares * * * became a part of her estate as a result of the stock split * * * [and] constituted an increment to her estate as that term was used, intended and understood by testatrix in paragraph 12(d) of her last Will.” In addition: “That the testamentary scheme and intent of the testatrix, as determined from the four corners of her last Will, plainly and manifestly was that the residuary legatees, whose names appear in paragraph 12(d) of said last Will, were the prime objects of her love and bounty and it was her intention that they would receive any ‘increments’ in the number of shares * *

Appellants submit that such findings are totally unsupported by the evidence, and that the conclusion reached is contrary to the established law of this state as declared in Shriners Hospitals for Crippled Children v. Emrie, Mo., 347 S.W.2d 198, and the many cases cited and discussed therein. Admittedly, in view of the similarity of facts in this and the Shriners case, there is some temptation to arbitrarily agree with appellants. However, no two wills are written exactly the same, and each case must turn on its own particular facts. For that reason we must determine the “actual intent” of this particular testatrix.

Respondents seek to sustain their position, as well as that of the trial court, by submitting: (1) that the additional shares “would constitute increments” to the estate; (2) that the words “including all increments of every kind and character,” used in paragraph 12(d), providing for distribution to the residuary legatees, must be read in connection with that part of paragraph 13 which says “all property of which I may die possessed” shall be distributed as provided on termination of the trust — that is, to the residuary legatees; (3) that testatrix had previously written a will dated October 10, 1952, making similar bequests of corporate stocks, and after a three-for-one stock split she had written the will with which we are now concerned — with the claimed inference that failure to write a new will after the “second” split is indicative testatrix wanted the number of shares listed to remain as they were; and, that from all surrounding circumstances it was the intent of testatrix that the additional 1,450 shares would go to the residuary legatees.

The many factors to be considered in seeking to find the “intent” of the testatrix have been expressed many times and all need not be reviewed. Boxley v. Easter, Mo., 319 S.W.2d 628; Ussher v. Mercantile Trust Co., Mo., 328 S.W.2d 699; Walters v. Sisler, Mo., 371 S.W.2d 187. First, we mention those arguments of respondents that we do not find persuasive nor helpful in our task. If we ignore for the moment the dispute as to the admissability of the earlier 1952 will, and compare it with that of 1959, it is clear the three-for-one stock split had been taken into account in writing the later will. However, in view of the many other changes made as to the manner of distribution of other properties and assets, it is pure speculation to say the first stock split motivated the new will. For instance, the original will had no specific bequests of jewelry or oil paintings nor where the recipients of the trust estate on the death of the husband the same. The present residuary legatees were not named therein, but said trust estate was to go to two sisters upon the death of the husband. With such changes, we can not make the deductions asked for by respondents nor made by the trial court. As suggested by respondents, we consider those portions of paragraphs 12(d) and 13 heretofore italicized. Clearly, the words “including all increments of every kind and character” refer to the “increments” to the trust estate, during the expected lifetime of the husband, and did not refer to other bequests unrelated to the trust. As to paragraph 13, it is true that it is somewhat ambiguous. It was contingent on the husband predeceasing testatrix or dying in a common disaster with her, and did provide that in the event of either contingency “all property of which I may die possessed” shall be distributed as provided in paragraph 12(d) (to the residuary legatees). If such words were taken literally, it would mean, since the husband had died, that all of the property of testatrix would fall into the residuary estate. Since provisions of a will must be construed in harmony with each other, if possible, it is our opinion testatrix intended to mean only that property designated for the trust estate; and, that such contingencies as mentioned in paragraph 13 were not designed to call for revocation of all other provisions of the will. Other facts upon which respondents rely can be evaluated while considering applicability of precedents wherein the same questions were involved. A few are: In Re Largue’s Estate, 267 Mo. 104, 183 S.W. 608; Fidelity Nat. Bank & Trust Co. v. Hovey, 319 Mo. 192, 5 S.W.2d 437; In Re Calnane’s Estate, Mo.App., 28 S.W.2d 420; Adams v. Conqueror Trust Co., 358 Mo. 763, 217 S.W.2d 476, and the Shriners case, supra. As stated in the latter case (347 S.W.2d 1. c. 201): “A stock split, such as we have here, is a mere change in form of the stockholder’s interest in the company and not a change in the substance of the property. * * * The fact that the additional shares of stock acquired by the testatrix by reason of such a stock split ‘pass under a specific bequest of the original shares, is too well settled for contradiction.’ (Citing numerous authorities.) * * * (1. c. 203) When it is necessary to determine what property the testator intended to bequeath specifically, the description employed by the testator is applied to the property as of the date of the will.” In answer to the quoted authority, however, respondents contend that the conclusions reached in the Shriners case only apply if the bequest is “specific,” and that classifying a bequest as specific or general is a secondary rule of construction and should not be resorted to when the intention of the testator is clear. Assuming this statement to be true, the arguments of respondents do not establish the intent of testatrix otherwise, and we must resolve whether or not this bequest of 1,450 shares was* or was not specific. If it is found to be specific, appellants must prevail by reason of the precedents listed which, also, fully delineate the distinctions between a specific, or general bequest. In addition, finding the intent of the testatrix necessarily calls for a determination of whether or not she intended to make a specific bequest. Fidelity Nat. Bank & Trust Co. v. Hovey, supra, 1. c. 441; In Re Calnane’s Estate, supra, 28 S.W.2d 1. c. 421. It is our opinion that she did, because (1) the bequest of the stock was closely associated with other gifts, rings and pictures, that were clearly specific, (2) the gift was not to be disturbed or diminished by any assessment of taxes, which were to be paid from the residue of the estate, and (3) the 1,450shares were kept in an agency account which testatrix insisted be maintained in the exact amount. Nor can we attach any significance to the fact testatrix did not bother to write a new will after the stock split. This fact, as well as others just mentioned, were all considered in the Shriners case and the deductions therefrom were all found contrary to respondents’ position.

Of course, every bequest of corporate stock may not be specific. If found to be a general bequest, the result would be otherwise. The answer would turn on the facts of the particular case.

We have concluded that testatrix intended to make a specific bequest of the 1,450shares to the legatees as named in paragraph 4, and we find that the additional 1,450shares resulting from the stock split should be added to that bequeathed to each legatee in the proportion designated.

The judgment is reversed and the cause is remanded for further proceedings consistent with this opinion.

All of the Judges concur.