State v. Barnard

121 P. 784, 44 Mont. 561, 1912 Mont. LEXIS 16

• Court: Montana Supreme Court
• Decided: February 5, 1912
• Docket: No. 3,072
• Status: Published

Opinions

MR. CHIEF JUSTICE BRANTLY

delivered the opinion of the court.

Josiah F. Beck died in Silver Bow county on April 28, 1909, leaving an estate consisting of real and personal property of the value approximately of $80,000. He left surviving him a widow, Agnes Beck, several nephews and nieces and the children of a deceased niece. By his will dated March 8, 1899, he gave to the widow the family home in the city of Butte, together with the household furniture, and the sum of $10,000 to be paid to her at the discretion of his executors, from time to time as her necessities might require. Among the other bequests made by the testator are the following: “To James R. and William Dickey (Dickey Brothers), now resident of Madison county, Montana, near Sheridan, I give and bequeath the sum of Three Thousand Dollars in money, less a note for Two Thousand Dollars held by me against them. * * * The foregoing conditions of my will having been complied with, by collections of money and sale of real and personal property, other than .that already bequeathed, the residue, if there be any, I give and bequeath to the use- and benefit of the ‘Orphans’ Home,’ located at Twin Bridges, Madison county, Montana, to be donated to said institution, at such times as my executors may be able to fairly dispose of any property belonging to the residue of my estate.” The will was duly admitted to probate by the district court of Silver Bow county, and Anthony W. Barnard, one of the persons named as executors therein, qualified and entered! upon the discharge of his duties. Thereafter, on May 12, 1909, the widow renounced the benefit of the testamentary provision made for her, and reserved the right of election to take her dower in the real estate and her share of the personal property under section 3714, Revised Codes, or, in lieu of dower, one-half of the real estate, after the payment of all just debts, under section 3716. Thereupon this proceeding was commenced by the state of Montana, through the attorney general representing the Orphans’ Home and also in its own behalf, under the provisions found in sections 7670-7672 of the Revised Codes, to have ascertained and declared the rights of all persons to any part of the estate and all interests therein and to whom distribution thereof should be made. The widow and all the next of kin of the testator, as heirs at law, entered their appearance and by answer contested the validity of the residuary clause of the will, on the ground that neither the Orphans’ Home nor the state of Montana has legal capacity to take as a legatee. There was also a controversy between the widow and the next of kin, as to what share of the estate, if any, they were entitled to in case the legacy to the Orphans’ Home should be declared invalid, the former contending that the latter were not entitled to any share whatever. The questions involved were determined upon an agreed statement of facts. It was stipulated therein that the Orphans’ Home mentioned in the will is the State Orphans’ Home at Twin Bridges, in Madison county, created and established under the provisions found in Part III, Chapter IY of Article III of the Political Code of 1895, and Acts amendatory thereto, brought forward into the Revised Codes as sections 1249-1280, inclusive, and thereafter further amended by the Act approved March 4,1909 (Laws of 1909, Chap. 73, p. 97). No question was made as to any of the other several bequests, except that it was contended by all the parties in interest, other than those mentioned as special legatees, that under the terms of the will the Dickey brothers were entitled to receive only such balance of the $3,000 bequeathed to them as would remain after’deducting the principal sum named in the note, admitted to be still due the estate, together with interest thereon up to the date of the probate of the will. The relationship to the testator of all the persons appearing as next of kin was admitted. It is not stipulated in the statement that the widow had made her election which she had reserved in the alternative, before the commencement of the proceeding. It was admitted pending final decision, however, that she had chosen the alternative accorded to her by section 3716, supra. It was also stipulated in open court at the time of final submission, that she was in any event entitled to a homestead of the value not to exceed $2,500, or, in lieu thereof, $2,500 in money over and above the share of the real estate accorded to her under section 3716.

Upon the agreed facts and these admissions the court ascertained and decreed: 1. That the residuary bequest to the Orphans’ Home is void; 2, that the amounts of the special bequests and debts must be paid out of the real estate; 3, that the Dickey brothers are entitled to receive the sum of $3,000, less the sum of $2,000, with interest thereon to the date of probate of the will; and 4, that the widow is entitled to receive (a) one-half of all the real estate belonging to the estate at the death of the testator, or of the proceeds thereof remaining after the payment of the specific legacies and debts; (b) that out of the remainder or the proceeds thereof she is entitled to a homestead not exceeding in value $2,500, or, at her option, $2,500 in money; and (c) that she is further entitled to one-third of the personal property remaining in the hands of the executor at the date of distribution after the payment of the costs of administration. It was decreed that the next of kin were entitled to the residue of the estate per stirpes. After the final decision, the widow and the next of kin adjusted their controversies. Those are therefore not now involved in this case. As against the state and the Orphans’ Home,- the widow made her motion for a new trial. This was overruled. She has appealed from the decree and order overruling her motion. The state and the Orphans’ Home have appealed from the decree, as have also the Dickey brothers.

The appeals of the widow and the state and Orphans’ Home present two questions, viz.: (1) Is the Orphans’ Home a person capable of taking as legatee under the Act, and, if not, construing the will as manifesting an intention on the part of the testator to make the state his beneficiary, is the state capable of taking; and (2) to what share is the widow entitled? If the first of these questions is answered in the negative, it will be unnecessary to answer the second, because, as noted in the statement of facts, after the decision by the district court the widow and next of kin adjusted their controversies by stipulation, and, as stated in the brief of counsel for the widow, her appeals were taken only in order to protect her rights as against the claims made on behalf of the state.

The right to make testamentary disposition of property depends [1] entirely upon the will of the legislature. It may withhold the right altogether or impose any limitations or conditions upon it which it chooses. (In re Noyes’ Estate, 40 Mont. 178, 105 Pac. 1013.) A necessary postulate of this proposition is, that the legislature has the exclusive power to designate those whom the testator may make the objects of his bounty. It is the general rule in the United States that in the absence of some special disability declared by statute, any person may be a legatee or devisee. When the statute of wills, in designating those who are capable of taking, employs the word “persons,” without limiting its meaning, it also includes corporations, in the absence of a prohibition in the charter. (18 Am. & Eng. Ency. of Law, 2d ed., 741; 7 Id. 721.) Our statute declares: “A testamentary disposition may be made to any person capable of taking the property so disposed of, except corporations other than those formed for scientific, literary, or solely educational purposes, cannot take under a will, unless expressly authorized [2] by statute.” (Rev. Codes, sec. 4725.) The evident meaning of this awkwardly expressed provision is, that natural persons and corporations formed for scientific, literary or solely educational purposes, may take through testamentary disposition, but that no other corporation may, unless expressly authorized by statute to do so. If the term “person” only had been used, the right would have been extended to any corporation capable of taking and holding property; for, though the term “person” ordinarily refers to a living human being — a natural person- — the definition given it by other provisions of the Codes includes corporations as well as natural persons. (Rev. Codes, secs. 16, 6224, 8071, 8099.) The same definition is given-in each of these sections. “A corporation is a creature of the law, having certain powers and duties of a natural person.” (Sec. 3805. ) “Corporations are either public or private. Public corporations are formed or organized for the government of a portion of the state; all other corporations are private.” (Sec. 3806. ) “Private corporations may be formed by the voluntary association of any three or more persons in the manner prescribed in this Article. ’ ’ [Art. I, Div. I, Part IY, Title I, Chap. I, Civil Code.] (See. 3807.)

The State Orphans’ Home does not fall within the above [3] definitions either of a public or private corporation. The purpose of its establishment was that it should be “a home for the support and care of orphans, foundlings and destitute children resident within the state of Montana.” (Rev. Codes, sec. 1249.) In none of the provisions of the original Act creating it nor in any of the amendatory legislation do we find it clothed with any of the attributes of government. No territory is assigned over which it has jurisdiction. It cannot sue or be sued. It cannot acquire property of any character. Its governing body cannot enact by-laws. It cannot levy or collect taxes or appropriate money, or provide for its own support, or even prescribe the terms upon which children may be admitted to it. In short, it is only an instrumentality provided by the state to accomplish through the state’s executive officers the purposes stated in the statute. Therefore it is not a public corporation. Nor is it a private corporation. It was not formed by the voluntary association of persons under the provisions of the Code, supra. It has no charter defining its powers and capacities. In itself, and apart from the power of control and management conferred upon the executive officers of the state government by the legislation creating it, it is not endowed with power or capacity of any character. The title to the property acquired for its use is vested exclusively in the state, and whatever support it has, is by the law of its creation derived from appropriations made from the state treasury. It is not, therefore, a corporation at all. (Weary v. State University, 42 Iowa, 335.) It is not, strictly speaking, even an educational institution, for though it is made incumbent upon the board of trustees to provide common school instruction for the inmates (Rev. Codes, see. 1261), this-provision is only an incident to the main purpose for which it was established, viz.: “A home for the support and care of orphans, foundlings and destitute children.”

In this state a private corporation may not be created by special law. (Const., Art. XY, sec. 2; Art. V, sec. 26.) If the legislature had intended by the Act to constitute the Home a private corporation, under these provisions of the fundamental law, the Act would have been void. It may be that the legislature has the power to create by special Act a public or quasi-public corporation to carry out the purposes sought to be accomplished by the institution. This course was pursued by the legislature of Kansas with reference to the State University (State ex rel. Little v. Board of Regents, 55 Kan. 389, 40 Pac. 656, 29 L. R. A. 378); and also in California (In re Royers’ Estate, 123 Cal. 614, 56 Pac. 461, 44 L. R. A. 364). But that the legislature of this state had any such purpose in view in establishing the Home is not even suggested in any provision of the Act of establishment.

Counsel contend that, though the Orphans’ Home cannot take, as such, yet since it was the manifest intention of the testator [4] that the state should receive the benefit of his bounty, the bequest is valid as to the state and it may take. The argument is that the state is a sovereign; that the right and capacity to take and hold property is one of the incidents of sovereignty; and that since the Constitution does not in any way limit the state’s power in this regard, it may take by donation, devise, bequest or any other mode of conveyance or transfer known to the law. It cannot be doubted that the power of the legislature is plenary, except so far as restrictions are imposed upon it by the Constitution. (Missouri River P. Co. v. Steele, 32 Mont. 433, 80 Pac. 1093.) But the question here is not the extent of the state’s power, but whether the legislature in the exercise of its sovereign power, in enacting the provision of the Codes, supra (sec. 4725), intended to include the state among those wlm may take under a will. The legislature speaks for the sovereign. Its expressed will is, within the limits of the fundamental law, that of the sovereign itself. The purpose of legislation is to [5] prescribe rules to regulate the conduct, and protect and . control the rights, of the citizen. Therefore, the rule to be observed in the construction of statutes is, that the state is not included by general words therein creating a right and providing a remedy for its enforcement. In United States v. Soar, 2 Mason, 314, Fed. Cas. No. 15,373, 26 Fed. Cas. 329, Mr. Justice Story said on this subject: “In general, Acts of the legislature are meant to regulate and direct the acts and rights of citizens; and in most cases the reasoning applicable to them applies with very different, and often contrary, force to the government itself. It appears to me, therefore, to be a safe rule founded in the principles of the common law that the general words of a statute ought not to include the government, or affect its rights, unless that construction be clear and indisputable upon the text of the Act.” (See, also, Endlich on Interpretation of Statutes, sec. 161; Mayrhofer v. Board of Education, 89 Cal. 110, 23 Am. St. Rep. 451, 26 Pac. 646, and cases cited; In the Matter of the Will of Fox, 52 N. Y. 530; United States v. Fox, 94 U. S. 315, 24 L. Ed. 192; McBride v. Board of Commrs. of Pierce County, 44 Fed. 17.) The rule applies also to laws which are merely enabling in character, in that they confer rights not theretofore possessed. In the Matter of the Will of Fox, supra, the court construed a statute containing provisions similar to those in onr own statute, supra, but dealing with devises of real estate only. The statute provided: “Such devise may be made to every person capable by law of holding real estate, but no devise to a corporation shall be valid unless such corporation be expressly authorized by its charter or by statute to take by devise.” The question at bar was whether a devise to the United States fell within the purview of the statute. It was held that the word “corporation,” as used therein, referred to corporations created under the laws of New York, and that without further definition it could not be held to embrace a state or nation. The court said further: “In construing a statute, words are to be taken in their ordinary sense, unless, from a consideration of the whole Act, it appears that a different meaning was intended. The word ‘person’ does not, in its ordinary or legal signification, embrace a state or government ; and there is no ground to justify such an extension of its meaning in construing the statute relating to .devises. The gift in the will in question to the United States cannot be sustained as a devise of land, for the reason that the testamentary capacity given by the statute extends only to devises to natural persons, and such corporations as are authorized by the law of the state to take by devise.” In affirming the judgment in this ease, under the title United States v. Fox, supra, the supreme court of the United States said: “The term ‘person’ as here used applies to natural persons, and also to artificial persons — bodies politic deriving their existence and powers from legislation,— but cannot be so extended as to include within its meaning the federal government. It would require an express definition to that effect to give it a sense thus extended.” Adopting the construction given to the statute by the New York court, it also held that the word “corporation,” as used in the statute, applied only to artificial persons created under the laws of the state.

Recurring to the proposition that the right of testamentary disposition is within the exclusive control of the legislature, and the necessary postulate therefrom that it may also designate the classes of persons who may take under such a disposition, we must conclude that there is no person, within the meaning of the statute, capable of taking the bequest in question. It is therefore void.

The attorney general argues, however, that the Constitution recognizes the right of the state to acquire property by testamentary disposition. He cites section 1 of Article XYII, and section 2 of Article XI of this instrument, which, so far as pertinent, read as follows: “All lands of the state that have been, or that may hereafter be granted to the state by Congress, and all lands acquired by gift or grant or devise, from any person or corporation, shall be public lands of the state, and shall be held in trust for the people, to be disposed of as hereafter provided, for the respective purposes for which they have been or may be granted, donated or devised.” (Sec. 1, Art. XYII.) “The public school fund of the state shall consist of * * * all unclaimed shares and dividends of any corporation incorporated under the laws of the state, and all other grants, gifts, devises or bequests made to the state for general educational purposes.” (Sec. 2, Art. XI.)

It is argued that these provisions imply capacity in the state to take, by testamentary disposition, property of any character. In the abstract this is true. It will be observed, however, that neither of these provisions deals with the subject of the capacity of the state to acquire property. Both are limitations upon the power of disposal by the legislature. They also embody an express injunction upon the legislature that the property with which they deal must be devoted exclusively to the purposes for which it has been or may be acquired. The state, as a sovereign, has the capacity to acquire property by any means. Yet in expressing its will as to testamentary disposition of property in the-statute supra, it has not put itself in the class of those who may acquire property by such mode of transfer. In other words, it has not given its consent to be the beneficiary of any citizen.

Section 14 of the Act of 1909, supra, declares: “All donations, grants, gifts, or devises made to any of the institutions named herein shall be made to such institution in its legal name, and if made to any officer or boards of sueh institutions, the same' shall be immediately transferred by such board or officer to sueh institution.” It is argued that this provision impliedly puts the state within the class of those who may take. It is sufficient to say in this connection that the Act itself deals exclusively with the subject of control of the state institutions, and does not purport to amend the provisions of the Codes on the subject of wills.

Finally, it is said that the Orphans’ Home may take as an educational, charitable or benevolent society, under section 4762, Revised Codes. Considerable space is devoted in the briefs of counsel to a discussion of the question whether this section, enacted, as it was, 1893 as an amendment to section 473 of the Second Division of the Compiled Statutes of 1887, and brought forward in the Codes of 1895 and 1907, respectively, does not entirely supplant section 4761, which has also been brought forward in the different Codes. We shall not undertake to determine this question. For present purposes it is not a material inquiry whether one or both of the sections must be looked to, to determine what the law is on the subject with which they deal. The purpose intended to be accomplished by them is not to establish charitable uses as they were known at common law, even though both recognize them, nor to enable any particular character of persons to accept a trust made by devise or bequest, but, as was pointed out by the supreme court of California, in Estate of Hinckley, 58 Cal. 457, they were enacted “to prevent improvident alienations or dispositions by languishing or dying persons to the disherison of the lawful heirs.” They go no further than to impose upon the right of disposition by the testator the limitation therein prescribed.

As stated at the outset, the answer given to the first question presented renders unnecessary a discussion of the second.

The appeal of the Dickey brothers presents the question whether the court erred in decreeing that interest should be [6] charged upon their notes up to the date of probate of the ■will. The language in which the bequest is couched clearly indicates that it was the intention of the testator to give to the • brothers the sum of $3,000, to be paid pro tanto by a discharge of the indebtedness due from them upon the note. The words “less a note for two thousand dollars” would, in ordinary business transactions, have reference to the debt as a whole, and not to-the sum mentioned as principal only. There is nothing to indicate that the testator intended to use them in any other or different sense. The court was therefore correct in assigning to them their ordinary meaning. (Rev. Codes, see. 4770.) It is true that the statement of facts does not disclose the rate of interest stipulated for in the note, nor whether any interest was in fact due at the date of probate of the will. Indeed, there was no evidence before the court disclosing anything with reference to the character of the note or the amount of indebtedness, represented by it, except the clause of the will itself. Nevertheless we think the decree, though indefinite,' sufficiently indicates how the settlement should be made by the executor with, these legatees.

The decree is affirmed as to all the appellants; as is also the order denying the widow’s motion for a new trial.

Affirmed.

Mr. Justice Holloway concurs.

Mr. Justice Smith:

I dissent from that part of the foregoing opinion wherein it is held that the state cannot take as residuary legatee for the use and benefit of the State Orphans’' Home. I agree that the right to make testamentary disposition of property depends entirely upon the will of the legislature and that the state may withhold it altogether. Neither is the right to take by descent an inherent one. I also concur in what, is said concerning the effect of our Code provisions governing-the right to make a will, and of persons and corporations, as-such, to take by will. But we must beware of pressing the words, of the statute “to a dryly logical extreme.” (Noble State Bank v. Haskell, 219 U. S. 104, 31 Sup. Ct. 186, 55 L. Ed. 112.) These, and similar enactments, have no reference to the state. They were not intended to apply to that power from which the laws themselves emanate. They simply confer rights upon persons and corporations. It was entirely unnecessary to name the state in the statute. Its capacity to take has always existed and is evidenced by the constitutional and statutory provisions cited in the majority opinion. The original and ultimate right of all property, real and personal, within the jurisdiction of this state and not belonging to the United States, is in the people of the state (Rev. Codes, sec. 26). Whenever the title to any property fails for want of heirs or next of kin, it reverts to the state (Rev. Codes, see. 27). True, the legislature speaks for the sovereign. But it is manifest that that body in enacting section 4725, Revised Codes, was not speaking of the sovereign but of individuals and certain corporations, because the original and ultimate right of all property was in the sovereign. The state was creating and conferring rights, not curtailing them. In my judgment, the commonwealth, in addition to its sovereign rights, has every other right enjoyed by any natural or artificial person, and it cannot be held to have renounced any of them without its express consent. The supreme judicial court of Massachusetts, in Dickson v. United States, 125 Mass. 311, 28 Am. Rep. 230, held that in the absence of a prohibitory statute, the United States could take by devise. In United States v. Fox, 94 U. S. 315, 24 L. Ed. 192 (cited in the majority opinion), it was held that a devise of real estate to the government of the United States was void for the reason that a law of New York, similar to ours, allowed real estate to be devised only to natural persons and certain corporations. In my opinion, this decision is founded in a fundamentally erroneous notion of the purpose and effect of the state statute. With due respect for so high authority, it seems to me altogether unreasonable to declare that a sovereign state, holding the original and ultimate right of all property, cannot take by will because, forsooth, it has graciously allowed certain of its citizens (practically all of them) to take in like manner.

(Submitted February 24, 1912. Decided March 13, 1912.)