Succession of Quintero , 209 La. 279 ( 1945 )

This is an appeal by Dorothy S. Spencer from a judgment of the lower court decreeing that she is not entitled under the will of the late Emma M. Quintero, born Peniston, bequesting her twenty shares of stock in The Times-Picayune Publishing Company, to the twenty additional shares of stock issued as a dividend to Mrs. Quintero by the company subsequent to the execution of the will but prior to her death.

Counsel for the appellant conceded in argument that under our law if The Times-Picayune Publishing Company had declared a cash instead of a stock dividend, such cash dividend would not have passed to the legatee at the death of the testatrix. He also conceded that if the dividend had been in cash and twenty additional shares of stock had been purchased with such cash, these shares of stock would not have passed to the legatee either. I cannot see the force or logic of the reasoning that would make this rule of law inapplicable in the instant case merely because the company, instead of declaring a cash dividend, issued such dividend in the form of additional stock of the corporation unless there were an express provision in our law making such a distinction.

It is the universally recognized rule of law that "A specific legacy of shares of stock in a corporation does not carry with it dividends accruing prior to the testator's death, whether in cash, property, or stock, or not payable until after the testator's death, unless a contrary intention is manifest in thewill, although the legatee is entitled to dividends declared after the testator's death." 69 C.J. 402, § 1452. See, also, 40 Cyc. 1549; Page on Wills, Lifetime Edition, § 1599c; vol. 11, Fletcher's Cyclopedia of Corporations 944, § 5383; vol. 7, Thompson on Corporations, 3rd Ed., 252, § 5372; Cook on Corporations, 8th Ed., § 301; Perry v. Maxwell, 17 N.C. 488, 2 Dev.Eq. 488; First National Bank v. Union Hospital,281 Mass. 64, 183 N.E. 247, 89 A.L.R. 1130; Griffith v. Adams,106 Conn. 19, 137 A. 20; McGregory v. Gaskill, Mo.App., 296 S.W. 833; In re Brann, 219 N.Y. 263, 114 N.E. 404, L.R.A. 1918B, 663; Hicks v. Kerr, 132 Md. 693, 104 A. 426, 10 A.L.R. 1326; Brundage v. Brundage, 60 N.Y. 544; In re Leavitt's Estate, 86 Misc. 609,148 N YS. 758; and Norris v. Harrison, 2 Madd.Ch. 268, 56 Eng.Reprint 333. This has been held to be true even though the stock dividend, declared during the testator's lifetime, is not paid until after his death, under the theory that a dividend belongs to the person owning the stock at the time it is declared. vol. 2, Clark Marshall on Private Corporations 1613; Cook on Corporations, 8th Ed., § 301; Sherman v. Riley, 43 R.I. 202, 110 A. 629; In re Kernochan,104 N.Y. 618, 11 N.E. 149; De Gendre v. Kent, L.R. 4 Eq. 283; and Lock v. Venables, 28 Beav. 598, 54 Eng.Reprint 237.

And it is elementary that the construction and interpretation of a will for the purpose of ascertaining the testator's meaning and intention as expressed therein is governed by the law of the testator's domicile.

However, the majority opinion, declaring this court has had no occasion heretofore to pass on the issues raised in this case, resorts to certain pronouncements and holdings under the common law, as well as the processes of analytical reasoning evolved therein (none of which are applicable here from either a factual or legal standpoint), instead of to the civil law system chosen by the people of this state as the system under which they desired to be governed, in construing Mrs. Quintero's will and reversing the decision of the lower court by decreeing the legatee, Dorothy S. Spencer, to be the owner of the twenty additional shares of Times-Picayune Publishing Company stock issued as a dividend to Mrs. Quintero during her lifetime.

On Page No. 6 of the majority opinion [24 So. 2d 592] we find the statement that "In other jurisdictions there are cases holding — under the facts peculiar to the case — that a testamentary bequest of a given number of shares of stock in a corporation did not of itself entitle the legatee to a stock dividend declared subsequent to the making of the will but before the death of the testator. And there are decisions— where the facts were similar to the instant case — maintainingthat such a testamentary bequest did entitle the legatee to thestock dividend. A lineup of the decisions cited on each side of the question is published in 10 A.L.R. 1326, in the Annotation of Hicks v. Kerr, 132 Md. 693, 104 A. 426, and in89 A.L.R. 1130, in the Annotation of First National Bank v. Union Hospital, 281 Mass. 64, 183 N.E. 247. * * *," and on page 17 of the majority opinion [24 So. 2d 599] it is pointed out that the comment of the annotator following the case of First National Bank v. Union Hospital in 89 A.L.R. is to the effect that "It may be noted that this rule may tend to defeat the intent of the testator. The value of the stock bequeathed may be greatly enhanced by undivided profits which testator understood to be a part of his gift of the stock itself, and if the profits are divided in the form of a stock dividend, the original value of the stock bequeathed is thereby greatly diminished, without bringing in any cash. The testator may regard it as in fact unchanged so far as his bequest is concerned, and intend the increase to pass with the stock originally bequeathed." (Italics mine.)

But it is not disclosed in the majority opinion, nor was this court informed, that in the annotation in 10 A.L.R. 1326, following the reported case of Hicks v. Kerr, under the heading "Do dividends of stock declared before testator's death pass to legatee of original stock?" is the comment that "The cases which have actually passed upon this question are few in number, and are in accord with the reported case (Hicks v. Kerr, [132 Md. 693, 104 A. 426, 10 A.L.R.] 1323), whether the dividend was in stock of the corporation which issued that covered by the will, or was a division among stockholders of the stock of other corporations held by the parent corporation. * * * However, the cases so far as they have actually passedupon the question, have held that the specific bequest did notcarry the stock dividend in either case." Nor is it disclosed in the majority opinion that in the supplemental annotation on this subject to be found in 89 A.L.R. 1130, and just preceding the quotation cited from Page No. 17 of the majority opinion [24 So. 2d 599], it is stated: "The majority of the cases herein collated agree with the few cases cited in the former annotationin holding that a specific bequest of shares of stock does notcarry with it a stock dividend declared during the lifetime ofthe testator, whether the dividend was in stock of the corporation which issued that covered by the will, or was a division among stockholders of the stock of other corporations held by the parent corporation." (Italics mine.)

Further, there is nothing in the majority opinion pointing to the fact that the cases following the so-called minority rule (which are the cases relied on to support the majority holding) are, as the annotator in 89 A.L.R. 1130 points out, all cases "in which an increase in the number of shares bequeathed has been effected by a change in the organization of the corporation or by a splitting of the original shares with a proportional reduction in par value after the making of the will and during the testator's lifetime," in which cases "a different rule seems to prevail. In such cases the courts hold that the increased number of shares, in proportion to the number of shares bequeathed, pass to the specific legatee." The annotator then gives specific examples of such instances: "Thus, in Fidelity Title T. Co. v. Young, 1924, 101 Conn. 359, 125 A. 871 (because of a provision in the will that the stock's `equivalent in cash at the time of my decease should I not then be the owner of said stock,' be given to the legatee), where stock of a par value of $100 was split five for one, and the par value was changed to $20, a specific legatee of 125 shares of stock was held entitled to 625 shares after the split. The court states that a specific legacy of shares of stock owned by the testator at the date of the will necessarily refers to shares then existing. So, in Heckler v. Young, 1931, 264 Ill. App. 34, a bequest of thirty shares of stock was held to carry ninety shares to the legatee where the shares were split three for one, with the consequent reduction in their value to about one third. Here the testatrix knew at the time the will was drawn and executed that the stock was going to be split; and the will provided that, in the event she did not own the stock at the time of her death, the legatee should receive cash equivalent to the market value of the stock as of the date of the will. And see to the same effect Bireley's Adm'rs v. United Lutheran Church, 1931, 239 Ky. 82, 39 S.W.2d 203, where the stock was split four for one, with consequent reduction in par value; In re Mandelle's Estate, 1930, 252 Mich. 375, 233 N.W. 230, where the stock was split five for one and shares of no par value substituted; and In re Martin's Will, 1929, 252 N.Y. 582, 170 N.E. 151 (reversing, 1928, 225 A.D. 724, 231 N.Y.S. 813), where stock was split four for one with a consequent reduction in par value, in all of which the same rule is applied." (The provision in the will in the Fidelity Title case was inserted in this quotation by me.)

Thus it may be seen that in all of these cases stock split-ups or corporate reorganizations were involved with the result that the shares bequeathed were, in effect, "watered". In none of these cases had stock dividends been declared. Further, it is obvious from a reading of the cases in this so-called minority group that the court rested its decision in each case on the intention of the testator as ascertained from the terms of the will itself and the circumstances surrounding the execution of the same. It therefore follows that whatever consolation the majority opinion may derive from the reasoning processes employed by the courts in reaching the decisions relied on, it can have no application to the facts of the case now under consideration.

A mere reading of the entire testament in this case will disclose that the testatrix obviously had the advice and assistance of counsel in its preparation and, in my opinion, the language used therein demonstrates that the testatrix not only understood the import and significance of the terms used by her in disposing of her property, but that she did this in the light of our codal articles, for, in her will, she declares: "I hereby make and establish the followingparticular legacies of the following particular objects and request that my executor deliver said legacies to the named legatees as soon as may be" (necessarily meaning that the legacy should be delivered by the executor after her death), and then stipulates in the second paragraph "To Dorothy Spencer I give and bequeath 150 shares of stock of the United Fruit Company, 20 shares of stock of The Times-Picayune Publishing Company, 20 shares of stock of the Banco Atlantida, and all the stock of the American Telephone Telegraph Company owned by me at the time of my death. * * *" (Italics mine.)

Under the express provisions of our Revised Civil Code "Testamentary dispositions are either universal, under a universal title, or under a particular title. * * *" (Article 1605), and "Every legacy under a particular title gives to the legatee, from the day of the testator's death, a right to the thing bequeathed * * *." Article 1626.

Counsel for the appellant argues that these articles must be read in connection with Article 1636 which provides that "The legacy bequeathed shall be delivered with everything that appertains to it, in the condition in which it was on the day of the donor's decease."

This is true, but it is also true that these three articles must be read in connection with Article 1631, to be found under the heading "Of Particular Legacies" in Paragraph 4 of Section 4 of Chapter 6 of Title II of the Revised Civil Code (dealing with donations inter vivos and mortis causa) wherein it is provided that "The interest or proceeds of the thing bequeathed shall accrue to the benefit of the legatee, from the day of thedecease, without his having brought suit for the same: 1. When the testator has expressly declared in his will to that effect; 2. When an annuity or pension has been bequeathed by way of maintenance."

Thus it may be seen that while the legacy takes effect from the date of the testator's death, the fruits of a particular legacy accrue to the benefit of the legatees only from the day the thing bequeathed is delivered or from the day judicial action is begun by the legatee except in the two cases referred to in Article 1631, i. e., when the testator has expressly declared to that effect in his will or an annuity or pension has been bequeathed by way of maintenance.

If there is any doubt, however, as to the meaning of the provisions to be found in Article 1636 when it is read in connection with the provisions of Article 1631, resort must be made to the construction given Article 1018 of the Code Napoleon, from which Article 1636 was derived, since its provisions are a literal translation of that article. McCaffrey v. Benson, 40 La.Ann. 10, 3 So. 393; Succession of Marinoni,183 La. 776, 164 So. 797; and Successions of Lissa, 198 La. 129,3 So. 2d 534.

Resort to the French jurisprudence under Article 1018 of the Code Napoleon and the comments thereon by the French authorities leaves no doubt that there was no conflict between the provisions of these two articles. The authorities are unanimous in holding that what is meant by "everything that appertains" to a particular legacy are those things that are indispensable to its use for the purpose for which it was destined. In other words, those accessories without which a thing bequeathed would be rendered useless, as the key to a closet, the sheath of a sword, the pedestal of an ornamental clock, the frame of a painting, or those things which have been attached to and made a part of the object bequeathed by law, such as immovables by destination. Vol. 3, La.Legal Archives, 901; Toullier, Droit civil francais, vol. 5, No. 531; Baudry-Lacantinerie, Traite de Droit Civil, vol. XI, No. 2542; L. Josserand, Cours de Droit Civil, vol. 3, No. 1508; Aubry Rau, Droit Civil Francais, vol. XI, p. 484; Pothier, Des donations testamentaries, Chap. V, Sec. III, Art. I, Section 8; and Pothier, Traite de Donations Testamentaries, Chap. V, Section III.

It certainly cannot be said that the fruits of a legacy form such an indispensable or integral part thereof and are so necessary for its proper enjoyment that they necessarily appertain thereto.

In the instant case the testatrix willed 20 shares of Times-Picayune Publishing Company stock, each share having a par value of $100, to Dorothy Spencer. If the judgment of the lower court is affirmed Dorothy Spencer will receive this identical number of shares and they will have the same par value — $100. It cannot be said that the 20 additional shares of stock, also with a par value of $100, are in any way indispensable to the proper enjoyment or use of the original 20 shares. These 20 additional shares should not, therefore, pass to Miss Spencer in the absence of an express declaration to that effect by the testatrix.

No such intention can be found either in the express terms of the will or implied from any terms found therein, and the deceased having failed to change her will or add thereto by codicil after these additional stock shares were issued to her by stipulating that she intended them included in the bequest to Dorothy Spencer, we are powerless to give them to her for under the heading "General Rules for the Interpretation of Legacies," in Section 7 of Chapter 6 (dealing with dispositions mortis causa) of Title II of the Revised Civil Code, it is declared that "In the interpretation of acts of last will, the intention of the testator must principally be endeavored to be ascertained, without departing, however, from the proper signification of the terms of the testament." Article 1712. (This is in conformity with the universal rule hereinabove referred to.)

And if, by some process of conjectural reasoning it can be said that because this stock dividend was carved out of the surplus and undivided profits that had accumulated under the 20 shares of stock bequeathed to Dorothy Spencer some doubt might exist as to whether or not the testatrix also intended to bequeath these fruits or dividends to the legatee, then the provisions of Article 1717 (found in this same Section 7 of Chapter 6 under the heading "General Rules for the Interpretation of Legacies") to the effect that "If it can not be ascertained whether a greater or less quantity has been bequeathed, it must be decided for the least," are applicable.

The court can only give effect to the expressed, not the conjectural or problematical, intention of the testator. Spath v. Zeigler, 48 La.Ann. 1168, 20 So. 663; Succession of Langles,105 La. 39, 29 So. 739; Succession of Villa, 132 La. 714,61 So. 765. And it cannot presume that the testator's intention has changed from that expressed in the will. Succession of Cunningham, 142 La. 701, 77 So. 506. Forced constructions that place in the mouth of the testator that which he refrained from saying are not permissible (Theall v. Theall, 7 La. 226, 26 Am.Dec. 501; City of New Orleans v. Hardie, 43 La.Ann. 251, 9 So. 12; Maguire v. Maguire, 110 La. 279, 34 So. 443) for the court has only one province, to construe wills. It cannot make them.

For these reasons I respectfully dissent from the majority holding.