Majority
p. 397Charles C. Brundage and others, executors &c., vs. Sarah S. Brundage and others.
Headnote
On the 22d of June, 1869, B. died, leaving a last will, dated May 22, 1868, and two codicils, dated respectively August 2, 1858, and May 23, 1860. He left a widow, a son and two daughters. At the time of his death, the testator owned certain shares of the capital stock of the company formerly known as the N. V. Central R. R. Co., afterward merged by consolidation with the Hudson River R. R. Co. After the execution of the will, and in March, 1869, the testator received ñ-om the company certificates or scrip for the amount of 80 per cent on the capital stock of the company then owned by him. This scrip he owned at his death, and upon it he had previously received dividends. The scrip certificates were payable out of the future earnings of the company, or convertible into stock of the company, at its option. He was seised of several pieces of land, at the time of his death, all of which he owned at the date of the will, except a house and lot purchased afterward. He owned no railroad bonds, at the time of his death. After the death of the testator, the two railroad companies "were consolidated, and the new
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company issued to'the stockholders of the R. Y. Central, scrip certificates for 21 per cent of their stock, which were to he paid out of the future earnings of the new company, or in stock, at its election; and until paid, it agreed to pay dividends thereon at the same rate, and on the same terms, as upon the stock.
By the will, the testator gave to his wife 20 shares of the R. Y, Central R. R. stock of $100 each, $2,000 in cash, and other personal property, diming her life, and after her decease $1,000 of the railroad stock and the $2,000 in cash given to the widow was to go and belong to Ms heirs. By the second clause of the will, the testator gave to his son-in-law, C. A. Collar, a farm, in consideration of Ms taking care of the testator, (and, by the first codicil,, of his wife,) during life. By the third clause, he gave to his daughter, Mrs. Collar, 10 shares of stock in the R. Y. Central R. R. of $100 per share, after the decease of his wife. By the fourth clause, he gave to Ms daughter Sarah 16 shares of the R. Y. Central stock, of $100 each, and $1,000 in the bonds of the same company, at Ms decease, and $1,000 in cash at the decease of his wife. By the last clause, he gave to his son, Charles C. the surplus, if any, after paying all his debts, legacies, bequests and devises, and his funeral expenses. By the first codicil he gave to his daughter Sarah, at his decease, 10 shares of R. Y. Central stock, of $100 each; and at Ms decease to Ms son, Charles C., $1,600 of R. Y. Central stock, &o. By the second codicil, he revoked the bequest of $1,600 of stock to Ms son Charles C., and gave Mm, in lieu thereof, a bond an'd mortgage for $1,250, which he (the testator) held against him.
In an action by the executors, and the son, Charles C., in his individual right, for a construction of the will, held, 1. That the executors, having nothing to do with the land, and no estate in, or control over, it, could not maintain an action for a construction of the will, as to the validity of the devise of the farm to C. A". Collar.
2. That the court could not give a construction to that clause on the application of Charles C.; the plaintiffs not having made proof of the facts alleged in the complaint, as to the failure of Collar to perform the condition on wMeh the farm was devised.
3. That the widow was not entitled to any share of, or interest in, the 80 per cent scrip issued by the R. Y. Central R. R. Co. to the testator. That the dividend for which that scrip was issued, having been made before the testator’s death, the scrip was personal estate, and there was no connection between it and the original stock, and none intended by the testator.
4. That the original stock and the scrip were distinct obligations against the company—assuming that the scrip was valid. That whatever dividends were made to the stockholders after the death of the testator, the widow was entitled to, to the extent of the shares of stock held by her, but not to any earned before, although not paid until after his death.
6. That such scrip passed to the testator’s son, Charles C., as part of the surplus referred to in the last clause of the will.D
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6. That although not entitled to share in the 80 per cent scrip, the widow was entitled to the dividend or income derived from the 27 per cent scrip which was issued after the testator’s death, and also to the income from the consolidation scrip issued by the consolidated company.
7. That under the fourth clause of the will, as modified by the first codicil, if the testator was the owner of ten shares of the IT. Y. Central R. R. stock, not bequeathed to some other person, then ten shares were payable from such stock to the testator’s daughter Sarah; but if not, then it was the duty of the executors to purchase ten shares, of $100 each, and transfer them to her.
8. That as the testator owned no bonds of the IT. Y. Central R. R. Co., the executors must either procure such bonds and deliver them to his daughter Sarah, or pay her the market value thereof, in money, thirty days after the death of the testator.
9. That Charles C. was entitled, under the will, to but one sum of $1,000 in cash and $1,000 in stock, from the cash and stock bequeathed to the widow. That the whole of that fund was disposed of by the clauses of the will preceding the fifth, and there was nothing in the will, or in the proof, to show that the testator intended to revoke or modify such clauses.
10. That as to the house and lot purchased by the testator after the making of the will, the testator could not then have intended it should pass to Charles C. as part of the surplus referred to in the will; and there was nothing in the codicils indicating any change of purpose as to what should pass as surplus.
11. That the surplus contemplated was that which should remain of the personal after paying the debts and the legacies specified in the will.
A dividend earned but not declared, belongs to the person owning the stock when the dividend is actually declared, and not to the person who was owner of the stock prior to such declaration.
APPEAL from a judgment of the Special Term in Ontario county giving a construction to the will of Nathan Brundage.
Nathan Brundage died on the 22d day of June, 1869, leaving a last will and testament, bearing date the 22d day of May, 1858, together with two codicils, one of which was dated August 2,1858, the other May 23,1860. The will and codicils were duly proved before the surrogate of Ontario county, and letters testamentary were issued to the above named plaintiffs, who were designated in the will as executors thereof.
The testator left surviving him his widow Eliza, and
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the defendants and Charles C. Brundage, one of the plaintiffs, his only heirs-at-law.
He died seised of several pieces of land in the town of Hopewell, all of which, except a house and lot, he owned at the date of his will. The house and lot he purchased after the date of the will, for the reason that his son-in-law Charles A. Collar to whom he. had devised his farm charged with the support of the testator and his wife during their lives, had refused to support them, and he, the testator, was obliged to purchase the house and lot for a home for himself and wife.
At the time of his death, and for several years • prior ■thereto, the testator owned shares of the capital stock of the company originally known as the New York Central Railroad Company, afterward merged by consolidation with the Hudson River Railroad Company.
After the will was made,' and on or about the 24th of March, 1869, the testator received from said company certificates or scrip for the amount of 80 per cent on the capital stock of said company then owned by him. This scrip he owned at his death, and he had received dividends thereon before his death. He did not own any railroad bonds at the time of his death.
The scrip certificates were payable out of the future earnings of the company, or convertible into stock of the company, at its election.
After the death of the testator the two companies above named were consolidated, and the new company, in order to equalize the interest of the stockholders of the two companies in the new company, issued to those holding stock in the New York Central, certificates whereby the consolidated company agreed to pay to the former stockholders in the Central 27 per cent of the amount of stock held by such stockholders respectively, out of the future earnings of the company, or in stock at the election of the company; and until paid it agreed to pay dividends thereon at the same rates and terms as upon the stock.
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By the will, the testator gave to his wife twenty shares of the New York Central railroad stock of $100 each, $2,000 in cash, and other personal property, during her life, and after her decease $1,000 of the railroad stock and the $2,000 in cash given to the widow was to go and belong to his hens.
By the 3d clause of the will he gave to his daughter Mrs. Collar, ten shares of stock in the New York Central of $100 per shares after the decease of his wife.
By the 4th clause he gave to his daughter Sarah 16 share, of the New York Central stock, of $100 each, and $1,000 in the bonds of the same company, at his decease, and $1,000 in cash at the decease of his wife.
And by the last clause he gave to his son Charles C. the surplus, if any, after paying all his debts, legacies, bequests and devises and his funeral expenses.
By the 1st codicil, he gave to his daughter Sarah, at his decease, ten shares of New York Central stock of $100 each, and at his decease, to his son, Charles C., $1,600 of New York Central stock; and the funeral expenses of his wife were to be paid out of the surplus, before division.
By the 2d codicil, he revoked the bequest of $1,600 of stock to his son Charles, and gave him, in lieu thereof, a bond and mortgage for $1,250, that the testator held against him.
By the 2d clause of the will the testator gave to his son-in-law, Collar, a farm in said town of Hopewell, of 95 acres, in consideration of his (Collar’s) taking care of him, (and, by the 1st codicil, of his wife,) during life.
The executors commenced this action to obtain a construction of the will, in the following particulars :
First. Whether or not the scrip or new stock issued by the directors of the New York Central Railroad Company, to the testator during his life, is not surplus within the true intent and meaning of said will, and as such belongs to Charles C.
p. 402This action is brought by the executors of tlie last will and testament of Nathan Brundage, deceased, to obtain a judicial construction of the will. An executor cannot maintain an action for the construction of a will in respect to questions with which he has nothing to do. In the present case, the executors have no interest in or power over the real estate, nor any duty connected therewith, and for that reason the questions raised in the complaint, as to the devolution of the title to the real estate owned by the testator at the time of his death, cannot be disposed of in this action. The only questions to be considered are those relating to the personal property. My conclusions respecting them are the following: I. By the 1st clause of the will, the defendant Eliza Brundage, the widow o-f the testator, is entitled, during
Second. Whether or not the plaintiffs are bound to give to Sarah S. a New York Central railroad bond of $1,000.
Third. Whether or not the codicils shall be considered a part of said will.
Fourth. Whether or not the plaintiffs are bound to pay to the legatees any more than the number of shares of stock named in the will at $100 per share.
Fifth. What part of the estate shall be considered surplus.
Sixth. Whether, at the decease of the widow, and the payment to Charles C. of $2,000? the residue of the property bequeathed to the widow shall be divided between the children, Charles C. and Sarah S.
Seventh. Whether Chester A. Collar is entitled to the farm, having failed to provide for the support of the testator and Ms wife.
The Special Term gave the following construction to the will:
“ James C. Smith, J.
p. 403her life, to 20 shares of the capital stock of the New. York Central Railroad Company of the nominal or par yalne of $100 each. She is not entitled, however, to the 80 per cent scrip and certificates issued to the testator in his lifetime, as the holder of those shares. The certificates being the property of the testator at the time of Ms death, the widow has no claim to them, unless they are given to her by the will.
They are not given by the will, unless they pass, as mere incidents, by a bequest of the stock eo nomine. That they thus passed, I tMnk cannot be mamtained. Whatever force there may be in the views advanced by the counsel for the defendants, as to the legal character and effect of the certificates, and the power of the company tó apply the future earnings to them payment, at the expense of the holders of the original stock, those views do not justify the conclusion that the certificates pass by a bequest of the stock. It is true the character of the certificates is somewhat anomalous. They are not capital stock, nor are they dividends, strictly speaking, either of cash or stock. They purport to represent past earnings of the company, which were expended in the construction and equipment of the road, and in the purchase of real estate and other property, with a view to the increase of the traffic of the company, and they are issued to the stockholders as evidence of such expenditures and of their right to reimbursement of the same, at some convenient future period. Yet they create no obligation on the part of the company to pay, even if the future earnings should be sufficient. They are payable, with dividends, at the pleasure of the company, and they are also convertible into capital stock at the option of the company, the legislature having authorized such conversion since the certificates were issued. Although they are the increase of the original stock, they are not mseparabiy connected with it; they may be sold and transferred separately, without affecting their va
p. 404lidity. It was competent for the testator to give the stock to one legatee, and the scrip certificates to another; and in my opinion he has done so "by the provisions of his will, the certificates being disposed of by the residuary clauses. The consolidation certificates are on a different footing. By the terms of the will, the widow was entitled to a delivery of the stock certificates at the expiration of thirty days after the death of the testator. The consolidation certificates were not issued, nor was the consolidation effected till after that time. She is therefore to be regarded as the holder and owner of the stock bequeathed to her, at the time of the consolidation and of the issuing of the consolidation certificates, and is entitled to receive her proportionate share of said certificates, as such shareholder. The same-observations apply to the sum of $518,310 retained out of the assets of the New York Central Bail-road Company for the purpose of equalization, on the consolidation of the two companies. If that sum, or any part of it, shall be paid over by the railroad corporation to tile stockholders during the lifetime of Mrs. Brundage, she will be entitled to receive her proportionate share thereof as such stockholder. So long as the consolidation certificates and the reserved fund remain in their present condition, Mrs. Brundage is not entitled to her share of the same absolutely, but only to the use and income thereof during her life. If the terms of consolidation between the companies are correctly understood, the corporation formed by the consolidation has the option to pay over the amount of such certificates from its future earnings, as earnings, or to convert the amount of such certificates into capital stock, and to pay dividends thereon. Earnings paid over as such to Mrs. Brundage, will belong to her absolutely; but as increased capital, will be hers for life only, and she will be required to preserve
p. 405it for those entitled in remainder, using only the income thereof for herself. She is not entitled, absolutely, to her proportionate share of the consolidation certificates and the reserved fund of $518,310, so long as the corporation has the option of converting them into capital. II. The defendant, Eliza Brundage, is also entitled, for life, to $2,000 in cash; to the household furniture left by the testator; and to a horse and other chattels mentioned in the first clause, which latter articles, if not belonging to the estate, are to be purchased by the executors to meet the bequest. III. The first clause also makes a final disposition, after the death of Eliza Brundage,aof all the property bequeathed to her during her life, namely, $1,000 of the railroad stock, and $1,000 in cash of the amount bequeathed to her, to the testator’s son, Charles C. Brundage, and the remainder of such property to the testator’s heirs equally, of whom there are three, viz., Charles, Mrs. Collar and Sarah Sophia Brundage. The bequests in the fifth clause to Charles, after the death of the testator’s wife, of $1,000 in Central railroad stock, and $1,000 in cash, are but repetitions of the like provisions in the first clause, and are not cumulative. By virtue of this bequest of $1,000 in stock of the Central railroad company, Charles will be entitled, on the death of Mrs. Brundage, to' ten shares of such stock, or shares of the nominal or par value of $1,000, of the stock of the corporation formed by the consolidation, or in whatever form said stock shall then exist. IV. The bequest in the fourth clause to Sarah S. Brundage, of $1,000 in New York Central railz’oad bonds, is not a specific, but a general or demonstrative legacy, and does zzot fail, though the testator had no such bonds at the time of his death. It is equivalent to a bequest of $1,000 in money. By the same clause, she has also a vested
p. 406legacy of §1,000 in cash, payable at the death of Eliza Brundage, out of the general assets of the testator. V. The bequest “to Mrs. Collar of ten shares of stock in the New York Central railroad, of §100 a share,” after the death of Eliza Brundage, is general and not specific. It is the duty of the executors to provide for its payment at the death of Mrs. Brundage, out of the general assets. The fact that the New York Central is consolidated with the Hudson River Railroad Company, does not work an ademption of the legacy, but the legatee will be entitled to the same number of shares in the New York Central and Hudson River Railroad Company, or to shares in that company of the same nominal or par value,'in the aggregate, as in the case of the bequest to Charles. VI. The “surplus” or remainder of the personal property of the testator, after paying and providing for all the legacies and bequests contained in the will, together with debts and expenses of executing the will and administering on the estate, is given to Charles C. Brundage. The costs of this action, including the taxable costs and disbursements of the defendants, being in the nature of expenses' of executing the will, are to be paid by the executors, out of the residuary property. Judgment to be entered accordingly ” By a stipulation between the parties, Charles C. Brundage was made a party plaintiff in his individual right, and it is in that right his counsel insists he is entitled to a construction of the will as to the validity of - the bequest to Collar. Judgment was entered in conformity to the conclusions of the court above stated.
The Special Term was right in holding that the executors were not entitled to call for a construction of the will as to the validity of
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the devise of the farm to Collar. They have nothing to do with the land. They have no estate in nor control over it.
Bor could the court give a construction to that clause on the application of Charles C. Brundage. It is charged in the complaint that Collar did not support the testator, but the allegation is denied in the answer, and there is no proof on the subject.
If Brundage desired to have the court pass upon that clause it was his duty to make proof of the facts alleged in the complaint; failing to do that, the court could not make any other disposition of the question than it has done. The case states that the plaintiff offered to prove that Collar abandoned the premises and failed to provide for the testator &c., and that the defendants objected to this evidence, and it was rejected. If by the plaintiff was meant Charles 0., I am not satisfied the learned judge was right in rejecting it. He obviously understood the offer to be made by the executors, and the mistake was not corrected, and it is too late to correct it now.
It was correctly held that the widow was not entitled to any share of, or interest in, the eighty per cent scrip issued by the Hew York Central Railroad Company to the testator.
The certificate for the eighty per cent is dated the 24th March, 1869, and was issued in pursuance of a resolution of the directors of said company, passed 18th December, 1868. The testator died 22d June, 1869. At the time of his death, therefore, the scrip was a part of Ms personal estate, and no connection between the original stock and the scrip is shown to exist thereafter, or that any connection between them was intended by the testator.
They were separate and distinct obligations against the company, assuming ttiat the scrip was valid; and
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its validity is not called in question in this action. (Currie v. White, 37 How. 339 .)
Whatever dividends were made to the stockholders after the death of the testator, the widow was entitled to, to the extent of the shares of stock held by her, but not to any earned before, although not paid until after his death. (Redf. on Wills, part. 2, pp. 469, 470, and notes. Spear v. Hart, 3 Rob. 420 .) This scrip passed to the son Charles, as part of the surplus referred to in the-last clause of the will. Although not entitled to share in the eighty per cent scrip, she was entitled to the dividends or income derived from the twenty-seven per cent scrip, which was issued after the testator’s death, and also to the income from the consolidation scrip issued by the consolidated company. A dividend earned but not declared belongs to the person owning the stock when the dividend is actually declared, and not to the owner of the stock before such declaration.
On the death of the widow $1,000 of the railroad stock bequeathed to her passed to Charles C. Brundage, together with $1,000 of the cash, given her by the will, and the residue of the property given to the widow was to descend to his heirs.. Ten shares of the same stock is given by the third clause of the will to Mrs. Collar after the death of the widow. $1,000 of the cash given to the widow is by the fourth clause of the will given to Sarah S. Brundage.
By the fifth clause of the will, the residue of the property, the use of which was given to the widow for life, after paying the foregoing legacies, is given to Charles and his daughters Maria and Sophia, to be equally divided between them.
By the fourth clause, as modified by the first codicil, ten shares of New York Central stock, and $1,000 in bonds of the same company are given at the decease of the testator to his daughter Sarah S. If the testator
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was the owner of ten shares of this stock not bequeathed to some other of the objects of the testator’s bounty, then ten shares are payable from such stock, but if not, it is the duty of the executors to purchase ten shares of $100 each, and transfer them to her. If such stock cannot be purchased, then Sarah is entitled to the market value, in money, of said stock, thirty days after the testator’s death.
As the testator owned no bonds of the Hew York Central Railroad, the executors must either procure such bonds and deliver the same to Sarah, or pay her the market value thereof in money, thirty days after the death of the testator.
By the fifth clause Charles C. is entitled, at the death of the testator, to $1,000 in cash.
Charles is entitled, under the will, to but one sum of $1,000 in cash, and $1,000 in stock, from the cash and stock bequeathed to the widow. The whole of that fund is disposed of by the clauses of the will preceding the fifth clause, and there is nothing in the will, or in the proof, to show that the testator intended to revoke or modify such clauses.
When the will was made, the testator had not purchased the house and lot, and he could not then have intended it should pass to Charles as part of the surplus referred to in the will.
There is nothing in either of the codicils, if they were made after the purchase of the house and lot, indicating any change of purpose as to what was intended to pass as surplus.
The surplus contemplated was, it seems, that which should remain of the personal, after paying the debts and the legacies specified in the will.
As the judgment in this case will not interfere with the right of Charles to insist, hereafter, that he is entitled to the house and lot, by the will, it is better for all
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concerned that the- question should be reserved for decision, to another litigation.
[Fourth Department, General Teem,-at Buffalo,
June 3, 1873.
Mullin, Talcott and B. D. 'Smith, Justices.]
Judgment affirmed. The costs of the executor to be paid out of the estate.
Cases cited
- Spear v. Hart 3 Rob. 420 p. 408