Hicks v. Kerr

⁶⁹⁴ Urner J., delivered the opinion, of the Court. The eighth paragraph of the will of Ella J. Kerr, late of Baltimore City, deceased, is as follows: “To my daughter, Ella K. Hicks, wife of R. Randolph Hicks, of Norfolk, Virginia, I give and bequeath the forty-two (42) shares of stock in the Horthern Central Railway Company, now registered in my name. I further provide with reference to said legacy that, in the event my said daughter predeceases me without children or descendants of children surviving her, the same shall become the absolute property of her husband, R. Randolph Hicks.” The will was executed July 1, 1913, and the testatrix died on the 17th day of March, 1917. During the period between the execution of the will and the death of the testatrix, her daughter, Mrs. Hicks, died without leaving any children, or descendants, but survived by her husband, to whom the forty-two shares of stock specifically bequeathed by the clause of the will we have quoted have been transferred in due course of administration.

At the time of her death the testatrix was also the owner of sixteen additional shares of stock of the Northern Central Railway Company, which she had received, by virtue of her existing share holdings, as her proportion of a forty per cent stock dividend declared by the company in July, 1914, on account of surplus earnings appropriated to improvements or otherwise invested. The sixteen shares which thus accrued to the testatrix are claimed by her son-in-law, Mr. Hicks, as the substituted legatee, under her will,, of the forty-two shares therein bequeathed, upon the theory that the dividend stock subsequently issued bore such a relation to the original shares as to follow the course of their testamentary disposition. This claim is contested by the two surviving sons of the testatrix, who assert that the sixteen shares in question have passed to them as residuary legatees. The appeal is from a decree by which the latter- view was sustained. ⁶⁹⁵ The descriptive terms of the bequest are clear.

The property intended to be bequeathed was plainly designated by the testatrix as “the forty-two (42) shares of stock in the Northern Central Railway Company now registered in my name.” It was the only stock of that company owned by her when she executed her will, and it was readily identified by the description quoted when the will took effect at her death. So far as the specific terms of the bequest arei concerned, they are completely gratified by the delivery to the legatee of the forty-two shares precisely described. It is only because the stock dividend represented assets which previously formed elements of value of the stock already issued that the dividend stock is claimed by the legatee of the original shares. When the sixteen shares, of dividend stock were issued to the testatrix, she also received her due proportion of a cash dividend likewise declared on account of accumulated earnings of the corporation.

It is, of course, not suggested that this cash dividend would pass under1 the bequest of the stock, even if the money thus derived could he identified at the period when the will became operative. The Railway Company might have distributed its surplus earnings wholly in the form of cash dividends, instead of using a part of such funds for improvements on account of which stock dividends were declared. If the former course had been pursued, it would not be contended that the bequest of the forty-two shares should he treated as carrying with it such part of the proceeds of the cash dividends as the testatrix may not have expended in her lifetime. The fact that the dividends were declared partly in stock, instead of entirely in cash, does not affect the principle of the question now being determined.

Northern Central Dividend Cases, 126