Wm. D. Shellady, Inc. v. Herlihy

⁴⁶⁴ Oppenheimer, J., delivered the opinion of the Court. This is an appeal from an order of the Circuit Court for Talbot County construing a will in which the testator used ambiguous words to describe the subject of a-bequest. A suit for construction of the will of R. Carl Bamberger was filed by his executors, the appellees. The executors are Thomas Herlihy, Jr. (Herlihy), the testator’s attorney who had prepared the will, and Albert J. Matlusky (Matlusky).

The suit was filed against the legatees under Item 2 of the testator’s will and Wm. D. Shellady, Inc., a Delaware corporation, (the corporation) of which the testator had been the president land of whose stock he was the largest holder. Matlusky was the secretary-treasurer of the corporation and the second largest holder of its stock. Item 2 of the will provides as follows: “I give and bequeath to each of the following named legatees, shares of Class ‘B’ stock of Wm.

D. Shellady, Inc. as follows: Albert J. Matlusky — 9 shares. Reinhardt F. Bamberger — 9 shares. Earl Bamberger — 5 shares. Elizabeth Brosnahan — 5 shares.

Mable McCrea — 32 shares. Vincent J. Colombo — 4 shares. Valdemar Lundberg — 4 shares. John Gibbons — 4 shares.

Charles Mason- — 4 shares. George Heinold — 4 shares. Jack Denny — 4 shares. Harry Donoho — 4 shares.

Thomas Point — 4 shares. Mary T. Kaminski — 4 shares. Holy Trinity Lutheran Church of Wilmington, Del. — 8 shares. “The bequest of stock to Holy Trinity Lutheran Church is to be considered as a memorial to my mother and father. I request each and every one of the afore ⁴⁶⁵ mentioned legatees before selling or disposing of the stock to offer the same to Wm.

D. Shellady, Inc. and that the corporation acquire the stock at book value.” The persons and church named in Item 2 are hereinafter referred to collectively as “the legatees”. By the third item of his will the testator bequeathed his household effects and automobile to his housekeeper, Mable McCrea, one of the legatees under Item 2; by the fourth item, he directed that she should have charge of his funeral arrangements. In the fifth item he devised and bequeathed the residue of his estate to the corporation. By the sixth item, he designated Herlihy and Matlusky to be his executors without bond.

After the taking of testimony, Chief Judge J. DeWeese Carter filed an opinion which, by stipulation of counsel representing all parties who appeared or wished to appear at the hearing, sets forth all the facts and questions which would be set forth in a separate statement under Maryland Rule 826g. In accordance with his opinion, Judge Carter filed an order which provides inter alia that “the words ‘Class B’ immediately following the words ‘shares of’ in Item 2 of the subject Will, be and the same are hereby stricken out and disregarded” and “that the Testator by Item 2 of the subject will bequeathed to the legatees therein designated, the 104 shares of Class A stock in Wm. D. Shellady, Inc. which he owned at the time of his death in the proportions therein specified * * The corporation has filed this appeal. The executors are named as appellees but have taken no part in the appeal.

Affirmation of the lower court’s order is urged by certain of the legatees other than Matlusky (some of the legatees did not take part in the proceedings below or in this appeal). Upon the testator’s death it was found that he owned 104 shares of the Class A stock of the corporation but did not own any shares of the corporation’s Class B stock. At the trial below the court admitted extrinsic testimony as to the meaning of Item 2 of the will, based on the fact that there was a latent ambiguity. Extrinsic evidence pertaining to the circumstances of the testator and of the corporation was clearly admissible.

Darden v. Bright, 173 Md. 563, 568-570 , ⁴⁶⁶ 198 Atl. 431 (1938) and the authorities therein cited; Miller, Construction of Wills, §§ 42-45 (1927). The evidence showed that in 1928 the testator and Harry W. Mason purchased all the stock of the corporation from the estate of William D. Shellady as equal partners. The business conducted by the corporation was that of installing and supplying plumbing facilities. Shortly prior to 1945, the testator and Matlusky purchased Mason’s interest.

The testator served as president until 1954, when he suffered a heart attack, followed by a paralytic stroke a few months later. Soon after his illness, he moved his residence from Wilmington, Delaware, to Talbot County; he relinquished the presidency of the corporation but continued as a director. He partially recovered in 1955 and from that time until 1957 made visits to the office of the corporation in Wilmington. He executed his will in 1954 and died in December, 1957.

The testator had no children and had been separated from his wife since 1945. Mable M. McCrea acted as his housekeeper and nurse from 1954 until his death. At the time of the execution of the will and at the time of the testator’s death, the corporation had issued and outstanding 174 shares of Class A stock, which was the voting stock, and three shares of Class B stock, which was non-voting, and which was owned by Frank H. Hanby, the vice-president. The testator, both at the time of the execution of the will and at the time of his death, owned 104 shares of the Class A stock; 53 shares were owned by Matlusky and 17 shares by Harry J. Donoho, who succeeded the testator as president.

In 1945 or 1946, the corporation had issued 23 shares of its Class B stock which was all of that stock ever issued; 20 shares of the Class B stock were originally owned by Matlusky and three by Han-by. Matlusky later surrendered his 20 shares of Class B stock for Class A stock. The testator had never in his lifetime owned any of the Class B stock. The only substantial assets owned by him at the time of his death were the 104 shares of the Class A stock.

The corporation’s financial statement for 1962 shows as a liability an indebtedness due to the testator’s estate of some $50,000, which is disputed by the corporation. The book value of the Class A stock at the time of the testator’s death was $898.40 a share. ⁴⁶⁷ The persons named as legatees under Item 2 of the will included the testator’s brother; Matlusky; the testator’s nephew and niece; his housekeeper; several employees of the corporation; and the church, whose bequest the testator stated was to be considered as a memorial to his parents. Judge Carter found that the legatees were the natural objects of his bounty. In his opinion, the Chancellor stated: “Under these circumstances, it appears obvious it was the testator’s intention to bequeath his Class A stock in Item 2, as the only stock he ever owned, and that the reference to 104 shares of Class B stock was an error.” The court applied the maxim of falsa demonstratio non nocet to the language employed in Item 2 by eliminating the words “Class B” so that the bequest reads: “I give and bequeath to each of the following named legatees shares of stock of Wm.

D. Shellady, Inc. as follows:” The appellant, the corporation, contends that the court below erred in applying the maxim based solely on the evidence admitted. It also contends that the court erred in excluding certain testimony of Herlihy and Matlusky and the rough draft of a letter from the testator to Herlihy, and that such evidence, if admitted, would have confirmed that the provisions of Item 2, as written, accurately represented the intention of the testator at the time of the execution of the will. I As Item 2 is written, all the bequests to the legatees named therein, in the proportions set forth, would become inoperative. The testator owned no Class B stock, either at the time he executed the will or at the time of his death.

The gift of stock is a specific legacy and, as a general rule, the non-existence of the subject of such a legacy at the testator’s death will defeat the gift. Gardner v. McNeal, 117 Md. 27, 35-37 , 82 Atl. 988 (1911) and Gelbach v. Shively, 67 Md. 498, 10 Atl. 247 (1887). See also Hall v. Elliott, 236 Md. 196 , 202 A. 2d 726 (1964). As Item 2 is written, the 104 shares of Class A stock which the testator owned would pass to the corporation as the testator’s residuary legatee.

The book value of these 104 shares of Class A stock at the time of the testator’s death was in ex ⁴⁶⁸ cess of $93,000. These shares were the only substantial assets owned by the testator at the time of his death. The maxim falsa demonstratio non nocet, 1 which originated in England, has been applied by this Court as well as by many jurisdictions of the United States. Littig v. Hance, 81 Md. 416 , 32 Atl. 343 (1895) ; Scarlett v. Montell, 95 Md. 148 , 51 Atl. 1051 (1902); Selwood v. Mildmay, 3 Ves.

Jr. 306 (1797) ; Miller v. Travers, 8 Bing. 244 (1832) ; Wigmore, Evidence § 2476 (3d ed. 1940); Jarman on Wills, 1146 (8th ed. 1951); Atkinson, Law of Wills, 283 (2d ed. 1953) ; Warren, Interpretation of Wills — Recent Developments, 49 Harv. L. Rev. 689 (1936) ; 94 A.L.R. 26 ,74. The application of the doctrine expressed by this maxim is explained in Littig v. Hance, supra, as follows: “Every application of this maxim implies that a mistake has occurred in the use of language. In all such cases the legal question is, conceding a mistake, is the intent clear upon the whole language employed?

Criss v. Withers, 26 Md. 569 . To illustrate: In * * * Selwood v. Mildmay, 3 Ves. Jr. 306 (which is designated a very strong case by C. J. Tindal, in Miller v. Travers, 8 Bing. 244), the testator devised to his wife part of his stock in the four per cent, annuities of the Bank of England, and it was shown by parol evidence that at the time he made his will he had no stock in the four per cent, annuities, but that he had had some which he had sold out, and of which he had invested the produce in long annuities, it was held that the bequest was in substance a bequest of stock, using the word as a denomination, not as the identical corpus of the stock; and as none could be found to answer the description but the long annuities, it was decided that such stock should pass, rather than the will be ⁴⁶⁹ altogether inoperative. And so in Day v. Trig, 1 P. Wms. 286, a devise of all the testator’s freehold houses in Aldersgate street, when, in fact, he had no freehold, hut had leasehold houses, was held to pass the latter, the word freehold being rejected; the rule being that when any property described in a will is sufficiently ascertained by the description, it passes under the devise, although all the particulars stated in the will with reference to it may not be true.

See also Doe v. Lord Cranslown, 7 M. & W. 1; Doe v. Roberts, B. & Ald. 407; Andrews v. Pearson, 68 Me. 19 .” 81 Md. at 431-32 . In Littig , the will of the testatrix bequeathed certain sums of money, referring to them as debts due to her. When the evidence showed that the sums were not in fact debts, it was held that the erroneous addition to the description did not defeat the bequest. In Scarlett v. Montell, supra, the property devised was a “lot of three acres situated at the corner of Bloomsbury lane and Rolling road.” It appeared that the testator owned a lot of three acres on Bloomsbury Lane but the lot did not lie on Rolling Road.

We held that the erroneous addition did not defeat the devise. Judge Page, in delivering the opinion of the Court, said: “We do know, however, that the testator held but one three-acre lot on the Bloomsbury lane and we cannot doubt that it was his intention to dispose of it and no other. If it be assumed that it was not possible to be at the ‘corner of Bloomsbury lane and the Rolling road,’ it is evident that the testator has made a mistake in the description of his lot. It is not less clear however that, notwithstanding the misdescription, he intended to' devise the particular lot lying along the Bloomsbury lane.

For the reasons that have already been given we think this cannot be successfully controverted. The lot mentioned in the will, is the lot the testator then was seized and possessed of lying along the Bloomsbury lane, and being so identified that there can be no reasonable doubt as to what the lot is, the ⁴⁷⁰ erroneous addition cannot defeat the devise. Littig v. Hance, 81 Md. 431 ; Crisis v. Withers, 26 Md. 569 ; Stockham v. Stockham, 32 Md. 207 ; Patch v. White, 117 U.S. 210 .” 95 Md. at 159 . “For the application of the doctrine of falsa demonstrate non meet, the words must be insensible with respect to the facts, the part to be disregarded must be a trimming rather than the body of the clause, and the remaining portion must be substantial.” Warren, Interpretation of Wills — Recent Developments, 49 Harv. L. Rev. 689 , 703 (1936).

The facts shown by the extrinsic evidence in this case comply with each of the three necessary elements for the application of the doctrine. The words “Class B” used to describe the testator’s stock in Item 2 are insensible with respect to the facts because the testator did not own and never had owned any shares of the Class B stock. The part of the description to be disregarded is a trimming rather than the body of the descrip-, tion, for the testator not only owned shares of stock of the corporation but owned the exact number, 104, which he disposed of in Item 2 of his will. The remaining portion of the description is substantial, for by omitting the words “Class B”, the item pertains exactly to the stock of the corporation which the testator did own.

The appellant contends that in Littig the use of the term “debts” was plainly surplusage and that the court felt free to disregard it particularly because the alternative was