Reed v. Head

Chapman, J. According to the fair interpretation of the will of Elizabeth Smith, the legacies of the Water Power and Mill [177] Dam stock, which are the subject of this suit, are given in trust, the dividends to be paid to the legatees, Elizabeth Smith Head and James E. Head, during their lives; and after they have severally deceased, the stock is devised over. The word “ dividends ” is used in the legacy to Elizabeth Smith Head, and the word “ income ” in the legacy to James E. Head; but both obviously mean the same thing. It is settled that such a gift is not a gift of the stock to either of these persons. Saunderson v. Stearns, 6 Mass. 37. Barrus v. Kirkland, 8 Gray, 512. But it is contended that they are not even entitled to the dividends. It appears that these corporations, which were originally formed with a view to make dividends out of the receipts for the use of water power, mills, and tolls from the use of the mill dam as a way, afterwards changed their purpose, and became land companies, and that since this change their dividends are made from the avails of the sales of the property which constitutes their capital stock. They are therefore dividing not merely their earnings, but their principal. Several English authorities are cited, according to which it is said that these legatees for life ought not to receive such dividends, because they are of an extraordinary character; but that, instead of the dividends, they should receive' a sum equal to legal interest on the capital stock; that the balance of the dividends should be regarded as accretions to the capital stock; and that the legatees for life should receive the interest which it may earn, and nothing more. The authorities cited are Brander v. Brander, 4 Ves. 800, and note; Paris v. Paris, 10 Ves. 185; Clayton v. Gresham, Ib. 288. The substance of these decisions is, that, as between a legatee for life of bank stock and a remainder-man, any extraordinary dividend of profits made by the bank among the proprietors is regarded as an accretion to the capital, unless clearly made as dividend only, and the legatee for life will take only the interest upon such accretion. The rule would be undoubtedly applied in England to all similar stocks. But in this case the dividends are clearly made as such, and are not extraordinary. They are the ordinary dividends, -and [178] the principal ones which land companies may be expected to make, and usually comprise a large part of the dividends of water power companies. The testatrix knew this long before her decease, and was in the habit of receiving the dividends. There is therefore no reason to doubt that she understood the meaning of the language used by her. It is true that the whole capital stock may be exhausted by the dividends in the lifetime of the legatees for life; but on the other hand it is quite possible that a large sum will be left in remainder. There is no policy of our law which should influence us in construing the will otherwise than according to' the plain intent of the testatrix. The general policy of our statutes favors the speedy distribution of estates, while the English policy favors their perpetuation ; but so far as their perpetuation is permitted by our statutes or by the principles of our common law, our only policy is to permit grantors and testators to exercise their own judgment, and to endeavor to construe grants and devises fairly. Decree to be entered in conformity with this interpretation of the will.