Blackmore v. Woodward

TAFT, Circuit Judge (after stating the facts). We are clearly of opinion that the demurrer to the bill wa's rightly sustained. The bequest of the 40 shares of stock in the Commercial National Bank was a legacy. The stock was severed from the bulk of the testator’s property by the operation of the will from the death of the tes [323] tator, and was specifically appropriated, with its increase and emolument, for the benefit of the wife during her life or widowhood. 2 White & T. Lead. Cas. Eq. (4th Am., from 4th Lond., Ed.) pt. 1, p. 639. From that time on, the beneficial interest in the stock was in the wife for life or widowhood, the remainder to pass on her death or marriage to the four children of the testator. It is urged by the appellee that the disposition of the estate, after the death or marriage of the wife, was void because of the power of absolute disposition of the same conferred on her in the second clause of the will of this stock, but it is unnecessary for us to decide that question. Assuming that she took only a life interest in the stock, with power 1o sell so much of it as might keep her comfortable duriug life, and that the beneficiaries under the sixth clause of the will were interested, as remainder-men, in so much of the stock as was not sold or used by her during life or widowhood, it is very certain that the general estate could not be made to respond to any liability dependent on a beneficial ownership of the stock. It is contended that the title of the stock should have remained in the administrator during the life or widowhood of the life tenant, and that, if it had been properly transferred to him as administrator, then the whole estate could have been made to respond. It is well settled that a, bequest of personal property, enjoyment of which can only be bad by its manual use, gives to the beneficiary the right of possession and the legal title, and the life tenant holds the property for the benefit of himself during life, and in trust for the remainder-men after his death. Weeks v. Jewett, 45 N. H. 540; Homer v. Shelton, 2 Metc. (Mass.) 194. Where, however, the personal property is in the form of stock, the benefits of which are to he derived by the payment of dividends, it is usually held that the executor or administrator may properly hold the title to the stock during the first estate' therein, and pay the dividends to the life tenant. This, however-. is in the absence of any provisions in the will tending to show that the testator intended the life tenant to have the Ml legal tide to the stock, and to he himself or herself the trustee for the remainder-man. Wherever there is anything in the will tending to show that it was a testator’s intention to have the life tenant take the title, that intention is to he carried out. We have no doubt that in 1 lie present case the testator intended his wife to take title to the stock bequeathed. Our opinion is based on the circumstance that he gave her the right to use the stock absolutely in so far as it might be necessary to render her comfortable. In giving her the right to use it, he necessarily gave her the right to sell it. To have the power to sell, she must have the title to the stock, so as to confer it upon a purchaser. The duty of the administrator or the executor with respect to the stock was fulfilled as soon as he properly transferred it to the name of the wife on the books of the bank. We need not, however, rest our decision upon the right of the wife to have the stock transferred to her. Even if the administrator or executor must by the will retain title, the beneficial ownership of the stock during her life would be in the wife, and would pass at her death or marriage to the beneficiaries named in the sixth clause of the [324] will. Any judgment rendered against tlie administrator for assessments upon the stock could not be made out of'the general estate, but must be made out of those for whose benefit the stock was held. Section 5152 of the Revised Statutes of the United States provides that persons holding stock as executors, administrators, guardians, and trustees shall not be personally subject to any liabilities as stockholders; but the estates and funds in their hands shall be liable in like manner, and to the same extent, as the testator, intestate, ward, or person, interested in such trust funds, would be, if living and competent to act and hold the stock in his own name. The administrator or executor holding stock under the circumstances of this case would be a trustee for the' life tenant and for the remainder-man. He would, with reference to this stock, occupy no relation of trust to the other persons interested in the estate; and it is hard to see how a judgment for stock liability against him de bonis testatoris could be rendered under the statute. Cases presenting analogous questions have arisen in the English courts of chancery. The question there was whether the general estate of the beneficiary under a legacy of stock in a company was liable for calls made upon unpaid portions of the stock subscriptions, and it has uniformly been held, where the calls were made and completed after the death of the testator, the beneficiary of the bequest must pay the same. See Armstrong v. Burnet, 20 Beav. 424; Day v. Day, 1 Drew & S. 261; Fitzwilliams v. Kelly, 10 Hare, 266. The reason for it is brought out very clearly in the distinction taken by Lord Chancellor Hatherly (then Sir William Page Wood, V. C.) in Re Box, 1 Hem. & M. p. 552. It was there held that the rule did not apply to calls made in the lifetime of the person who was tenant for life of the whole estate, including the shares of the entire fund. The true test was held to be whether the shares were, by the terms of the will, to be regarded as separated from the general estate at the date of the call. On the whole case, we affirm the decree of the court below.