Court Opinion

ID: 9763988
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:06:09.833466+00
Date Added: 2024-06-11T07:29:52.091089
License: Public Domain

■ Dissenting Opinion by
Mr. Justice Boberts:
Alice M. Greathead died August 24, 1964. She left a will signed April 10, 1956. At the time of the execution of her will she owned 2,400 shares of the capital stock of Smith, Kline & French Laboratories. In the second paragraph of her will she bequeathed all of *561these shares in 100 and 200 share lots to fourteen named persons, and 200 shares to her church (the appellant), thus disposing of her entire SKF holdings.
On August 2, 1956, Miss Greathead bought an additional 35 shares of Smith, Kline & French stock; approximately two years later, in September 1958, she sold 400 and in October of that year 35 additional shares were sold, leaving her in possession of 2,000 of the 2,400 shares she bequeathed by her will. On May 29, 1959 SKF stock split 3 for 1, increasing her holdings to 6,000 shares—this stock split did not increase the capital of SKF nor did it affect the total book value of any stockholder’s shares. Four months after this stock split Miss Greathead was hospitalized and less than two months later was adjudicated incompetent. The issue here presented is whether appellant-church is entitled to receive the fruits of the stock split, or, as the lower court decided, the additional 4,000 shares pass to the residuary legatees. I believe that the church is so entitled.
The testatrix’s fifteen separate gifts of Smith, Kline & French stock correspond precisely to the total number of shares held by her at the date of the execution of the will. To my mind that fact is strongly indicative of an intent to give each of the fifteen legatees the fraction of her holdings in SKF represented by the proportion each bequest bore to her total holdings. I do not see why the failure of testatrix to change the terms of her will in response to a purely formal alteration in the number of those shares by unilateral corporate action should be construed to indicate a change in such intent. Certainly, had SKF stock not split, this would be a simple case of ademption and each legatee under the second paragraph of testatrix’s will would be entitled to 5/6 of the number of shares left to him under the will. Corporate action, changing the form but not the substance of testatrix’s holdings, should not affect *562a testator’s intended disposition. Furthermore, if SKF management had, instead of a stock split, undertaken what is commonly called a reverse stock-split (e.g., an exchange of three old shares for one new one), each legatee would surely still be entitled to have his bequest satisfied with these new shares. The result should be identical whether corporate action results in an increase or decrease in the number of shares held by a decedent.
The import of testatrix’s failure to respond to the stock split seems especially devoid of any significance when it is recalled that the testatrix was adjudicated an incompetent only six months after the split. Moreover, the disposition of the lower court (now affirmed by an equally divided Court), which has the effect of distributing SKF shares to residuary legatees, seems to run' contrary to testatrix’s intent, since under the testatrix’s scheme of distribution viewed from the date of the execution of her will her SKF stock was to be left solely to legatees of specific bequests.
There is an additional and perhaps more compelling reason to reject the court’s decision. Each of the fifteen bequests of SKF stock are phrased as follows: “I give and bequeath [x number] shares of my Smith, Kline & French stock, to . . . .” (Emphasis supplied.) A bequest of stock qualified by the testator by use of the word “my” is clearly a specific bequest under Pennsylvania law, Horn’s Estate, 317 Pa. 49, 175 Atl. 414 (1934) ; Klenke’s Estate (No. 2), 210 Pa. 575, 60 Atl. 167 (1905) (per curiam). A specific bequest is subject to ademption if the subject of the bequest is not among the assets of the estate at the date of testator’s death because the absence of the subject from the estate is presumed indicative of action by the testator exhibiting testamentary intent contrary to that expressed by the literal language of his will. See Will of Hinners, 216 Wisc. 294, 257 N.W. 148, 150 (1934). Where, *563however, a unilateral action beyond the control of the testator changes the form, but not the substance, of the subject of a specific bequest, the reason for and consequently the rule of ademption fail, see ibid. In effect, today’s decision disregards this fact and works a partial ademption of the bequest to appellant.
Although there appears to be no appellate authority on this precise question in Pennsylvania,* the appellate courts of many other states have rejected attempts to enforce a partial ademption in such circumstances. See Fidelity Title & Trust Co. v. Young, 101 Conn. 359, 125 Atl. 871 (1924) ; Heinneman v. Colorado College, 150 Colo. 515, 374 P. 2d 695 (1962); Butler v. Dobbins, 142 Me. 383, 53 A. 2d 270 (1947) ; Igoe v. Darby, 343 Mass. 145, 177 N.E. 2d 676 (1961) ; Morrow v. Detroit Trust Co., 330 Mich. 635, 48 N.W. 2d 136 (1951); Shriners Hospitals v. Emrie, 347 S.W. 2d 198 (Mo. 1961) ; Griffing Will, 11 App. Div. 2d 709, 204 N.Y.S. 2d 850 (1960), aff’d per curiam, 9 N.Y. 2d 919, 176 N.E. 2d 99, 217 N.Y.S. 2d 90 (1961); Will of Hinners, 216 Wisc. 294, 257 N.W. 148 (1934). Indeed in each of the above cited cases it was held that the legatee of *564a specific bequest of stock is entitled to an increase in the number of shares resulting from a split occurring before the testator’s death. Thus today’s decision not only reaches an unwarranted conclusion, but also ignores the ■ overwhelming weight of persuasive authority.
Finally, it should be noted that the appellee’s reliance on-the holding in Woodward Estate, 407 Pa. 638, 182 A. 2d 732 (1962) is misplaced. Woodward is distinguishable from the instant appeal in any event because the bequest in Woodward was not a specific one. Equally important, Woodward’s testatrix’s bequests of 30 and 35 shares were made at a time when she held 143 shares of the stock involved. Such a circumstance is'-not nearly as suggestive of an intent to give her legatees a proportionate share of her holdings in a company as the instant testatrix’s bequests of nine-200 share and six-100 share bequests comprising her entire holdings of SHF at the time of the execution of the will.
Accordingly, I would reverse.
Mr. Justice Jones and Mr. Justice Eagen join in this dissenting opinion.

 In Rempp Estate, 33 Pa. D. & C. 2d 426 (O.C. Montgomery County, Pa. 1964) the court held that the legatee of a specific bequest was entitled to the benefit of a stock split which increased the number of testator’s shares between the date of the execution of the will and the date of death. See also Watson Estate, 55 Luzerne L.R. 55 (O.C. Luzerne County, Pa. 1964) (legatee of specific bequest entitled to increase in number of shares resulting from a split after death but before distribution). In Carlson Estate, 78 Pa. D. & C. 571 (O.C. Erie County, Pa. 1951) the court held that legatees of a specific bequest of stock were not entitled to stock dividends declared upon the subject of the bequest between the date of the execution of the will and the date of death, but called attention to the difference between a stock dividend and a stock split. It should also be noted that neither Woodward Estate, 407 Pa. 638, 182 A. 2d 732 (1962) nor McFerren Estate, 365 Pa. 490, 76 A. 2d 759 (1950), relied upon by the appellee, involved bequests which were specific.