Facts
- William B. Broadbent died and left his wife, Martha S. Broadbent, 400 shares of Standard Oil of New Jersey stock, “together with all dividends, rights and benefits” declared after his death, and requested that if Martha did not need the shares during her lifetime she give them to his daughter, Norma B. Polson.
- After William’s death, Martha executed a will devising to Norma “four hundred (400) shares of capital stock of Standard Oil Company.”
- Martha later executed a new will that again devised 400 shares of Standard Oil Company stock to Norma.
- The evidence showed Martha kept the 400-share block separate from her other stock holdings, treating it as a distinct holding tied to William’s bequest.
- Standard Oil later became Exxon, and stock splits multiplied the number of shares attributable to the original 400-share block that Martha had received from William.
- After Martha’s death, a dispute arose between Norma and the executors/other beneficiaries of Martha’s estate about whether Norma was entitled to only 400 shares or instead to all Exxon shares traceable to the original block (including the split shares).
- In the probate proceeding, the probate court characterized Martha’s devise as a general devise and ruled Norma was entitled to only 400 shares.
- The circuit court reversed, holding the devise was specific and that Norma was entitled to the original shares plus the additional shares resulting from stock splits.
- The executors/other beneficiaries appealed the circuit court’s ruling to the South Carolina Court of Appeals.
Issues
- Whether Martha Broadbent’s will, devising “four hundred (400) shares of capital stock of Standard Oil Company” to Norma Polson, created a specific devise of a particular, identifiable block of stock or a general devise of a quantity of stock.
- If the devise was specific, whether it included the additional shares issued through stock splits of the originally devised shares (after Standard Oil became Exxon).
Decision
- The South Carolina Court of Appeals affirmed the circuit court.
- The court held Martha’s devise was a specific gift tied to the identifiable block of stock Martha received from William and continued to keep separate.
- Because the devise was specific, Norma was entitled to the additional shares attributable to stock splits of that specifically devised stock, not merely to 400 shares.
Legal Principles
- The primary goal in construing a will is to determine and carry out the testator’s intent, gleaned from the will as a whole and, when appropriate, the surrounding circumstances.
- A specific legacy (or devise) is a gift of particular property, identified and distinguished from other property of the same kind; a general legacy is a gift of a stated amount or quantity payable from the general assets of the estate and not tied to a particular item.
- A bequest of corporate stock may be treated as specific when the language and context show the testator meant the gift to come from a particular holding (including a block the testator treated as distinct or separately maintained).
- When stock is specifically devised and the corporation later effects a stock split, the additional shares issued as a result of the split follow the specifically devised shares; the devisee takes the split shares attributable to the original block unless the will shows a contrary intent.
- On appeal in will-construction disputes, the appellate court reviews the legal classification of the bequest (specific vs. general) in light of the will’s text and the factual context developed in the record.
Conclusion
In Polson v. Craig, the South Carolina Court of Appeals held that Martha Broadbent’s gift of “four hundred (400) shares of capital stock of Standard Oil Company” to Norma Polson was a specific devise of the identifiable stock block Martha received from William Broadbent and kept separate, so the devise carried with it the additional Exxon shares produced by stock splits traceable to that original block; the court therefore affirmed the circuit court’s reversal of the probate court.