April 21, 1939. Present — Martin, P.J., Glennon, Untermyer, Cohn and Callahan, JJ. [ 169 Misc. 412.] Decree unanimously affirmed, with costs to the respondents other than New Rochelle Hospital, Walter H. Leonard and Jean Leonard, and Kate B. Stern, as administratrix of the estate of Barnett Brenner, payable out of the estate.
Perhaps such registration is only for the protection of the corporation, as has been stated, or implied in various opinions, leaving the fundamental question of gift dependent upon other facts and circumstances. I have observed that it is possible for legal ownership of stock to be in one person and the right to receive dividends to be in another person. ( Matter of Brenner, 169 Misc. 412.) Without repeating the particulars with respect to the stock and the dividends in this case, it seems clear that Mrs. Schenk did not intend to give the stock to her daughters, and further that no delivery of the stock was made.
It is provided, however, that, where the absolute right of alienation is suspended by "an instrument in execution of a power", the period must be computed, not from the date of such instrument, but from the time of the creation of the power (Real Property Law, § 178). These sections of the Real Property Law, as well as all the provisions of the Real Property Law relating to powers (i.e., §§ 130-183) are equally applicable to situations involving personal property (Williams v. Montgomery, 148 N.Y. 519, 526; Matter of Moehring, 154 N.Y. 423, 427; Matter of Brenner, 169 Misc. 412, 418, affd. 256 App. Div. 1064). Concededly, when the trust instrument was executed in 1901, Mabel was in being, but Eleanor was not.
And by statutory definition, the absolute power of alienation is suspended when there are "no persons in being" by whom an absolute fee in possession can be conveyed (Real Property Law § 42). It is provided, however, that, where the absolute right of alienation is suspended by "an instrument in execution of a power", the period must be computed, not from the date of such instrument, but from the time of the creation of the power (Real Property Law, § 178). These sections of the Real Property Law, as well as all the provisions of the Real Property Law relating to powers (i.e., §§ 130-183) are equally applicable to situations involving personal property ( Williams v. Montgomery, 148 N.Y. 519, 526; Matter of Moehring, 154 N.Y. 423, 427; Matter of Brenner, 169 Misc. 412, 418, affd. 256 A.D. 106 4). Concededly, when the trust instrument was executed in 1901, Mabel was in being, but Eleanor was not.
It is elemental that whether a testamentary gift is general, demonstrative or specific is determined by the intention of the testator as gathered from the will as a whole. ( Matter of Crouse, 244 N.Y. 400, 404; Matter of Brenner, 169 Misc. 412, 419.) The provision in question is somewhat unusual in that in this "Seventh" paragraph all of the testator's tangible property, excepting the piano and house and lot mentioned in paragraphs "Second" and "Third", was devised and bequeathed to his executors in trust.
If the purpose of the pertinent statutes was to enable strangers after that decisive date to divest rights in devisable property that had vested at the death of Mrs. Alling, then it appears to be the better view of those enactments, in the light of their development and declared purpose, that the language in them claimed to express any such extraordinary purpose falls far short of the necessarily appropriate clarity. There was no intention on the part of the Legislature in enacting the two statutes aforesaid, nor on the part of the Alling directors, to divest rights that had already vested in the stock and its produce; nor is there in the will of either of these testators any indication of an intention to bequeath such an expectancy, if it can properly be called such, as appears in Matter of Brenner ( 169 Misc. 412, 414, affd. 256 A.D. 106 4), where a corporation had set up a surplus as of January 1st; and on that day a stockholder, whose name appeared in the firm, died. By his last will he had bequeathed to five persons all his "interest in and to the share of undivided profits, and income and unpaid dividends" to which he might be entitled as of the day of his death, with the proviso that if a dividend were declared after his death out of the earnings up to his death, then this dividend should be prorated among the five legatees.
The earnings and profits of a corporation remain the property of the corporation until severed from the corporate assets and distributed as dividends, and until then the stockholder has no property interest therein ( Olcott v. Estate of Hoffman, Incorporated, 127 Misc. 399, and cases cited). Mr. Bonbright in his last will did not suggest his interest in undeclared profits be separated from his interest in the capital of any corporation, as was the case in the Matter of Brenner ( 169 Misc. 412, affd. 256 A.D. 1064). The phrase "issues and profits" is not used anywhere in his will, as it was in Stewart v. Phelps ( 71 A.D. 91, 93). It has also been held that if corporate stock held in trust increases in value through the accumulation of corporate earnings after the beginning of the trust, and no dividends are declared the whole increase belongs to corpus, even upon a sale of the stock ( First Nat. Bank of Tuscaloosa v. Hill, 241 Ala. 606) . Undeclared dividends pass with the stock on a sale before declaration of dividends ( Matter of Lander, 162 Misc. 201). Until dividends have been declared, no question of apportionment can arise.
It is virtually an offer to him of the estate or fund, that he may receive or reject at will, and like any other offer to donate property to a person, no title can vest until he accepts the offer * * *." (To the same effect see 22 Am. Eng. Ency. of Law [2d ed.], 1095.) Separation of a power over property from title or interest therein is well established in our law. (See, for example, Matter of Brenner, 169 Misc. 412; affd., 256 A.D. 1064; Onondaga Trust Deposit Co. v. Price, 87 N.Y. 542.) Since Julian B. Hart was donee only of a power of selection and not a legatee of identified property, the only question is whether the power is of a kind which is extinguished by non-execution.