Jane v. Martinez

1. Executors and Administrators. Properly of estate. Bank stock. Situs. Code 1906, section 2056. Distribution. Under the definition as to what are assets of the estate of a deceased person, as defined n section 2056, Code 1906, bank stock is an I asset of personal property, and under the laws of this state the ! stock in a bank has its situs where the bank is located. 2. Same. Where a party residing in Alabama with his wife at the time of his death owns stock in a bank located in this state, such stock is distributable according to the laws of Mississippi, was hable to the claims of creditors of his estate, and was not exempt to his nonresident widow.

Appeal from the chancery court of Jackson county. Hon. T. A. Wood, Chancellor. Suit by Mary J. Martinez and others against E. J. Jane and others. Prom a judgment for complainants, defendant appeals. The facts are fully stated in the opinion of the court. The propositions which we shall undertake to’ maintain upon this state of facts are, broadly, these: The bank stock was intangible, personal property which adhered to the person of the owner, and he dying testate, should be administered and disposed of under the laws of the state of his domicile. On thé first proposition we, with apologies to the court, shall begin by a short definition of the Legal Nature of Shares of Stock: ‘ ‘ Stock in a corporation, in the sense of a stockholder, is a species of incorporeal personal property in the nature of a chose in action.” Cherry v. Frost, 77 Tenn. 1. “Shares of stock are incorporeal chattels.” 22 Am. & Eng. Ency. of Law (2 Ed.), 751. “Stock is defined as a proportional part of certain rights in the management and profits of the corporation during its existence, and in the assets upon its dissolution. ” 7 Words & Phrases, 6662. “A share in a corporation is a right to participate in the profits or in the final distribution of the corporate property prorated.” “It is in the nature of a chose in action.” Field v. Pierce, 102 Mass. 253-261; Hutchins v. State Bank, 53 Mass. 421; Judge Holmes in Foster v. Patte, 37 Mo. 524, says: “The property interest of the shareholder is an intangible and invisible thing and cannot be seized by an officer. ’ ’ “A share of stock is a right which the owner has .in the management of profits and ultimate assets of the corporation. ’ ’ Jones v. C. & M. B. B. Co., 30 Atl. 616. See also a great number of authorities to the same general effect in 7 Words and Phrases, pp. 6472 and 6479. Now then, the nature and character of shares of bank stock as we have seen, being intangible, personal property, the next inquiry which logically follows it: Where was the situs of the stock for purposes of administration on the death of the owner ? It is axiomatic to say that the stock, being intangible property, followed the person of the owner, and was legally presumed to be about his person in the state of Alabama when he died. The fact that the property is of an intangible nature renders it incapable of having any actual location of its own, and the law locates it upon the person of the owner. Williams on Personal Property, 191; 1 Cook on Corporations, Sec. 12; State v. Kidd, Executor, 125 Ala. 421; S. C., affirmed by Supreme Court of U. S. when on appeal to that court 188 U. S. 730'; Pleasanton v. Johnson, 47 Atl. 1025 ; S. C., 91 Md. 673; Boyd v. City of Selma, 96 Ala. 144; S. C., 16 L. R. A. 729; 1 Desty on Taxation, p. 329; Seward v. Rising Sun City, 79 Ind. 353; M.urray v. Charleston, 96 TJ. S>. 433. We believe it is equally well settled that tbe succession of personal property is governed by the- law of tbe state of tbe domicile of tbe owner at tbe time of bis death, and that sucb is tbe proper place for tbe principal administration, and it is equally well settled that ancillary administration may be taken out wherever property of tbe owner may be found, these ancillary administrations being necessary to gain possession and control of property in other states for tbe benefit of creditors residing in such other states. But tbe question now before us is: Where was tbe bank stock for tbe purpose of administration? We say that it was in Mobile, Alabama, and in support of our statement of this proposition we refer tbe court to tbe following authorities: 1 Cook on Corporations, Sec. 12, p. 48;.Lowndes v. Cooch, 87 Md. 478, 40 L. R. A. 380. In tbe case of Lowndes v. Cooch the question dealt with and decided was: Where was tbe situs of certain bank stock for purposes of administration and what law would govern, whether tbe law of tbe domicile of tbe owner, or tbe law of tbe place where tbe stock was located, and tbe court answers tbe question by bolding that tbe stock being with tbe owner, its disposition would be governed by tbe law of tbe place of bis domicile, notwithstanding tbe effect of this bolding caused tbe lapse of a legacy which would not have resulted, bad tbe bolding been otherwise. That is, bad they held that tbe law of tbe place where tbe corporation was located, controlled, they could have upheld tbe legacy, which, of course, courts always prefer to-do, rather than make sucb bolding as will defeat tbe intention of tbe testator, and they lay down tbe rule squarely, as follows: ‘‘The law of this state has been settled and determined to tbe effect that shares of stock of a corporation are personal property only and governed by tbe law of tbe owner’s domicile.” And they cite Donovan v. Fireman’s Ins. Co., 30 Md. 159; Key ser v. Bice, 47 Md. 212, 28 Am. Rep. 448, and several other cases. In the case of Keyser v. Bice, 28 Am. Rep. 448, the court sustained an injunction which was brought to restrain a creditor from attempting to subject to his demands, through the courts of West Virginia, a debt due the complainant in the injunction proceedings, by the Baltimore & Ohio Railroad Company, both parties residing in Maryland, and the debt being exempt under the laws of the state of Maryland, and that décision is cited with approval. In a number of cases which are to be found in Vol. 16, p. 1164, Notes to American Reports, the courts almost uniformly hold that a court of equity should intervene by injunction to enjoin the doing of that in the accomplishment of which the court of equity in this case has given its assistance. In this case the court of Mobile county, Alabama, set apart the property as exempt from debt, to be used by the widow for the purpose of maintaining herself and children for a year, and that allowance was made in pursuance of the exemption laws of the state of Alabama. The court of equity has aided the appellees in the accomplishment of that which is inequitable, if not indeed unlawful. If the authorities cited are sound, it must follow that the action of the court below, in undertaking to deal with property which had been properly administered by he Alabama court, was without authority and its action should be reversed. The issue presented by the pleadings in this cause were the same identically as was presented by the demurrer to the bill wherein, on appeal, to test the questions of law so raised, this court in Myers et al. v. Martinez, 95 Miss. 104, 48 So. 291, on Feb'. 15,1909, fully sustained the contention of complainants that the twelve shares of bank stock was an asset having its situs in this state and subject to administration and application to the payment of debts here and thát failure of the executrix to report and administer the same here and her collection of dividends and subsequent sale of the stock and appropriation of the proceeds constituted a devestavit for which she was liable to be proceeded against on her bond as was being done. It will be noted that the only question really at issue on the demurrer was the question of the situs of this bank stock. The bill of complaint clearly and fully disclosed the fact that decedent died in a foreign state, that he there made his will by which he not only constituted his wife sole executrix but bequeathed to her all his estate. That, having probated the will at the forum of the domicile of decedent, she also propounded it for probate and procured letters of administration here because of the existence of assets in this jurisdiction and that here creditors proved their claims and thus acquired the right to have all assets within this jurisdiction administered under the law of this state. The sole complaint then was that the corporate stock of the Merchants’&Marine Bank, a domestic corporation, had come into her hands and that she appropriated it. The demurrer admitted these facts and then squarely challenged the right of creditors here to call in question the right of this executrix and sole devisee to appropriate assets of the character so fairly and explicitly described and whose status was so clearly fixed by the statement on the face of the bill. The question then raised and decided was whether this stock in a domestic corporation of this state and in the jurisdiction of this court was assets in this jurisdiction or had its situs for administration at the domicile of the decedent. This administration drew to it no assets except such as was located here and unless,under this state of facts this stock was located here and not at the place of residence of the decedent, these complainants clearly had no cause of action whatever, any more than they would have had for the failure to account for decedent’s horse and buggy by this executrix, because it came to her hands at the domicile of decedent and was never in this jurisdiction. To settle this one question of law that appeal was taken and the question raised and decided; When the case is remanded the defendants answered the bill and made up the issue to be tried. That issue was the same identical question. Every material allegation of the bill is admitted and not a single issue of fact is raised. The devestavit and breach of the bond which is the gravamen of the action is contained in paragraph No. 8 of the hill shown on pages 5 and 6 of this record. The answer denies the technical change of the wrongful appropriation of this stock and then fully admits the apropriation of the stock, claiming the legal title and right to appropriate same because by the express terms of the will of Johnson, title to said stock vested absolutely in her, freed of the claims of his creditors, because, being assets located not in Jackson county, Miss., hut in Mobile County, Ala., it was exempt. This was plainly the same identical question raised by the demurrer and decided on appeal adversely to these defendants.