Bachrach v. Seifert
G.R. No. L-1592, September 20, 1949 Montemayor, J.
FACTS:
The will of E. M. Bachrach provided for the distribution of the considerable property which he had left. The sixth and eighth paragraphs of the provisions of the will provide as follows: Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for life all the fruits and usufruct of the remainder of all my estate estate after after payment payment of the legacies, legacies, bequests and gifts provided provided for above; and she may enjoy such usufruct and use or spend such fruits as she may in any manner wish. Eighth: It is my wish that upon the death of my beloved wife, Mary McDonald Bachrach, all my estate, personal, real and otherwise, and all the fruits and usufruct thereof which during her life pertained to her, shall be divided as follows: One-half thereof shall be given to such charitable hospitals in the Philippines as she may designate; in case she fails to designate, then said sum shall be given to the Chief Executive of these Islands who shall distribute it, share and share share alike alike to all all charit charitabl able e hospit hospital als s in the Phi Philip lippin pines es exclu excludin ding g those those belonging to the governments of the Philippines or of the United States; One-half thereof shall be divided, share and share alike by and between my legal heirs, to the exclusion of my brothers. The estate of E. M. Bachrach, Bachrach, as owner of 108,000 shares of stock of the AtokBig Wedge Mining Co., Inc., received from the latter 54,000 shares representing representing 50% stock dividend on the said 108,000 shares. Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize the Peoples Bank and Trust Company as administrator of the estate of E. M. Bachrach, to her the said 54,000 share of stock dividend by endorsing and delivering to her the corresponding certificate of stock, claiming that said dividend, although paid out in the form of stock, is fruit or income and therefore belonged to her as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and therefore belonged not to the usufructuary but to the remainderman. remainderman. And they they have have appea appealed led from from the order order grant granting ing the petiti petition on and and overr overruli uling ng their their objection. ISSUE:
Is a stock dividend fruit or income, which belongs to the usufructuary, or is it capital or part of the corpus of the estate, which pertains to the remainderman? HELD:
The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock dividend are civil fruits of the original investment. They represent prof profit its, s, and and the the deli delive very ry of the the cert certif ific icat ate e of stoc stock k cove coveri ring ng said said divi divide dend nd is
equivalent to the payment of said profits. Said shares may be sold independently of the the orig origin inal al shar shares es,, just just as the the offs offspr prin ing g of a dome domest stic ic anim animal al may may be sold sold independently independently of its mother.
