James Oldrum Smith, III v. Lela Smith Flowers
2016 Miss. App. LEXIS 634
| Miss. Ct. App. | 2016Background
- Decedent J.O. Smith Jr. died in 2006 leaving a will (1987) and three codicils; dispute centers on Codicil #3 (Dec. 12, 2005) that allocates percentages of stock in three closely held corporations.
- Codicil language: (1) J.O. Smith III to receive 41% of the shares "that I own" in Big River Shipbuilders, Vicksburg Plant Food, and Yazoo River Towing; (2) Patrick and Lela to receive 39% of the stock "that I own" in Big River Shipbuilders and Vicksburg Plant Food; (3) Patrick and Lela to receive 29% of the stock of Yazoo River Towing divided equally (omitting the phrase "that I own").
- At death the corporations had multiple shareholders; decedent did not own 100% of Yazoo River Towing (he owned 69%). The omission in the third bequest produced two plausible distributions (of decedent-owned shares vs. of total outstanding shares).
- Chancery Court ruled the codicil unambiguous and construed it to apply to the shares the decedent owned; it entered a Rule 54(b) judgment allocating shares accordingly. Little J.O. and Patrick appealed.
- The Court of Appeals held the omission in the third bequest created a latent ambiguity (susceptible to two reasonable meanings), so extrinsic/parol evidence should have been admitted; it reversed and remanded for further proceedings. Costs assessed to Lela.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Codicil #3 is ambiguous (latent ambiguity) | Little J.O./Patrick: omission of "that I own" in third bequest creates latent ambiguity; two reasonable interpretations exist | Lela: codicil is clear on its face; context shows percentages refer to shares decedent owned | Court: latent ambiguity exists; extrinsic evidence admissible; reversal and remand |
| Whether extrinsic (parol) evidence may be considered to ascertain testator intent | Little J.O./Patrick: yes — to resolve the ambiguous third bequest | Lela: no — codicil unambiguous so parol evidence barred | Court: parol evidence should have been considered because the codicil is susceptible to two reasonable constructions |
| Proper effect of codicil: direct bequest vs. passing to residuary estate | Some parties argued the codicil created direct bequests of decedent-owned shares | Others maintained any omitted shares pass through residuary or to heirs of predeceased child | Court found ambiguity as to ultimate disposition; remanded to the chancery court to consider extrinsic evidence and determine testator intent |
| Mathematical/allocation errors in chancery order | Dissent: chancery made calculation error regarding Yazoo River Towing shares; but interpretation consistent that percentages applied to shares decedent owned | Appellants: urged reinterpretation to give controlling interest to Little J.O. under alternate reading | Majority: did not resolve final allocations; remanded for factfinding including proper calculations after considering extrinsic evidence |
Key Cases Cited
- In re Estate of Black, 135 So.3d 181 (Miss. Ct. App.) (standard for when parol evidence may be considered in will construction)
- In re Estate of Langston, 57 So.3d 618 (Miss.) (de novo review for legal questions in chancery findings)
- In re Estate of Saucier, 908 So.2d 883 (Miss. Ct. App.) (de novo review for will interpretation)
- In re Last Will & Testament of Carney, 758 So.2d 1017 (Miss.) (appellate review standard for will construction)
- Estate of Regan v. Estate of LeBlanc, 179 So.3d 1155 (Miss. Ct. App.) (four-corners rule and when to stop inquiry)
- DeJean v. DeJean, 982 So.2d 443 (Miss. Ct. App.) (parol evidence admissible only if will language yields multiple interpretations)
- Dalton v. Cellular S. Inc., 20 So.3d 1227 (Miss.) (definition of ambiguity: susceptible to two reasonable interpretations)