United States of America v. Link and Green

THE ROYAL TRUST COMPANY and

*Oct.

ROBERT W. McMURRAY, Executors

APPELLANTS; of the Estate of William Marr Craw- *Jan ford, deceased (Plaintiffs) ...........

CATHERINE McLEAN CRAWFORD

A

' AND

CATHERINE GRAHAM CRAWFORD

RESPONDENTS. and others (Defendants) ............

ON APPEAL FROM THE APPEAL BRITISH COLUMBIA

Wills-Residuary estate consisting of unauthorized securities-Trust for conversion with power to postpone-Rights of Tenant for life- Enjoyment in specie.

A testator gave the residue of his estate upon trust to convert with power to postpone conversion and directed his trustees to pay the income of his residuary estate to his widow for life and upon her death to set aside sufficient of the residue to yield certain annuities and subject thereto to divide the residue among the testator's nephews and nieces then alive. The major part of the residue consisted of shares in a company, a type of security in which trustees were not by law authorized to invest. At the date of death the company had built up a large surplus which it proceeded to distribute to shareholders as a dividend.

This raised the question as to whether the widow was entitled to enjoy the dividends in specie or whether an order similar to that in In re Chaytor: Chaytor v. Horn [19051 1 Ch. 233 should be made.

Held (Estey and Cartwright JJ. dissenting): That upon a proper construction of the will it was to be presumed that the testator intended that the residue was to be enjoyed by different persons in succession and applying the rule in Howe v. Dartmouth (Earl) 7 Ves. 137, a duty rested on the trustees to convert. The rule might have been excluded if the will disclosed an intention either by express direction or necessary implication that the property should be enjoyed in specie but the onus of showing this had not been met.

: By clause IV (b) of the will a power was conferred upon the trustees to retain until the trusts were completely executed. By clause IV (e) the testator gave to his widow the net annual income of all the securities representing the residue of his estate including income from unconverted property subject only to payment of specified annuities thereby excluding the rule in Howe v. Dartmouth, Earl, supra. Re Thomas [18911 3 Ch. 482 at 486 approved in In Re Chaytor, Chaytor v. Horn [19051 1, Ch. 233 at 238 referred to.

Kerwin CJ. and Rand, Kellock, Estey and Cartwright JJ.