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FEBRUARY, 1919.]
The Gazette of the Incorporated Law Society of Ireland.
51
Judges.—
The Right Hon. Lord Justice'
O'Connor, and the Right Hon. Mr. Justice
Ross.
Registrars.
—Mr. J. J. McDonald, Solicitor,
116 Grafton Street, Dublin ;
Major Ronald
D. Ross, Oatlands, Stillorgan, Co. Dublin.
Recent Legal Decisions
Bonus Dividends on Stocks and Shares—
Capital or Income—Rights of Tenant for
Life and Remainderman.
Questions of some difficulty not
in
frequently arise where
settled property
consists of stocks or shares, and the company
in which the investment is made declares a
bonus dividend in the form of new shares
allotted proportionately to the holding in the
company.
Is the tenant for life entitled to
the bonus as income, or are the new shares
to be held by the trustees as capital ?
A recent case,
Ogilvie
v.
Ogilvie
(35 T. L. R.,
218), will
repay perusal.
The
leading
authority on the subject is
Bouch
v.
Sproule
(1887), 12 A. C., 385.
In his judgment Lord
Herschell, at p. 397, says :—" The general
" principle for the determination of such a
" question and in my opinion the only sound
" principle is that which is well expressed in
" the judgment of Lord Justice Fry. Where
" a testator or settlor directs or permits the
" subject of his disposition to remain as
" shares or stocks in a company which has
" the power either of distributing its profits
" as dividend or of converting them into
" capital, and the company validly exercises
" this power, such exercise of its power is
" binding on all persons interested under the
" testator or settlor
in his shares, and
" consequently what is paid by the company
" as dividend, goes to the tenant for life, and
" what is paid by the company to the share-
" holder as capital or appropriated as an
" increase of capital stock in the concern
" enures
to
the benefit of all who are
" interested in the capital."
Bequest of Moneys in Bank.
It has been decided that a bequest of " all
my moneys at the Bank " passes not only the
money to credit at current account but money
on deposit receipt. Usually in this country
money on deposit receipt is payable on
demand, but when the amount
exceeds
£1,000 a condition
is generally inserted
entitling the bank to seven days' notice of
withdrawal.
Re Glendenning:
Steel
v.
Glendenning
(63 Sol. I., 156), decides there is
no difference in principle in the nature of a
deposit receipt requiring notice of withdrawal
and a notice not requiring such notice, and
that both pass on a bequest of " all moneys
at bank."
Double Portions.
The doctrine of double portions laid down
by Lord Eldon in the leading case,
Ex parte
Pye
(White & Tudor, Leading Cases, 8th
edition, Vol. II., 373), is that "Where a
" parent gives a legacy to a child, not
" stating the purpose with reference to which
" he gives it, the Court understands him as
" giving a portion, and by a sort of artificial
" rule upon an artificial notion that the father
" is paying a debt of nature, and a sort of
" feeling upon what is called a leaning against
" double portions, if the father advances a
" portion on the marriage of that child,
" though of less amount, it is a satisfaction
" of the whole or in part." The rule is
applicable where a
testator has placed
himself
in loco parentis
to the beneficiary.
A recent case of interest on the subject is
Re Dawson: Swanson
v.
Dawson,
1919,
1 Ch. D., 102. Shortly the facts were, that
the testator divided the residue of his estate
into five parts, three parts he bequeathed to
his three unmarried daughters, a fourth part
to a grandson, son of his only son who had
predeceased him, and the fifth part to the
children of a daughter who had predeceased
him. Having made his will, he gave sub
stantial sums by gift
inter vivos
to his children,
and the question arose whether they were
bound to account for these sums as a satis
faction
pro tanto
of their shares of residue.
On the question of fact the judge held that
the grandfather had not placed himself
in
loco parentis
to any of his grandchildren, and
the case establishes the proposition of law
that a grandfather is in the position of a
stranger for the purpose of the doctrine
against double portions, and that grand
children cannot claim the benefit of the
doctrine unless on proof that the grandfather
had assumed the parental care of them.