KERWIN,
J.:—On
October
7,
1937,
W.
Herbert
Brookfield,
domiciled
and
resident
in
Nova
Scotia,
made
an
arrangement
with
Royal
Trust
Company
under
which
the
latter,
from
time
to
time,
on
his
instructions,
bought
shares
of
the
capital
stock
of
various
companies
incorporated
under
the
laws
of
different
States
of
the
United
States
of
America.
Each
of
these
companies
had
its
head
office
in
the
United
States
and
maintained
no
share
register
or
transfer
office
in
Nova
Scotia.
The
shares
were
registered
in
the
names
of
various
persons
employed
by
the
Trust
Company
at
its
office
at
Halifax
and
the
certificates
for
such
shares
were
endorsed
in
blank
by
the
respective
persons
in
whose
names
they
were
made
out.
To
each
such
certificate,
singly
or
by
groups,
was
attached
a
declaration
of
trust,
signed
by
the
person
in
whose
name
the
certificate
was
made
out,
declaring
that
such
person
held
the
shares
as
nominee
of
the
Trust
Company
and
that
he
had
furnished
the
company
with
authority
to
collect
and
receive
all
dividends
to
which
he,
as
registered
owner,
might
become
entitled.
Mr.
Brookfield
died
November
14,
1944,
having
previously
made
his
last
will
and
testament,
wherein
he
appointed
executrices
but,
they
being
unable
or
unwilling
to
act,
administration
with
the
will
annexed
was
granted
to
the
Trust
Company.
The
Trust
Company
paid
the
Collector
of
Succession
Duties
of
Nova
Scotia
a
sum
of
money
which
included
succession
duty
in
respect
of
the
property
to
which
the
testator
was
entitled
in
the
shares.
Later,
the
company
paid
the
Collector
of
Inland
Revenue
of
the
United
States
a
sum
of
money
as
Federal
Estate
Tax
in
respect
of
the
said
shares.
The
company
claimed
a
refund
of
this
latter
amount
from
Nova
Scotia
on
the
theory
that
the
provisions
of
the
Canada-United
States
of
America
Tax
Convention
Act,
1944-45
(Can.),
c.
31,
was
applicable.
The
taxes
therein
referred
to
are
the
taxes
imposed
under
the
Dominion
Succession
Duty
Act,
1940-41
(Can.),
c.
14,
and
as
to
the
first
question
raised
by
the
stated
case,
I
agree
with
the
Court
en
banc
[supra,
p.
50]
that
such
an
Act
and
the
Convention
could
not
have
any
effect
upon
the
power
of
the
Province
to
collect
and
retain
succession
duty
taxes.
The
second
question
is
more
difficult.
see.
3(1)
of
the
Nova
Scotia
Succession
Duty
Act,
1945
(N.S.),
e.
7,
provides:
“For
the
purpose
of
raising
a
revenue
for
provincial
purposes,
and
save
as
is
hereinafter
otherwise
expressly
provided,
there
shall
be
levied
and
paid
for
the
use
of
the
Province
a
duty
(called
Succession
Duty),
at
the
rate
hereinafter
specified
upon
all
property
hereinafter
mentioned
which
has
passed
on
the
death
of
any
person
who
has
died
on
or
since
the
1st
day
of
July,
A.D.
1892,
or
which
passes
on
the
death
of
any
person
who
shall
hereafter
die,
the
duty
to
be
according
to
the
fair
market
value
of
such
property
at
the
date
of
the
death
of
the
deceased.’’
And
see.
8(a)
enacts:
"‘8.
Save
as
is
hereinafter
otherwise
expressly
provided
the
property
on
which
succession
duty
shall
be
levied
and
paid
under
this
Act
at
the
rates
hereinafter
specified
shall
be
as
follows:
‘(a)
all
property
situate
in
Nova
Scotia
which
has
passed
as
aforesaid
or
which
passes
as
aforesaid
on
the
death
of
any
person,
whether
the
deceased
was
at
the
time
of
his
death
domiciled
in
Nova
Scotia
or
elsewhere.’’
The
subject-matter
of
the
taxation
is
property
‘‘situate
in
Nova
Scotia’’.
Mr.
Brookfield
had
the
beneficial
interest
in
the
shares
and
undoubtedly
at
the
time
of
his
death
that
interest
passed
within
the
meaning
of
the
Act;
but
the
question
is
whether
such
interest
is
property
situate
in
the
Province.
The
Court
en
banc
[supra,
p.
50],
decided
that
the
question
was
concluded
by
the
decision
in
Stern
v.
The
Queen,
[1896]
1
Q.B.
211,
but
before
dealing
with
that
decision
it
is
convenient
to
refer
to
certain
propositions
that
have
been
established
in
cases
of
this
nature.
They
were
formulated
by
Duff,
C.J.C.,
speaking
for
this
Court
in
Rk.
v.
National
Trust
Co.,
[1933]
S.C.R.
670,
and
were
expressly
approved
and
repeated
by
the
Judicial
Committee
in
R.
v.
Williams,
[1942]
A.C.
541
at
p.
559.
As
pointed
out
by
Lord
Uthwatt
for
the
Judicial
Committee
in
Treasurer
of
Ont.
v.
Blonde,
[1947]
A.C.
24
at
p.
30,
the
authorities
before
the
Walliams
case
established
that,
if,
for
the
purposes
of
Succession
Duty
Acts
(such
as
the
Nova
Scotia
Act),
there
be
found
within
a
particular
provincial
jurisdiction
a
place
in
which
registered
shares
in
a
company
can
be
effectively
dealt
with
as
between
the
shareholders
and
company,
the
shares
are
situate
within
that
jurisdiction;
but
that
in
none
of
those
cases
was
there
present
the
feature
that
there
were
two
places
where
the
shares
could
effectively
be
dealt
with,
one
within,
and
the
other
outside,
the
jurisdiction.
Lord
Uthwatt
proceeded
to
say
that
the
principle
laid
down
in
the
Williams
case
was
that
if
it
were
possible
on
rational
grounds
to
prefer
one
of
the
alternative
places
to
the
other
as
the
place
of
transfer
for
the
shares
in
question,
the
selection
should
be
made
accordingly.
It
was
in
applying
this
principle
that
Viscount
Maugham
in
the
Williams
case
stated
that
their
Lordships
had
come
to
the
conclusion
that
the
existence
in
Buffalo,
at
the
date
of
the
death,
of
certificates
in
the
name
of
the
testator,
endorsed
by
him
in
blank,
must
be
decisive.
Their
Lordships
did
not
think
it
right
to
express
any
opinion
as
to
the
conclusion
which
they
would
have
come
to
if
the
certificates
had
not
been
endorsed
and
signed
in
blank
by
the
testator,
since
the
point
did
not
arise
for
decision
and
there
were
some
obvious
distinctions
arising
in
cases
where
the
endorsement
on
certificates
has
not
been
signed
by
the
registered
holder.
This
reservation,
it
will
be
noticed,
was
made
in
a
case
where
the
Judicial
Committee
was
faced
with
the
problem
of
preferring
one
of
two
alternative
places,
one
of
which
was
within
the
jurisdiction
of
a
Province
and
the
other
outside
Canada.
In
the
Blonde
case,
as
here,
there
was
no
place
within
the
claiming
Province
where
a
transfer
of
the
shares
could
be
carried
through
but,
differing
from
the
present
case,
the
certificates
while
physically
situate
in
the
claimant
Province,
had
not
been
endorsed
in
blank
by
the
registered
holder.
I
assume
without
deciding
that
we
are
dealing
with
‘‘street
certificates’’.
In
stating
in
the
Blonde
case
the
first
matter
to
be
ascertained,
Lord
Uthwatt
left
aside
the
case
of
street
certificates
but
in
my
view
the
presence
in
Nova
Scotia
of
such
certificates
does
not
alter
the
effect
of
the
proposition
that
in
deciding
in
such
cases
as
this
whether
a
matter
is
"Taxation
within
the
Province”
within
head
(2)
of
sec.
92
of
the
B.N.A.
Act,
the
test
is
where
the
shares,
not
as
between
transferor
and
transferee,
but
as
between
the
company
and
the
owner,
may
be
effectively
dealt
with.
A
transferee
of
such
a
certificate
would,
of
course,
obtain
the
right
to
take
the
necessary
steps
to
become
the
registered
holder
of
the
shares
represented
by
the
certificate
but
that
is
not
sufficient.
The
judgment
in
Stern
v.
The
Queen,
[1896]
1
Q.B.
211,
so
strongly
relied
upon
by
the
respondent
and
followed
by
the
Court
en
banc,
was
delivered
by
Wright,
J.,
on
behalf
of
a
Divisional
Court.
It
was
concerned
with
certificates
of
shares
in
a
foreign
company.
In
the
statement
of
facts
it
is
stated
that
while
the
forms
of
transfer
and
powers
of
attorney
had
in
regard
to
a
large
number
of
the
shares
been
signed
by
the
firms
or
persons
in
whose
names
the
certificates
were
made
out,
with
regard
to
some
of
the
shares,
of
which
the
certificates
were
in
the
name
of
Stern
Bros.,
such
forms
had
not
been
signed
by
them.
Nevertheless,
the
case
apparently
proceeded
on
the
basis
that
all
the
certificates
were
included
in
the
first
class.
It
is
evident
that
Wright,
J.,
intended
to
follow
Attorney
General
v.
Bouwens
(1838),
4
M.&
W.
171,
150
E.R.
1390.
At
the
time,
the
view
was
held
that
he
really
extended
the
operation
of
that
decision
(12
L.Q.
Rev.
105),
and
in
the
Court
of
Appeal
in
Winans
v.
The
King,
[1908]
1
K.B.
1022
at
p.
1026,
the
Master
of
the
Rolls
states
that
the
Bouwens
case
was
"‘possibly
carried
further
in
the
case
of
Stern
v.
Reg.’’.
In
the
Winans
case
it
was
admitted
for
the
purposes
of
argument
that
the
bonds
were
all
bearer
bonds
passing
by
delivery
and
that
they
were
capable
of
being
dealt
with,
and
were
in
fact
dealt
with,
for
money
on
the
stock
exchange.
The
case
had,
therefore,
nothing
to
do
with
shares.
It
had
to
do
with
taxation
under
the
Finance
Act
of
1894
which
was
held
to
be
analogous,
not
to
the
Legacy
and
Succession
Duty
Acts
but
to
the
old
Probate
Duty
Acts,
and
it
was
in
that
connection
that
Lord
Atkinson,
on
the
appeal
to
the
House
of
Lords,
[1910]
A.C.
27,
at
p.
35,
cited
the
Bouwens
and
Stern
cases
for
the
proposition
that
probate
duty
would
before
the
passing
of
the
1894
Finance
Act
have
undoubtedly
been
payable
in
respect
of
the
bonds.
The
only
other
law
Lord
who
referred
to
the
Stern
case
was
Lord
Gorell,
who,
at
p.
39,
states
that
the
Bouwens
case
was
followed
in
Stern.
I
am
inclined
therefore
to
assume
that
the
approval
of
the
Stern
case
by
Lord
Atkinson
and
Lord
Gorell
was
confined
to
cases
of
bonds.
Even
if
that
be
not
so
and
if
the
Stern
case
be
treated
as
an
extension
in
England
of
the
common
law
rule
in
the
Bouwens
case,
it
should
not
be
so
treated
here
in
constitutional
cases.
In
England
there
is
no
question
of
divided
jurisdiction
but
certainly
in
Canada
it
would
make
serious
inroads
upon
the
test
of
the
situs
of
shares
as
being
where
they
may
be
effectively
dealt
with
as
between
the
company
and
the
owner.
Another
argument
of
the
respondent
is
put
thus
in
his
factum:
"The
notional
rule
of
the
Brassard
case
[[1925]
A.C.
371]
fixes
the
situs
of
the
property
of
a
registered
owner
of
shares
as
the
locus
of
the
share
registry
because
that
it
where
the
rights
that
make
up
that
property
may
be
dealt
with:—the
rights
to
vote,
attend
meetings
and
receive
dividends.
The
rule
would
completely
lose
its
logic
if
applied
to
such
a
case
as
the
present
where
the
deceased
held
none
of
these
rights.’‘
In
the
first
place,
Duff,
J.,
as
he
then
was,
in
Smith
v.
Levesque,
[1923]
S.C.R.
578
at
pp.
585-6,
points
out
that
situs
ascribed
to
intangible
property
for
the
purpose
of
determining
the
authority
of
the
executor
to
deal
with
it
is
not,
strictly
speaking,
a
fictitious
situs.
Then,
so
far
as
the
respondent’s
present
contention
is
based
upon
the
fact
that
the
deceased
was
not
the
registered
owner
nor
in
possession
of
the
certificates,
the
Trust
Company
and
its
employees,
in
my
view,
were
merely
Mr.
Brookfield
’s
agents
bound
to
follow
his
instructions
as
to
voting,
attending
meetings
and
receiving
dividends.
The
contention
that
the
real
nature
of
Mr.
Brookfield’s
property
was
a
right
of
action
under
a
Nova
Scotia
trust,
is
to
overlook
the
realities
of
the
situation.
Even
if
the
Trust
Company
and
its
employees
were
trustees,
the
trusts
ended
when
the
certificates,
endorsed
in.
blank,
came
into
possession
of
the
Trust
Company
as
administrator
with
the
will
annexed
of
the
deceased.
The
appeal
should
be
allowed.
Notwithstanding
the
form
of
the
stated
case
and
of
a
written
agreement
signed
on
behalf
of
the
parties,
I
understand
that
if
the
above
views
prevail,
the
proper
order
to
be
made
is
that
the
answers
to
the
following
question
submitted
for
determination,
namely,
‘‘
Whether
succession
duty
was
leviable
and
payable
for
the
use
of
the
Province
of
Nova
Scotia
in
respect
to
the
property
to
which
the
said
W.
Herbert
Brookfield
was
at
the
time
of
his
death
entitled
or
which
passed
upon
his
death
by
reason
of
the
facts
related
in
para-
graphs
5,
6
and
7
of
the
Stated
Case
herein?’’
is
that
such
succession
duty
was
not
leviable
and
payable
for
the
use
of
the
Province
of
Nova
Scotia
and
that
the
Province
of
Nova
Scotia
was
not
right
in
exacting
the
said
tax
and
is
required
to
make
a
refund
of
the
sum
of
$14,347.09
without
costs
of
any
of
the
proceedings
in
this
Court
or
in
the
Court
en
bane.
TASCHEREAU,
J.:—W.
Herbert
Brookfield
died
in
November,
1944,
and
at
the
time
of
his
death,
had
his
domicile
in
the
Province
of
Nova
Scotia.
The
administration
of
his
estate,
valued
at
more
than
$450,000,
was
given
to
the
Royal
Trust
Company,
appellant
in
the
present
case.
Prior
to
his
death,
the
testator
caused
to
be
registered
in
the
names
of
certain
persons,
shares
of
incorporated
companies
having
their
respective
head
offices
in
the
United
States
of
America,
and
no
transfer
offices
in
the
Province
of
Nova
Scotia.
It
is
common
ground
that
these
shares
were
held
on
the
testator’s
behalf,
for
management
and
safekeeping,
in
the
vaults
of
the
Royal
Trust
Company
in
Halifax.
The
certificates
were
endorsed
in
blank
by
the
respective
persons
in
whose
names
they
were
made
out,
and
to
each
certificate
was
attached
a
Declaration
of
Trust.
Some
time
after
the
death
of
Mr.
Brookfield,
the
Royal
Trust
Company,
as
administrator
of
the
estate,
paid
to
the
Collector
of
Succession
Duties
for
the
Province
of
Nova
Scotia,
the
sum
of
$65,258.97,
in
which
amount
were
included
duties
on
the
shares
previously
referred
to.
An
amount
of
$17,897.92
was
also
paid
to
the
Collector
of
Inland
Revenue
of
the
United
States,
being
the
Federal
American
taxes
due
on
the
transfer
of
said
shares.
The
appellant,
then
claimed
a
refund
from
the
Province
of
Nova
Scotia
amounting
to
$14,347.09,
and
a
stated
case
was
submitted
to
the
Supreme
Court
of
Nova
Scotia
en
banc.
The
question
was
the
following:
"‘Whether
succession
duty
was
leviable
and
payable
for
the
use
of
the
Province
of
Nova
Scotia
in
respect
to
the
property
to
which
the
said
W.
Herbert
Brookfield
was
at
the
time
of
his
death
entitled
or
which
passed
upon
his
death
by
reason
of
the
facts
related
in
paragraphs
5,
6
and
7
of
the
Stated
Case
herein?’’
The
unanimous
answer
was
that
such
duties
were
leviable
and
payable,
and
that
the
Province
of
Nova
Scotia
was
right
in
exacting
the
tax,
and
was
not
required
to
make
a
refund
thereof.
I
agree
with
the
Supreme
Court
en
banc
of
Nova
Scotia
[supra,
p.
90]
that
the
Royal
Trust,
as
administrator,
cannot
base
its
claim
for
a
refund
on
the
ground
that
under
the
Canada-United
States
of
America
Tax
Convention
Act,
1944-45
(Can.),
c.
31,
the
taxes
are
not
due.
I
fully
concur
in
the
following
statement
of
Doull,
J.:
"‘I
am
of
opinion
that
this
convention
can
have
no
application
to
a
question
of
situs
arising
under
the
Nova
Scotia
Succession
Duty
Act.
I
do
not
agree
with
the
suggestion
that
the
Dominion
Parliament
has
power
to
change
the
Nova
Scotia
enactment,
if
such
enactment
is
within
the
power
of
the
Nova
Scotia
Legislature
under
the
B.N.A.
Act,
but
in
the
present
case,
no
such
question
arises
for
the
convention
by
its
terms
deals
only
with
‘the
tax
imposed
under
the
Dominion
Suc-
cession
Duty
Act
9
.
Equally
true
it
is
that
while
Canada
is
defined
as
the
‘Provinces,
the
Territories
and
Sable
Island’,
the
definition
is
only
‘in
a
geographical
sense’.
The
convention
does
not
purport
to
affect
any
provincial
power.’’
But
with
due
deference,
I
cannot
agree
with
the
Court
below
on
the
second
point.
The
relevant
section
of
the
Nova
Scotia
Succession
Duty
Act,
1945
(N.S.),
c.
7,
is
the
following
:
1’8.
Save
is
is
hereinafter
otherwise
expressly
provided
the
property
on
which
succession
duty
shall
be
levied
and
paid
under
this
Act
at
the
rates
hereinafter
specified
shall
be
as
follows:
"‘(a)
all
property
situate
in
Nova
Scotia
which
has
passed
as
aforesaid
or
which
passes
as
aforesaid
on
the
death
of
any
person,
whether
the
deceased
was
at
the
time
of
his
death
domiciled
in
Nova
Scotia
or
elsewhere.’’
The
words
‘‘
property
situate
in
Nova
Scotia’’,
mean
property,
and
in
the
present
case,
"‘shares
that
can
be
effectively
dealt
with
in
Nova
Scotia,
as
between
the
shareholders
and
the
company”.
I
am
of
the
opinion
that
these
shares
purchased
with
the
deceased’s
money,
in
which
of
course,
he
had
a
beneficial
interest,
issued
in
the
name
of
nominees
and
endorsed
by
them
in
blank,
cannot
be
dealt
with
in
Nova
Scotia,
as
between
the
shareholder
and
the
company,
but
only
in
the
United
States
where
are
the
share
registers
and
transfer
offices.
I
would
allow
the
appeal,
but
without
costs
here,
or
in
the
Court
en
bane.
Rand,
J.:—At
the
threshold
of
any
consideration
of
the
situs
of
shares
of
stock
in
relation
to
succession
duty
lie
two
recent
rulings
of
the
Judicial
Committee.
In
Brassard
v.
Smith,
[1925]
A.C.
371,
the
test
of
the
local
situation,
the
place
where
shares
are
to
be
taken
to
be
situate,
was
enunciated
in
the
question,
where
can
they
be
effectually
dealt
with?
In
R.
v.
Williams,
[1942]
A.C.
541,
this
was
declared
to
mean,
dealt
with
as
between
the
shareholder
and
the
company.
Situs,
in
other
words,
is
at
the
locus
of
the
controlling
act
from
which
the
relation
of
shareholder
immediately
arises.
As
between
transferor
and
transferee
the
test
would
be
virtually
useless
since
a
shareholder
can,
speaking
generally,
effectively
transfer
the
right
to
a
share
in
any
part
of
the
world.
The
latter
Judgment
affirms
certain
other
propositions
relating
to
death
duties
imposed
by
Canadian
Provinces:
first,
that
as
between
Provinces,
movable
or
immovable
property
transmitted
owing
to
death
can
have
only
one
local
situation;
that
the
situs
of
intangible
property
must
be
determined
by
some
"‘prin-
ciple
or
coherent
system
of
principles’’
deducible
from
the
common
law
of
England;
and
that
a
provincial
Legislature
is
not
competent
to
prescribe
the
conditions
fixing
situs
for
the
purpose
of
defining
the
subjects
of
its
taxine
powers
under
sec.
92(2).
The
further
rule
was
laid
down:
"‘That
the
solution
must
be
the
same
in
this
case
as
it
would
have
been
if
the
testator
had
been
domiciled
in
another
Province
of
Canada,
say
in
Quebec
instead
of
in
New
York,
and
if
all
the
other
facts
had
been,
as
they
were
in
fact,
including
the
existence
of
a
separate
registry
in
Quebec.”
-
i
These
pronouncements,
reaffirmed
in
Treasurer
of
Ont.
v.
Blonde,
[1947]
A.C.
24,
treat
mere
transferability
or
merchantability
of
the
right
to
become
a
shareholder,
in
the
initial
stages
of
the
enquiry,
as
having
little
if
any
relevance
to
situs;
but
they
recognize
as
matters
of
a
determinative
nature
what
the
law
creating
the
shares
has
provided
to
evidence
their
characteristics
as
property.
Registration
in
a
book
and
representation
by
a
certificate
are
tangible
badges
which
set
conditions
to
complete
transferability
of
the
shares
as
well
as
facilitate
dealings
with
them.
If,
as
in
the
case
of
bearer
shares,
in
analogy
to
bearer
bonds,
the
issuing
jurisdiction
has
in
effect
embodied
in
a
certain
instrument
the
exclusive
symbol
of
the
total
rights
created,
then
certainly,
as
a
rule,
the
situs
is
taken
to
be
the
locality
in
which
the
instrument
may
at
any
time
be.
Mr.
Macdonald’s
contention
is
that
the
merchantability
of
street
certificates
differentiates
the
case
here
from
the
previous
controversies.
His
argument
is
this
:
A
share
certificate
endorsed
in
blank
by
the
registered
holder
and
transferred
to
a
purchaser
by
delivery
has
come
thereupon
to
represent
a
separate
unit
of
property
consisting
of
the
beneficial
interest
in
the
share
coupled
with
a
power
in
the
bearer
to
become
a
shareholder,
with
the
delivery
of
the
certificate
concluding
the
transaction
between
the
parties;
the
right
thus
acquired,
as
against
the
company,
to
make
a
transfer
of
ownership
on
the
registry
satisfies
the
requirement
that
direct
and
immediate
legal
relations
must
arise
between
the
transferee
and
the
company
as
the
result
of
acts
done
at
the
situs.
The
difference
between
the
two
cases
is
obvious:
In
the
one
a
person
is
or
can
be
made
a
shareholder
by
acts
within
the
jurisdiction;
in
the
other,
by
such
acts
he
is
clothed
with
power
only
to
make
himself
a
shareholder
by
means
of
his
further
acts
outside:
and
the
test
remains
unsatisfied.
For
his
proposition,
however,
Mr.
Macdonald
has
the
support
of
Stern
v.
The
Queen,
[1896]
1
Q.B.
211,
and
the
question
comes
down
to
this:
whether
in
a
Province
under
the
rules
laid
down,
the
legislative
situation
is
such
as
will
permit
the
distinction
to
be
acted
on.
Under
a
law-making
sovereignty
the
subject-matter
of
taxation
may
in
fact
be
anything
on
which
power
con
be
exerted
or
in
respect
of
which
the
payment
of
money
can
be
made
the
condition
of
the
doing
of
an
act
or
exercising
a
right
within
its
territorial
boundaries.
In
the
Stern
case
there
were
street
certificates
within
England
which
were
essential
to
an
entry
of
transfer
on
the
register
outside
of
England;
and
the
legislative
authority
of
England
extended
in
effect
to
restrain
the
use
of
those
certificates
until,
or
to
charge
other
property
admittedly
in
England
with,
the
payment
of
certain
monies
related
to
them.
Whether
these
monies
are
taken
to
be
probate
or
estate
duties
or
legacy
or
succession
duties
does
not,
for
purposes
of
jurisdiction
in
taxes,
appear
to
be
material.
But
a
Province
of
the
Dominion
is
not
apparently
in
that
degree
of
sovereignty.
The
power
of
"‘direct
taxation
with
the
Province”,
interpreted
as
it
has
been
by
the
authorities
cited,
is
to
be
exercised
on
the
footing
that
there
is
only
one
situs
for
every
class
of
property
and
that
that
situs
must
be
within
the
Province.
And
for
shares,
there
can
be
no
such
division
of
interests
or
powers
in
or
annexed
to
them
as
would
in
the
result
attribute
to
them
a
situs
in
two
or
more
places.
It
is
not
suggested
that
the
law
of
New
York
has
embodied
the
visible
and
exclusive
evidence
of
these
rights
in
one
tangible
and
movable
symbol
to
be
looked
upon
and
dealt
with
as
a
chattel
as
in
Attorney-General
v.
Bouwens,
4
M.
&
W.
171;
and
that
being
so,
we
are
remitted
to
the
considerations
by
which
the
shares
are
localized
in
the
place
where
they
may
be
effectually
dealt
with.
But
it
is
conceded
that
an
entry
of
the
purchaser’s
name
on
the
registry
of
the
shares
in
New
York
would
be
essential
to
admitting
him
to
membership
in
the
com-
pany
and
the
case
comes
then
directly
within
the
principles
laid
down.
The
appeal
must,
therefore,
be
allowed
but
as
agreed
without
costs
in
both
Courts.
The
judgment
of
KELLOCK
and
Estey,
JJ.,
was
delivered
by
KELLOCK,
J.:—The
stated
case
shows
that
at
his
death
on
November
14,
1944,
the
testator
was
domiciled
and
resided
in
Nova
Scotia.
Some
time
prior
to
his
death
the
shares
here
in
question,
all
common
shares,
were
registered,
pursuant
to
the
instructions
of
the
deceased,
in
the
names
of
nominees
of
the
Royal
Trust
Company,
the
share
certificates
being
endorsed
in
blank.
In
every
instance
a
‘‘Declaration
of
Trust’
‘
was
also
executed
by
the
nominee,
stating
that
the
shares
were
registered
in
the
name
of
the
shareholder
as
the
nominee
of
the
Royal
Trust
Co.
and
that
the
certificates
had
been
delivered
to
the
Trust
Company
together
with
an
irrevocable
authority
to
collect
and
receive
the
dividends.
It
appears
also
that
these
certificates
were
so
delivered
pursuant
to
the
direction
of
the
deceased
for
safekeeping
and
management.
They
were
therefore
in
the
possession
of
the
deceased
through
his
agent.
The
respondent
contends
that
the
case
is
not
within
the
principle
of
the
decision
in
R.
v.
Williams,
[1942]
A.C.
541,
for
the
reason
that
although
the
deceased
was
the
beneficial
owner,
he
was
not
the
registered
owner.
It
is
said
that
(1)
in
the
case
of
certificates
endorsed
in
blank,
where
the
deceased
was
not
the
registered
shareholder,
the
physical
location
of
the
certificates
fixes
the
situs
for
succession
duty
purposes,
their
marketability
there,
according
to
the
contention,
being
the
determining
consideration;
and
(2)
that
in
any
event
the
only
property
which
passed
on
the
death
was
a
chose
in
action
under
a
Nova
Scotia
trust.
The
statute
which
is
applicable
is
the
Succession
Duty
Act
of
Nova
Scotia,
1945,
ce.
7.
By
sec.
3(1)
provision
is
made
for
the
levying
of
a
succession
duty
upon
all
property
mentioned
in
the
statute
passing
on
the
death
of
any
person
who
has
died
on
or
since
July
1,
1892.
By
subsec.
(2)
"property
passing
on
the
death’’
is
deemed
to
include
for
all
purposes
of
the
Act:
"(a)
property
of
which
the
deceased
was
at
the
time
of
his
death
competent
to
dispose.”
By
sec.
2(1)
(b)
the
expression
‘‘property’’
includes
real
and
personal
property
of
every
description,
whether
tangible
or
intangible,
and
every
estate
and
interest
therein.
By
subsec.
(2)
(a)
of
sec.
2,
a
person
shall
be
deemed
competent
to
dispose
of
property
for
the
purposes
of
the
Act:
"‘If
he
has
such
an
estate
or
interest
therein
or
such
general
power
as
would
if
he
were
sui
juris
enable
him
to
dispose
of
the
property.’’
In
Bradbury
v.
English
Sewing
Cotton
Co.,
[1923]
A.C.
744
at
p.
767,
Lord
Wrenbury
said:
"‘A
share
is,
therefore,
a
fractional
part
of
the
capital.
It
confers
upon
the
holder
a
certain
right
to
a
proportionate
part
of
the
assets
of
the
corporation.’’
Certain
rights
or
incidents
are
attached
thereto,
such
as
the
right
to
attend
meetings
and
to
vote,
etc.
'the
case
at
bar
the
property
passing
on
the
death
of
the
late
Mr.
Brookfield
was,
in
my
opinion,
the
full
beneficial
interest
in
the
shares
and
was
not
merely
a
chose
in
action.
I
think
it
unnecessary
to
say
more
as
to
the
second
branch
of
the
argument.
Coming
to
the
first
branch,
the
deceased
in
R.
v.
Williams,
[1942]
A.C.
541,
an
American
citizen,
domiciled
in
the
State
O
New
York,
was
the
owner
of
certain
shares
of
Lake
Shore
Mines
Ltd.,
a
company
incorporated
by
letters
patent
issued
under
the
Ontario
Companies
Act.
The
share
certificates
were
at
all
material
times
physically
located
in
the
State
of
New
York
and
they
had
been
endorsed
in
blank
by
the
testator.
At
the
date
of
the
death,
the
company
had
an
office
in
Toronto
and
one
in
Buffalo,
in
the
State
of
New
York,
at
both
of
which
transfers
of
shares
might
properly
be
made.
The
executors
had
taken
out
probate
in
the
State
of
New
York
and
subsequently
ancillary
letters
probate
in
Ontario,
where
the
testator
possessed
property
apart
from
the
shares.
The
question
for
decision
was
as
to
whether
the
testator’s
property
in
the
shares
was
liable
to
suecession
duty
in
Ontario.
It
was
held
that
the
shares
were
not
so
subject,
not
being
property
situate
in
Ontario.
In
the
course
of
delivering
the
opinion
of
the
Board,
Viscount
Maugham
referred
to
the
earlier
decision
of
the
Board
in
Brassard
v.
Smith,
[1925]
A.C.
871,
where
the
rule
was
laid
down
that
in
cases
where
there
is
but
a
single
Province
in
Canada
in
which
shares
of
a
company
may
be
effectively
dealt
with,
i.e.,
where
they
can
be
transferred
on
the
books
of
the
company,
the
situs
of
the
shares
for
fiscal
purposes
is
in
that
Province.
At
p.
558,
he
said:
"‘The
first
observation
is
that
the
phrase
used
in
laying
down
the
principle
clearly
means
‘where
the
shares
can
be
effectively
dealt
with
as
between
the
shareholder
and
the
company,
so
that
the
transferee
will
become
legally
entitled
to
all
the
rights
of
a
member,’
e.g.,
the
right
of
attending
meetings
and
voting
and
of
receiving
dividends.’’
In
the
circumstances
present
in
the
Williams
case,
as
already
noted,
the
shares
were
transferable
either
in
Ontario
or
in
New
York,
and
it
was
held
that
the
presence
of
the
certificates,
endorsed
as
mentioned,
in
New
York,
was
the
determining
element.
As
to
whether
a
different
rule
applies
as
between
two
Provinces
than
as
between
one
or
more
Provinces
and
a
foreign
country,
their
Lordships
stated
at
p.
559:
"They
observe
that
the
solution
must
be
the
same
in
this
case
as
it
would
have
been
if
the
testator
had
been
domiciled
in
another
Province
of
Canada,
say
in
Quebec
instead
of
in
New
York,
and
if
all
the
other
facts
had
been,
as
they
were
in
fact,
including
the
existence
of
a
separate
registry
in
Quebec.’’
The
same
principle
was
applied
in
Treasurer
of
Ont.
v.
Aberdein,
[1947]
A.C.
at
p.
31.
The
present
problem
differs
from
the
problem
presented
by
the
facts
in
the
Williams
case
in
that
in
the
case
at
bar
the
deceased
was
not
the
registered
owner.
In
the
Williams
case,
[1942]
A.C.
at
p.
556,
Viscount
Maugham
said:
‘‘The
rule
laid
down
in
Brassard
v.
Smith
would
in
practice
be
useless
if
the
place
where
the
certificates
for
shares
were
found
at
the
time
of
the
death
should
be
taken
to
be
necessarily
the
situs
of
the
shares.
Their
Lordships
have
no
hesitation
in
holding
that
the
situs
of
the
certificates
is
not,
taken
alone,
sufficient
to
afford
a
solution
to
the
present
problem.’’
In
adverting
to
the
fact
that
the
certificates
in
the
Williams
case
had
been
endorsed
in
blank,
their
Lordships
said
at
p.
557
:
"This
had
the
admitted
result
of
making
a
delivery
of
the
certificates
with
the
endorsements
signed
in
blank
a
good
assignment
of
the
shares,
since
it
passed
a
title
to
the
assignees
both
legal
and
equitable,
with
a
right
as
against
the
Company
to
obtain
registration
and
to
obtain
new
certificates.
(Colomal
Bank
v.
Cady
(18901),
15
App.
Cas.
267.)
It
must
be
accepted
therefore
as
a
fact
that
the
certificates
were
currently
marketable
in
the
State
of
New
York
as
securities
for
the
shares,
and
that
they
were
documents
necessary
for
vouching
the
title
of
the
testator
to
the
shares/
‘
Again
at
p.
588:
"The
late
owner
in
the
normal
case
was
absolutely
entitled
to
the
shares
as
the
registered
owner
of
them
in
the
books
of
the
Company,
and,
if
resident
in
a
country
or
Province
different
from
that
in
which
the
shares
can
be
effectively
dealt
with,
could
nevertheless
have
sold
the
shares
and
completed
the
transaction
by
an
attorney
or
otherwise.’’
In
the
present
case
the
deceased,
although
not
the
registered
owner,
was
in
a
position
to
deliver
the
certificates,
endorsed
in
blank,
to
whomsoever
he
pleased
and
thereby
to
pass
to
his
assignee
the
interest
of
the
registered
shareholder
(Colonial
Bank
v.
Cady
(1890),
15
App.
Cas.
267
at
p.
277,
per
Lord
Watson)
as
well
as
his
own
interest,
with
a
right
as
against
the
company
to
obtain
registration
and
new
certificates.
It
is
difficult
perhaps
to
see
why,
if
the
respondent’s
contention
be
correct,
the
ability
of
a
registered
owner
to
sell
his
shares
and
to
satisfy
his
contract
by
delivering
endorsed
certificates,
does
not
touch
the
question
of
situs,
while
the
same
capacity
on
the
part
of
a
beneficial
owner
has
not
the
same
effect.
In
the
Williams
case
their
Lordships
went
on
to
say
at
p.
960:
"‘The
certificates
endorsed
and
signed
as
they
were
cannot
be
regarded
as
mere
evidence
of
title.
They
were
valuable
documents
situate
in
Buffalo
and
marketable
there
and
a
transferee
was
capable
of
being
registered
as
holder
there
without
leaving
the
State
of
New
York
or
performing
any
act
in
Ontario.
On
the
testator’s
death
his
legal
personal
representatives
in
the
State
of
New
York
became
the
lawful
holders
of
the
certificates
entitled
to
deal
with
them
there;
any
sale
by
them
would
be
‘in
order’
and
the
purchaser
could
obtain
registration
in
the
Buffalo
registry.
If
we
contrast
the
position
in
Ontario
the
difference
is
obvious.
Nothing
effective
could
lawfully
be
done
there
without
producing
the
certificates,
.
.
.
.
In
a
business
sense
the
shares
at
the
date
of
the
death
could
effectively
be
dealt
with
in
Buffalo
and
not
in
Ontario."
In
the
case
at
bar
the
shares
could
be
‘‘effectively
dealt”
with
only
in
some
one
or
more
of
the
United
States.
The
transferee
could
not
become
“legally
entitled
to
all
the
rights
of
a
member”
in
Nova
Scotia:
see
Viscount
Maugham,
[1942]
A.C.
at
p.
558.
It
seems
to
me
therefore
that,
in
the
circumstances
of
the
present
case,
the
mere
fact
that
the
shares
were
not
registered
in
the
name
of
the
deceased
does
not
render
inapplicable
the
principle
of
the
decision
in
R.
v.
Williams.
The
certificates
here
in
question
all
require
the
production
of
the
certificate
for
the
purpose
of
transfer.
The
conclusion
as
above
to
which
I
have
come
was
the
conclusion
arrived
at
in
somewhat
similar
circumstances
in
the
Supreme
Court
of
the
Irish
Free
State
in
Re
Ferguson,
[1935]
I.R.
21.
In
that
case
shares
in
a
British
company
belonging
to
a
person
of
unsound
mind,
which
had
been
transferred
into
the
name
of
the
accountant
of
the
Court
of
Justice,
were
held
to
have
their
situs
in
Englaid
where
the
register
of
shareholders
was
located.
The
statute
there
considered
was
the
Finance
Act,
1894,
the
relevant
provisions
of
which
are
all
reproduced
in
the
Nova
Scotia
statute
set
out
above.
The
Court
applied
the
principle
of
Attorney-General
v.
Higgins
(1857),
2
H.
&
N.
339,
157
E.R.
140,
and
Brassard
v.
Smith,
[1925]
A.C.
371,
as
well
as
Erie
Beach
Co.
v.
Attorney-General
for
Ont.,
[1930]
A.C.
161.
The
argument
presented
in
the
present
case
on
behalf
of
the
respondent
was
rejected
in
Ferguson
f
s
case.
Hanna,
J.,
at
pp.
49-50
says
:
"‘Mr.
McCann
distinguishes
all
these
cases
by
the
fact
that
in
each
of
them
the
legal
interest
and
the
beneficial
ownership
were
in
the
same
person.
In
my
view
that
cannot
affect
the
position,
even
if
we
resort
to
the
dissection
of
the
legal
situation
as
the
Revenue
Commissioners
invite
us
to
do.
If
the
Chief
Justice
desired
by
an
order
to
deal
with
the
shares,
it
could
not
be
effective
save
by
operating
upon
the
register
in
Great
Britain
where
the
property
is
situate
and
seeking
in
aid,
if
necessary,
the
jurisdiction
of
the
British
Courts.
The
executors
also,
in
the
final
resort,
must
go
to
the
register
in
Great
Britain
or
appeal
to
the
British
Court.
Accordingly,
I
think
that
the
distinction
drawn
by
Mr.
McCann
in
this
case
does
not
effect
the
principle
once
the
Court
come
to
the
conclusion
that
it
is
the
shares
that
pass.”
FitzGibbon,
J.,
at
p.
65
in
delivering
the
judgment
on
appeal
said
:
"‘The
law
is
summed
up
by
Lord
Merrivale,
quoting
from
Baron
Martin’s
judgment
in
Attorney-General
v.
Higgins
(2
H.
&
N.
339)
:
‘When
transfer
of
shares
in
a
company
must
be
effected
by
a
change
in
the
register,
the
place
where
the
register
is
required
by
law
to
be
kept
determines
the
locality
of
the
shares.’
1
"
The
Revenue
Commissioners
can
have
no
doubt
that
estate
duty
is
payable
in
Great
Britain
upon
these
shares
by
reason
of
the
death
of
Sarah
Ferguson;
it
has
been
decided
by
us
that
it
was
the
property
in
these
shares
that
passed
upon
her
death;
and
it
follows
that
the
respondents
are
entitled
to
an
allowance
of
the
sum
paid
in
duty
in
Great
Britain.”
At
p.
66
FitzGibbon,
J.,
also
said
in
dealing
with
the
same
point:
“We
do
not
agree
with
this
contention,
having
regard
to
the
circumstances
in
which
the
name
of
the
Accountant
came
to
be
placed
upon
the
registers,
but
in
any
event
the
decision
of
Eve,
J.,
in
In
Re
Aschrott,
Clifton
v.
Strauss,
[1927]
1
Ch.
315,
is
an
authority
for
the
proposition
that
the
same
principles
apply
even
when
the
name
of
the
deceased
person
is
not
actually
upon
the
register
of
shareholders
at
the
time
of
his
death.’’
In
Re
Aschrott,
[1927]
1
Ch.
313,
the
testator,
a
German
subject,
was
entitled
to
stock,
shares
and
securities
in
English,
South
African
and
American
companies
which
had
been
purchased
for
him
by
certain
German
banks
acting
through
their
London
agencies.
The
certificates
were
in
all
cases
situate
in
London
and
the
securities
themselves
were
transferable
in
London
at
the
outbreak
of
the
war
of
1914
and
at
the
date
of
the
testator’s
death
in
1915.
The
securities
were
held
in
large
blocks
by
the
London
agencies
and
had
not
prior
to
his
death
been
specifically
allocated
to
the
testator
so
that
it
would
appear
that
none
of
the
certificates
were
in
his
name.
By
virtue
of
the
provisions
of
the
Treaty
of
Peace
Orders
all
the
shares
became
charged
with
the
claim
of
the
Custodian
of
Enemy
Property.
The
question
for
decision
in
the
case
was
whether
estate
duty
was
payable
on
all
or
any
of
the
securities
which
in
turn
depended,
as
put
by
Eve,
J.,
on
the
question:
"Were
these
shares
in
companies
registered
in
South
Africa
and
America,
but
having
offices
in
England
where
certificates
could
be
produced,
transfers
passed,
and
the
names
of
transferees
entered
on
the
register,
property
situate
out
of
the
United
Kingdom?”’
It
was
held
that
the
shares
had
their
situs
in
England.
If
it
be
the
Province
where
the
shares
are
situate
which
has
the
constitutional
authority
to
levy
a
succession
duty
upon
the
death
of
the
owner,
it
seems
past
question
that,
upon
the
death
of
the
person
in
Nova
Scotia
who
is
the
registered
shareholder
but
who
is
not
the
beneficial
owner,
if
the
register
of
the
company
is
situate
in
another
Province,
say
Quebec,
the
latter
Province
would
be
entitled
to
levy
succession
duty
in
respect
of
nothing
more
than
the
interest
of
the
nominee,
i.e.,
the
bare
legal
interest.
The
value
of
such
interest
would
appear
to
be
nominal
only.
In
the
Court
below
reliance
was
placed
on
the
case
Stern
v.
The
Queen,
[1896]
1
Q.B.
211.
In
that
case
the
testator
died
in
England
owning
shares
in
foreign
companies,
the
certificates
being
in
England
and
standing
in
the
name
of
persons
other
than
the
testator.
Some
were
endorsed
but
some
had
not
been
at
the
time
of
the
death.
It
was
held
that
the
certificates
being
currently
marketable
in
England
were
liable
to
probate
duty.
That
case
was
decided
upon
a
stated
case
which
contained
the
statement,
inter
alia,
that
the
delivery
of
a
certificate
endorsed
by
the
registered
owner
in
blank
constitutes
as
between
the
parties
to
the
transaction
a
good
assignment
of
"the
shares’’
both
in
law
and
in
equity
passing
the
title
to
the
shares
both
legal
and
equitable.
In
giving
judgment
Wright,
J.,
said
at
p.
218:
‘‘There
is
in
this
country
.
.
.
a
document
the
existence
of
which
vouches
and
is
necessary
for
vouching
the
title
of
some
one
to
the
foreign
share,
so
that
in
the
absence
of
that
document
no
one
at
all
could
establish
a
title
to
the
share
.
.
.
.
It
being
a
marketable
security
operative,
though
not
completely
operative,
to
pass
the
title,
and
having
a
marketable
value
here,
I
think
that
it
is
itself
a
document
which
is
a
document
of
value
in
the
hands
of
the
executors
within
the
jurisdiction
of
the
Ordinary.
‘
‘
It
would
appear
that
the
considerations
which
determine
the
decision
were
the
existence
of
the
endorsed
certificates
within
the
jurisdiction
and
their
marketability
there,
together
with
the
fact
that
as
between
transferor
and
transferee,
the
legal
and
equitable
title
to
‘‘the
shares‘‘
was
vested
in
the
transferee.
Marketability
as
later
laid
down
in
the
'Williams
case
4
does
not
touch
the
question
of
situs’’,
and
the
‘‘
situs
of
the
certificates
is
not,
taken
alone,
sufficient
to
afford
a
solution
to
the
.
.
.
problem’’.
Unless
the
decision
in
Stern’s
case
proceeded
on
the
ground,
apparently
assumed
by
counsel
in
Aschrott’s
case,
[1927]
1
Ch.
at
p.
317,
and
in
Blonde’s
case,
[1947]
A.C.
at
p.
27,
that
the
shares
in
question
in
that
case
were
transferable
on
branch
registers
in
England,
I
cannot
consider
it
a
governing
authority
as
to
the
situs
of
shares
for
the
purposes
of
succession
duty
in
one
of
the
Provinces
of
Canada
where
situs
has
been
authoritatively
determined
to
depend
on
the
considerations
already
discussed
and
not
mentioned
in
Stern’s
case.
In
Winans
v.
Attorney-General,
[1910]
A.C.
27,
a
case
concerned
with
bonds,
Lord
Atkinson
at
p.
35
treated
Stern’s
case
and
Attorney-General
v.
Bouwens,
4
M.
&
W.
171,
as
founded
on
a
common
principle,
as
did
also
Lord
Gorell
at
pp.
38-9.
At
p.
31
Lord
Atkinson
said:
44
It
is
not
disputed
that
the
bonds
are
payable
to
bearer,
are
marketable
in
England,
are
not
registered
in
the
name
of
the
deceased,
nor
is
his
name
mentioned
in
them,
are
transferable
in
England
by
delivery,
and
that
no
act
other
than
delivery
need
be
done
in
or
out
of
England
to
complete
the
title
of
the
transferee.’’
All
of
this
applies
to
the
certificates
here
in
question
except
the
last,
and
the
first
and
44
leading”
enquiry
in
the
case
of
shares
is
the
location
of
the
place
of
transfer
where
the
transferee
will
become
legally
entitled
to
all
the
rights
of
a
member.
That
consideration
is
the
same
for
the
transferee
whether
or
not
he
receives
a
certificate
directly
from
the
registered
shareholder.
In
a
case
of
shares
as
distinct
from
the
case
of
bearer
bonds
Attorney-General
v.
Boziwens
has
been
determined
not
to
be,
but
Attorney-General
v.
Higgins,
2
H.
&
N.
339,
the
governing
authority.
In
the
judgment
in
Blonde’s
case,
[1947]
A.C.
at
p.
30,
Lord
Uthwatt
left
open
the
question
of
the
situs
of
‘‘street
certificates”.
Until
a
different
rule
is
established
by
their
Lordships
in
such
cases
however,
my
view
is
as
above.
Bearer
share
warrants
are
subject
to
different
consideration.
In
such
case
the
legislation
usually
provides
that
delivery
of
the
warrants
in
itself
effects
a
transfer
of
the
shares
without
more.
I
would
allow
the
appeal.
There
should
be
no
costs
in
this
Court
or
below.
Appeal
allowed.
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